When to do it?

From MarketWatch:

The single best month to buy a home, according to this analysis of 33 million home sales over 8 years

Timing isn’t everything, but it doesn’t hurt either. According to a recent analysis of more than 33 million single family home and condo sales over the past 8 years conducted by ATTOM Data Solutions, a provider of real estate and property data, the best time to close on a house is in October. That’s because the premium — which measures the amount you pay for the house compared to the estimated value of the house — is just 2.9%, which is the lowest of the year. That’s followed closely by November, December and January. (In each month, buyers paid some premium for homes, on average, which ATTOM explains is due to the fact that home prices rose quickly during a lot of the periods analyzed.) As for what day to buy? “The day after Christmas usually offers the biggest price discount as sellers try to woo a smaller pool of homebuyers during the winter months,” says Denny Ceizyk, senior mortgage writer for LendingTree.

Posted in General | 17 Comments

Green Shoots

From Insider:

China has at least 65 million empty homes — enough to house the population of France. It offers a glimpse into the country’s massive housing-market problem.

If you drive an hour or two outside Shanghai or Beijing, you’ll find something odd. The cities are still tall, and they’re still modern. They’re also, generally, in good condition. But unlike their bustling, Tier 1-city counterparts, they’re basically empty.

These are China’s ghost cities.

Their existence has been well-documented. In one prominent example, CBS’ “60 Minutes” ran a 2013 segment on China’s ghost towns that opened with the correspondent Lesley Stahl on a major road at rush hour with barely a car in sight.

But as China’s real-estate market has risen to the forefront of the global conversation with Evergrande’s $300 billion debt looming large, so, too, have ghost cities become a renewed source of interest. While they’re a testament to China’s reliance on real estate as a driver of economic growth and in its belief in the sector as a safe investment, their exact quantity is hard to define.

Li Gan is a professor of economics at Texas A&M University and the director of the Survey and Research Center for China Household Finance at Chengdu’s Southwestern University of Finance and Economics. He’s also considered one of the top experts on China’s housing market. When I asked him how many ghost towns there were in China, he didn’t have an answer.

“I don’t know if there’s any definition of ‘ghost town,'” he said. “So I don’t know if there’s any number.”

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Up Up and Awayyyyy

From CNN:

Goldman Sachs: Home prices to climb another 16% by the end of 2022

Since the pandemic began, demand among homebuyers has far exceeded the supply of available homes, causing real estate prices to skyrocket

But as high as prices are, they have yet to peak, according to a new report from Goldman Sachs. 

The investment bank projects that home prices — already at record highs — will grow another 16% by the end of 2022. Despite price increases of 20% over the past year, the analysts at Goldman Sachs suggest that homes remain “relatively affordable” thanks to historically low mortgage rates. But continued strong demand among buyers and ongoing low inventory will keep pushing prices even higher, according to the report.

Sure, the inventory picture has improved a little since the spring, with more homes for sale and price growth moderating a bit. But Goldman’s analysts say this supply and demand imbalance is expected to continue through next year.

But it is questionable whether demand will remain as strong going forward, given the high prices. About two-thirds, 66%, of respondents to a University of Michigan survey on homebuyer sentiment said this is not a good time to buy a home, according to the report. That’s the highest it has been since the early 1980’s.

But homeowners today remain “‘reluctant bulls’, who still intend to buy despite thinking it’s a bad time,” Goldman’s analysts wrote.

Posted in General | 169 Comments

Think south on this gloomy fall day

From the Florida Insider:

South Florida’s housing market is freezing out potential buyers who can’t compete with investors

In South Florida, home prices continue to surge. The housing market trend has left several homebuyers either unable to find properties or in an all-out bidding war.

“I’ve been looking for a home for about two years, it has been a very difficult and kind of a strenuous process,” said South Florida resident Alexander Shepard.

Shepard adds despite having thousands saved and a great credit score, his lifelong dream of becoming a homeowner has become virtually impossible.

“A house might be on and off the market within three or four days, sometimes two days. So before I can even get the paperwork signed, I’m told that the house is off the market,” said Shepard.

According to Realtor.com, Miami-Dade County’s total home sales surged 142% from this time last year. On top of homes being sold in record time, realtor Brittney Woods says “many properties are also being sold well above the listing price.”

According to the October 2021 Housing Affordability Index Report by RealtyHop, Miami has officially passed Los Angeles as the second least affordable housing market in the U.S. The median household income in Miami is $39,049, while the median home price is $549,000, according to the report’s findings.

“Miami overtook L.A. as the second most expensive housing market in the nation, even though the price decreased slightly since our last report,” states the report. “A household in Miami should expect to pay $2,653 per month toward homeownership costs, or roughly 81.55% of median incomes.”

Posted in General | 207 Comments

All Time High

From the NYT:

More apartments were sold in Manhattan in the third quarter than at any other time in the last 32 years, in the latest sign that New York City real estate is set for a faster-than-expected recovery, according to new market reports.

There were 4,523 closed sales of co-ops and condos in Manhattan in the third quarter, exceeding the record set in the middle of 2007, when 3,939 sales were recorded, according to Jonathan J. Miller, an appraiser and the author of a new report by the brokerage Douglas Elliman. The quarter ended with more than three times as many sales as in the same period in 2020, when the market was largely locked down because of the coronavirus, and with 76.5 percent more sales than the same time in 2019, before the pandemic.

“What we’re seeing right now is a catch-up,” Mr. Miller said, referring to pent-up demand after a year of near-record inventory for sale. “All the suburbs were booming while Manhattan was seeing sales at half the normal rate last year. Now we’re seeing this massive surge.”

The data comports with others companies’ findings. Sales volume topped $9.5 billion, the most in any recorded quarter, according to the brokerage Corcoran, while Brown Harris Stevens reported the highest quarterly sales numbers in eight years.

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For posterity’s sake

From Axios:

Trillion-dollar platinum coin could be minted at the last minute

A trillion-dollar platinum coin could be minted “within hours of the Treasury Secretary’s decision to do so,” Philip Diehl, former director of the United States Mint, tells Axios.

Why it matters: Congressional solutions to the debt-ceiling problem could take weeks to implement, especially if the reconciliation process is used — and time is running out. In case of emergency, a trillion-dollar coin could be deployed to bridge any gap between the money running out and the debt ceiling being raised.

How it works: The U.S. Mint, which Diehl ran from 1994 to 2000, already produces a one-ounce Platinum Eagle and has no shortage of platinum blanks already in stock.

  • Producing a trillion-dollar Eagle would require only the denomination to be changed. “This could be quickly executed on the existing plaster mold of the Platinum Eagle,” says Diehl. Then an automated process would transfer the new design to a plastic resin mold.


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Weekend Open Discussion

No Pumpkins, not Halloween.

Posted in General | 106 Comments

Up Up and Away

From the FT:

US home price gains hit new record for fourth straight month

The increase in US home prices continued to accelerate in July, setting an annual record for the fourth straight month as strong demand and a dearth of available properties sent values soaring.

Home prices were up 19.7 per cent nationally compared with the same month last year, the biggest gain on record dating back to 1988, according to the S&P Corelogic Case-Shiller index. That surpassed the previous record set in June, when prices rose 18.7 per cent year on year.

“The last several months have been extraordinary, not only in the level of price gains but in the consistency of gains across the country,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.

Property values in 10 major markets grew 19.1 per cent versus a year ago, while the 20-city index jumped 19.9 per cent.

Seventeen of those 20 cities posted higher annual growth rates when compared to June. Home prices in all but one of those markets sit at all-time highs, with Chicago just 0.3 per cent below its peak.

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Welcome to Fall

Or is it THE fall? From the NY Times:

If the pandemic has been good to anybody, it’s been homeowners listing their properties, as pent-up demand for homes has sent prices skyrocketing. But could this sellers’ market finally be on the way out? Data suggests that may be the case.

A new report by Redfin examining more than 350 metropolitan areas nationwide shows that in the four weeks ending Sept. 5, half of homes sold went for over the asking price — down from a July peak of 55 percent. Homes aren’t moving as quickly, either: 47 percent sold during this period went into contract within two weeks, down from the March apex of 56 percent.

Bidding wars are worth keeping your eye on too, according to Redfin. The report shows that multiple bids on a property were less common nationwide in August than they were in the previous month and a year ago. Among Redfin brokers who submitted offers, 59 percent faced competition in August — 2021’s slowest month for bidding wars — down from a peak of 74 percent in April and 60 percent in August 2020.

Where is the trend most visible? When looking at 48 large metros in which Redfin brokers submitted at least 20 offers in both July and August of this year, multiple bids were at their lowest levels in Oklahoma City — 36 percent in August, down from 60 percent in July and a similar 60 percent a year earlier. Sarasota, Fla., and Richmond, Va., followed, as seen in this week’s chart.

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The … Sack?

What the serious f? From NJ Monthly:

Hackensack is Back on the Real-Estate Radar for Renters and Buyers

Forgive Hackensack for feeling overlooked. Torched by the British during the Revolution, the Bergen County seat never flexed the industrial muscle of Paterson, boasted the cultural richness of Newark, or enjoyed the cachet of Montclair. Instead, the city on its namesake river became known as a shopping destination. Its Main Street was the place to buy a dress or a suit. You could also catch a matinee at the Fox or the Oritani.

But the advent of malls—specifically, those in Paramus—spawned a decades-long decline of Hackenack’s urban core. The Franklin Simon and Arnold Constable department stores? Gone. The downtown movie theaters? Gone. The beloved Prozy’s Army-Navy store? A memory. Billy Joel didn’t help by singing, “Who needs a house out in Hackensack? Is that all you get for your money?”—lyrics that dissed a city gone dowdy.

Nowadays, Hackensack is feeling better about itself. A downtown revitalization in recent years has spawned a construction boom hitched to an eyebrow-raising nickname: the Sack.

Enticed by financial incentives from the city, developers are replacing underused or vacant commercial properties, even a parking lot, with luxury rental buildings replete with the amenities young professionals covet: gyms, swimming pools, grilling stations, pet spas, and rooftop decks with Manhattan views. The new buildings—some occupied, others under construction or yet to break ground—comprise more than 3,500 studio, one- and two-bedroom apartments, which could push the city’s population to 50,000 by 2024. (Currently at 43,856, Hackensack is New Jersey’s 20th most populous municipality.)

“For years, downtown Hackensack sat here, and nothing was happening,” says Bryan Hekemian, chairman of the Main Street Business Alliance, the public-private partnership that is central to the city’s redevelopment. “Well, now it’s Hackensack’s turn. Not just turn, but time.”

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August home sales dip

From the WSJ:

Hot U.S. Housing Market Cooled Some in August

The turbocharged housing market slowed in August as near record asking prices are giving buyers pause, easing some of the frenzy that gripped the market only a few months ago.

August existing-home sales posted a 2% decline from July, the biggest monthly decline since April, the National Association of Realtors said Wednesday. Sales last month also slid 1.5% from a year earlier, the first year-over-year decrease since June 2020.

Home sales surged in the second half of last year and first half of 2021 after pandemic-related lockdowns pushed the normally busy spring selling season into the fall and winter. As lockdowns lifted, buyers raced to find more space for their families to work and attend school from home, and wealthy households invested in vacation properties. 

Now, the house-buying frenzy is showing signs of abating. Families have resettled and are sending their children back to school. More workers are starting to return to their offices.

Posted in Economics, National Real Estate | 167 Comments

Silk City is Hot

From the Record:

Gentrification or growth? Why Paterson is hot for real estate buyers and investors

Zaib Atyat purchased his first home in Paterson 20 years ago for $250,000. The three-family unit on the city’s south side offered a steady source of rental income and has progressively increased in value. Based on online calculators, Atyat, 47, estimates that his real estate investment is worth about $650,000 now. 

“When I moved here, there was a lot of crime. Cars were stolen at night,” the immigrant from Jordan recalled. He lived near Paterson’s former Alexander Hamilton Public Housing Project, also known as Alabama Project, before buying a home.   

From its past marred by urban blight, Paterson is emerging as a hot spot for real estate investment. Two of the city’s ZIP codes are among the fastest-appreciating areas for real estate sales in North Jersey, according to Zillow data between February 2020 and June 2021. The meteoric rise of Paterson’s two hot ZIP codes — 07501 and 07522 have seen appreciation of 32% and 26%. respectively — illustrates the shift in housing demands since the start of the COVID-19 pandemic last year.  

“You had Hoboken, Edgewater, now Paterson,” said Paterson Mayor Andre Sayegh. “We believe we are the new frontier.”

Paterson is close to New York City and near a number of highways, and it offers great diversity, Sayegh said. People are moving to Paterson because they are being priced out of New York City and other areas of North Jersey, he added.

The average rent price is $1,414 in 2021, 3% more than in 2020, according to RentCafe.com, with the average size of the apartment being 724 square feet.

“What we know as growth we recognize as a push out,” Imani said. “Working-class people are being pushed out.”

Sayegh doesn’t view the development as a push out or gentrification. The people who are moving into the city are immigrants: Dominicans, Palestinians and Bengalis, he said. They are being priced out of other areas, such as New York. The median household income in Paterson in 2019 was $41,350. Paterson saw apopulation growth of 9%, according to the 2020 census.  

Posted in New Development, New Jersey Real Estate | 125 Comments

Sales down, prices up..

From Redfin:

Home Sales Fell 6% in August, the First Annual Decline in 15 Months

However, home prices were up 16%, and new listings posted their first year-over-year decline since February, which could signal a tightening market.

The median price of homes sold in August was $380,271, up 16% from a year earlier, the lowest growth rate since February. August marked the 13th consecutive month of double-digit price gains.

“When it comes to home prices in this market, what goes up stays up,” said Redfin Chief Economist Daryl Fairweather. “That’s especially true in the Sun Belt; home prices are up more than 20% from last year in Austin and Phoenix. Even with these steep increases, homes in these areas are still relatively affordable, so these and other hot migration destinations are going to continue to attract homebuyers from the coasts. As workers change jobs en masse and enhanced unemployment benefits come to an end, we could see even more households relocate for affordability in the coming months.”

Median sale prices increased from a year earlier in all but two of the 85 largest metro areas Redfin tracks: Milwaukee, WI (-1.6%) and Bridgeport, CT (-1.1%). It is worth noting that both of these metro areas had already seen significant price gains a year ago, with prices up 14% and 30% respectively in August of 2020, compared to a 11% gain nationally. So they may have overheated last year, and prices have moderated since, leading to a slight decline in the latest data.

The largest price increases in August 2021 were in Austin, TX (+36%), followed by Phoenix (+25%) and Salt Lake City (+24%).

Seasonally-adjusted home sales in August were down 6% from a year earlier, the first annual decline in 15 months. They were also down 1.4% from July. Compared to August 2020, home sales fell in 44 of the 85 largest metro areas Redfin tracks. The biggest sales declines were seen in New Orleans (-23%), Salt Lake City (-16%) and Warren, MI (-14%). The largest gains were in places where sales were still somewhat depressed in August 2020, including New York (+65%), Honolulu(+47%), and Nassau County, NY (+32%).

Posted in Economics, Housing Bubble, National Real Estate | 136 Comments

Never bet against NYC

From Bloomberg:

New York City Has Once Again Defied the Doomsayers. Here’s Why.

New York City is emerging as one of the world’s most resilient big cities in the wake of the pandemic. The secret to its success is more than just its size — it’s the Big Apple’s model of urbanism that offers something no other American metropolis can match.

New York was the first big city in the country to be hit hard by Covid-19. Immediately, people began predicting that the pandemic would trigger a backlash against dense urban living. A wave of murder and violence that followed the mid-2020 Black Lives Matter protests  added weight to this glum forecast — the end of America’s urban revival was at hand. 

For some cities like San Francisco, the exodus does seem real — at least for now. But Gotham defied the doomsayers in spectacular fashion. An analysisof cell phone data showed that more people moved to the New York City metropolitan area during the pandemic than moved out. Young people are especially eager to move in.

In fact, recent data shows that the appeal of New York has been vastly understated over the past few years. Mid-decade U.S. Census estimates during the 2010s had shown the city’s population peaking and beginning to fall, but when the official 2020 Census numbers came in, it turned out that New York had actually been gaining population. So much for that mass exodus. 

How did New York City remain such a popular destination despite all its formidable challenges, and despite the fact that it isn’t in the booming Sun Belt? Economists’ go-to explanations are called agglomeration and industrial clustering effects:  basically, big cities tend to stay big, and rich cities tend to stay rich. New York is the home of many high-value industries, among them finance and publishing. Those industries keep a large, well-educated population of knowledge workers in the area, which draws in other companies — most recently, tech firms.

Posted in General | 216 Comments

Impact or not?

From the Philly Voice:

U.S. housing market faces ‘shock’ from end of mortgage forbearance — but no bubble, experts say

Pandemic policies have undoubtedly shaped the way the U.S. housing market has functioned throughout the health crisis, which has had countless ripple effects across different industries and walks of life.

In the housing market, the most obvious headlines of the pandemic have been the soaring sale prices, bitter competition, vacation home boom and limited inventory of starter homes.

Less often discussed is the impact of the federal government’s mortgage forbearance program, which has allowed homeowners to pause payments during the crisis. At its peak, more than 7.2 million homeowners were in the program, but the nation’s economic recovery helped give most of them the breathing room to organize a plan, whether it meant modifying a loan, selling to take advantage of the market or waiting out the storm for as long as possible.

At the beginning of October, the Biden administration has signaled strongly that it will let the program lapse after several extensions were made. And that’s a big deal for the roughly 1.7 million borrowers who remain enrolled.

Many of these homeowners, depending on their circumstances, may ultimately be forced or opt to sell their property while they still believe they can get an above-market deal. If short supply is one of the main drivers of the 17.2% increase in median home prices over the last year, then this influx of homes could have a noticeable impact, even if only modest, according to Fortune.

During the recent summer months, U.S. housing inventory already has climbed in small increments and a mild cooling effect has been seen across the market. Those who have been holding out for more normalcy and who aren’t willing to pay a premium for a home right now may be aided by an anticipated increase in homes that become available due to the end of mortgage forbearance.

Posted in Economics, Mortgages, Politics, Risky Lending | 112 Comments