Access = Prosperity

From the Star Ledger:

What causes income inequality among similar N.J. towns?

Railroads have historically been instrumental to human development by connecting economic centers and providing people with enhanced access to opportunities. New Jersey is no exception. In the 1830s, numerous railroad companies jockeyed for access to Jersey City in order to capitalize on Manhattan’s economic boom.

Shortly thereafter, new train lines were built, and certain towns in the state gained access to Jersey City and Manhattan (see Benjamin Bernhart’s “Historic Journeys by Rail: Central Railroad of New Jersey Stations, Structures & Marine Equipment” for more information).

These towns, in turn, would explosively transition from agriculturally-based economies to diverse and white-collar hubs.

Unfortunately, railroad access to Manhattan was not granted equitably, and economic inequality between towns and counties expanded as time wore on. We see this inequality most clearly when comparing the success of towns with early, direct access to train lines to towns without such access.

Consider the towns of Plainfield and Westfield in Union County, where income inequality is abundantly clear. Westfield households earn 2.69 times more and the average property is worth $429,100 more than their neighbors in Plainfield. Until the Central Railroad of New Jersey built a direct line between Westfield and Jersey City in 1901, Westfield and Plainfield shared a similar history.

Both towns were largely dependent on agriculture for growth and sustenance. But once the connection from Jersey City to Manhattan was established, Westfield transitioned from a blue-collar to white-collar town and naturally experienced economic prosperity. On the other hand, Plainfield did not gain access to the Jersey City line until 1910 – for reasons which are still unclear.

Today, Westfield has an express line to/from Newark Penn station during rush hour that skips the seven other towns between Westfield and Manhattan. This has attracted more wealthy families to the area, led to a better school system and public services, and, overall, perpetuated the vast inequality between the neighboring towns.

We see a similar trend when comparing the fortunes of Garfield with that of Ridgewood over in Bergen County. The town’s Chamber of Commerce acknowledges that failed attempts to build a rail line in the 1870s – and a lack of early train access – were inhibitors to the town’s development.

Meanwhile, Ridgewood, which according to the 2010 U.S. Census Bureau today has a median household income of $147,823 compared to Garfield’s $45,469, got rail access to NYC as early as 1848. Ridgewood and similarly wealthy Bergen County towns point to the railroad as a critical turning point in the town’s success, as it attracted wealthy businessmen to a countryside lifestyle with work access.

Posted in Demographics, Economics, New Jersey Real Estate | 17 Comments

The New Newark

From the NYT:

Work for Audible, Live Rent-Free?

Would you live in Newark if your boss paid your rent for a year?

That was the question that, the audiobook company, posed to its workers when it announced a housing lottery in January. The 20 winning employees would get $2,000 a month in free rent for a year if they signed a two-year lease at the newly restored Hahne & Company building in downtown Newark, a 10-minute walk from Audible’s headquarters.

Of about 1,000 employees in the company’s Newark and Jersey City offices, 64 applied. In March, the company, which has 16 global locations, expanded the offer, pledging a $250 monthly rent stipend for a year to any employee who lives in, or moves to, Newark. More than two dozen employees have taken advantage of that offer.

Audible is among a handful of companies around the country to offer housing assistance to its workers, although such benefits tend to happen in areas where the cost of living is extraordinarily high, which is not the case for Newark.

Only about 70 Audible employees working in the headquarters live in Newark, and that number includes those who took the company up on its housing offer. About a quarter of the company’s New Jersey-based employees live in New York City and Jersey City and the rest commute from elsewhere in the tristate area, coming from as far away as Connecticut.

Many Audible workers suffer through long commutes not because they can’t afford to live near where they work, but because they don’t want to. So for Audible, the incentive isn’t really about money; it’s about Newark. “Clearly what they’re trying to do is to get people to give Newark a try,” Mr. Lubell said.

Audible’s founder and chief executive, Donald R. Katz, has been something of a cheerleader for the struggling city, ever since he moved the headquarters to Newark from Wayne, N.J., a decade ago.

Conference rooms are named after notable natives like Aaron Burr, Gloria Gaynor and Shaquille O’Neal. Two years ago, the company helped start an incubator, Newark Venture Partners, to lure fledgling technology companies to the city. And next year, Audible will expand into three buildings on nearby James Street, including the Second Presbyterian Church from 1811, which Mr. Katz calls a “tech cathedral.”

For Mr. Katz, persuading workers to live in the city is a logical next step now that developers are pouring money into housing downtown. The first project to catch his eye was the Hahne department store at 50 Halsley Street, which underwent a $174 million renovation to build 160 apartments, a Whole Foods Market and a Rutgers University cultural center. “Young people want to be pioneers,” he said. But Mr. Katz, who is 65 and lives in Montclair, a wealthy suburb about 10 miles away, has no plans to move to Newark anytime soon.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 28 Comments

If not for immigrants, NJ would be sunk

From the Star Ledger:

Immigration is the only thing keeping N.J.’s population afloat, data shows

New Jersey came closer to reaching nine million residents last year, but the state’s meager growth slowed its pace toward that milestone, according to new Census data.

The state was home to 8,944,469 people in July 2016, an increase of 9,000 over the same time in 2015. If that population growth continues, New Jersey will not hit that nine million market until roughly 2022.

New Jersey was 39th in the nation in population growth over the past year, increasing by just 0.1 percent, compared to the national average of 0.7 percent. It ranked roughly the same in growth since 2010, the year the Census uses as a comparison point in its data.

The state’s population growth comes from births and inward migration, while it shrinks due to the deaths and outward migration. While it had some of the highest international migration in the nation — nearly 300,000 since 2010 — it has lost even more people from outward migration.

This difference could have long-term impact on New Jersey’s demographics and economy. The state relies on population growth to drive economic growth and productivity.

Previous data has shown Asian immigrants account for 45 percent of net international immigration to the state, followed by Latin American immigrants. Meanwhile, Jersey-born residents are leaving the state to retire or look for other jobs.

Posted in Demographics, New Jersey Real Estate | 15 Comments

Does this explain the construction gap?

From Bloomberg:

Foreclosures Dry Up and a Hot Wall Street Trade Gets New Look

It was a rare lucrative business for Wall Street in the aftermath of the financial crisis: snapping up properties in foreclosure and renting them out. So good, in fact, that now, as the distressed pool dries up, some investors are refusing to let the rental-model fizzle. They’re building more and more of the houses themselves.

American Homes 4 Rent, a five-year-old real estate investment trust and the biggest of the publicly traded landlords by number of homes, is buying lots and houses around the U.S. Colony Starwood Homes plans to purchase at least 600 just-erected properties over the next year from more than a dozen builders. Privately held AHV Communities LLC is plotting whole neighborhoods for those who want — without the bother of ownership — single-family residences with some apartment-complex bells and whistles, such as fitness centers and bocce-ball courts. Residents don’t even have to mow their lawns.

The bet behind the build-to-rent boom is that there are enough people who dream of the detached-house life but can’t afford to buy into it. With tight mortgage standards and rising prices, and millennials putting off marriage and loaded up with student debt, that might not be a long shot.

As it is, the homeownership rate in the U.S. has been hovering for a while near a 51-year low, according to U.S. Census data, though that could be changing: The number of owner-occupied homes rose faster than the number of renting households for the first time since 2006 in the first three months of the year.

For the landlord companies, it typically costs more, of course, to purchase a freshly constructed property than it does to acquire and refurbish an already lived-in model. But they’re getting discounts from builders. They also have to put less into maintenance and repairs, especially early on.

And a new single-family rental can command higher rent, 5 percent to 8 percent more than an older, renovated one, according to Alex Sifakis, president of based JWB Real Estate Capital, which has built about 450 rental homes in Jacksonville, Florida, since 2011.

American Homes 4 Rent, started by Public Storage founder B. Wayne Hughes, expects the new homes it’s having constructed will bring higher yields than the existing properties it buys, executives said on a call with analysts.

What the other REITs are doing is not only generating business for the building industry but getting them out of jams. “Some builders get a little bit of fatigue at the end of trying to close out an existing community, and they have maybe 10, 15, 20 remaining homes,” Colony Starwood Chief Financial Officer Arik Prawer said on a February conference call. By the same token, “some builders love to just get some momentum going in a new community, and like for us to buy a strip of homes upfront just to get it going.”

Colony executives said this month that they have three communities in the works, where every home is a newly built rental, and eight more planned. The company is No. 2 in total returns among the largest single-family landlords this year through Friday.

Even Lennar Corp., the second-largest U.S. homebuilder, is in on the game. It created its own rental-only community in Sparks, Nevada, a Reno suburb, starting with about 80 homes in 2015. Now there are 225, with all but two occupied as of last month, according to the local leasing office.

Posted in Demographics, Economics, National Real Estate, New Development | 145 Comments

Shiller on the origins of housing’s animal spirits

From the New York Times:

How Tales of ‘Flippers’ Led to a Housing Bubble

There is still no consensus on why the last housing boom and bust happened. That is troubling, because that violent housing cycle helped to produce the Great Recession and financial crisis of 2007 to 2009. We need to understand it all if we are going to be able to avoid ordeals like that in the future.

But the explanations for what happened in housing are not, I think, to be found in the conventional data favored by economists but rather in sociologically important narratives — like tales of getting rich through “flipping” houses and shares of initial public offerings — that constitute the shifting mentality of the era.

Consider the data for a moment. It shows us that extreme changes took place but doesn’t tell us why.

Real home prices rose 75 percent from February 1997 to December 2005, according to the S&P/Case-Shiller National Home Price Index, corrected for inflation by the Consumer Price Index. And then, from 2005 to 2012, real prices reversed course, falling to just 12 percent above their 1997 level. In the years since 2012, they have climbed 29 percent, about halfway back to their 2005 peak. This is a roller coaster in national home prices — it has been even scarier in some more volatile cities — yet we have no clarity on why it happened.

I believe the price swings have something to do with the changing mentality of the times, changes caused by narratives that have gone viral and swept across the population. Looking for answers in such popular stories contrasts starkly with the prominent approach of modeling people as though they react logically to economic forces. But a less orthodox approach can be quite useful.

One thing is clear: The prevalent narratives of 1997 to 2005 did not include the concept of a housing bubble, not at first. A computer search using ProQuest or Google Ngrams shows that the phrase “housing bubble” was hardly used until 2005, the end of the boom. What is a bubble? It typically includes the notion that, spurred by the public’s expectation of ever further price increases, demand eventually reaches levels that cannot be sustained, and so the enthusiasm wanes and the bubble collapses. But that thought was just not on many people’s minds then, the evidence suggests.

Instead, during the 1997 to 2005 boom there were multitudes of narratives about smart investors who were bold enough to take a position in the market. To single out one strand, recall the stories of flippers who would buy a house, fix it up, and resell it within months at a huge profit. These stories appear to have been broadly exciting to people who didn’t flip houses themselves but who appear to have begun to think that stretching a little and buying a house with a large mortgage would make them wise investors.

It can take a long time for narratives like this to grip the popular imagination. Flipping was “a thing” in the condominium conversion boom of the 1970s and ’80s. The idea then was this: Big-time converters with deep pockets would buy apartment buildings and convert the rental apartments to owner-occupied condos, selling units to diverse individuals, some of them flippers. For public relations purposes, converters would offer to sell at reduced prices to renters already living in a building, and typically to some outsiders, too.

This generated buzz. When renters and speculators flipped their purchase contracts at a big profit, sometimes using borrowed money for down payments to flip multiple units without actually even closing on the condos, it was thrilling. It seemed that anyone with energy and initiative could get rich doing this.

Posted in Housing Bubble, National Real Estate | 52 Comments

The building boom cometh

From Builder Magazine:


Job gains and improving household confidence are expected to guide existing-home sales to a decade high in 2017, but supply and affordability headwinds and modest economic growth are holding back sales and threatening to keep the nation’s low home-ownership rate subdued, according to speakers at a residential real estate forum here at the 2017 REALTORS® Legislative Meetings & Trade Expo.

Lawrence Yun, chief economist of the National Association of Realtors, presented his 2017 midyear forecast and was joined onstage by Jonathan Spader, senior research associate at the Joint Center for Housing Studies at Harvard University, and Mark Calabria, chief economist and assistant to Vice President Mike Pence. Spader’s presentation addressed past and projected movements in the home-ownership rate, and Calabria dove into why reversing weak productivity and the low labor force participation rate are necessary to boost the economy.

The first quarter was the best quarterly existing sales pace in exactly a decade (5.62 million), and Yun expects activity to stay on track and finish around 5.64 million – the best since 2006 (6.47 million) and 3.5% above 2016. With several metro areas seeing hefty price growth, the national median existing-home price is expected to rise around 5% this year.

Although sales are currently running at a decade high, Yun believes the healthy labor market should be generating even more activity. However, listings in the lower- and mid-market price range are scant and selling fast, and home buyers are discovering they can afford less of what’s on the market based on their income.

“We have been under the 50-year average of single-family housing starts for 10 years now,” said Yun. “Limited lots, labor shortages, tight construction lending and higher lumber costs are impeding the building industry’s ability to produce more single-family homes. There’s little doubt first-time buyer participation would improve and the home-ownership rate would rise if there was simply more inventory.”

Housing construction has been uneven so far this year, but Yun does anticipate starts to jump 8.4 percent to 1.27 million. However, this is still under the 1.5 million new homes needed to make up for the insufficient building in recent years. New single-family home sales are likely to total 620,000 this year, up 8.4% from 2016.

Posted in National Real Estate, New Development | 77 Comments

Buy? Buy what?

From CNBC:

Real estate CEO: Record-low housing inventory is ‘freaking us out’

The number of homes for sale in America has been falling steadily for the past year, but the situation is apparently getting much worse as spring demand heats up.

“The inventory is reaching historic lows. It’s never declined faster than it did last month. It’s freaking us out — it’s affecting our business; it’s limiting our sales,” said Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm. “We’re going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch.”

Kelman started Redfin more as a technology company and touts his ability to track closely the more than 80 metropolitan markets it covers. He blames the lack of inventory on a new dynamic in housing.

“It’s a new landlord nation where everybody is renting out their basement. When somebody moves up they don’t sell their old place, they rent it out to somebody else, and it’s because they want to keep that 30-year mortgage for 30 years, and it’s because they can easily find somebody on Airbnb who will take the place,” Kelman said.

Homes in April sold the fastest since Redfin began tracking the market in 2010. The typical home went under contract in just 40 days, 10 days faster than April 2016. As a result, 1 in 4 homes sold above their list price, which is the highest percentage Redfin has recorded.

Home prices continue to move higher as well, but, “It’s not a bubble,” said Kelman emphatically, who cites tight credit as keeping the bubble at bay.

Posted in Economics, National Real Estate, Unrest | 89 Comments

Foreclosure crisis completely behind us now?

From HousingWire:

Homeowners keep getting better at paying their mortgage

Consumers are steadily getting better at paying their mortgage with fewer and fewer loans moving into foreclosure, according to the Mortgage Bankers Association’s latest National Delinquency Survey.

The report found that the delinquency rate for mortgage loans on one- to four-unit residential properties decreased to a seasonally adjusted rate of 4.71% of all loans outstanding at the end of the first quarter of 2017. The delinquency rate was down nine basis points from the previous quarter, and was six basis points lower than one year ago.

Marina Walsh, MBA’s vice president of industry analysis, explained, “Mortgage delinquencies decreased overall in the first quarter of 2017, driven by a drop in both the FHA and VA delinquency rates from the previous quarter as the conventional delinquency rate held constant.”

On top of this, Walsh added that employment growth started 2017 on strong footing, with the economy adding 216,000 jobs in January and 232,000 jobs in February.

“Average hourly wage growth increased 2.8% over the year, and has maintained a generally increasing trend since late 2015. These fundamentals have helped to support the performance of all loan types – whether FHA, VA or conventional loans,” she stated.

The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, fell to 2.76%, a decrease of 37 basis points from last quarter, and a decrease of 53 basis points from last year.

Walsh concluded, “In addition, nearly all states had a decrease in the percentage of loans in foreclosure in the first quarter. The overall percentage of loans in the process of foreclosure was 1.39%, its lowest level since the first quarter of 2007. While judicial states still had more than three times the percent of loans in foreclosure as non-judicial states, that measure declined to the lowest level since the fourth quarter of 2007.”

Posted in Economics, Foreclosures, Housing Recovery | 87 Comments

America loves houses again

From HousingWire:

Realtors: Homebuyers flooded housing market in first quarter

The first quarter of 2017 saw the strongest quarterly home sales pace in a decade, according to the latest quarterly report from the National Association of Realtors.

This increase in home sales put downward pressure on housing inventory levels and caused home prices growth to accelerate its rate of increase in the first quarter, the report states. In fact, metro home prices now accelerated for three consecutive quarters.

The national median home price increased to $232,100, up 6.9% from the first quarter of 2016. This represents the fastest rate of growth since the second quarter of 2015.

“Prospective buyers poured into the market to start the year, and while their increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter,” NAR Chief Economist Lawrence Yun said. “Those able to successfully buy most likely had to outbid others, especially for those in the starter-home market, which in turn quickened price growth to the fastest quarterly pace in almost two years.”

Single family home prices increased in 85% of markets as 152 of 178 metropolitan statistical areas showed sales prices gains in the first quarter, the report states. However, in 14 MSAs, home prices decreased year-over-year.

“Several metro areas with the healthiest job gains in recent years continue to see a large upswing in buyer demand but lack the commensurate ramp up in new home construction,” Yun said. “This is why many of these areas, in particular several parts of the South and West, are seeing unhealthy price appreciation that far exceeds incomes.”

Total existing home sales, including single-family homes and condos, increased 1.4% in the first quarter to a seasonally adjusted rate of 5.62 million, the highest rate since the first quarter of 2007. This is up from 5.55 million in the fourth quarter of 2016 and from 5.36 million in the first quarter of 2016.

Housing inventory, however, decreased 6.6% from 1.96 million homes for sale in the first quarter last year to 1.83 million this year. This average supply rested at 3.7 months in the first quarter, down from 4.2 months last year.

Posted in Demographics, Economics, Employment, Housing Recovery, National Real Estate | 98 Comments

Armageddon for NJ

From the APP:

NJ suburbs: Endangered because of millennials?

New Jersey’s suburbs, with their sprawling single-family homes and regional malls built to attract baby boomers, need to be re-engineered for a new generation that wants to ditch its cars and walk, experts say.

Despite reams of demographic data, real estate developers and mayors say the turnaround hasn’t been easy. Not-in-my-backyard residents aren’t shy about voicing concerns about noise and traffic new development can bring.

“The state of New Jersey has to recognize they’re facing a land-use apocalypse,” said Carl Goldberg, a real estate consultant and former chairman of the New Jersey Sports and Exposition Authority.

Goldberg was one of several experts who spoke recently at Monmouth University’s Kisalk Real Estate Institute’s forum titled: “The Future of New Jersey’s Suburbs.”

The event came as builders try to make New Jersey hip and cool enough to attract the giant millennial generation that has made it clear: A suburban life with a large home and long commute to an office park isn’t as idyllic as it once sounded.

“Many of our 20th century assumptions about growth and development have been made obsolete,” Rutgers University economist James W. Hughes said.

The result: From 1950 to 2004, New Jersey added 29 jobs for every one job added in New York City. From 2004 to 2015, New York City added 29 jobs for every one job in New Jersey, Hughes said.

Millennials “look for where they want to live and then think about a job,” said Geoff Anderson, president and chief executive officer of Smart Growth America, a Washington, D.C., research group. “Who does that?”

Posted in Demographics, Economics, New Jersey Real Estate | 102 Comments

Big price jumps on Long Island – Sustainable?

From Newsday:

LI home prices jump in April as inventory plummets: MLS

The number of homes listed for sale on Long Island plummeted last month, driving up prices as buyers competed for scarce listings, the Multiple Listing Service of Long Island reported Thursday.

The median home price in Nassau County was $475,000 in April, up 8 percent from a year earlier. In Suffolk County the median price rose 9 percent, year over year, to $340,000.

The number of closed sales fell, year over year, by 9 percent in Nassau and increased by 0.6 percent in Suffolk.

Buyers are getting into bidding wars over the most desirable homes, and some repeatedly lose out because they refuse to raise their price enough, said Andy Yakubovsky, manager of Century 21 American Homes in Oceanside. “Usually by the third time, they say, ‘I see a pattern here, I need to go full or over asking price,’” he said.

But with inventory so tight, in some cases sellers accept a bid and start looking for their next home — only to realize there’s nothing acceptable in their price range, Yakubovsky said. Some of those contracted sales fall through, contributing to the decline in closed transactions, he said.

Homeowners, he said, “are basically saying, ‘Never mind, I’m staying,’ ” he said.

Posted in Economics, National Real Estate, NYC | 117 Comments

Fake it until you make it, or lose it again

Or, you just can’t fix stupid. From the NY Post:

Repeat foreclosures in the city have reached an all-time high

New York homeowners are in default mode — again.

The city leads the nation in repeat foreclosure filings

And the winner in all this is the residential mortgage servicing industry, which collects monthly payments and cashes in on fees for every homeowner’s misfortune.

The number of repeat foreclosure filings in New York City far outstrips that of other major cities like Los Angeles, while New York state is No. 1 for repeat foreclosures, outpacing every other state and the US as a whole.

In a report prepared exclusively for The Post, Attom Data Solutions found that in New York City last year, roughly 4,900 — or more than half of all new foreclosures filed — were repeats, up from just 5 percent in 2008.

Statewide, 73 percent of the 49,200 new foreclosure cases — or roughly 35,916 foreclosures — over the past 12 months were repeats, up from 20 percent in 2007, according to Black Knight, which collects data reported by servicers.

Refilings, which occur when borrowers land in foreclosure more than once for the same property, can happen for a host of reasons, from a failed loan modification to a foreclosure being dismissed when the servicer can’t prove it owns the loan and later refiles the case.

Posted in Foreclosures, NYC | 183 Comments

Will Trump help NJ home prices?

From the Star Ledger:

The Trump Effect: What will the president mean for Bedminster real estate?

Residents of Bedminster are used to getting a blank look whenever they tell people the name of their hometown, followed by a quizzical, “Where?”

They usually answer the question by explaining it’s near Basking Ridge, or Bernardsville, or the Bridgewater mall.

With a very special neighbor expected to make frequent weekend visits this summer, however, that may change.

Less certain, though, is whether the local real estate market will experience a Trump Effect.

As Donald Trump quietly concluded his first getaway weekend in New Jersey since taking office, will his presence bring a certain cachet to the region, or be a turn-off to customers who worry about the commotion it might bring?

“We’re used to him, you know,” said Debra Groendyk, a real estate agent manning an open house of a property with 38 acres smack in the middle of horse country.

“We all know the different helicopters by now: ‘Oh, there’s the Trump helicopter. Oh, there’s the Forbes helicopter,'” she said.

While feelings about Trump still run high on both sides, so far they don’t seem to be rubbing off on town itself, several agents said.

“I’ve not had a single customer say, ‘Oh, Trump lives there! I don’t want to live there!,” said Groendyk. Nor has she had any customers express a preference for Bedminster-based solely on Trump’s use of his golf club there as a weekend retreat.

Any commotion was at a minimum this weekend. While there were planned protests on Saturday, just one person showed up briefly on Sunday. There were police cars parked at the front and side entrances of the golf club, but no road closures.

Instead, the traffic jams and parking headaches were a few miles away, at the fabulously popular rummage sale run by the Somerset County Visiting Nurses Association.

For Angela Olsen, a Scotch Plains residents exploring homes for sale in the Somerset Hills neck of the woods, the notion that the president could have any possible impact on that hunt gave her pause. She had made the association between the president’s visit and the town she was exploring just the day before, she said.

“Hopefully it won’t drive up prices for people who just want to live here for other reasons,” she said.

One change everyone agrees is likely: they’ll no longer have to give a long geography lesson whenever they mention Bedminster.

“He’s putting it on the map,” said Melton, “and maybe that’s good.”

Posted in Housing Recovery, New Jersey Real Estate | 69 Comments

Just Kidding

From CNBC:

Home prices will not fully recover until 2025, and a new report explains why

Check out any one of the many national home price reports, and headlines scream of new peaks and growing gains each month. Home prices are rising faster than inflation, faster than incomes and faster than some potential buyers can bear. Those reports are heavily weighted toward large metropolitan housing markets.

In fact, most of the U.S. housing market has not recovered from the epic crash of the last decade.

Only about one-third of homes have surpassed their pre-recession peak value, according to a new report from Trulia, a real estate listing and analytics company. Price growth in most markets is so slow that it will take about eight years for the national housing market to fully recover — that is, for all home values either reaching or surpassing their previous peaks.

To say that the housing recovery has been uneven is an understatement. Some markets that have seen huge employment and population growth in the last decade, such as Denver, Seattle and San Francisco, lead the news with bubble-worthy headlines.

Not only have home prices there surpassed their recent peaks, they continue to rise at double-digit paces. Nearly all the homes in Denver and San Francisco (98 percent) have exceeded their pre-recession peak, according to Trulia. Other less obvious markets, like Oklahoma City and Nashville, Tennessee, have also seen the prices of most homes surpass their peak.

In areas hit hardest by the foreclosure crisis, fewer than 4 percent of homes have recovered to pre-recession price peaks. These include Las Vegas; Tucson, Arizona; Camden, New Jersey; Fort Lauderdale, Florida; and New Haven, Connecticut.

Overall, the housing recovery has been limited to a mix of markets in the West seeing huge economic growth and in parts of the South where the housing crash didn’t hit as hard. Outside of major markets, the recovery is strongest in the heartland and the Pacific Northwest, which are both seeing bigger employment and income growth.

Posted in Housing Recovery, National Real Estate | 146 Comments

What bust?

From HousingWire:

CoreLogic: Home prices continue upward trend in March

Home prices, to no surprise, continued their upward trend in March, increasing both year over year and month over month, according to the Home Price Index from CoreLogic, a global property information, analytics and data-enabled solutions provider.

Home prices nationwide, including distressed sales, increased year over year by 7.1% in March 2017 compared with March 2016.

On a monthly basis, home prices increased by 1.6% in March 2017 compared with February 2017.

“A potent mix of strong job gains, household formation, population growth and still-attractive mortgage rates in the face of tight inventories are fueling a continuing surge in home prices across the U.S.,” said Frank Martell, president and CEO of CoreLogic. “Price gains were broad-based with 90 percent of metropolitan areas posting year-over-year gains. Major metropolitan areas were especially hot with CoreLogic data indicating that four of the largest 10 markets are now overvalued

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.9% on a year-over-year basis from March 2017 to March 2018, and on a month-over-month basis home prices are expected to increase by 0.6% from March 2017 to April 2017.

Frank Nothaft, chief economist for CoreLogic, explained what this means for the future of home prices.

“Home prices posted strong gains in March 2017, and the CoreLogic Home Price Index is only 2.8% from its 2006 peak,” said Nothaft. “With a forecasted increase of almost 5% over the next 12 months, the index is expected to reach the previous peak during the second half of this year. Prices in more than half the country have already surpassed their previous peaks, and almost 20% of metropolitan areas are now at their price peaks.”

Posted in Housing Recovery, National Real Estate | 39 Comments