BY BRAD BECKETT ON NOVEMBER 9, 2018
The U.S. government is reporting that the national vacancy rates in Q3 2018 were 7.1% for rental housing and 1.6% for homeowner housing. The rental vacancy rate was virtually the same as Q2 and 0.4% lower than the third quarter of 2017. The homeowner vacancy rate was 1.6%, which is 0.1 percentage points higher than the the second quarter 2018, but is the same as one year ago. The U.S. homeownership rate was 64.4%, which was not statistically different from the second quarter 2018 or one year ago.
BY BRAD BECKETT ON OCTOBER 25, 2018
Have you ever bought a property, sight-unseen? According to recent data from Redfin, one in five recent homebuyers said they made an offer sight-unseen. That figure is 35% less than a similar survey conducted last November. Redfin obtained their data from a survey in May of 1,463 people across 14 major markets who had bought a home within the last year.
“Now that most homes are staying on the market for longer than a week, there just isn’t as much pressure for buyers to make offers so hastily,” said Jessie Culbert, a Redfin agent in Seattle. “That’s a big change from earlier this year when sellers set offer review deadlines…This meant that whether or not you had time to physically step inside the home, you had to get your offer in on time in order to be considered…”
BY BRAD BECKETT ON OCTOBER 25, 2018
According to the latest CoreLogic Single-Family Rental Index (SFRI), single-family rents in August 2018 were up 3.1% year over year. CoreLogic’s SFRI index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. In addition, the report shows that single-family rents climbed steadily between 2010 and 2018. However, year-over-year rent growth has slowed since February 2016, when it peaked at 4.1%, and has stabilized over the last year with a monthly average gain of 2.8%.
BY JESSE BREWER ON OCTOBER 24, 2018
No taxation without representation’ and how that applies to non-resident property owners
by Jesse Brewer
Being in the rental property business, I am required to pay many property tax bills, and given that I own real estate in neighboring counties, I am forced to pay county, city, and other taxes for these properties. I live in Northern Kentucky, which is also part of the greater Cincinnati, Ohio region.
While I understand that I must pay taxes to these governments for schools, police, fire, and other government services for the properties I own, what I don’t get is that I have absolutely no say in how these properties are assessed, who gets to assess them, and what tax rates I must pay.
Normally, you get to have a say in these types of things when you vote for leaders in that particular community; however, since I don’t live in these municipalities, I don’t get to vote for the city council persons, county leaders, school board representatives, or other persons who determine these issues. The problem with this issue is one of the basic principles upon which our beloved United States was founded and for which we went to war to gain our independence — Taxation without Representation.
“Taxation without Representation” is defined in Dictionary.com as this: “A slogan of the Revolutionary War and the years before. The Colonists were not allowed to choose representatives to parliament in London, which passed the laws under which they were taxed. To be taxed only with the consent of one’s representatives in Parliament was a particularly cherished right of the people under English law, a right dating back to Magna Carta in the 13th century. Each additional tax caused fresh resentment among the colonists. Taxation without representation is one of the principal offenses of Britain listed in the Declaration of Independence.”
Wow. Take a moment and let that sink in. Read it again if you need too.
Being taxed without representative government to hear your voice (i.e., someone for which you vote) is a cherished right dating back to Magna Carta, but yet here we are today, being taxed six ways to Sunday with zero say about it.
I know what you may be thinking, this is all sounds good in theory but how much really can you be paying without having a say. For the purpose of trying to better explain this issue, I’m happy to share with you some of my personal numbers in this matter. I live in Boone County, Kentucky. While I own property in the county, the majority of my rental property is in Kenton County.
For the 2017 tax year, I will pay a total of $38,758.32 in property taxes to various government agencies. Now, $2,100 of that amount is paid to the state of Kentucky, and I do have a representative at the state level, so I cannot count that as not being represented. The problem becomes the other $36,658 of it.
I own property in Covington, Kentucly; therefore, I have the privilege of paying Covington public schools more than $1700 per year. I get to pay the City of Covington itself $5,189.18 and the Kenton County Fiscal Court $2,668 annually. The Kenton County Library gets $1,945.76 and another $6,625 in 911 dwelling fees also goes to Kenton County. In Newport, I have the privilege of paying that city $6,443.84 a year, plus other 911 fees, taxes to the Campbell County Library, and a slew of other taxes.
Officials elected in these areas set these tax rates. The Covington school board members are all Covington residents. The Covington Board of City Commissioners also is elected by Covington residents. Of course, Kenton County residents elect members of the Kenton County Fiscal Court. All of these elected officials get to dictate how much I get to pay, yet I have ZERO voice in their “parliament,” or in this case, their city hall, city school board, or county government. Now, I’m not a historian, but to me, the situation I just described fits the meaning of “Taxation without Representation” to a tee.
I understand that some elected officials who represent me in Boone County also represent residents in Kenton County as well. For example, we have the same Congressman, same U.S. Senators, same Governor, same state officials, such as secretary of state and others who serve in Frankfort, and I can accept that I shouldn’t get to vote for these persons multiple times.
However, wouldn’t it be fair to let people who have a vested equitable interest (real estate) in the community – taxpayers — have a right to vote on the local elected officials who can levy taxes and fees on them? No matter where they live give the only one vote for a congressman, even if the property they own is in a different congressional district, they are still being represented, give them one vote for Governor, give them one vote for US Senator and all the other federal, state and judicial offices. The only things maybe allow them to vote for are elected officials that are with the city or county, that can levy higher taxes, special fees and other related items that are attached to properties. It can even be simplified by restricting the person to their only “one vote” type offices to their home address, much like it is now.
After all, isn’t that one of the basic principles this country was created upon and one of the essential freedoms many of our ancestors died trying to obtain?
Yet, year after year this violation of our constitutional rights goes on and nobody mentions it or seems to care. I suspect that this would never happen. Not because it seems “drastic” or draconian, but because politicians would lose their ability to tax those that cannot be represented all while trying to minimize the tax burden they put on the few that can vote for them and keep them in office.
Jesse Brewer purchased his first rental property in 2003, a single family house in Newport, Kentucky that he still owns to this very day. Since then Jesse has acquired several more investment properties in his portfolio that consist of single family homes, multi-unit buildings and commercial use spaces. In 2005 Jesse earned real estate licenses in both Kentucky and Ohio so that he could begin helping others build their own cash flow real estate portfolios. He is a member of Queen City REIA, in Cincinnati, Ohio and is a Boone County, Kentucky, Commissioner (District 3–elect). Jesse was also featured in the Member Spotlight of the Spring, 2018 issue of the RE Journal.
BY BRAD BECKETT ON OCTOBER 24, 2018
Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for October, 2018 where they share their thoughts on developments taking place in the U.S. economy.
National Economic Outlook – October 2018
October 23, 2018
By: Ingo Winzer
After the wrenching ups and downs of real estate markets over the last ten years, it’s fair to ask where we are now. Home construction can give us a partial answer. Back in the boom days before 2008, when sub-prime mortgages put an extra 5 million people into a home, builders were putting up units as fast as they could – about 2 million per year. It still wasn’t enough, though, and home prices kept climbing.Then, during with the recession, when many sub-prime loans ended in foreclosure, construction plunged to little more than half a million units per year – and many builders went out of business. In recent years activity picked up again and last year 1.3 million new homes were built.
For the size of the US population, however, the average number of homes built per year should be 1.8 million. We haven’t seen that level since 2006. What this means is that even though too many homes were built before 2008, we’re now facing a chronic shortage. Builders can’t possibly scale up fast enough, so we’ll see demand greater than supply for years – and higher home prices.
Total jobs in September were up 1.7 percent from last year, the same rate we’ve seen for months. Jobs were up 2.2 percent in manufacturing, 0.4 percent in retail, 1.4 percent in finance, 2.8 percent in business services, 1.9 percent in healthcare, and 1.7 percent at restaurants. As usual, government jobs were almost flat.
The increase in manufacturing jobs is encouraging, but it’s business services that’s pulling the economy along. The lack of growth in retail jobs – online shopping – looks like it’s permanent.Don’t miss what else Ingo has to say about the economy this month.
Click Here to see his FREE 5 minute webinar.
About the Author: Ingo Winzer is President of Local Market Monitor, and has analyzed real estate markets for more than 20 years. His views on real estate markets are often quoted in the national press and in 2005, he warned that many housing markets were dangerously over-priced. Previously, Ingo was a founder and Executive Vice President of First Research, an industry research company that was acquired by Dun and Bradstreet in March 2007. He is a graduate of MIT and holds an MBA in Finance from Boston University. He resides in Cambridge, Massachusetts.
BY BRAD BECKETT ON OCTOBER 23, 2018
While not exactly sexy, this is an interesting item from a data and public health perspective. According to research from the NAHB’s Economics analysis of the Survey of Construction (SOC), about 9% of new single-family homes started in 2017 were served by individual wells and more than 16% have private septic systems. Interestingly, New England has the highest occurrence of septic systems and wells in the nation. The SOC classifies community or shared water supply/wells as public water rather than individual wells. Nationally, more than 9% of new single-family homes started in 2017 are served by individual wells, and the remaining vast majority of new homes are served by a public water system, including community or shared water supply/wells. Now you know.
BY BRAD BECKETT ON OCTOBER 23, 2018
According to a new report from Freddie Mac, over three-quarters of Americans now see renting as more affordable than owning a home. The data, as reported by the Wall Street Journal (reposted on Realtor.com), also says demand for “for-sale” housing could remain soft in the coming months with 58% of renters saying they don’t currently have plans to buy a home.
“Demand for rentals swelled after the recession, as millions of families lost their homes to foreclosure and tight credit made it difficult for young people to buy homes. Rents rose by double-digit percentages in many cities and the share of families who couldn’t afford their rent swelled to record highs.”
BY BRAD BECKETT ON OCTOBER 22, 2018
The National Association of Realtors is reporting that existing-home sales fell 3.4% in September and down 4.1% from one year ago. According to data, there were 5.15 million completed transactions in September with a median price (for all housing types) of $258,100. In addition there were 1.88 million existing homes for sale at the end of September with properties typically staying on the market for 32 days.
“There is a clear shift in the market with another month of rising inventory on a year over year basis, though seasonal factors are leading to a third straight month of declining inventory…Homes will take a bit longer to sell compared to the super-heated fast pace seen earlier this year.” Said Lawrence Yun, the NAR’s chief economist.
BY BRAD BECKETT ON OCTOBER 22, 2018
The U.S. government is reporting that privately‐owned housing starts in September were at a seasonally adjusted annual rate of 1,201,000. This figure is 5.3% lower than August’s revised estimate but is 3.7% higher than one year ago. Single‐family housing starts in September were at a rate of 871k, which is 0.9% (±8.9 percent)* below August’s revised number. September’s rate for units in buildings with five units or more was 324k. Privately‐owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,241,000. This figure is 0.6% lower than August’s revised rate and is 1% below the September 2017. Single‐family authorizations in September were at a rate of 851k, which is 2.9% higher than August. Authorizations of units in buildings with five units or more were at a rate of 351k.
BY BRAD BECKETT ON OCTOBER 21, 2018
According to BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the count of unfilled jobs in the construction sector increased in August and reached another post-Great Recession level high. Data reveal that the he number of open construction sector jobs increased to 298k in August, which is consistent with survey data indicating that access to labor remains a top business challenge for builders.