Up or Down or Up or Down or Up or Down

From Marketwatch:

Housing demand may keep market afloat, even if rates rise

How will the housing market handle rising rates?

Ever since the November election, when the unexpected Trump victory sent bond yields flying and mortgage rates following closely behind, analysts have been preoccupied with that question. From overly cautious lending standards to extremely tight inventory, the housing market has plenty of challenges, and any additional constraint won’t help.

But new data from Black Knight Financial Services suggests that demand might be resilient enough to withstand higher borrowing costs in 2017.

The last time mortgage rates spiked was in mid-2013, when then-Fed Chairman Ben Bernanke warned markets that the central bank would shortly begin to unwind its extraordinary stimulus programs. Rates jumped a full percentage point between April and September, and mortgage applications plunged.

So did home price appreciation.

In an illiquid market like housing, it takes time for prices to respond – in this case, until August, when they were rising at an annual rate of 9%. Then appreciation fell every month for over a year until hitting bottom.

When price gains finally starting rising, in early 2015, they kept going. Lower rates helped boost demand, and that was reflected in stronger pricing, said Ben Graboske, Black Knight’s vice president of data and analytics.

It’s worth noting that there’s another factor driving prices up: extremely tight supply. Inventory of previously-owned homes fell to a 17-year low last month, and choices of both existing and new homes have been so scarce that analysts have assumed it will quench demand at some point.

But prices even spiked a bit in the last months of 2016 – even after rates surged post-election. Black Knight doesn’t have December home price data yet, and Graboske cautioned that it’s hard to predict the path of mortgage rates from here on, with so much uncertainty around policy and markets.

If rates go up enough, price appreciation could slow – and possibly even reverse, he told MarketWatch.

But there’s another big question mark hanging over the housing market: the path of regulatory reform. If there are big changes to the 2010 Dodd-Frank law, Graboske said, it could open up lending to far more Americans.

This entry was posted in Demographics, Economics, National Real Estate, Politics, Risky Lending. Bookmark the permalink.

64 Responses to Up or Down or Up or Down or Up or Down

  1. Anon E. Moose, proud owner of Silk City Bourbon ver 2.36/114 says:

    Good Morning, New Jersey. Good Morning, Grim. Good Morning, Mike.

  2. yome says:

    8:46
    This can not be correct. Middlesex;assuming median price per sq ft of land at $197 is $1,970,000.00 for a 10,000 sq ft land

  3. Grim says:

    That analysis is confusing.

    They are talking about land square footage but those prices seem more like total cost per square foot of finished construction (plus the underlying land cost).

    So, a 2500 square foot home on a representative parcel of land in Middlesex is $492,500, not that a 100×100 buildable lot costs $2 million.

  4. The Original NJ ExPat says:

    The best “buys” are in Abbot Districts. shocker

  5. The Great Pumpkin says:

    Supply and demand. The best deals will be in places no one wants to live.

    If you have the money, it’s a good bet to place some money on land in a place like Camden or AC. It’s dirt cheap right now, practically giving it away. If things turn around, you win the lottery. AC is beach front, camden is right next to philly, not bad bets to take right now. Yes, it might never recover, but you won’t lose much. The land can’t go any lower, so you will just lose on property taxes. Seems like a good bet to me. AC is by far the best deal on the jersey coast, only a matter of time before they join the rest of the coast in prices.

    The Original NJ ExPat says:
    February 7, 2017 at 10:00 am
    The best “buys” are in Abbot Districts. shocker

  6. D-FENS says:

    Uh…yeah I mean if you plan on being alive for the next century or two.

  7. D-FENS says:

    As much as I wish that were true Michael, I think that’s terrible investment advice.

  8. Fast Eddie says:

    Pumpkin Seed,

    I heard no-cal pizza and wall paper that glows in the dark are the next up and coming investments!

  9. The Great Pumpkin says:

    It’s a gamble, not investment, but it could pay off big time. Look on the coast of jersey, how many cheap opportunities do you have to buy? What happens if they are able to gentrify AC? That land becomes a winning lottery ticket.

  10. Steamturd, Hate Trumps Cankles says:

    Once they liquify real estate and put it in an aerosol can, I’ll be all in!

  11. The Original NJ ExPat says:

    So does your extensive data analysis tell you now is time rotate out of pancake in a can and rotate into sh1tholes?

    If you have the money, it’s a good bet to place some money on land in a place like Camden or AC. It’s dirt cheap right now, practically giving it away.

  12. The Original NJ ExPat says:

    Mayor Rahm Emanuel has warned Democrats they need to “take a chill pill” and realize that they are not going to take back national power anytime soon.

    “It ain’t gonna happen in 2018,” Emanuel said Monday at Stanford’s Graduate School of Business in California. “Take a chill pill, man. You gotta be in this for the long haul.”

    http://www.chicagotribune.com/news/chicagoinc/ct-rahm-emanuel-national-democrats-advice-0207-chicago-inc-20170206-story.html

  13. The Great Pumpkin says:

    Things change. Best opportunities come when there is blood in the streets. Right now, there is blood in the streets of AC and Camden. Camden is actually starting to see a lot of investment. Gentrification happens, it’s not easy to predict, but if you take a gamble, it could be a life changer. You are buying at the absolute bottom, could be the opportunity of a lifetime. If you lose, you lose, it’s part of the game. The people that actually make it to the top are the biggest risk takers in life. They have lost many times, but when they do win, it carries them to the top.

    Making 10% a year is a nice safe way of maintaining your money if you already made your money. Settling for 5-10% a year is a sure way to never enjoy your money. By the time it compounds, you will be of old age. If you really want to make it, you have to gamble on situations like this.

    Ask all those people who have recently hit the lottery in Hoboken and Jersey City. It happens, and you would be fool to think the same thing can’t happen to ac or camden.

  14. The Original NJ ExPat says:

    Congressional Democrats remind me of Pumps. They just can’g get any more wrong or less successful at everything they say or do.

  15. Steamturd, Hate Trumps Cankles says:

    That Devos appointment was truly horrible. I support voucher system, but not if it becomes a discount on private school for the wealthy at the expense of those who can’t afford it. With that said, expect private school tuition to shoot up.

  16. Comrade Nom Deplorable, The G.O.A.T. says:

    ” Steamturd, Hate Trumps Cankles says:
    February 7, 2017 at 11:04 am

    Once they liquify real estate and put it in an aerosol can, I’ll be all in!”

    LMAO. Laughed so hard, the paralegal in the next office asked me if I was all right.

  17. Comrade Nom Deplorable, The G.O.A.T. says:

    Steamturd,

    DeVos is proof that you don’t put your zealot henchperson in charge of the agency, you put them and others a level or two down where they can actually be effective, and you appoint someone to the top spot that will let them work without attention or distraction.

    Uh, now that I think about this . . . .

  18. Steamturd, Hate Trumps Cankles says:

    We’ll see where this goes. We might go from No Child Left Behind to No Christian Child Left Behind.

  19. Comrade Nom Deplorable, The G.O.A.T. says:

    With every move this administration makes, whether theatrical or substantive, I can’t help but wonder if they are truly subtle geniuses that are pushing the dems into a box like an All-Pro offensive line pushes pass rushers, or are they just making it up as they go along?

    So I don’t know whether to be gleeful or frightened.

  20. Comrade Nom Deplorable, The G.O.A.T. says:

    I just can’t shake this feeling about the whole travel ban imbroglio that Trump doesn’t care so much about it that he will continue to fight if the courts shut it down.

    (full disclosure: I can see the legal points on either side but don’t know this area well enough to comment on the law or EO).

    I think it is possible that if he relents, he will make the argument that he tried to keep the country safe but the left and their minions on the bench held him back. “Hey, I tried to keep this promise but the dems won’t allow it. They are putting you at risk.”

    It really is a no-lose proposition with the base. If nothing happens, Trump gets the credit for keeping America safe despite the dems trying to weaken our defenses. And if anything does happen, he will absolutely hammer the democrats.

    Ironically, if anything happens, a lot of fingers will get pointed and the one that the dems will point is that Trump cynically allowed terrorism to happen by making a political calculus to fight only a symbolic fight rather than effectively keep out terrorists. I doubt that dog will hunt but that will be one argument.

  21. HouseWhineWine says:

    @1:14, The chances of one of the immigrants who is allowed into this country being a terrorist, as a result of the possible repeal of this ban is slim to none. These new immigrants have supposedly been investigated for two years, or so they are reporting. I am more worried about home-grown terrorists.

  22. The Original NJ ExPat says:

    I would concur that the vote was horrible. I would further posit that it was because the Dems are now in the business of horrible because they don’t have any other viable business options. Dragging feets and bloviating tweets/i> will be their battle cry for the next two years.

    That Devos appointment was truly horrible. I support voucher system, but not if it becomes a discount on private school for the wealthy at the expense of those who can’t afford it. With that said, expect private school tuition to shoot up.

  23. The Original NJ ExPat says:

    Macabre thought experiment. A terrorist departing from each of the seven countries boards a plane with a bomb today and detonates it. The Dems will say it is Trump’s fault and vice-versa, right? It wouldn’t matter that it was possible and preventable, only that Trump made them “mad”, right?

    @1:14, The chances of one of the immigrants who is allowed into this country being a terrorist, as a result of the possible repeal of this ban is slim to none. These new immigrants have supposedly been investigated for two years, or so they are reporting. I am more worried about home-grown terrorists.

  24. The Great Pumpkin says:

    Blah blah blah….want a cookie?

    The Original NJ ExPat says:
    February 7, 2017 at 12:37 pm
    Congressional Democrats remind me of Pumps. They just can’g get any more wrong or less successful at everything they say or do.

  25. The Original NJ ExPat says:

    BTW, my understanding is that who was vetted and who gets on the plane are not necessarily the same person(s), or do I have that wrong? The US doesn’t have any personnel in those countries who decide who boards, right? The US consulate might issue the visas, but who supervises the boarding of the planes?

  26. The Great Pumpkin says:

    So let me get this right. She was put through a screening process in which she failed to answer basic questions about education, and they still put her in charge of the education in this country. WOW! You really can’t make this sh!t up! What is going on here?

    Steamturd, Hate Trumps Cankles says:
    February 7, 2017 at 12:50 pm
    That Devos appointment was truly horrible. I support voucher system, but not if it becomes a discount on private school for the wealthy at the expense of those who can’t afford it. With that said, expect private school tuition to shoot up.

  27. 3b says:

    Pumps so Camden and AC come back and maybe Newark . Along with Manhattan and Brooklyn of course . And in addition Hoboken and JC and West New York. Some are even saying the Kingsbrudge Rd area in the Bronx is gentrifying. So if this is the case then who is going to move to the suburbs??

  28. yome says:

    When a relative sponsor you to the US to become a permanent residence , it depends who is doing it. A US citizen parent sponsoring a under age child can take 6 months to a year. A married child, a sibling sponsored can take to 10 years. Depends on the quota. Embassy schedule you for interview after submitting requirements. A police clearance, birth certificate, a certificate coming from sponsor that they will be responsible for your stay in the US. You are required to take medical exam and bring the xray on your entry. Once you are set for interview as a green card holder, it is almost guaranteed you will get it. My problem is with refugees. They do not have paper works. The US Government is their sponsor. The tax payer is responsible putting up the bill. The vetting is a series of questions about their belief

  29. ProudLiberal says:

    @The Original NJ ExPat,
    [quote]Macabre thought experiment. A terrorist departing from each of the seven countries boards a plane with a bomb today and detonates it. [/quote]

    You have no idea how the immigration process works, do you?
    People who have no clue should STFU!

    It’s not a thought experiment – it’s like scratching your an us for no reason.

  30. yome says:

    Immigrant is a broad term. It coul be a legal immigrant or an illegal immigrant staying in the US. An illegal immigrant can be legalized by marrying a US Citizen or sponsored by next of kin that is a US Citizen. A illegal immigrant to be legalized is usually ask to exit the US and do the interview from their country of origin. Some have good lawyers that will not require them to exit and do the interview in Newark

  31. jcer says:

    Proud liberal here is the issue, we are dealing with countries where the social order has broken down, it becomes very difficult to verify a person is who they say they are. SO the “person” we have vetted might not actually be that person and might be a known terrorist, don’t tell me you have faith in the US immigration to keep things straight.

    As for DeVos, Trumps picks are a clear ploy to destroy these government entities, which I somewhat support, the federal government is far too involved in local level issues, we need fewer turf wars and more accountable government, given the politicking and horsetrading that happens in Washington, I actually would rather have control in the hands of the local crooks, at least the electorate in NJ was responsible for their election. Federal department of education should set a minimum standard curriculum and publish a series of tests used to determine whether or not a child can be promoted to the next grade and nothing more, leave education to the local level, people will get the education they are willing to fund.

  32. The Great Pumpkin says:

    I don’t know if they will come back, but it’s a pretty good bet, imo. Telling me that Camden can’t feed off philly or do something with the port access it has? Telling me that AC can’t take advantage of its location? There is no more beach being created, they have to be able to take advantage of their location one day.

    People are constantly coming from other states and countries. If you haven’t checked, most of the population growth in this country has been on the coasts. Has nj’s population ever gone down?

    3b says:
    February 7, 2017 at 1:46 pm
    Pumps so Camden and AC come back and maybe Newark . Along with Manhattan and Brooklyn of course . And in addition Hoboken and JC and West New York. Some are even saying the Kingsbrudge Rd area in the Bronx is gentrifying. So if this is the case then who is going to move to the suburbs??

  33. 3b says:

    Pumps: so everywhere is coming back?

  34. The Original NJ ExPat says:

    ProudLiberal – I’m just asking who stands between the people with the papers and the plane they board. If it takes 14 years to issue the visas who cares if the wrong person carrying those papers gets on the plane with a wink and a nod? Does Yemen Alua Akbar Homeland Security check the credentials at the airport?

  35. Comrade Nom Deplorable, The G.O.A.T. says:

    Housewhinewine

    The chances are slim to none regardless of source. Trying to ferret out the bad hombres is literally a needle in a haystack search.

    The problem is that they only have to be right once to succeed. And we only have to be wrong once to fail.

    My point is that if failure is inevitable, the administration should at least deflect the blame. Interestingly, NPR is already trying to head this off via a preemptive strike–they ran an article that says even if Trump loses these cases, it will still be Trump’s fault if we are attacked because he has to play the hand he’s dealt, not the hand he wants.

  36. The Original NJ ExPat says:

    Check out Maxine Water’s face when Pelosi’s Alzheimers kicks in.

    https://www.youtube.com/watch?v=x2czvd61mR0

  37. Comrade Nom Deplorable, The G.O.A.T. says:

    Pumpkin,

    “If you haven’t checked, most of the population growth in this country has been on the coasts.”

    The Democratic Archipelago?

    http://the-american-catholic.com/2016/12/18/the-clinton-archipelago-v-trumpland/

  38. Bystander says:

    Dumb twit, is Philly making a comeback first so that Camden can make its comeback? Good to know there is no correlation to jobs available in area and real estate. I mean AC has the beach afteral. All the rich NYC folks and foreigners should be lining up to drive 3 hours in snarling traffic for a place they can live 4 months out of year and be continually fleeced by the state. Everything is making a comeback except your dead brain. Pull plug already.

  39. STEAMturd, Ch@nelling JJ says:

    They should let the hot refugees in.

  40. Juice Box says:

    re 1:28 pm: “SLIM TO NONE”

    Nothing to worry about at all.

    U.S. Citizenship and Immigration Services USCIS conducts the refugee interview. The Syrian refugee officers at USCIS must undergo a one week training course on Syria-specific issues.

    And those pesky fake passports? No worries AKA, ‘also known as.’” is allowed by USCIS…..

  41. The Great Pumpkin says:

    AC would cater to philly. What 3 hour drive? Ever been to Avalon, Ocean city, stone harbor, or LBI? Prob not, ton of money in the beaches surrounding AC. Only matter of time before they push out the minorities and take over the land.

    Do you know how much money is being invested in Camden? I guess they are just throwing their money away, right?

    Do you think anyone gave New Brunswick a chance 20 years ago? Well look what’s happening in that area. I can go on and on. AC and Camden can indeed become lottery tickets in the future for people who buy now.

    Bystander says:
    February 7, 2017 at 3:18 pm
    Dumb twit, is Philly making a comeback first so that Camden can make its comeback? Good to know there is no correlation to jobs available in area and real estate. I mean AC has the beach afteral. All the rich NYC folks and foreigners should be lining up to drive 3 hours in snarling traffic for a place they can live 4 months out of year and be continually fleeced by the state. Everything is making a comeback except your dead brain. Pull plug already.

  42. STEAMturd, Ch@nelling JJ says:

    Lottery tickets? Lose for Life?

  43. The Great Pumpkin says:

    Open up your eyes because it sure seems like it. Think about it, if this NYC metro area becomes undesirable like you state, please name me one other location that can handle this amount of people if they decide to leave? There is a major reason the largest population areas are all located by massive bodies of water. Since I’m the idiot, you tell me why. Why don’t they go to middle America? Why, smart guy?

    3b says:
    February 7, 2017 at 2:42 pm
    Pumps: so everywhere is coming back?

  44. Juice Box says:

    re: #3:38 PM – “please name me one other location that can handle this amount of people if they decide to leave?”

    Texas added about 7 million people since the year 2000. If we all moved out it would be just Pumpkin and his renters.

  45. 3b says:

    Pumps : I did not say you were dumb. Well not today anyhow. You said Camden and AC may come back. I simply noted that with all these urban areas coming back including possibly the Bronx well than what happens to your thesis that the people in the urban areas will eventually move to the suburbs including your town. So I guess there will be an unending supply of wealthy people in both the urban and suburban areas and I guess the poor will just all disappear.

  46. SteamTurd, reminiscing about Cankles says:

    Simcity is not real!

  47. grim says:

    AC will never redefine itself without massive eminent domain and bulldozers, a process that needs to be embraced and backed by the judicial system – such that holdout landowners can’t reap massive profits simply by attempting to stalemate.

    This was, historically, how eminent domain and large scale projects happened. The judiciary did not side with every whining owner. Fair was fair, and you were expected to move on.

    Today? That would never happen, NJ’s judiciary would side with every bleeding heart piano tuner who weaves a heartwrenching story about his second home. Or, property owners would expect a payout equal to the expected future value of the property, which would be impossible.

    So which side of the AC-Buy In do you want to be on? The side that gets property taken away at fair market value so that AC can rebuild and redefine itself, or the side that pays for the corruption and bullshit bureaucracy of the recovery that never comes.

    There may be winners in AC, but I don’t believe it will be existing property owners, that just doesn’t make sense.

    Organic gentrification of AC? Impossible given the current situation. There is nothing that would even remotely lend itself to this.

    If you want it to be a world class beach resort and destination, you will need to destroy nearly everything to make it one.

    Is it possible? Absolutely. Does NJ have the will to do what it takes? Not even close.

  48. Juice Box says:

    Tie Breaker in the Senate, VP Pence cast his first…..

    Yes it has happened before on Nominations and Budgets etc.

    https://fivethirtyeight.com/features/pence-has-already-done-something-biden-never-did-break-a-senate-tie/

  49. grim says:

    AC is simply not in a position to see the same kind of gentrification that secondary and tertiary areas surrounding growing job centers see. Brooklyn for example, being one of the most noteworthy recent examples. The entire AC region is a complete jobs vacuum.

    You need to look at new/inbound resident driven gentrification in a very different way from redevelopment/commercial driven gentrification.

    What is going to attract the kind of early trendsetters into an area like AC?

    Asbury had he gay community, and the artsy community – without which it would still be the slum by the sea.

    What does AC have? Not jobs, not any kind of trendsetting artsy vibe that attracts money and more residents.

    By that token, I think Camden is better situated than AC. The problem there being that there are a significant number of secondary neighborhoods in Philly that would gentrify long before Camden would.

    The only option would be commercial driven redevelopment. And the kind of activities necessary to support this would be looked at as raping the local residents of their god-given right.

  50. grim says:

    When Charlie Birnbaum is looked at as the problem and not the victim, AC is prime for redevelopment.

  51. 3b says:

    Grim and even asbury park I am told from s gay couple we know who have a second home there is struggling to make the final leap because according to them at least it is too far from NYC.

  52. Ben says:

    Do you think anyone gave New Brunswick a chance 20 years ago? Well look what’s happening in that area. I can go on and on. AC and Camden can indeed become lottery tickets in the future for people who buy now.

    New Brunswick accomplished what they did through massive amounts of eminent domain. I still remember the day they leveled those projects. I was only 20 and had no idea that was in the works. Those were the worst buildings in town and if you turned down that street, you always risked not making it out. There were some really bad bad people there. They all got displaced to other towns when those buildings went down. Luxury apartments went up and so did low income housing separated by a massive overpass to act like a Berlin wall. If you look out the window of your luxury apartment there, you may still get a glimpse of gunfire battle every so often.

    Overall, New Brunswick only improved a small section of town. You go two blocks off, and it’s still a very bad place.

  53. Blue Ribbon Teacher says:

    Philly is miles and miles of abandoned factories and warehouses. I don’t see it making a comeback any time soon. There are better places to build.

  54. The Great Pumpkin says:

    Absolutely right.

    Texas is a coastal state, though. My point in making the statement was in reference to coastal areas being able to support large condensed populations due to shipping. That’s why middle America is dead and can’t support large populations. Way too isolated. Any coincidence that the largest cities are located in states with access to the ocean. Over half of the American population lives within 50 miles of the coast. Most of the world lives near the coast.

    Juice Box says:
    February 7, 2017 at 3:57 pm
    re: #3:38 PM – “please name me one other location that can handle this amount of people if they decide to leave?”

    Texas added about 7 million people since the year 2000. If we all moved out it would be just Pumpkin and his renters.

  55. The Great Pumpkin says:

    And Chicago has access to the ocean.

  56. The Great Pumpkin says:

    Grim, good analysis.

    I guess it’s a bad idea. Didn’t realize they were siding with people like “Charlie Birnbaum.” No chance, unless tide changes with people like him.

  57. Essex says:

    The Oracle if Boston thinks: Investors who’ve been swept up in the Trump rally, and its promise of “stimulative tax cuts,” have been “ignoring the risks from America-first protectionism and the erection of new trade barriers,“ wrote Klarman. Worse, he says, Trump cheerleaders on Wall Street are ignoring the real problems holding down wages while offering all the wrong solutions. “President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces. While they might be popular, the reason the U.S. long ago abandoned protectionist trade policies is because they not only don’t work, they actually leave society worse off.”

  58. SteamTurd, reminiscing about Cankles says:

    As someone who spent the last year in Philly, the gentrification there is running at pace that is unparalleled by anyplace else I’ve ever witnessed. Essentially, everything from Fishtown due West to West Philly is coming back strong. The areas just from 76 to the airport is and will remain dead for a while. Camden has one area gentrifying and that is the area right around the colleges to the waterfront (aquarium). Go east, north or south and you are in the worst crime area in America. I would expect Philly to gentrify much further north and south before that tiny section in Camden grows at all. I’ve been through bad sections of Watts, Oakland, even TJ and Acapulco. Nothing comes even remotely close to Camden. That city is truly scary. I mean, empty lots, people living in abandoned projects, bodegas and gas stations have bulletproof windows to pay and order and that’s pretty much all there is for block after block after block. I would bet 98% of that cities residents are unemployed and completely on the dole. As someone who drove his roommate home a number of times when in college, this is the Camden I remember. It doesn’t look like it’s changed a bit since then.

    https://www.flickr.com/photos/lesmarcyd/albums/72157627633504428

    https://www.flickr.com/photos/lesmarcyd/albums/72157627633504428

  59. Fabius Maximus says:

    Buying popcorn for this one!
    I assume we will hear the standard “Not my bailiwick” from the JD’s!
    http://www.msn.com/en-us/news/politics/melania-trump-claims-article-hurt-chance-to-make-millions/ar-AAmIaLB

  60. grim says:

    How much money have Obama’s kids earned while in office?

    I recall the older one having an estimated net worth of 17 million.

    Pretty sure it had nothing to do with selling hair bows anonymously through Etsy.

    For the record, I think both situations are disgusting.

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