From CNBC:
The housing recovery isn’t over, it just feels like it is
A slew of negative housing numbers for July are piling up on top of a slew of negative housing numbers from the last several months.
Sales of new and existing homes are falling, construction of single-family homes is basically flat for the year, mortgage rates are rising and affordability is weakening. It certainly feels like the housing recovery that really took off in the last four years has come to a grinding halt, but it hasn’t.
Is the ultra-hot and competitive housing market cooling off? Absolutely. Home prices rose too far, too fast, and the market is now hitting a price wall. We know that because the price gains are finally starting to shrink, according to a report this week from the National Association of Realtors. Anecdotally, real estate agents across the country are saying that their sellers are beginning to come back down to earth.
“I don’t think the recovery is over,” said Sam Khater, chief economist at Freddie Mac. “Economic growth is still very strong and essentially running at capacity. However, the consistent decline in housing affordability means there are fewer consumers who can afford to purchase a home.”
The reason the housing recovery isn’t over is because demand is very solid, and the price gains are starting to ease. As with all things real estate, however, location is key in this recovery.
“While the decline in home sales and deceleration in home price growth has been broad-based, the slowdown is more intense in the hot coastal markets — which is a natural reaction to rapidly escalating home prices and higher rates versus a year ago,” added Khater.
…
Foreclosure starts hit a 17-year low in June, according to Black Knight Inc., and mortgage delinquencies are at their lowest level in more than a decade. That includes a slight bump in troubled loans from states hit hard by last year’s hurricanes.The vast majority of homeowners are paying their mortgages on time, and an increasing number of homeowners are putting a lot of money into their houses, raising the value and adding to the remodeling economy of materials and retailers.
…
The housing shortage has been the one glaring villain holding back a more robust housing recovery. Demand is strong, thanks to basic demographics, an improving economy and a stronger labor market. The trouble is that most of that demand is on the low end of the market, where supply is leanest.“Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market,” said Danushka Nanayakkara-Skillington, senior economist at the National Association of Home Builders. “While affordability conditions remain positive and the labor market sees low unemployment, prospective homebuyers face increased uncertainties as interest rates trend higher and trade war concerns grow.”
…
The housing recovery may have peaked, but it isn’t over. As more supply hits the market, sales will grow again. Consumer credit scores are still strengthening, a huge generation is aging into its homebuying years, and another huge generation is downsizing into active adult communities and urban condominium developments. While there is a new affinity for renting, that demand can fuel home construction and the overall housing economy as well.
I guess that end around may not have worked regarding SALT:
https://www.reuters.com/article/us-usa-tax-salt/us-treasury-irs-move-to-block-states-dodging-tax-deduction-cap-idUSKCN1L82H0
Also from the Star Ledger:
Trump administration rejects efforts to save your property tax break
The Trump administration on Thursday rejected attempts by New Jersey and other high-tax states to get around the federal cap on deducting state and local taxes by setting up charitable funds.
The Treasury Department proposed a rule that limited the total amount that could be claimed if taxpayers donated to a charitable fund in lieu of paying state and local taxes. The deduction was capped at $10,000 in Republican tax legislation passed last year.
“The amount otherwise deductible as a charitable contribution must generally be reduced by the amount of the state or local tax credit received or expected to be received, just as it is reduced for many other benefits,” the proposed rule read.
…
“The proposed rule will uphold that limitation by preventing attempts to convert tax payments into charitable contributions,” Mnuchin said.
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The ruling came despite the fact that more other states have charitable funds, often to use taxpayer subsidies for private schools. Mnuchin said that the new rule would affect only 1 percent of using charitable funds for private school tuition.
New Jerseyans reacted with outrage to the proposal.
…
New Jersey and three other states have sued the Trump administration over the deduction cap, saying a “highly rushed and partisan process” resulted in changes to the tax code that infringed on the states’ “sovereign authority to determine their own taxation and fiscal policies.”
“We are prepared to fight back tooth and nail against any attempts by the IRS or the Trump administration to block localities from setting up charitable funds to help New Jersey taxpayers preserve their deductibility,” Gov. Phil Murphy said.
Attorney General Gurbir Grewal threatened further legal action.
“There doesn’t appear to be any good basis for the sudden change in policy, except to make it more difficult for states like New Jersey to cope with the backward tax policies the federal government imposed on us last year,” Grewal said.
Don’t blame the Federal Government when you have fat, bloated, do-nothing local officials making six-digit salaries and then retiring with six-digit pensions to South Carolina. Maybe it’s time to adjust salaries, consolidate services and dissolve teachers unions so that property taxes can be reassessed. Privatize, eliminate and endorse competition.
Fresh NJ house price stats are out. Through July, NJ houses trading hands at a median price 4.2% higher than last year. Hudson County leading the way at +16.5%. Salem comes in at -14.5%. The statewide figure is healthy and rational while the Hudson-Salem separation reflects the different economic trajectories of those regions.
LA Unified about to blow up…
“Underlying the district’s hard line is a long-standing criticism of teachers. We are blamed for LAUSD’s low test scores. The union cites other factors, chiefly the sharp drop in the socioeconomic status of students over the past several decades. Today, 76% of our students live in poverty, 25% are just learning English and 90% are members of minority populations. Many LAUSD parent never had the opportunity to go to high school in their native countries. L.A. Unified students are bright and capable and it is a pleasure to teach them, but they start off considerably behind the student populations of most other school districts.”
http://www.latimes.com/opinion/op-ed/la-oe-sacks-utla-reasons-to-strike-20180823-story.html
Look at my post yesterday. This entire article’s points about housing were stated by me yesterday, but I get beat up and made to look a fool on this blog because haters can’t see the market like I do. You have negative glasses on and can’t see the true market for what it is.
“The housing shortage has been the one glaring villain holding back a more robust housing recovery. Demand is strong, thanks to basic demographics, an improving economy and a stronger labor market. The trouble is that most of that demand is on the low end of the market, where supply is leanest.”
The Great Pumpkin says:
August 23, 2018 at 12:00 am
It doesn’t take Einstein to understand the long term play with housing. It will get significantly more expensive till the housing supply is fixed (which is prob never, it’s too far gone to fix anytime soon). So you will have pauses, like the current log jam taking place, or even a little downturn, but make no mistake about what the long term trend in housing is based on supply…..upwards trajectory based on housing supply that will only get worse.
Just remember how much materials and labor costs to build now, and that’s not going down anytime soon. Hell, if they tried to go on some crazy building spree to address the housing supply, they will only drive up the cost of building…..labor costs and material costs will sky rocket under the huge demand.
You want honest analysis that focuses on what matters instead of the noise, read my posts. Your welcome on the valuable free advice.
The saying buy now or be priced out forever, really holds some weight in this market. And don’t show me sales on over 1 million dollar homes to call bs. Avg priced home is nowhere near that market and it’s not representative of the typical buyer at all. Builders only building luxury homes is part of the reason for this housing supply mess.
Show me a 300,000 home significantly dropping in price….good luck. That’s all I need to know about the housing market and where it is heading. Start from the bottom, then up. That’s what the millennial buyer bloc represents. Some of them are already moving from 300,000 starter homes to 600,000 homes.
Remember, the current high end real estate was driven up by the boomer buying bloc. That’s why it is stagnating or decreasing. You have to wait now for the millennial buying bloc to work their way up the real estate market. It’s going to take time, but they will work their way through the entire market. Right now, still on starter home pricing level for the most part. The oldest millennials are starting to hit up the next tier.
Bystander, evidence of what I said to you. Look at how high these jobs are paying.
The Great Pumpkin says:
August 23, 2018 at 11:38 pm
Bystander, new jobs being created as finance jobs being eliminated.
New York Is the Capital of a Booming Artificial Intelligence Industry – Bloomberg
https://apple.news/AD0VJ6t5eRSqyEqYOGKwoOQ
I had immigrated parents. My Father basically worked all the time to support us. Many of us growing up had immigrant parents with the equivalent of about a 6th grade education. And yet we did well. There is always an excuse. Maybe many of the parents just don’t care!
Who are all these people moving into active adult communities? Everything I have seen and read indicates the 55 and over communities are not popular.
Pumps you shouldn’t have allocated so much of your family’s net worth in your primary residence and you wouldn’t have to constantly agonize over the health of the nj real estate market. Bad quality of life decision by you to overextend. You make enough people in this blog miserable I can only imagine the people around you.
So the housing recovery is not over but in a holding pattern? And then it will pick back up again? Will the two more rate hikes this year impact that as well as possibly several more next year?
Nwnj,
Who has been on point with their real estate calls over the past 6 years on this blog? Who has not? That’s why I’m hated so much on this blog. Fact! It’s a real estate blog, and they rather bash the only guy making correct calls because it doesn’t fit their negative personal outlook on real estate. Open up your eyes, the economy is getting stronger and in the beginning stages of an epic boom in the 2020’s. Been saying this for how long and it’s happening right before their eyes and they still ignore my calls.
Yo! that posting the other day from NJ REReport in 2006….. was it intentional that you selected that example when you were responding to Joyce?
Yo! says:
August 24, 2018 at 7:55 am
Fresh NJ house price stats are out. Through July, NJ houses trading hands at a median price 4.2% higher than last year. Hudson County leading the way at +16.5%. Salem comes in at -14.5%. The statewide figure is healthy and rational while the Hudson-Salem separation reflects the different economic trajectories of those regions.
Not going to debate with you, just pointing out where things went awry and how you could recover some peace of mind.
“You make enough people in this blog miserable I can only imagine the people around you.”
If this were true, you morons would stop engaging him. In this one post you’ve just proven you read and digest practically everything he writes.
https://www.nj.com/news/index.ssf/2018/08/as_orthodox_jews_move_in_taxpayers_in_these_nj_tow.html#incart_2box_nj-homepage-featured
Just end the religion tax exemption and this and other problems go away tomorrow.
Still waiting for the day you withdraw your scary talents from us bloodsuckers and go tend a pig farm under the productive shadow of your very own cancerous oil derrick like those dumb fvcks in that stupid atlas shrugged. It’s a sad thing..but pumpkin is actually smarter than you.
Fast Eddie says:
August 24, 2018 at 7:54 am
Don’t blame the Federal Government when you have fat, bloated, do-nothing local officials making six-digit salaries and then retiring with six-digit pensions to South Carolina. Maybe it’s time to adjust salaries, consolidate services and dissolve teachers unions so that property taxes can be reassessed. Privatize, eliminate and endorse competition.
Just understand that this was a starter home for my wife and I. We can afford significantly more now. Every year that goes by, the more frugal we look in the price to earnings ratio. We bought under the strictest lending standards, we did not buy and become House poor. We also put 20% down. It’s a nice luxury to be able to buy a house you can live in forever at the age of 31. The longer you stay in it, the more you save! I only care about the price 20 years out or more. Current pricing means absolutely nothing to me. My rental property I will never sell. That’s sweet retirement spending money!
Point of all this. I’m unbiased in today’s pricing. Even next decade. I’m in the long game, and it’s really hard to lose in the long game. I’m just a nobody that has ocd when it comes to real estate and the economy with a lucky knack for hitting my market calls. This blog is an avenue I use to debate those subjects with a little politics sprinkled in.
I don’t discuss or debate the subject matter I engage in on this blog in my personal life. Most people are not interested in economics or real estate, so I keep my thoughts to this blog. That’s why I’m here posting so often….my brain is getting exercise feeding it the fuel it loves.
So bash me, I don’t care. My skin is thick. I don’t get to discuss this stuff with anyone else. So I’ll take what I can get even if it means being the town donkey.
I’m also honest and raw on here. I change positions. Why not? Only a fool is unable to change positions as we age.
It’s a sad thing..but pumpkin is actually smarter than you.
You were hoping my talents would be used to endorse your level of thinking and accept your ideology? Why would I want to demean myself by submission like the majority of males in your circles? Wipe the makeup off your face and be a man.
Right now, trump has done a hell of a lot to make my predictions of a roaring 20’s 2.0 come alive. As much as he is a pig, he is fantastic for this economy. So I’m backing him right now.
Pump, what you gonna do with all the RE if it doubles/triples in 20 years but you are sick due to the all the emission from your highway ??
Joyce,
You’ve got to be kidding me. There has to be lines with religious fanatacism, particularly when taxpayers are funding it.
“The cost, which includes separate routes for male and female students going to Jewish schools, has helped cripple the school district’s finances and forced the state to provide extra cash to Lakewood to keep its schools out of the red.”
I forgot how good The Monroe’s were. One of the 80s bands that did not but should have made it big.
On top of separating male and female on the buses, there’s 120 “schools” in town. Ridiculous
Bystander says:
August 24, 2018 at 10:38 am
Joyce,
You’ve got to be kidding me. There has to be lines with religious fanatacism, particularly when taxpayers are funding it.
“The cost, which includes separate routes for male and female students going to Jewish schools, has helped cripple the school district’s finances and forced the state to provide extra cash to Lakewood to keep its schools out of the red.”
Pumpkin, US companies stopped training American employees over a decade ago, now they just shuffle in more H-1B visa workers from India, as they will for the “new AI tech jobs being created as finance tech jobs are eliminated.”
American companies no longer invest in American employees, or the country itself (notwithstanding phony PR stunts where a few “employees” pick up a paint brush on a Saturday afternoon to paint a dilapidated classroom in Jersey City in order to publish a feel-good press release).
American companies today care about one thing: the next quarterly results. The entire country can go all the way down the toilet, as far as they’re concerned, and short of President Trump’s prodding, they would continue to do exactly that, full speed ahead.
———————–
” ‘The industry needs to be creative in order to solve the supply-demand imbalance; one way to do so is by embracing job seekers with non-traditional backgrounds or by training them on the job,’ Mukherjee said.”
New York Is the Capital of a Booming Artificial Intelligence Industry
https://www.bloomberg.com/news/articles/2018-08-23/new-york-is-the-capital-of-a-booming-artificial-intelligence-industry
Globalism – It’s out of fashion? Already?
Yeah, turns out the supposed benefits were all multinational corporate and progressive lies.
I am an older ‘millennial’
I’ve been in a 3br/1bath ‘starter home’ for nearly 8 years, been casually looking at 4 br / 2.5 bath / 2 car garage houses for the last 2 years… and haven’t found a single one worth moving to for double taxes, double price, longer commute. And almost all of these houses are in terrible shape with no character and bad details… I honestly think I will save for a 950K+ house as that is where i actually see some decent housing stock (getting cheaper by the day)…
AI in the NYC area is all about job elimination. All the white collar office jobs the plan is to either ship them out or automate them it is all a matter of time horizon. If the technology exists today and is mature enough you keep a skeleton crew in NYC and use AI to eliminate manual process. Banks are looking for AI technologists to get rid of the operations people.
New York City is a popular destination for Ivy Leaguers who graduated from schools lining the East Coast. New York City is more affordable than you think with loads of free entertainment and big businesses, Business Insider previously reported.
Meanwhile, about one-fifth of grads of Harvard University prefer Boston and one-fourth of University of Pennsylvania grads stay in Philadelphia.
11:20 Government Cheese and this singer Maria McKee both should have been semi-iconic…
Mike S.,
You are smart. Don’t get hoodwinked into overpaying based on decorative radiator covers. You are highlighting a problem I see it market. People who paid 650k back in 2009 thought they were getting a steal because home was 750k in 2007. They put $100k into it and now think they can sell it for $850k – $900k. Older homes comes listed at $750k – $900k are competing with brand new builds. I see it in my neighborhood. Developers buy dump on .3 acres for $300m. Build new houses for $350k. Sell at 800k to $1m. Why would a buyer pay $850k for older home that needs work when you can buy brand new everything for 900k? Makes no sense.
Loving the work I’m doing with RPA and AI now.
I spent 20 years taking your jobs and sending them off shore.
Now I get rid of them entirely.
So with all this AI and automation to get rid of people who will be left to buy these 800k houses or for that matter a 400k house. Of course some will say new jobs will be created and then AI people will figure out how to get rid of all those new jobs! Of course we have heard before that getting rid of old factory jobs will lead to new jobs well that has not exactly turned out the way they thought it would.
RPA is going to decimate India back office.
Are RPA robots allowed to fraternize with other robots in the same company?
Yes, the robots in india(people) will be replaced with actual robots….it just makes sense. Between automation and tools, the number of employees handling process will only go down.
No doubt RPA and AI will have a significant impact on our society. However jobs being replaced by technology is nothing new and has been going on since the dawn of the industrial revolution. The cotton gin took the work of fifty slaves down the just three slaves to do the same amount of labor in a day, that single piece of technology is one of the causes of the Civil War. Jobs being replaced is JUST a very small facet of what AI is really going to change for our society. Think about it once the Robots do all the work (drive cars, deliver stuff, make and serve food, clean clothes, heck even perform childcare and teaching etc then what will mankind do with it’s idle hands?
RPA—-ain’t that just a fancy “macro”?!
Does anybody have the contact info for the home inspector
I believe he was referred to as the “Uber inspector”?
I need a real shark.
Thanks.
http://www.afullhouseinspection.com
Yeah RPA is nothing new, it’s the same shit we were doing to automate back office 15 years ago.
There isn’t really much real “AI” or “Machine Learning” involved, even though the marketers insist on it.
Juice exactly. If AI and robots will do almost all. What will the almost all do? And how will that affect society and the economy? What will everyone do? And what will be the value of anything including houses?
In 1972 I was promised a future of more leisure time and a 4 day workweek. Where is it!!!
Thanks Grim
1987 I thought you are retired?
I was speaking for the “universal” I