Housing Prices | GeorgMedia

November 8, 2022

Americans’ confidence in home buying has fallen to its lowest level since Fannie Mae’s survey began

home for sale — Rising mortgage rates and high house prices are driving potential homebuyers away, according to Fannie Mae’s chief economist.
Joe Raedle/Getty Images

Just 16% of Americans believe now is a good time to buy a home, a Fannie Mae survey found.
Rising mortgage rates now at 7% and high house prices are putting off potential buyers.
“We expect home sales to slow even further in the coming months,” Fannie Mae’s chief economist said.

Americans haven’t felt this gloomy about the US housing market since Fannie Mae first started surveying the sector over a decade ago.

The government-sponsored mortgage provider’s Home Purchase Sentiment Index, which tracks attitudes towards both buying and renting, fell 4.1 points to 56.7 in October for its lowest reading since it began in 2011.

Just 16% of respondents believe now is a good time to buy a home, down from 19% last month.

Meanwhile, the percentage who feel it is a bad time to buy rose from 75% in September to a record 80% in October.

Rising mortgage rates and elevated home prices are both pushing potential buyers away from the housing market, according to Fannie Mae’s chief economist.

“Consumers are increasingly pessimistic about both homebuying and home-selling conditions,” the firm’s senior vice president Doug Duncan said.

“Amid persistently high home prices and unfavorable mortgage rates, the ‘bad time to buy’ component increased to a new survey high this month, while the ‘good time to sell’ component continued its downward trend.”

Mortgage rates have soared this year as the Federal Reserve hikes interest rates to try to curb red-hot inflation, with higher borrowing costs making it harder for homebuyers to enter the market.

The 30-year mortgage rate averaged 6.95% as of Thursday, according to Freddie Mac, compared with 3.09% a year ago.

High home prices are also alienating potential buyers, with the national average house price jumping 40% since the start of the pandemic in March 2020 due to fiscal stimulus fueled demand clashing with tight supply, according to ING.

Fannie Mae forecast home sales – which have already fallen for eight consecutive months – to carry on slumping as the market becomes even less affordable.

“As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months,” Duncan said.

Some experts believe the downturn in the US housing market could prompt the Fed to re-evaluate its policy on monetary tightening. Wharton professor Jeremy Siegel has said the US central bank is overlooking how significantly home prices are declining, as the available data is backward-looking.

Read the original article on Business Insider

November 11, 2021

Manhattan just fell off America’s top 20 most expensive zip codes

Post-lockdown Manhattan hasn’t regained its spot among the top US zip codes – quite the opposite.
For the first time ever, none of the borough’s zip codes were in PropertyShark’s ranking of the 100 most expensive neighborhoods.
While the city’s economy is rebounding, the pandemic might have permanently marred its housing market.

The richest Americans are sleeping on the city that never sleeps.

New York City’s housing market might’ve had a “hot vax summer,” but it still hasn’t recaptured its prepandemic glitz. Manhattan fell out of the top 20 most expensive zip codes in 2021, according to a PropertyShark report published Monday. For the first time in its tracking, the report said, the city isn’t home to any of the country’s priciest neighborhoods.

The ranking reveals that, despite the city’s resurgence, Manhattan isn’t the same city as was in early 2020. Its economy was kneecapped by its time in 2020 as the epicenter of the COVID crisis in the US.

Even though Manhattan’s recovery since has been dramatic, with roughly 83% of its residents having at least one dose of a COVID vaccine, and everyday life a far cry from the quiet quarantines seen through much of 2020, PropertyShark’s report shows Americans’ wealth shifting elsewhere. New York City only had six zip codes in the list’s top 100, down from 10 zip codes in 2020.

The state’s most expensive zip codes were found in the Hamptons. Sagaponack was the third most expensive neighborhood in the US, with a median home-sale price of $5 million. The decline of Manhattan neighborhoods and the rise of the Hamptons echoes the pandemic migration wealthy New Yorkers took to escape the densely packed city.

Manhattan still holds its fair share of pricey locales. The 10013 zip code – which covers parts of the TriBeCa, SoHo, Little Italy, and Hudson Square neighborhoods – was the country’s 22nd most expensive, with a median sale price of $3.2 million. That’s up 7% from last year’s level. Still, the area has yet to fully recover from the 19% price drop it saw throughout 2020.

The 10007 zip code followed close behind in the 25th spot with a median sale price of $3.1 million. The area covers downtown Manhattan and some of TriBeCa and SoHo. Selling prices slightly declined throughout 2021, leading the area to plunge 14 spots from its 2020 ranking.

The rest of the PropertyShark list shows relatively little change during the recovery. The Bay Area suburb of Atherton, California reigned supreme for the fifth straight year. It’s median sale price rose to $7.5 million from $7 million through the year. The Bay Area was broadly the most expensive metropolitan area, with 47 zip codes landing in the top 100.

Los Angeles County also held its wealth over the last 12 months. The area hosted 21 of the country’s most expensive zip codes, with Beverly Hills’ 90210 and the coastal Pacific Palisades neighborhood ranking in the top 10.

Just as Manhattan saw the harshest shift during lockdown, its real estate environment could face the most lasting change. The city is still among the country’s most expensive. But as home values continue to soar higher, Manhattan prices are settling at a slightly lower ceiling.

Read the original article on Business Insider

October 9, 2021

Housing prices are booming in the area surrounding Tesla’s planned Gigafactory in Austin, Texas

Tesla CEO Elon Musk visits the Gigafactory Berlin construction site on May 17, 2021.
Christophe Gateau/Getty Images

Housing prices near Tesla’s new Austin-based Gigafactory are surging.
Home prices in the county where the factory will be built were up 53.7% compared to last year.
CEO Elon Musk officially announced Tesla’s HQ move to Texas on Thursday after much speculation.

Housing prices surrounding Tesla’s new Austin-based Gigafactory are increasing as Tesla also prepares to move its corporate headquarters to Texas.

In September, home prices in Travis County, Texas, where the factory will be built, were up 53.7% compared to last year, selling for a median price of $363,000, according to Redfin. That’s more than a 26% increase compared to Austin, Texas as a whole.

Tesla confirmed the new factory’s location in July 2020 after a bidding process involving several other southern cities, Insider reported. Tesla was offered $65 million in tax rebates over 10 years to take over a concrete plant. The plant will become a 5 million-square-foot factory for Tesla’s Cybertruck, Semi truck, and Model 3 and Y.

Tesla said plans to hire up to 5,000 workers at a starting wage of $15 an hour for many of the low-skill manufacturing roles, according to Insider.

Tesla CEO Elon Musk made the announcement that the company would relocate its headquarters to Texas at its annual shareholder meeting on Thursday.

Homes for sale in the areas surrounding the plant have already started listing their proximity to the factory. A four-bedroom, three-bathroom house for sale in Austin, Texas is advertising a “great location- 13 min from Tesla,” on Redfin.

“I think there will be a premium on being close to Tesla HQ, especially since a portion of engineering jobs will have to be in person,” said Daryl Fairweather, Redfin’s chief economist, told Austin’s local news station KXAN in an email.

Redfin defines Travis County as a “very competitive” area for home buyers. The most popular homes can sell for about 12% above the list price and go pending in around 19 days, according to data from the real estate website.

Musk has already moved himself to the Lone Star State after fighting with California over its coronavirus restrictions, Insider reported. Musk already moved his charitable foundation to Texas, too, further fueling speculation that a new factory would soon follow. SpaceX, Musk’s other venture outside of Tesla, also has a launchpad in Texas.

Musk was the highest-paid CEO in the country in 2019. The move allows the CEO to see a bit more out of his paycheck as Texas has no income tax compared to California which has some of the highest rates in the US.

Read the original article on Business Insider

May 17, 2021

BlackRock’s Rieder says the Fed should start tapering asset purchases ‘sooner rather than later’

BlackRock’s Rick Rieder said the Fed should start tapering its asset purchases in a new interview Monday.
Rieder said the Fed has done an “incredible job” during the pandemic, but he believes its “time to evolve the policy.”
The BlackRock bond CIO added that he believes the Fed can begin tapering asset purchases and still maintain an “accommodative” stance.
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BlackRock’s global fixed income chief investment officer, Rick Rieder, says the Fed should start tapering asset purchases “sooner rather than later.”

In an interview with Bloomberg on Monday, Rieder said he believes the Fed has done “an incredible job” rescuing the American economy amidst a global pandemic but thinks it’s “time to evolve the policy here” and begin tapering asset purchases.

The Federal Reserve, under the direction of chair Jerome Powell, said it will continue to buy at least $120 billion of bonds each month “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals” in a meeting back in December.

Rieder’s comments stand in opposition to Atlanta Fed President Raphael Bostic, who told reporters last week that he believes it’s too soon to consider changing interest rates or tapering asset purchases.

“There is a lot of healing that would need to happen before I would want to start to be thinking about us having made substantial progress,” Bostic said in comments to reporters after a speech at a Consumer Financial Protection Bureau conference.

“Right now, I’m not sure I am at a place where I would be wanting to force that (tapering) conversation at a committee level,” he added.

Rieder, on the other hand, said that markets are “awash with liquidity today” and that it’s fueling inflation concerns.

Some of those concerns may be transitory, according to Rieder, but some are more durable.

“If you said to me what’s going to be durable in terms of inflation, it will be shelter. It’ll be the fact that we don’t have enough homes,” Rieder said.

The BlackRock CIO highlighted data from National Home Builders Association shows lumber prices alone have driven up the value of the average new single-family home by over $30,000 since last April.

Rieder did say that he’s not sure if the liquidity dynamic in markets today will create the long-term inflation some market pundits are expecting, but also argued the Fed should begin moving away from its emergency policies either way.

“So if I were the Fed, I mean I would taper down the amount of buying they are doing in the front end,” Rieder said.

“Save some powder for continuing to be a buyer at the longer end of the yield curve in case people get too worried about inflation, but I would start to taper sooner rather than later, but you know, we’re going to watch how they’re going to think through that,” Rieder added.

Rieder also said that he doesn’t believe a mild tapering will hurt markets and noted that the last jobs report was not representative of the true hiring levels seen in the US.

“Hiring is going to take place, it’s got real momentum to it that won’t, because of the Fed tapering, will not slow down in any way, shape, or form.”

Rieder concluded by saying that he believes the Fed can evolve its policy and still be “accommodative” towards markets.

Read the original article on Business Insider

May 11, 2021

Two NYC mayoral candidates think the median home in Brooklyn sells for less than $100,000. Only Yang guessed correctly.

donovan mcghuire brooklyn housing 2x1 — New York City Democratic mayoral candidates Ray McGuire (left) and Shaun Donovan (right).
David Dee Delgado/Getty Images

Two NYC mayoral candidates were way off target when asked to guess home prices in Brooklyn.
Democrats Shaun Donovan and Ray McGuire were off by around $800,000 on the median sale price.
Andrew Yang was the only one who answered correctly during his interview with The New York Times editorial board.
See more stories on Insider’s business page.

A pair of Democratic New York City mayoral candidates offered drastically low estimates when asked about the median housing price in Brooklyn.

Ex-Citigroup executive Ray Donovan estimated that the middle figure was around $80,000 to $90,000. Former Housing and Urban Development Secretary Shaun Donovan guessed $100,00. Both were wrong – by some $800,000.

The question from Mara Gay of The New York Times editorial board took the pulse of how familiar the candidates are with the Big Apple’s affordable housing crisis.

“In Brooklyn, that number has gone up now,” McGuire said. “It depends on where in Brooklyn.”

Gay reiterated that it’s the median for the borough, meaning the price at which half of homes are more expensive and half are less.

“It’s got to be somewhere in the $80,000 to $90,000 range, if not higher,” McGuire said.

To that, Gay said: “The median sales price for a home in Brooklyn is $900,000.”

McGuire did, however, correctly estimate that the median rental price for an apartment in Manhattan is $3,000 per month.

Donovan, who ran the Department of Housing and Urban Development in the Obama administration from 2009 to 2014, ended up offering an even lower figure.

“In Brooklyn, huh?” Donovan said in his interview. “I don’t [know] for sure. I would guess it is around $100,000.”

When Gay pointed to the $900,000 figure, Donovan asked if it included apartments. He later emailed the Times saying that his estimate referred to the assessed value of homes in the borough, adding “I really don’t think you can buy a house in Brooklyn today for that little.”

Frontrunner Andrew Yang ended up getting the figure spot-on when he was asked the same question.

“This is, like, blowing my mind, this question,” Yang said in his editorial board interview. “So median home – could be any size, right? So some of them would be very substantial. But you’re looking at the median, so you have to, like, whittle down. I would just say that the median – it’s going to be something, like, much higher than it should be. So the number that popped into my mind is $900,000.”

“That’s exactly right,” Gay replied.

“No way!” Yang said. “I was going to go with $800,00 or $900,000.”

Other candidates in the field overshot the figure, with City Comptroller Scott Stringer pegging it at around $1 million, and attorney Maya Wiley offering the highest estimate at $1.8 million. Meanwhile, Brooklyn Borough President Eric Adams guessed that it was $550,000, while non-profit executive Diane Morales put it at $500,000.

Kathryn Garcia, former commissioner of the city’s Sanitation Department, said the median housing price in Brooklyn was $800,000. She received the Times endorsement.

Read the original article on Business Insider

April 8, 2021

Home prices in Seoul rose by 22% last year, the biggest increase in any major city in Asia

Seoul South korea — Home prices in Seoul increased by 22%.
Allan Baxter / Getty Images

The average home price in Seoul, South Korea, rose by 22% year over year in 2020.
That’s the biggest price increase of any major city in Asia, per a new report from Knight Frank.
Home prices in New Zealand, Turkey, and Russia also saw major increases.
See more stories on Insider’s business page.

Home prices in Seoul are taking off.

The South Korean city saw a 22% increase in home prices from Q4 2019 through Q4 2020, according to a new report from global wealth consultancy Knight Frank.

It’s the biggest price increase among all major cities in Asia, and it far eclipses the next-highest price change amongst cities in the region. No other Asian city tracked a greater than 10% increase in the same time period.

Seoul, a city of around 9.9 million, is trying to position itself as an alternative to Asia’s financial hubs, and many locals are finding themselves priced out of the real estate market.

The city has faced an increasingly dire affordability crisis since President Moon Jae-in took office in 2017. Despite the government announcing nearly two dozen measures to curb increases over the past three years, home prices in Seoul have risen by 50% since 2017, per a Reuters report.

Skyrocketing home prices in cities across New Zealand and Russia

Urban home prices globally increased by an average of 5.6% in 2020, Knight Frank reported. That’s up from 2019, when home prices saw a 3.2% increase.

In a press release, Victoria Garrett, head of residential, Asia-Pacific, for the firm said buyer confidence is expected to grow with vaccine rollout and addressed fears of a housing bubble.

“Governments are now starting to watch residential markets closer to minimise the risk of asset bubbles,” Garrett said.

The three biggest home price changes over the 12-month period were all recorded in Turkey, though the report notes price growth in Turkey is linked to high inflation and changes with the lira. Ankara, Izmir, and Istanbul led the ranking with 30.2%, 29.4%, and 27.9% changes respectively.

New Zealand’s home prices are also taking off, with two major cities – Auckland at a 26.4% increase and Wellington at 18.4% – ranking among the top 10 cities globally. Bloomberg recently reported that the housing market in New Zealand is “brutal,” citing a dilapidated bungalow in an Auckland suburb that sold for NZ$1.81 million and a national median home price that’s 6.7 times higher than the average annual income.

Russian cities, too, made appearances in the report’s top ten rankings with St. Petersburg (25.4% increase) and Moscow (21.2% increase) at No. 5 and No. 7 respectively.

For its global residential cities index, Knight Frank tracks the movement in mainstream residential prices across 150 cities worldwide.

Read the original article on Business Insider

April 6, 2021

US home prices soared at the fastest rate since 2006 in February

House for sale US — A house’s real estate for sale sign shows the home as being “Under Contract” in Washington, DC, November 19, 2020.
Saul Loeb/AFP/Getty Images

US home prices surged 10.4% year-over-year in February, the biggest such jump since 2006.
The market has been red hot during the pandemic, but affordability represents a new challenge.
Price growth will cool into 2022 as mortgage rates rise and price out more buyers, CoreLogic said.
See more stories on Insider’s business page.

Everyone knows it’s been hard to find an affordable house amid the pandemic, but as the data comes in, it’s becoming clearer just how hard.

The answer: Extremely.

US home prices continued to rip higher in February as supply constraints across the country and outsize demand boosted competition.

Selling prices increased 10.4% in February from year-ago levels, marking the largest year-over-year gain since 2006, according to CoreLogic data published Tuesday. Prices rose 1.2% from levels seen in January 2021. Idaho and Montana saw the biggest jumps, with year-over-year gains of 22.6% and 19.5%, respectively, according to the financial analytics firm CoreLogic.

And the outlet sees another year of more expensive housing ahead, projecting prices will rise another 3.2% by February 2022. The end of the pandemic can ease constraints on supply, CoreLogic said. On the demand side, it expects the lack of affordable housing to cut into some potential purchases.

“The run-up in home prices is good news for current homeowners but sobering for prospective buyers,” Frank Nothaft, chief economist at CoreLogic, said. “Those looking to buy need to save for a down payment, closing costs, and cash reserves, all of which are much higher as home prices go up.”

The housing market was among the few hotbeds of economic activity throughout the coronavirus pandemic. The Federal Reserve’s emergency rate cuts in March 2020 pulled mortgage rates to numerous record lows throughout last year, leading many to take advantage of more appealing borrowing costs. Prolonged work-from-home periods spurred moves from apartment-dense cities into suburbs, which also lifted housing-market demand.

The buying spree quickly snapped up most of the market’s available supply, but that streak recently showed signs of slowing. For one, expectations for a strong economic recovery saw investors dump Treasurys in recent weeks, lifting yields on government debt and in turn leading mortgage rates to swing higher. Rates now sit at their highest levels since June after rising for seven weeks straight.

The turnaround in mortgage rates and soaring prices seemed to finally bite into the housing market’s rally in February. Existing home sales fell 6.6% that month to the slowest rate since August, according to the National Association of Realtors. At the same time, supply remained a measly 1.03 million units, a level that would only satisfy two months of sales at the February rate. Should prices trend even higher, the red-hot market could cool even faster.

“Homebuyers are experiencing the most competitive housing market we’ve seen since the Great Recession,” CoreLogic CEO Frank Martell said. “As affordability challenges persist, we may see more potential homebuyers priced out of the market and a possible slowing of price growth on the horizon.”

Read the original article on Business Insider

March 27, 2021

A $400,000 house got 122 offers in 2 days, highlighting the desperate frenzy buyers are facing amid skyrocketing real-estate prices and a dearth of homes for sale

Suburban neighborhood aerial view — Rolf Schulten/ullstein bild via Getty Images

A central California home for sale received 122 offers in a single weekend.
The selling price was “in the mid-$400,000 range,” according to Fox affiliate KTXL.
It’s a symptom of a soaring real estate market where inventory is low and demand is high.
See more stories on Insider’s business page.

A California home received 122 offers in a single weekend amid a skyrocketing US real estate market.

The 1,400-square-foot home – located in Citrus Heights, California, a suburb of Sacramento – was listed at $399,900. It spans 1,400 square feet and has three bedrooms, two bathrooms, and a swimming pool, according to a report from KTXL, the local Fox affiliate.

The house received 122 offers in two days, including one above $500,000, and has since been sold for an undisclosed amount – KTXL reports the selling price was “in the mid-$400,000 range.”

The home’s current owners predicted they would receive eight or 10 offers for their home. They’re planning to move to Idaho, KTXL reports.

The unprecedented number of offers is a symptom of a pandemic-related surge in home sales. According to a September report from the National Association of Realtors, existing home sales reached a 14-year high last August. Similarly, housing inventory hit a record low in September, and dipped even lower one month later to 2.5 months of supply.

Those who already own homes are opting not to sell, and new home construction has dipped over the years. But according to Bloomberg, new home construction rose to a new high last August, its highest since 2006.

Given the low inventory, home prices are also on the rise. Prices soared through the end of 2020, jumping the most in seven years by December, according to the S&P Case-Shiller US home-price index. Phoenix, Seattle, and San Diego saw price increases among the 19 cities surveyed.

A rush to buy up homes may lead to regret for new homeowners

The real estate frenzy is driven by a combination of factors. Mortgage rates hit record lows a dozen times in 2020 alone, and the pandemic induced a desire for outdoor space or a more comfortable work-from-home arrangement.

According to research from investment management firm Cowen and Company published late last year, there’s been a noticeable migration among people ages 25 to 34 from urban areas to suburban ones. Among the 2,700 people Cowen surveyed, 48% of millennials reported living in the suburbs compared with 44% in 2019.

Those who reported living in cities fell to 35%, down from 38% last year.

“This suburbanization trend has been slowly occurring since 2017, and we expect it to accelerate with the COVID-19 disruption,” Cowen analyst John Kernan wrote. “These results are also corroborated by a shift in home ownership.”

The rush to snap up homes during the pandemic has already led to regrets for many buyers. The Wall Street Journal’s Candace Taylor reported last month that buyers were making hasty purchases, skipping due diligence, and waiving inspections. One family discovered a wasp infestation after closing on the house, while another learning they’d have to spend $150,000 on siding to alleviate a woodpecker issue.

A LendEDU survey from September found that roughly 55% of Americans who bought houses during the pandemic reported buyer’s remorse – 30% of those people said they should have waiting to buy a home for financial reasons.

Scott Trench, the CEO of the real-estate-investing resource BiggerPockets, recently told Insider’s Taylor Borden that it may not make sense to try to buy a house right now.

“Frantically trying to buy ‘something’ is a great way to make a bad purchase,” he said.

Read the original article on Business Insider