Greedy boomers living too long

Posted on November 19, 2024 by grim

From Fortune:

The ‘Oracle of Wall Street’ says home prices need to fall 20% to end the ‘generational schism’

Baby boomers own more homes than millennials and Gen Zers, creating a “generational schism” in the world of housing, according to Meredith Whitney, the “Oracle of Wall Street,” who predicted the Great Financial Crisis.

Boomers aren’t selling, and that’s a problem. “They’re not selling because they’re aging in place, because they can’t afford to go anywhere else,” Whitney said last week in an interview with CNBC. “Until they sell, you’re going to have this real standoff between sellers and buyers.”

So what’ll it take? Well, home prices have to fall; Whitney said prices need to drop about 20%. But that price decline would only take us to the price levels of three or four years ago before the pandemic and its corresponding housing boom. Plus, people would still have a lot of equity in their homes, Whitney explained, so it wouldn’t be a housing crash.

At this point, it doesn’t make sense for a lot of people to sell their homes because they have either locked in a low mortgage rate or own their home outright. To give that up would likely mean a much higher mortgage rate, and a much more expensive home. Considering an unwillingness to sell from older generations, that leaves fewer homes for younger generations to buy; those that are for sale are, in some cases, unaffordable because prices continue to rise since supply is tight—and mortgage rates are higher than what people are used to.

In some cases, people list their homes at exorbitant prices and sell if they get an offer, or stay if it doesn’t meet their expectation, Whitney said. Sales are depressed, particularly at the middle and lower tiers of the market, whereas luxury is sort of carried by all-cash offers, she added. “Something has got to give in the regular market,” Whitney said. “I think you’re going to start to see home prices go down.”

“For homes to be affordable, that’s going to have to happen,” she added. Whitney said she wrote a letter to whoever won the presidential election, telling them they have to let home prices drop, and it wouldn’t be the end of the world, for one, because “demand may be overstated.” (She didn’t provide any other details on the letter.)

In an interview with Fortune earlier this year, Whitney said she sees home prices falling 30% partly because young, single men are living at home, playing video games.

Posted in Crisis, Demographics, Economics, Housing Bubble, Humor, National Real Estate | 148 Comments

Home Insurance Spiking Across US

Posted on November 17, 2024 by grim

From Fast Company:

The housing market’s home insurance shock, as told by an interactive map

Over the past few years, many housing markets have experienced a home insurance shock. Part of this is due to insurance models reassessing disaster risks, while much of it stems from rising housing and construction costs. Replacement and repair costs have soared, and insurers are trying to keep pace, though some state insurance commissions are slowing the process.

To better understand what has happened to home insurance across the country, ResiClub reached out to economists Benjamin Keys, a professor of real estate economics at the University of Pennsylvania’s Wharton School, and Philip Mulder, a professor of insurance at the University of Wisconsin-Madison. This summer, they published a paper for the National Bureau of Economic Research (NBER), conducting their analysis using raw data from CoreLogic.

They found that the three-year shift in the median annual U.S. home insurance premium from 2020 to 2023 was 33%. That’s a bit above the three-year shift in U.S. home prices from December 2020 to December 2023 (28%).

“We find that premiums have risen sharply since 2020, that this growth has been concentrated in disaster-prone ZIP codes, and that elevated reinsurance costs are a critical driver of the increase,” wrote Keys and Mulder in their NBER paper.

Among the 500 largest U.S. counties, these 15 counties saw the biggest three-year increase in median home insurance premiums from 2020 to 2023. Nine of them are in Florida:

  1. Prince William County, Virginia: 150.2% 
  2. St. Tammany Parish, Louisiana: 117.8%
  3. Calcasieu Parish, Louisiana: 90.8% 
  4. Weber County, Utah: 86.4% 
  5. Flagler County, Florida: 79.7% 
  6. Martin County, Florida: 77.9%
  7. Santa Rosa County, Florida: 76.7%
  8. Escambia County, Florida: 74.2%
  9. Lee County, Florida: 72.2% 
  10. Utah County, Utah: 71.6%
  11. Marion County, Florida: 70.9% 
  12. Okaloosa County, Florida: 70.1%
  13. Guilford County, North Carolina: 70.1%
  14. St. Lucie County, Florida: 65.7%
  15. Manatee County, Florida: 64.7%
Posted in National Real Estate | 68 Comments

Basement Voters Swing Election?

Posted on November 15, 2024 by grim

From Fortune:

Top real-estate CEO suggests some young people might have voted for Trump because they’re sick of living in their parents’ basements

“The young voters who, after years living in their parents’ basement, swung right in this election, will expect President Trump to act as America’s real estate developer in chief, and build the housing that they need,” Redfin chief executive Glenn Kelman wrote Wednesday in a note titled: “Way-Too-Early Take: What Trump’s Re-Election Could Mean for Housing.”

In a prior interview, Kelman told me, “Biden’s basic problem with millennials is how optimistic can you be about the economy from your parents’ basement?” That was, of course, before President Joe Biden dropped out of this year’s race, before Vice President Kamala Harris became the Democratic Party’s candidate, and before Trump won it all. 

Home prices soared during the pandemic because people could work and live from anywhere, and mortgage rates were lower than they’d ever been. When inflation became a real hot problem, the Federal Reserve raised interest rates, indirectly lifting mortgage rates. Americans were left with high home prices and high mortgage rates—and still are, to an extent. Some people can’t buy homes, and others won’t sell them and lose their low mortgage rate: That’s why sales are depressed. Also, after years of underbuilding—and in some cases, decades of policy failure—there aren’t enough homes to go around. 

But Trump can maybe fix that, according to Kelman, by “setting aside well-meaning regulations on home-building that limit construction and make housing less affordable,” he said, partly referring to “environmental reviews in already well-settled areas, and limits on apartment buildings in neighborhoods of single-family homes.”

It isn’t up to the federal government, though; it’s all up to states and localities, who pretty much control development via land-use regulations, but Trump could create incentives for them to get housing built. “Many of America’s problems are hard to solve, but this one isn’t, especially for a president who loves construction,” Kelman said. Trump was once a real-estate scion, after all.  

So far, in the week since the former president has become the president-elect, demand in the housing world has leaped by one measure: Demand from home-buyers requesting service through Redfin’s site was about 25% higher this weekend than the same weekend last year, the largest year-over-year jump since things started to go south two years ago. “Some buyers are undoubtedly enthusiastic about a Trump economy; others may have been waiting to make major decisions until after the election,” Kelman said. 

Posted in Crisis, Demographics, Economics, National Real Estate | 91 Comments

Florida falls first?

Posted on November 13, 2024 by grim

From the NY Post:

Florida’s crumbling home prices haven’t been this bad since 2011

Florida’s sun-soaked southwestern coast, known for its wealthy enclaves and retirement appeal, is grappling with the steepest home price drops in more than a decade. 

From Sarasota’s luxury listings to Punta Gorda’s booming developments, property values have fallen at rates not seen since the post-recession days of 2011. 

Despite rising home prices across most of the US, certain Southeast metros, especially in Florida, are bucking the trend.

Data from the National Association of Realtors (NAR) paints a grim picture. The Punta Gorda area witnessed a 6.5% price drop this past quarter, pulling the median down to $350,000. North Port-Sarasota-Bradenton wasn’t far behind with a 5.8% fall, pushing median prices to $485,000. 

Cape Coral-Fort Myers also recorded a 3.7% dip, adding to earlier declines this year. Economist Lawrence Yun from NAR highlighted a cocktail of challenges pressuring the market, including increased housing supply, skyrocketing insurance premiums and accelerated construction in recent years.
…
Florida isn’t alone in this reversal. San Antonio, Texas, and Durham, North Carolina — cities that saw their real estate boom with over 20% gains two years ago — are now facing price corrections. 

And while national home prices inched up by 3.1% in the third quarter, with the median hitting $418,700, the pace of growth is slowing, indicating that affordability is still a major concern in many places. 

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 139 Comments

Seller and Buyer Profiles

Posted on November 12, 2024 by grim

From the NAR:

Profile of Home Buyers and Sellers 2024

First-time home buyers in the last year shrunk to an historic low of just 24 percent of all buyers. Prior to 2008, the share of first-time buyers had a historical norm of 40 percent. In the last two years, first-time home buyer household income has grown by $26,000. This year’s report shows that the median household income of first-time home buyers was $97,000. Underscoring the hurdles to entering the housing market, first-time home buyers’ median age reached an all-time high of 38 years old. In the 1980s, the typical first-time home buyer was in their late 20s.

The housing market appears bifurcated between repeat home buyers and first-time home buyers. Repeat buyers can enter the housing market with large downpayments (median of 23 percent), and 31 percent paid cash and did not finance their home. This is likely due to the increase in housing equity. If repeat home buyers are financing their home purchase, a larger downpayment helps to offset their mortgage payment due to the higher mortgage interest rate they could have. For repeat buyers, this is the highest downpayment seen since 2003. This year, downpayments also grew for first-time buyers, as they may need to make a more substantial offer among all-cash buyers. The typical downpayment for first-time buyers was nine percent, which is the highest share since 1997.


Repeat buyers also have the highest median age seen in the report’s history of 61. As half of repeat home buyers are over the age of 61, they are driven by the desire to purchase a home to be closer to friends and family at 17 percent. It should be noted that while this is the top reason to purchase a home, neighborhood preferences have also changed. Among all buyers, the quality of the neighborhood (59 percent) and convenience to friends and family (45 percent) are the top neighborhood factors.

Convenience to the home buyer’s job has declined incrementally and is now at 34 percent, down from 38 percent last year and down from 52 percent in 2014.


Overall, 83 percent of buyers were White/Caucasian, up from 81 percent last year. However, among first-time buyers, 36 percent are non-white home buyers. Nine percent of all buyers were born outside the U.S., which is true for 13 percent of first-time home buyers.


Among all home buyers, 62 percent are married couples, 20 percent are single women, and eight percent are single men. Multi-generational living remains popular, with an all-time high of 17 percent of all buyers purchasing a home that will house different generations. The most common reasons are for cost savings, elder care, and young adults moving back. The share of buyers with children under the age of 18 dropped to the lowest level seen at 27 percent of all buyers.

Posted in Demographics, Economics, Employment, National Real Estate | 55 Comments

No Crash?

Posted on November 11, 2024 by grim

From Bankrate:

Is the housing market going to crash? What the experts are saying

The U.S. housing market had finally started slowing in late 2022, and home prices seemed poised for a correction. But a strange thing happened on the way to the housing market crash: Home values started rising again. So much for the now-quaint notion that the post-pandemic “housing recession” would reverse some of the outsized price gains in homes.

In another reflection of ongoing increases, the S&P CoreLogic Case-Shiller home price indexfor August was up 4.2 percent from a year earlier, another all-time high. 

Despite prices being high, though, the volume of home sales has plunged, and inventories are still too low to meet demand. Homeowners who locked in 3 percent mortgage rates several years ago are declining to sell — and who can blame them, with current rates more than double that? — so the supply of homes for sale is staying tight. As a result, any correction will be nothing like the utter collapse of property prices during the Great Recession, when some housing markets experienced a 50 percent cratering of values.

“Even with the rapid price appreciation over the last few years, the likelihood of a market crash is minimal,” NAR chief economist Lawrence Yun said in a November 2024 statement. “Distressed property sales and the number of people defaulting on mortgage payments are both at historic lows.”
…
The main driver of record home prices is a one-two punch straight from Econ 101 — a lack of housing supply coupled with strong demand. Inventories have been growing but remain frustratingly tight, with NAR’s September data showing a 4.3-month supply. Not even high mortgage rates have slowed price appreciation. For instance, in October 2023, home values held steady even as mortgage rates soared to 8 percent, their highest level in more than 23 years. 

They have since dipped, but not enough to make a meaningful difference (despite the Fed’s rate cuts). The average rate for a 30-year fixed mortgage in Bankrate’s weekly survey released Nov. 6 was 7.0 percent.

“You’re not going to see house prices decline,” says Rick Arvielo, head of mortgage firm New American Funding. “There’s just not enough inventory.”

Skylar Olsen, chief economist at Zillow, agrees. “We’re not in that space where things are suddenly going to be more affordable,” she says.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 63 Comments

Inventory Up, Prices Up

Posted on November 8, 2024 by grim

From NorthJersey.com:

North Jersey real estate saw more new home listings, but higher prices, in October

New Jersey’s real estate market saw more new home listings and properties staying on the market longer in October, but also increasing home prices.

Overall, October marked the 12th consecutive month of inventory growth across the nation, reported Realtor.com. With 29.2% more homes actively for sale than at this time last year, the number of homes actively for sale is the highest it has been since December 2019.

Homes for sale across the nation stayed on the market for about 58 days, which is eight more days than at this time last year and three more days than last month, Realtor.com said. That made this past month the slowest October in five years.

As for interest rates, the median rate on a 30-year fixed-rate mortgage was 6.88% as of Oct. 31, the Wall Street Journal reported. And the median interest rate on a 15-year fixed-rate mortgage was 6%.

This is how North Jersey’s real estate market performed in October, data from Realtor.com showed.
…
In North Jersey, the counties of Bergen, Morris and Hudson all had more new listings in October than at this time last year. And the counties of Passaic, Essex and Sussex had a decrease in new listings compared with this time last year.

  • Bergen: 756 (4.71%).
  • Passaic: 294 (-0.68%).
  • Morris: 494 (28.65%).
  • Essex: 390 (-1.52%).
  • Sussex: 180 (-18.18%).
  • Hudson: 382 (1.6%).
    …
  • Of New Jersey’s 21 counties, 17 had an increase in median listing prices from October 2023. And when compared with September 2024, 14 counties had an increase in median listing prices.
  • In North Jersey, Hudson was the only county to see a decrease in median listing prices compared with this time last year. Hudson County had a 0.01% decrease, with a median listing price of $649,947. Otherwise, all other North Jersey counties saw prices increase.
  • Bergen: $779,500 (0%).
  • Passaic: $549,333 (15.66%).
  • Morris: $738,422 (7.41%).
  • Essex: $571,000 (12.4%).
  • Sussex: $427,500 (7.04%).
Posted in Housing Bubble, New Jersey Real Estate | 90 Comments

Fed Cuts!

Posted on November 7, 2024 by grim

From CNBC:

Federal Reserve cuts interest rates by a quarter point

The Federal Reserve approved its second consecutive interest rate cut Thursday, moving at a less aggressive pace than before but continuing its efforts to rightsize monetary policy.

In a follow-up to September’s big half percentage point reduction, the Federal Open Market Committee lowered its benchmark overnight borrowing rate by a quarter percentage point, or 25 basis points, to a target range of 4.50%-4.75%. The rate sets what banks charge each other for overnight lending but often influences consumer debt instruments such as mortgages, credit cards and auto loans.

Markets had widely expected the move, which was telegraphed both at the September meeting and in follow-up remarks from policymakers since then. The vote was unanimous, unlike the previous move that saw the first “no” vote from a Fed governor since 2005. This time, Governor Michelle Bowman went along with the decision.

The post-meeting statement reflected a few tweaks in how the Fed views the economy. Among them was an altered view in how it assesses the effort to bring down inflation while supporting the labor market.

“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the document stated, a change from September when it noted “greater confidence” in the process.

Posted in Economics, Housing Bubble, Mortgages, National Real Estate | 17 Comments

Who is better for housing?

Posted on November 5, 2024 by grim

From Mansion Global:

Housing Was a Factor for About 40% of Early Voters in the U.S. Presidential Election

For U.S. adults who voted in the presidential election by Nov. 1, about two in five said the housing market was a factor in their decision, according to a report from Redfin on Monday.

Of the 1,002 early voters surveyed, 38% said housing affordability affected their choice for president, while 40% said it was a factor in their local races. 

Kamala Harris voters were more likely to cite housing affordability as a concern than Donald Trump voters, with 43% of early Harris voters reporting that it impacted their decision, compared with 29% of Trump voters who said the same.

Homes in blue areas of the U.S. tend to be much more expensive than red areas, which is likely a reason why Harris voters were more concerned with the housing market than Trump voters, according to Redfin. 

Of the 14 issues Redfin surveyed early voters about, housing affordability ranked 12th, having more weight than only climate change (36% of voters said it was a factor) and access to gender affirming care (19%). 

The economy was the top concern among those who already voted, with 63% saying it impacted their choice for president. Inflation was No. 2 at 59%, followed by protecting democracy (56%). 

About one-third of the survey respondents believe mortgage rates will fall if Trump is elected, while 23% think they’ll drop if Harris is elected. Additionally, 32% think rates will increase under a Harris presidency, while 28% believe they’d rise if Trump wins. 

Posted in National Real Estate, Politics | 167 Comments

Make me move

Posted on November 4, 2024 by grim

From CNET:

Most Homebuyers Won’t Budge Until Mortgage Rates Drop to 4%, CNET Survey Finds

A recent CNET survey found that half of US adults say lower mortgage rates would make them realistically consider purchasing a house. If average mortgage rates were to fall to 4% or below, that rate could potentially unlock the housing market.

Except bargain mortgage rates aren’t likely in the near term. And experts say it would take a severe economic downturn for mortgage rates to reach the record lows we saw during the pandemic. 

After peaking above 8% in late 2023, average mortgage rates have been in the mid-6% range for a while. They could drop close to 6% by the end of the year, but that’s still not enough to draw buyers off the sidelines. A mere 4% of US adults would realistically consider purchasing a home or refinancing their mortgage at a 6% rate.

Posted in Economics, Housing Bubble, Mortgages, National Real Estate | 52 Comments

NJ home prices up 552% in 40 years

Posted on November 2, 2024 by grim

From Axios:

Washington home prices rose more than 800% in 40 years

Posted in Demographics, Economics, Employment, National Real Estate | 48 Comments

Wait and see

Posted on November 1, 2024 by grim

From NorthJersey.com:

Do presidential elections affect the housing market? Here’s what experts had to say

The time surrounding a presidential election is often said to see a slowdown in real estate activity in some markets. Though not by a significant margin, inventory levels and completed transactions may dip as buyers and sellers take a wait-and-see approach before making any real estate decisions, according to Nationwide Mortgage Bankers.

“I think a lot of years, you’ll see a bit of a slowdown during an election month. I think people are just kind of waiting to see what happens this year,” said Dutch Mendenhall, co-founder of RADD Companies. “It’s been a rough year for people in real estate up until about 60 days ago, and then 60 days ago it really started to change. And then 30 days ago, it really started to shift more, with interest rates shifting and changing.”

Bankrate analyst Jeff Ostrowski said the idea that there is less real estate activity during this time is something that is typically spoken about by real estate agents and loan officers. But he said there’s very little, if any, statistical evidence to demonstrate that it is a consistent trend in presidential election years.

In addition to inventory, things like mortgage rates and listing prices are also not typically affected during an election year, Ostrowski said. If home prices or interest rates shift, it is due to factors that have already been at play in our real estate markets.
…
Both Democratic candidate Kamala Harris and Republican candidate Donald Trump have several proposed policies as part of their campaigns that relate to housing. And while these things will not have an immediate impact on our housing market, they could in the long term, based on which candidate is elected.

Harris’ plan calls for the construction of 3 million new housing units across the country over the next four years to increase housing supply; $25,000 in down payment assistance to as many as 4 million first-time buyers who have paid their rent on time; and stopping investors from buying and marking up housing, USA Today reported.

Posted in Housing Bubble, National Real Estate, Politics | 89 Comments

Availability improving?

Posted on October 31, 2024 by grim

From the NAR:

October 2024 Monthly Housing Market Trends Report

  • The number of homes actively for sale continues to be elevated compared with last year, growing by 29.2%, a twelfth straight month of growth, and is now highest since December 2019.
  • The total number of unsold homes, including homes that are under contract, increased by 22.5% compared with last year.
  • Home sellers increased their listing activity in October, with 4.9% more homes newly listed on the market compared with last year, but this was sharply down from last month as mortgage rates rose to two month highs. 
  • September’s increase in new listings is strongly correlated with a rise in pending listings across the largest U.S. markets in October, such as Seattle, Boston, and San Diego.
  • The median price of homes for sale this October was flat compared with last year, at $424,950, however, the median price per square foot grew by 2.1%, indicating that the inventory of smaller and more affordable homes continues to grow in share.
  • Homes spent 58 days on the market, the slowest October in five years. This is eight days more than last year and three more days than last month.
  • The share of listings with price cuts was unchanged from last year, with 18.6% of sellers cutting prices in the month of October.
  • Home prices in swing states mirror home prices in red states much more than blue states since the last election, tending to be about 30-40% less expensive than blue states on a per square foot basis but 10-20% more expensive than red states.
Posted in Demographics, Economics, National Real Estate | 78 Comments

Beetlejuice in NJ

Posted on October 30, 2024 by grim

From NorthJersey.com:

How to book an Airbnb tour of this ghostly ‘Beetlejuice’ house in New Jersey

He’s the ghost with the most, babe, and now the site of his ghostly hauntings is open for the public to tour — if they dare — right here in New Jersey.

In the quaint town of Hillsborough lies a ghoulish replica of the famed Deetz residence from the award-winning 1988 film “Beetlejuice” and its high-acclaimed sequel that was released in September, “Beetlejuice Beetlejuice.” Draped in a mourning veil for her beloved husband, Delia Deetz is opening up her home from the Afterlife for a limited time on Airbnb.

Ghost hunters, art enthusiasts and lifelong fans can submit a request to book the home on the platform for one of 10 three-hour visits for up to six guests each between Nov. 16 and 27. Requests will be accepted until Nov. 4 at 11:59 p.m. PT, or Nov. 5 at 2:59 a.m. ET. The price is not disclosed until you get an invitation to book.

“Now that my work is posthumously appreciating in value and recognition, it’s only fair that artistic souls be invited to my magnificent home,” Delia said. “So, come admire my life’s work and Create with a capital C in the first-ever art class from beyond the grave. Just watch out for that pesky trickster in the attic!”

Posted in Humor, New Development, New Jersey Real Estate | 41 Comments

$700k to live in Staten Island

Posted on October 29, 2024 by grim

From SI Live:

Median price of a Staten Island home hits $700,000, report says

Staten Island home prices are continuing to rise, according to the latest report from the Staten Island Board of Realtors (SIBOR) — and the median sales price of homes in the borough recently hit $700,000, a 3.7% jump from 2023.

“The continuing rise in prices shows an unfortunate lack of entry-level inventory; some policy changes are necessary to assist that end of the market,” said Sandy Krueger, CEO of SIBOR. “I wouldn’t expect much to happen until this year’s election season is over.”

Staten Island’s rising home prices are in line with the nationwide trend, with the National Association of Realtors (NAR) reporting a median sales price of $416,700 as of last measure — a 3.1% increase from the same time last year and a new high for the month.

And price is not the only number that’s growing: When compared to September 2023, new listings on the Island increased 2.7% to 420, and pending sales were up 2.4% to 302. Inventory levels, however, fell 16.7% to 1,195 units.

The days on market statistic was also down 5.9% to 62 days, and sellers were encouraged as the “months supply of inventory” was down 19.5% to 3.9 months.

Posted in Demographics, Economics, Housing Bubble, National Real Estate, NYC | 33 Comments