Home prices just took the biggest jump in four years
Homebuyers, hold onto your wallets. The gains in home prices are getting bigger as the supply of homes for sale gets leaner.
The median price of a home sold in March surged 8.9 percent compared with March 2017, according to Redfin, a real estate brokerage. It is the biggest annual increase in four years. Redfin tracks prices in 174 local markets and calculated the median home price at $297,000.
High prices are the result of very, very low inventory. The supply of homes for sale was down 11.9 percent in March, compared with a year ago. As a result, sales fell 3.7 percent. The number of new listings in March dropped 5.6 percent annually, although part of that may have been due to the Easter holiday falling early this year.
“Sellers are slow to list this year and we aren’t seeing enough new construction homes to fill the gap,” said Redfin’s chief economist, Nela Richardson. “If we don’t see the new listings number turn around next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year.”
Homebuilders are not helping much. Housing starts disappointed in March, with single-family construction falling 3.7 percent for the month. Building permits, an indicator of future construction, declined 5.5 percent for the month and are barely 2 percent higher compared with a year ago. In contrast, multifamily construction is increasing considerably. Builders are banking on continued, strong demand for rental apartments, as homebuyers struggle to find affordable homes.
“The change towards multifamily could be the initial signs that affordability is starting to impact the mix of construction,” noted Tendayi Kapfidze, chief economist at LendingTree. “Multifamily units are at lower price points and include significant rental units. Notably, single-family housing starts are particularly weak in the high-cost Northeast — that is also the most exposed region to the negative impacts of the tax plan.”
Buyer demand is still strong, despite higher prices. Sellers are pulling back, however, likely worried they won’t be able to find anything else they like or can afford. The average home went under contract in 43 days in March, more than a week faster compared with a year ago and a March record. Nearly a quarter of the homes sold for more than their list prices.
As mortgage rates continue to rise, current homeowners will have even less incentive to sell. Sales have been dropping as a result of the tight supply, and prices usually lag sales by a few months. That does not appear to be the case, however, in this cycle, as demand is outweighing everything else. It may be that young buyers are waiting, and renting longer, in order to save for higher-priced homes.
Third is the secret winning # of the day.
Fox News host Sean Hannity has been linked to a group of more than 20 shell companies that has spent at least $90 million buying almost 900 homes across seven states over the past decade, according to a report Sunday by The Guardian. Many of the properties were bought at discounts in 2013 after foreclosures, and others were bought with funding help from the U.S. Department of Housing and Urban Development, the Guardian said, citing public records. Around that time, Hannity had sharply criticized former President Barack Obama for the rate of U.S. foreclosures, and he did not disclose his financial dealings with HUD during an interview last year with HUD Secretary Ben Carson in which he complained about the state of public housing. Last week, it emerged that Hannity was a client of Michael Cohen, President Donald Trump’s personal lawyer, whose office was recently raided by the FBI. Hannity had not disclosed that fact, and said he only asked for Cohen’s advice on some real-estate matters.
One has to pity the future president who will be called upon to deliver a tasteful eulogy for former president Trump.
Donald Trump’s day so far:
– Robert Mueller sealed indictments
– Sean Hannity real estate scandal
– Shania Twain apologizes for Trump
– Mueller laughs at Rudy Giuliani
– Trump yells “Witch hunt!”
– Weird “sleepy eyes” rant
– Pressure is getting to Trump
Something like this,
Lead article not surprising. Land costs too much to build at price points where there is demand.
My suburb may be the poster child. 95% of the town is standard issue 0.5 acre (or less). Larger lots are not ‘mansion’ lots as one would have in Short Hills. Usually anything over 0.5 acre is unbuildable on the excess – steep slope, wetland, etc.
So what’s out there?
No open buildable tracts for a while now. Five lots/land listed. All crap. Two are a bad subdivide literally clinging to a cliff, massive variances even to get them divided, no yard as the land slopes straight down from the street. Those are $230k each, been listed for three years. One is a knockdown on a very busy county road by power wires. $600k, with an 8% price drop in last 30 days. Last two are a subdivide of a single lot knockdown at $795k and $835k. On the absolute fringe of town in not a great neighborhood. Listed six months, price drop 10%.
That’s it. No land inventory, what is there is radically overpriced. And the price drops show the (lack of) quality of the land.
I figure a Bush will be the one sticking the pin. The Clinton’s will bring the mirror to check for fog. Obama will be the one sneezing. And Mueller will be in the background.
I think my land is worth more than my house. (atleast the tax records say so)
Looking at new home construction all the action is in knockdowns.
I’ve noticed over the last 18 months a distinct drop in the quality of the location. More on county roads. There are two going up side by side on a one acre subdivided lot on the same busy county road referenced above. No quiet enjoyment there. Ditto on the county road that runs perpendicular. Interestingly, all three of those houses are through the developer, no listing I can see. Feels like builders are pulling out all the plugs to stay a few hundred K at least beneath $2.0m, including sacrificing location. Dangerous balancing act there.
So what’s out there in houses/knockdowns?
109 SFH total, excluding a handful of foreclosures. Lowest priced home is $425k.
Junk: Small starter homes (1400ft2 or less) on busy streets or out of the way fringe neighborhoods. About ten total, $425k-625k. Unattractive but the cheapest entry, developers won’t touch them due to location, small lot size, etc.
Decent Entry: Same starter home, 1400ft2 or so, better neighborhood. About another ten homes, $625k-800k. Works as a starter, not developer attractive usually due to lot size, only thing they could put up is a replacement home same size. Obviously, that makes no economic sense.
Enter and Stay: Ten homes between $800k and $1.0m total. Generally 1800ft2 or so. Only three I would say are buy and hold, they are in decent neighborhoods and not on main roads. Prime price point and area for knockdowns.
Solid Family Home: Homes of 2200ft2 or so in good neighborhoods or larger in marginal neighborhoods or on busy roads. 16 total. $1.0m-1.25m.
That’s it. Everything else is 1.25 or higher. Notably, the $2.0m price point has shrunk appreciably. That market has evaporated. Only 16 homes total. Was a time in recent past – two seasons ago? – that number was close to half. Kiss of death now.
Interesting, as I scan through, there are a lot more reno flips. Never used to see those here usually it was buy and knockdown. These reno flips are usually fairly substantial often including an addition. Entry point seems to be the old knockdown market, looking at one now bought in a solid neighborhood for $825k and rather than knockdown and go to near $2.0m sale price the builder is redoing and listing at $1.6m.
Another one bought at $875k, guy must be twisting, going on a year now and just dropped price to $1.4. Bad decisions, location generally is solid but overlooks private tennis club so busy, noisy and the reno was not substantial.
Back of the envelope I always used a $900k spread from knockdown to new sale price as a minimum for it to be worthwhile. Funny enough, and reemphasizing that there are marginal purchases now to stay under $2.0m on the new sale price there is a knockdown on probably the worst main street in town. Bought $450k, listing $1.35m. I’m watching that one as an indication of market top, if that goes we are nearly there.
Bottom line for me:
Short term…vertical type price rise on small and declining volume. I’ve never made money in any market with that characteristic and most often indicative of short term market top.
Long term…most desirable areas in metro NJ suburbs substantially built out. Now the infill starts, a la Nassau. Once that begins prices will take a leg up rise. Quality of life falls through the floor though, unless your idea of the good life is points east of the SOB on the Southern State……personally, I’d rather take a different lifestyle than the money.
One more big dump to go and the adult diaper comes off.
Got a $5k lo-ball offer on the Harley. Wanted a bit more so I counter offered to no response. We shall see. If I keep it, the first thing I will do is rebuild the forks. Front end drift is no joke on the 101 at 75 mph. Wife wants a 911 Convert. so the bike may or may not even make a dent in that depending upon how ‘old’ a 911 we’ll get some. I know some had a main bearing issue, I wonder if any other 911-philes can shed any light on better years/drivetrains for those cars.
So we have home prices increasing yoy and number selling yoy and inventory continuing to get tighter……
Are we seeing this rise in home prices in our neck of the woods? I don’t see that happening here. At best, I see flat to slight price drops. Although, my buddy sold his home in a couple of weeks – received over a dozen offers and one nearly 10% over asking. Granted, his house is a starter level in one of the “desirable” areas in central jersey that a certain herd goes nuts over.
Speaking of the shortage in buildable land, I was driving on a busy street in Paramus over the weekend and came across 3 mini-McMansions out of the blue. It was so out of place – squeezed between a gas station on one end and maybe some type of industrial parking lot on the other. It was like, “Why?” Man, at least plant some serious trees out front to provide some cover. Then I started to notice that there are a lot of newly built homes all over the area (busy roads or not) that are wide open with pretty bare yards. Why not plant some trees for some privacy and aesthetics? Is it possibly they pretty spent everything they could afford on the house?
Topper, generally, what is your neck of woods?
How far from NYC terminal, best commute, honest door to door?
On a Midtown Direct line?
As the gunman entered the Waffle House to continue shooting, Mr. Shaw recounted on Monday, he looked for a moment to fight back.
“There is kind of no running from this,” Mr. Shaw, in an interview on ABC’s “Good Morning America” on Monday, said when asked about what he was thinking. “I’m going to have to try to find some kind of flaw or a point in time where I could make it work for myself.”
I sometimes wonder how I would react in situations like this. I hope and think I could be brave as this gentleman, but I really won’t know until I face it. I know from experience during high stress/high alert situations (nothing like the situation this gentleman was in) I’ve been in, I sought of go into a zone where it things go into slow motion and instinct takes over – sought of like when you go in that “zone” in sports. This dude saved a lot of lives. Would like to see more goodness come of this for the man. Interestingly, doesn’t seem to have gotten the publicity or captured the attention as it would have for others. Hmm … wonder why….
How does one italicize on this thing?
Upper Bergen county. No direct … around 1.5 hours all-in (bus or train).
Rotate your head 30 degrees while you type.
Hehe … so that’s the secret! You are the man. Let’s see if it works ;)
No charge Cornell function….. anyone interested let me know……. it is more of an industry review than anything related to finance….. you have to put up with me if you go…… Midtown near Grand Central….
“Challenges & Opportunities in American Infrastructure: Technology, Resilience, Funding & Finance”
WHEN: Wednesday, April 25, 2018
1:00 pm – 5:00 pm
Stuff to be italicized
How does one italicize on this thing?
At the beginning reverse those brackets above and put an “i” in between at the end reverse those brackets at put a forward slash followed by another “i” in between.
(i)Stuff to be italicized(/i)
Use angle brackets instead of parentheses.
Why exactly does the British royalty (or any royalty) get so much coverage? What exactly have they done other than win the sp@rm lottery to deserve such deference and fawning? Do we really need breaking news updates on the baby or the wedding? I just don’t get it. The curtsies blow me away!
Then again, given we have a society that goes gaga over the Khardasians, I guess I shouldn’t be surprised.
Anyone else notice that shania Twain supposedly made controversial comments about being a trump supporter(even tho she’s A Canuck) and the next day her tour sales commence? I’m getting spammed. I guess trump supporters buy concert tickets?
I’d bet its more of a woman’s interest. I’m sure women would be just as bewildered wondering how a sport owns the day of the week.
I think the British Royalty is like the Superbowl of the Bachelor (amazes me its still on the air and transcended generations at this point)
“As the gunman entered the Waffle House to continue shooting, Mr. Shaw recounted on Monday, he looked for a moment to fight back.”
Not hearing the same outcry as in school shhotings either. Guess the expectation to eat and not get shot < the expectation to go to school and not get shot.
If these little kids (meaning the teenagers in FL and most adult liberals) would stop making shootings a political point on gun rights and instead focus on safety we may get somewhere.
I've proposed it before, and continue to believe in this strongly.
Strict criminal liability for gun owners if their weapon is used in a killing, especially by a minor. Not manslaughter. Jump it up to something with a mandatory 15 years and if multiple deaths sentences run consecutively.
Sandy Hook, the mom knew she had a very troubled teen yet she left weapons available to him. Why should she not be in jail for a very long time for the 20+ deaths?
This kid at the waffle house was very troubled. The Secret Service got his firearms card revoked after he went into restricted zones near the WH. He got arrested for jumping in a public pool in a pink womans coat and underwear. He filed a police report that 30 people were barking like dogs at him while he tried to sleep. He told police Taylor Swift was stalking him.
What did the old man do when the Secret Service yanked his card? Gave him access to the weapons.
But it was the fault of the weapon….ban the guns!!!!! Uh, OK.
Four dead? 4×15=60. Parent should have 60 years firm in lockup.
Implementing this kind criminal liability would stop more mass shooting deaths than all the gun control that could and could not ever be passed.
All it takes is one highly publicized case of an adult going to jail for the rest of his life. Every home will secure gun safe.
I wonder why these mentally ill people turn to guns. I mean, there probably are many mentally ill people that simply DON’T go on a rampage. Instead they just talk to themselves.
What I was referencing was that the “hero” in the Waffle House shooting doesn’t seem to have gotten a whole lot of attention from the public or the press. I was wondering if it might have something to do with the fact that he is black, the people who were killed were black and Hispanic (from the name), Waffle House, etc. I have to wonder if it was a white police officer (who is trained, armed, and doing his/her job) had ….
I just think the gentleman was extremely brave. Very few people can act like he did in a situation like that … he saved many lives. I just hope there is something good that comes to him from the community, state, a company, etc.
So I want to roll back my statement on the mentally ill. While I don’t have the details on the pedestrian deaths in Toronto yet, nor do I know that it was a mentally ill person, I can say I forgot that mentally ill people do use cars as weapons.
Topper , I noticed that most folks that move in to leafy suburbs from cities do not like trees. My block had many 40-50 year old 80 ft oaks all knocked down when several Greek families moved in from Astoria. Replaced by 3 ft shrubs. My neighborhood easily drops 5 degrees in the summer as I pulll around the bend. But from what I see New Yorkers really hate trees.
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I am the new girl