From CNN:
The US housing market is starting to cool off — a bit
The housing market is showing signs of cooling off.Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were up 2% in July from the month before, marking two consecutive months of increases, according to a report from the National Association of Realtors.
The number of available homes for sale also rose a bit in July, relieving some of the pressure on buyers. And while home prices still climbed year-over-year, they did not top recent record levels, the report found.
“There has been a turn in the market from super heated to still very strong,” said Lawrence Yun, NAR’s chief economist.
A consistently tight supply of inventory has pushed home prices higher over the past year, but that picture is improving slightly, said Yun. The inventory of unsold homes increased 7.3% from June to July, but it was still down 12% from a year ago, NAR reported. Unsold inventory is at a 2.6-month supply at the current sales pace. A balanced market is about a 6-month supply of homes.
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Yun. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
The median price for an existing home in July was $359,900, up 17.8% from a year ago and marked 113 straight months of year-over-year gains. But the price jump for July is down from increases of 20% or more that were occurring in the market over the past year.
First
History lesson, increasing inventory at the same time sales volume was decreasing (but prices were rising), was what created the blow off top of the last bubble. Fixation on continued increases in basic statistics like average/median sales price blinded folks from seeing the dislocation in inventory and sales that was taking place. To some extent, this increase in price created more pressure to bring inventory to market, setting the stage for the collapse. It didn’t even require prices to fall to start the stampede out, all that was needed was for pricing to pause, which would completely erode confidence in ever increasing price gain.
Turns out, the answer we were seeking this whole time was Scranton. What the f*ck?
NYC-to-Scranton Amtrak service would spur big economic boost to region, study says
If it’s put into place, proposed Amtrak service between New York City and Scranton, Pennsylvania would provide a $2.9 billion one-time financial boost to the region, followed by about $87 million in economic activity annually.
That was the conclusion of an Amtrak analysis released this month that provides some, but not all the fiscal information about resuming rail service between the Big Apple and the Electric City that is part of the rail carrier’s larger “Amtrak Connects US” plan.
The plan predicts an annual $87 million in economic impact of the three train trips per day, citing 10 universities in three states on the line that could provide passengers, as well as tourist attractions in Scranton such as indoor water parks, ski areas, hiking trains and parks, including Steamtown National Park.
$2.9b one time financial boost to the region is code word for what it’s going to cost us to build it.
$87m annual benefit on top of the $2.9b cost? That’s 33 years payback, assuming zero operating costs.
I 100% support this initiative, because it’s funded with government cheese, and will increase my real estate value in Wayne and NNJ more broadly, larger swaths of which would get one-seat access to NYC. Choo Choo!
If NYC wants to protect the value of it’s real estate, they might want to consider funding any and all “access-to-NYC” initiatives.
Bystander says:
August 23, 2021 at 1:24 pm
“Oh gee, another 7% increase by garbage collection…”
Sorry, this one is too funny not to comment on…You vote for a guy who’s policies (killing Keystone pipeline, halting oil and gas leases on federal lands) deliberately harm domestic energy production, cede pricing power back to OPEC, and result in a 50% increase in the price of gasoline since January…and then bellyache when your trash hauler raises your bill by ONLY 7%. Clueless!
Typical SmallBrain, can’t read it is 15% in 1.5 years which goes along with all other inflation hurting families. And when has SmallBrain ever cared about reasoning or facts:
Trump’s record..why if he created such amazing energy independence?
Gas prices
Nov 2016 2.30
May 2018 3.04
Gasoline prices are up ~ $1.00 per gallon from the time O’Biden took office. Trump left office in January 2021, not May 2018.
I will get you a Dow 36K hat too Ed. House prices big time since Biden took office. See how dumb this is?
Totally different game today. Back then, the market got taken over by short term type stock trader mentality. The housing market because a buy on margin, make a quick buck, and get out mentality. So people were no longer buying housing because they needed it (personal demand), it was being bought by short term traders looking to flip. When that price stopped going up, these people got smashed.
Again, today’s market is cheap. There is so much demand and not enough supply. If you think for one second that pricing is going to go down under this formula, you are crazy. It might not appreciate hard right now, but you have cautious buyers that are giving the market a breather. Let the market take a chill pill and now acknowledge that these prices are the new reality. So expect prices to rise again next spring and prob level off again by end of summer.
grim says:
August 24, 2021 at 7:10 am
History lesson, increasing inventory at the same time sales volume was decreasing (but prices were rising), was what created the blow off top of the last bubble. Fixation on continued increases in basic statistics like average/median sales price blinded folks from seeing the dislocation in inventory and sales that was taking place. To some extent, this increase in price created more pressure to bring inventory to market, setting the stage for the collapse. It didn’t even require prices to fall to start the stampede out, all that was needed was for pricing to pause, which would completely erode confidence in ever increasing price gain.
punkin head,
Trying to dispute grim’s logic on housing is like me telling Tom Brady how to throw a football. If anyone had any doubt that your posts were nothing more than satire, they need only read your “response” above. I don’t know whether to laugh or be frightened.
I’m not saying Grim is wrong…I’m simply using his post to paint my position on the current housing market. I think im seeing it clearly. Time will tell. I simply don’t think this is bubble territory yet, it’s only starting to get some air in the bubble. The air is the millennial buyers, when their actions stop, housing will have peaked unless foreign investors start invading the market. Then all bets off for a decline…
Can anyone with access copy and paste the article?
https://www.nj.com/politics/2021/08/njs-big-deal-with-teachers-to-cut-healthcare-costs-is-backfiring-in-130-school-districts.html
“Three vital issues for investors remain uncertain as the Federal Reserve moves toward tapering its bond buying. Will this quantitative tightening mean Treasury yields go up or down? Will stocks do better with rising or falling bond yields? And, a linked issue, is the stock-bond relationship that has held for the past three decades going into reverse?
Few people share my first uncertainty, because it seems so obvious that if the Fed buys fewer Treasurys, the price will drop and hence the yield rise. It is basic supply and demand, goes the response: Duh.
It is certainly true that all else equal, fewer bond purchases should mean a higher yield. But all else isn’t equal, because the Fed’s discussion of withdrawing stimulus shows a shift in mentality toward tighter monetary policy. Tighter monetary policy means less growth and inflation in the long run, and so lower long-term bond yields. The balance between the demand impact of less Fed buying and the perception of policy tightening will determine whether 10-year yields rise or fall, and it isn’t obvious to me which way they will go.”
Face it, low rates, low growth is coming. Get in high growth stocks or buy real estate.
Fast: I know a few married millennials with good incomes, and they are all refusing to buy houses at current prices.
When compared to the pricing on bonds, stocks, and bitcoin, residential property prices might not really be that elevated in comparison. Particularly given that one’s residential property may increasingly also serve as one’s office and schoolroom. That should help kill the “tiny home” phenomenon. In particular, luxury home values in low-income-tax states should be even more favored – not only can a home there provide a new office, depending on one’s (high) income level the tax savings alone could create cumulative tax savings value equal to the home within just a few years.
Someone making $3 million per year would be paying NJ about $250k/yr in state income tax. Buy a $2m house in FL, work from the nice home office, maybe incur an extra $50k/expenses per year than otherwise, and it still pays for itself in about 10 years. That $2m house is effectively pays a 10% annual yield, and you can play golf and tennis and go boating year round. For about 0.5% of the US population, this makes sense, and they go buy in the top 1% of Florida real estate locations.
“History lesson, increasing inventory at the same time sales volume was decreasing (but prices were rising), was what created the blow off top of the last bubble”
Good advice for any market, not just housing. In addition to the three factors above I would suggest a measure of how high the price is relative to some measure of standard deviation and I imagine you’ll have a signal with an r-squared at 0.80 or better.
“Sorry, this one is too funny not to comment on…You vote for a guy who’s policies…”
Elections have consequences…..and the knuckleheads in your State are going to elect someone as Governor who says if ever increasing taxes bother you then just GTFO. In the State that is already among the highest taxed in the Nation.
At least they don’t say mean things, though.
They think they are clever. They assume it’s going to drop because it’s a “bubble.” These will be the first to act next year when they realize prices aren’t coming down. Understand the psychology of the market. People are still scared from that last housing bust. This market is going up with cautious buyers…tells you all you need to know.
3b says:
August 24, 2021 at 10:30 am
Fast: I know a few married millennials with good incomes, and they are all refusing to buy houses at current prices.
“I don’t know whether to laugh or be frightened.”
Be very frightened. He is actually charged with influencing young minds…
Also, thinking about it, I totally understand the view of white privilege held by minorities now…if you’re from the ghetto and your perception of a white professional comes from daily interactions with Pumps you HAVE to subscribe to a theory of privilege….even a teenager can spend five minutes with him and think “Man, this guy is so incompetent there has to be something else why he’s gainfully employed and paid. Must be skin color”.
3b,
I wouldn’t buy at this time. Renting is something I never did but I’m closer to retirement than not so if I decide to sell in a year, two years or five years from now, I may consider renting short term. Renting long term is not an option. In a year or five years from now, it may be an opportunity to buy.
Fast: Madness to buy at this time. Renting makes sense. We have a potential retirement home that’s paid for, not in the area. Don’t know if we will retire there, back on forth on that. But the bubble will burst, it’s not different this time.
Pumps: They are pretty clever, well educated and more importantly well informed.They know exactly what they are doing.
Lefty,
When the prices are higher come this time next year, don’t tell me it was inevitable. Say good call.
This time is different, I get it.
Some of my all time favorite phrases uttered by house tour guides:
– The price is warranted.
– Prices never go down here.
– This town is reserved for a specific type of buyer.
– I need your best and highest by tonight and we’ll let you know if you’re in the running.
– Take out a loan on your house but don’t tell the bank what you’re using it for.
– This town bleeds wealth.
– You’ll insult the buyer with that offer (house sold a month later to another buyer with same offer as mine).
– Just knock out these two walls and you can expand.
– I have no idea why that water mark is there.
– Maybe you need to go up in price range (as if a 700K or 800k piece of shit makes a difference than a 600K piece of shit).
I might contemplate renting in Vegas as well. That market has always been incredibly easy to predict and it’s peaking for sure right now. Might be worthwhile to rent for two years (condo probably). before purchasing our final home.
“before purchasing our final home”
Mausoleum..nice. Have they peaked too? ;>)
This time is different…… That’s what they said 30 years ago. A quote I heard on the radio, “ A whole generation will be shut out of the housing market “!
Fast: it’s not a busy street even though it is a county road.
I agree that WFH and chaos politics in democratic cities are game changers for suburban housing. You can vote without ID but you can’t eat at restaurant without vaccine paperwork. Criminals are treated like royalty.
Talking to the people who have fled it doesn’t sound like they’ll ever go back.
Libturd says:
August 24, 2021 at 12:27 pm
“I might contemplate renting in Vegas as well. That market has always been incredibly easy to predict…”
I recall flying home from Vegas sometime 2004/05ish, and chatting with the guy next to me on the plane. He said he had just come to Vegas to work construction, and I remember him saying that the housing market was so crazy that all you had to do was show up in Vegas with a toolbelt and you’d be on a job that afternoon. Was one of the early signs that things weren’t healthy. Of course the full page ads in every newspaper hawking no-money-down, no-credit-check, interest-only mortgages was an even bigger sign.
Everyone enjoy last week of vacation and normalcy. School starts next week for many and MDs and EDs have been enjoying vacation while Rome (India really) burned. Three more resignations this week. 70% turnover in Pune this year with another quarter left. If Sept is not all on white collar hiring blitz then economy is toast. Stagflation will destroy us.
“The Great Retirement” is also upon us. The number of people who retired during the pandemic is over 2 million what was expected, according to The New School’s Schwartz Center for Economic Policy Analysis.
Charlie Watts RIP.
California Governor recall . . .
Recall election is in 3 weeks. Coin toss as to whether Newsome gets tossed.
Leading contenders to replace him are Republican Larry Elder (black conservative radio host who tells the African American community to act better for greater success rather than blame racism) and Democrat Kevin Paffrath (youtube finance and real estate influencer).
Paffrath is being ignored by mainstream media similar to the way that Andrew Yang was during the Presidential Democratic primary (for example, listing contenders who are polling much worse than Paffrath while excluding Paffrath from articles and infographics).
If Newsome goes down, maybe it’s a signal to Murphy and the other blue state governors that the people disagree with and are fed up with the Covid mandates (vax, mask, or shutdown, etc). Also, maybe a signal that people don’t like it when homeless people are allowed to camp wherever, don’t like the idea that shoplifting less than $950 of merchandize is not treated like a crime?, don’t like paying $4.50/gallon for gasoline, etc.
crushednjmillenial says:
August 24, 2021 at 2:36 pm
“California Governor recall . . .”
Looking like another opportunity for the Dems to hold a sham election.
https://losangeles.cbslocal.com/2021/08/23/torrance-police-more-than-300-stolen-recall-election-ballots-found/
Homeless issue in Los Angeles is truly a mess. Three of my East Coast friends who moved out there in the late 90s all moved back to North Jersey in the past year.
The Californians
https://www.youtube.com/watch?v=Tt-tG6ufH90
4:26 unless you actually work in LA there is little to no reason to ever go there.
I think the bloom is off the Dem’s rose.
Biden’s approval dips 10 points. Betcha
it stays there and the midterms end up being
an electoral route for the Dems.
Gas prices are up and we are on Summer Blend is there a point to that whine Gary?
Some of my all time favorite phrases uttered by house tour guides:
Nor that you are 4-5 years in on your purchase. How many held up?
Is your area still bleeding weath. ITV was the last time I looked!
“In the next 10yrs, the autonomous taxi network will be $12 trillion globally” – @CathieDWood on @carolmassar show. Also says $TSLA robot day was misinterpreted by media. The real goal was to attract AI talent to join firm.
https://twitter.com/ericbalchunas/status/1430266495158919172?s=21
Modern Monetary Theory
https://twitter.com/CSigmaShow/status/1430321034796814337
Gas prices are up and we are on Summer Blend…
What were we running cars on last summer, Bud Light?
“grim says:
August 24, 2021 at 7:31 am
“The $2.9b one time financial boost to the region is code word for what it’s going to cost us to build it.
$87m annual benefit on top of the $2.9b cost? That’s 33 years payback, assuming zero operating costs.”
The $2.9 billion economic boost will get more impressive when the cost balloons by a few billion and advocates – contractors and the politicians they donate to – hype a bigger economic boost.
I read the so-called study and no details are provided to show how the $2.9 billion cost or $87 million economic impact will be achieved.
Anyway, Greyhound and Flixbus already run round trip bus service from Scranton to New York City. Costs $25 to $55 round trip and is quicker than Amtrak’s proposed time.