New-Home Price Data Reveals Affordability Problems
BY BRAD BECKETT ON SEPTEMBER 17, 2019
The NAHB’s Eye on Housing is reporting that there is a mismatch between the actual prices of new homes and the prices buyers expect to pay, which they say is further evidence of the growing problem of housing affordability. Using data from the Census Bureau and HUD, the NAHB says that while the median sales price of single-family homes started in 2018 was under $322k their data (from the 2019 edition of What Home Buyers Really Want) show that the median price buyers expect to pay is around $254k. Indeed…
“The reasons for this mismatch at the low end are not mysterious. Factors such as the ongoing shortages of labor and lots, and escalating regulatory costs have made it difficult to impossible to produce a new home at these lower price ranges. This obviously is forcing a significant share of buyers into the market for existing homes only”
Click here to read the full report at the NAHB’s Eye on Housing.
Workers Fleeing Big Cities for Smaller Ones and Taking Jobs with Them
BY BRAD BECKETT ON SEPTEMBER 17, 2019
We have seen this data pop up before. People are moving away from expensive, high-tax, over-regulated states to places with overall better climates. However, a recent story in the Wall Street Journal (reposted on Realtor.com) takes a look at a trend among more-mobile workers who are moving to smaller cities and taking their jobs with them.
“One of the bummers is that they are not necessarily joining the workforce,” said Sheila Smith, a real-estate agent in Boise. Many of the out-of-town arrivals she sells to work from home or commute to jobs in distant cities, she said.
“People who do their jobs from home, freelance or constantly travel for work are migrating away from expensive urban centers such as Los Angeles and San Francisco toward cheaper cities including Boise; Denver; Austin, Texas; and Portland, Ore…”
WSJ.com
Click here to read the full story at Realtor.com.
Click here to read the full story at the Wall Street Journal.
Local Market Monitor's National Economic Outlook for September
BY BRAD BECKETT ON SEPTEMBER 16, 2019
Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for September, 2019 where they share their thoughts on developments taking place in the U.S. economy.
National Economic Outlook – September 2019
By Ingo Winzer
The number of jobs in August was up just 1.4 percent from last year, the smallest increase in the last two years, and down significantly from the 2 percent rate of January. Any further slowing will be the worst since the big recession.
That won’t necessarily lead to another recession – certainly not one of that epic scale – but the slowing of job growth in every major sector in the last few months suggests that an easy fix is not in the works because the economic problem is system-wide.
It’s much easier for the US economy to go into recession these days because it’s mainly a service economy. It’s easy for consumers to cut back on services if they feel a bit pinched. You need food, shelter, your car, your phone, some clothes – but you don’t need the extra latte, the extra movie, you can put off the trip to the Rockies, you might even delay that visit to the doctor.
Jobs in August were up 2.4 percent in healthcare, 2.1 percent in business services, 1.9 percent at restaurants, 1.3 percent in finance and 1 percent in manufacturing. Jobs were down in retail and almost flat in government.
Construction jobs increased 2.3 percent, not even half the 5 percent rate of January. A further slowing will mean that businesses are delaying new projects.
www.LocalMarketMonitor.com
info@localmarketmonitor.com
800-881-8653About 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.
Report Says Mortgage Closing Rates at Record High
BY BRAD BECKETT ON SEPTEMBER 16, 2019
According to their latest Origination Insight Report, Ellie Mae says that closing rates rose to a new high with the closing rate on all loans at 77%, up from 76.8% in June. Closing rates on purchases increased to 79.3% in July, up from 78.8% in June, while closing rates on refinances dropped slightly to 72.9% in July, down from 73.4% the month prior. The average time to close was at 42 days in July, the average time to close a purchase dropped to 43 days and the time to close a refinance increased to 40 days. Ellie Mae’s Origination Insight Report provides monthly data and insights from a robust sampling of closed loan applications that flow through Ellie Mae’s approximately 35% of U.S. mortgage applications.
Lawn Fertilization Tips for Fall
BY BRAD BECKETT ON SEPTEMBER 13, 2019
Believe it or not, in about a week the Autumnal Equinox will take place (the first day of Fall is 9/23) and that means it’s time to start thinking about lawn-care for the upcoming months. The following infographic from The Home Depot lays out exactly what needs to be done to prepare your yard for the winter months so it’s in tip-top shape for Spring. Happy Friday!!!!
Americans View Real Estate As The Safest For Long term Retirement
BY BRAD BECKETT ON SEPTEMBER 12, 2019
We like these kinds of surveys because they always point out what we real estate investors already know – that investing in real estate is not only a smart choice but the best choice for the long run! That being said, the folks over Sophisticated Investor conducted a survey asking 2k US respondents which investments they regarded as the safest for long-term retirement investing. They used Google Surveys and targeted men & women between the ages of 35 to 65+ from coast to coast. They asked them which investments (from a list) do you view as the “safest” for long term retirement investing. By the way, do you have an SDIRA set up yet?
Click here to read the full report at sophisticatedinvestor.com.
Home Depot's Former CFO Says Millennial Homeowner Habit is Music to their Ears
BY BRAD BECKETT ON SEPTEMBER 11, 2019
On a recent episode of Jim Cramer’s Mad Money, Jim interviewed the since-retired CFO of Home Depot, Carol Tomé, who shared some of her vast experience with The Home Depot as well as what the future holds. Tomé was with The Home Depot for 24 years. Among the many items they discussed were Home Depot’s new B2B personalized experienced program they’re rolling out as well as how millinnenals are now buying homes and seeing them as investments. Indeed….
“They’ve told us through our research, ‘We want to work on our house because we think it’s a good investment,’” Tomé said in a one-on-one interview with “Mad Money’s” Jim Cramer. “So that’s music to our ears.”
“Homeowners that think of their dwelling as an investment, as opposed to an expense, tend to spend more money on their home, she said. Home equity values — the difference between property value and what’s owed — have more than doubled within the last decade, and that has helped boost sales at the home improvement chain, she added.”
Ten Fastest Growing Retirement Cities
BY BRAD BECKETT ON SEPTEMBER 11, 2019
We have kept our eyes on that rapidly retiring cohort known as the Baby Boomers. With that in mind, a recent article on Realtor.com caught our attention. They put their number-crunchers to work to come up with a list of the top 10 cities experiencing a “boomer boom.” To get their list, they calculated the counties with the greatest numbers of incoming people aged 55 and up (per capita), and identified those places that have seen the biggest increases over the past two years (using U.S. Census Bureau numbers). They then they selected the primary cities from all of those counties. Indeed…
“Many boomers recognize that cities are a great place to age,” says Daniel Levine, founding director of the Avant-Guide Institute trends consultancy. “Everything is often within walking distance, from restaurants to hair salons. Add the plethora of cultural activities and aging in the city is sort of like one big retirement home…”
Their top ten cities are:
- Tuscon, AZ
- St. Louis, MO
- Tampa, FL
- Denver, CO
- Atlanta, GA
- Las Vegas, NV
- Albuquerque, NM
- Portland, OR
- Sacramento, CA
- New Orleans, LA
Construction Employment Rises by 14k in August, Firms Still Shorthanded
BY BRAD BECKETT ON SEPTEMBER 10, 2019
According to recent data from the Associated General Contractors of America, construction employment increased by 14k jobs in August and was up 177,000, or 2.4%, over the past 12 months. In addition, they also report that the number of unemployed jobseekers with construction experience remained near historic lows. AGC officials said that 80% of contractors reported they were having a hard time finding enough qualified hourly craft workers to hire.
“Construction employment gains would likely have been higher if firms could find even more people to hire,” said Ken Simonson, the association’s chief economist. “Our survey found that 91 percent of respondents said their firms expect to hire in the next 12 months, but overwhelmingly, they are finding most craft positions hard to fill. Even as firms are raising pay and benefits, doing more in-house training and investing in labor-saving equipment, labor shortages are changing the way many firms bid, schedule and manage their projects.”
HUD Submits Housing Reform Plan to The President
BY BRAD BECKETT ON SEPTEMBER 9, 2019
The U.S. Department of Housing and Urban Development (HUD) recently submitted a plan to President Trump proposing to overhaul & reform the Nation’s housing system. The plan was developed along with an accompanying one from the U.S. Treasury department pursuant to a memorandum from the President back in March of this year. HUD says the plan ensures FHA and Ginnie Mae can continue to serve their important missions effectively, responsibly, and sustainably for many years to come as well as accomplishing four objectives:
- Refocuses FHA to its core mission
- Protects American taxpayers
- Provides FHA and Ginnie Mae the tools to appropriately manage risk
- Provides liquidity to the housing finance system
The U.S. Treasury Department submitted a plan to reform the housing finance system through a series of recommended legislative and administrative reforms that are designed to protect American taxpayers against future bailouts, preserve the 30-year fixed-rate mortgage, and help hardworking Americans fulfill their goal of buying a home.
The full release from is presented below:
THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SUBMITS HOUSING REFORM PLAN TO THE PRESIDENT
9/5/19
WASHINGTON – Today, the Department of Housing and Urban Development (HUD) presented President Donald Trump with a plan for reforming the Nation’s housing finance system. Read HUD’s housing finance reform plan.
On March 27, 2019, President Trump issued a Memorandum on Federal Housing Finance Reform, directing HUD and the Department of Treasury to craft the housing finance reform plans released today. HUD plays a critical role in the Nation’s housing finance system, primarily through the Federal Housing Administration (FHA). FHA currently insures 8.1 million single-family forward mortgages, nearly 500,000 reverse mortgages, and 15,500 multifamily and healthcare properties. In addition, the Government National Mortgage Association (Ginnie Mae) guarantees more than $2 trillion in mortgage-backed securities.
“As a direct result of the Trump Administration’s pro-growth policies, unemployment is at 50-year low and American families are earning higher incomes and enjoying more opportunities than seemed possible just a few years ago,” said Secretary Ben Carson. “There is still one piece of unfinished business from the financial crisis: housing finance reform. These changes to our housing finance system will help more American families achieve their dream of owning a home.”
The reform plan presented today ensures FHA and Ginnie Mae can continue to serve their important missions effectively, responsibly, and sustainably for many years to come. HUD’s reform plan accomplishes four objectives:
- Refocuses FHA to its core mission;
- Protects American taxpayers;
- Provides FHA and Ginnie Mae the tools to appropriately manage risk; and
- Provides liquidity to the housing finance system.
“FHA and Ginnie Mae should focus on helping families and individuals in their respective programs become sustainable homeowners while minimizing risk to the taxpayer to the greatest extent possible,” said Brian Montgomery, FHA Commissioner and Assistant Secretary of Housing.
U.S. Treasury Secretary Steven Mnuchin also presented President Trump with a complementary housing finance reform plan today.
Click here to read the full release at HUD.gov.
Click here to read the entire HUD plan submitted to the President.
