Nothing to see here

From the MPA:

Which housing markets have been most vulnerable to COVID?

The housing markets in Illinois, New Jersey and Delaware counties are more vulnerable to the impact of the ongoing coronavirus pandemic than elsewhere in the US, according to a report by property analytics firm, ATTOM.

The 2021 Special Coronavirus report released last week highlighted county-level housing markets vulnerable to damage from the ongoing COVID-19 virus in the US during the third quarter, based on the percentage of homes facing possible foreclosure, among other factors.

The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by the property database curator. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three.

The report revealed that New Jersey, Illinois and Delaware had 26 of the 50 counties that were most exposed to the potential housing-related impacts of the pandemic.

Of these, eight were in the Chicago metropolitan area (Cook, De Kalb, Du Page, Kane, Kendall, Lake, McHenry and Will counties), seven in the New York City metropolitan area (Essex, Hunterdon, Monmouth, Ocean, Passaic and Sussex counties in New Jersey and Rockland County in New York), and two in Delaware – Kent County (Dover) and Sussex County (Georgetown).  

Posted in Demographics, Economics, Foreclosures, National Real Estate | 362 Comments

Hot or Not

From Bloomberg:

Housing Market Shows Cracks With Price Cuts in Pandemic Boomtowns

No city exemplifies the mania of the Covid-era U.S. housing market better than Boise, Idaho, where prices have surged by more than 30% in the past year. But in a sudden reversal, buyers are now the ones with power. 

Asking prices for houses are being slashed. Bidders no longer have to waive inspections to win over sellers juggling multiple offers. Demand has slowed so much it’s like a light switch suddenly turned off, said Dominic Zimmer, a local Realtor.

“You’re seeing the fear of missing out switching from buyers to sellers,” Zimmer said. “Now sellers are afraid of not scoring the way they saw their neighbors do a year ago.”

The cracks in one of the nation’s hottest housing markets mark an early sign that the U.S. boom — fueled by low mortgage rates and remote-work moves — is losing intensity. While much of the country is still seeing record price increases and plunging listings, in some destinations builders who could hardly put up homes fast enough now have inventory sitting. 

The slowdown is particularly pronounced in areas away from major urban hubs where buyers were seeking affordability and picturesque havens during the pandemic. That demand has ebbed as people have more reasons to stay put this fall, with the return of in-person school and more companies ordering workers back to the office, or at least requiring them to be somewhere in the vicinity. 

Posted in Demographics, Economics, Employment, National Real Estate | 219 Comments

Sell and Rent

From the NYT:

The lawns are manicured. The swimming pools sparkle in the sun. And the homes, all of them turnkey and smelling of fresh paint, are lined up in tidy rows, an army of cookie-cutter porches standing at attention.

Covid-19 inflamed the real estate market, pushed Americans toward the suburbs and changed our relationship with where we live, work and play. It also accelerated interest in built-to-rent housing, which even before the pandemic was expanding at a breakneck pace.

The number of built-to-rent homes — single-family homes constructed expressly for the purpose of renting — increased 30 percent from 2019 to 2020. Today, they make up about 6 percent of all new homes being built in the United States, and that number is poised to double in the next 10 years. This is the fastest-growing sector of the American housing market, and it is increasingly master-planned and built on tracts. On the fringes of America’s second-tier cities, entire villages owned by large-scale investors are popping up, offering renters who either can’t or don’t want to spring for a down payment another path to the American dream.

Two months ago, Brian and Amanda Voorhees moved with their two children to 360 Communities at Shearwater, a community of 127 two-, three- and four-bedroom townhouses and single-family homes about 40 minutes from Jacksonville, Fla. They left New Jersey after selling their 3,600-square-foot home there at the top of the market, and they weren’t ready to jump into a new investment.

“We really wanted to have the flexibility to enjoy life versus having to worry about repairing the roof or cutting the grass rather than heading to the beach,” said Mr. Voorhees, a vice president of underwriting for an insurance broker. “We didn’t want to have to worry about all the potential pitfalls of homeownership.”

They rent their new home, a four-bedroom townhouse, for $2,600 a month. Mr. Voorhees, 33, now works from home, and Ms. Voorhees, 36, stays at home with Braden, 7, and Abigail, 4, taking the children for bike rides along the community’s trails and spending hours with them at the community pool.

Posted in Economics, National Real Estate | 146 Comments

Welcome Back

From CNBC:

This could be the worst market for a first-time homebuyer, experts say

Buying a first home is always a huge decision. It’s even bigger when the market has been as hot as it has in the last two years.

Financial advisors say this could be the worst market for home buyers we’ve ever seen, and caution clients to perhaps wait.

Certified financial planner Rick Kahler, founder of Kahler Financial Group in Rapid City, South Dakota, expected the coronavirus pandemic might cool down a real estate market that had been rising for the last decade.

“I told a client 18 months ago not to buy a home, but he did,” said Kahler, who lives in Rapid City. “I was dead wrong, of course.”

Not only has the pandemic failed to cool the hot housing market, it has kicked it into higher gear. At the end of September, the average home price in the U.S. was $377,000, according to real estate broker Redfin. That’s up 14% from the same month last year and a staggering 30% from September 2019, when the average selling price for a home was $291,000.

Current homeowners are in the catbird seat. If they “overpay” for a new home, they can make up for it by selling their old one. For first-time homebuyers, however, it’s a different story.

“This could be the worst market for a first-time homebuyer that I’ve ever seen,” said CFP Sheryl Garrett. “Don’t be in such a hurry to buy a house.”

Garrett, founder of the Garrett Planning Network, suggests that some people are driven to own a home for the wrong reasons.

Posted in General | 320 Comments

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 | 103 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.”

Posted in General | 134 Comments

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.

Posted in General | 221 Comments

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.


Posted in General | 164 Comments

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.

Posted in General | 398 Comments

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.

Posted in General | 312 Comments

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.”

Posted in General | 46 Comments

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 | 168 Comments