Index: Rising Homes Prices are Catching up with Housing
BY BRAD BECKETT ON SEPTEMBER 30, 2018
According to the latest S&P CoreLogic Case-Shiller Indices, home prices showed a 6% annual gain in July, down from 6.2% in June. Their 10-City Composite annual increase came in at 5.5% and their 20-City Composite posted a 5.9% year-over-year gain, down from 6.4% in the previous month. The S&P CoreLogic Case-Shiller Home Price Indices are one of the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate both nationally as well as in 20 metropolitan regions.
“Rising homes prices are beginning to catch up with housing,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Year-over-year gains and monthly seasonally adjusted increases both slowed in July for the S&P Corelogic Case-Shiller National Index and the 10 and 20-City Composite indices. The slowing is widespread: 15 of 20 cities saw smaller monthly increases in July 2018 than in July 2017…”
Local Market Monitor's National Economic Outlook for September
Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for September, 2018 where they share their thoughts on developments taking place in the U.S. economy. This month they warn about consumer borrowing and the banks and politicians that are seemingly incentivized to encourage it.
National Economic Outlook – September 2018
September 20, 2018
By Ingo WinzerI’ve been harping about consumer debt for a while now because I think it will cause the next recession. It won’t trigger it, that will be some unrelated event, but all of a sudden people will realize they can’t spend any more money. Here are some facts. Adjusted for inflation, ordinary consumer debt – that is, not including mortgages – is now $12,000 per man, woman and child in the US, up from $4,000 in 1980. That’s equal to 40 percent of income, mainly in the form of credit cards and student loans. It used to be 20 percent.
The problem I see is that banks – which formerly made their money from businesses but now make it from consumers – have every incentive to encourage people to borrow more and more. And politicians have every incentive to help the banks do it.
With no natural brake on the system, where will it end? When debt is 50 percent of income, 80 percent? Or maybe it will never end and we’ll have a larger portion of the population spending less and less, while an ever-smaller, wealthier one spends more and more. That would be a social and political disaster.
Jobs in August were up 1.7 percent over last year. They were up 2 percent in manufacturing, 2.6 percent in business services – the main driver for the economy right now – 2 percent in healthcare, and 1.6 percent at restaurants. Jobs in the retail sector struggled slightly higher after a disastrous year, while jobs in government were again essentially flat.
Jobs in the construction sector were up 4 percent. This may seem like a big deal, but it’s not. After a decade of empty homes and fewer people who can afford to buy – and despite the new boom in California – the construction industry is still smaller than it was ten years ago.
Don’t miss what else Ingo has to say about the economy this month.
Click Here to see his FREE 6 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.
www.LocalMarketMonitor.com
info@localmarketmonitor.com
800.881.8653
New Home Sales Up 3.5% in August
BY BRAD BECKETT ON SEPTEMBER 30, 2018
The U.S. government is reporting that sales of new single-family houses in August 2018 were at a seasonally adjusted annual rate of 629k. This figure is 3.5% higher than July’s revised rate and 12.7% higher than one year ago. The median sales price of new houses sold in August 2018 was $320,200 and the average sale price was $388,400. There were an estimated 318k homes for sale at the end of August representing a 6.1 month supply.
Existing Home Sales Down 1.5% from 2017
BY BRAD BECKETT ON SEPTEMBER 30, 2018
According to data recently released by the National Association of Realtors, existing home sales remained steady in August after four months of decline. However, they also report that sales are down 1.5% from one year ago. There were 1.92 million existing homes available for sale at the end of August, slightly higher than one year ago. Unsold inventory is at a 4.3-month supply at the current sales pace. Once again, lack of inventory is largely to blame:
“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand…Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.” Said Lawrence Yun, the NAR’s chief economist.
Housing Starts Up 9.2% in August, but Permits Drop
BY BRAD BECKETT ON SEPTEMBER 30, 2018
The U.S. Government is reporting that privately owned housing starts in August were at a seasonally adjusted annual rate of 1,282,000. This figure is 9.2% higher than July’s revised estimate and is 9.4% higher than August, 2017. Single-family housing starts in August were at a rate of 876k and the rate for units in buildings with five units or more was 392k. Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,229,000. This is 5.7% lower than July’s revised rate and is 5.5% lower than August 2017. Single-family authorizations in August were at a rate of 820k and authorizations of units in buildings with five units or more were at a rate of 370k.
Local Market Monitor’s National Economic Outlook for September
BY BRAD BECKETT ON SEPTEMBER 25, 2018
Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for September, 2018 where they share their thoughts on developments taking place in the U.S. economy. This month they warn about consumer borrowing and the banks and politicians that are seemingly incentivized to encourage it.
National Economic Outlook – September 2018
September 20, 2018
By Ingo WinzerI’ve been harping about consumer debt for a while now because I think it will cause the next recession. It won’t trigger it, that will be some unrelated event, but all of a sudden people will realize they can’t spend any more money. Here are some facts. Adjusted for inflation, ordinary consumer debt – that is, not including mortgages – is now $12,000 per man, woman and child in the US, up from $4,000 in 1980. That’s equal to 40 percent of income, mainly in the form of credit cards and student loans. It used to be 20 percent.
The problem I see is that banks – which formerly made their money from businesses but now make it from consumers – have every incentive to encourage people to borrow more and more. And politicians have every incentive to help the banks do it.
With no natural brake on the system, where will it end? When debt is 50 percent of income, 80 percent? Or maybe it will never end and we’ll have a larger portion of the population spending less and less, while an ever-smaller, wealthier one spends more and more. That would be a social and political disaster.
Jobs in August were up 1.7 percent over last year. They were up 2 percent in manufacturing, 2.6 percent in business services – the main driver for the economy right now – 2 percent in healthcare, and 1.6 percent at restaurants. Jobs in the retail sector struggled slightly higher after a disastrous year, while jobs in government were again essentially flat.
Jobs in the construction sector were up 4 percent. This may seem like a big deal, but it’s not. After a decade of empty homes and fewer people who can afford to buy – and despite the new boom in California – the construction industry is still smaller than it was ten years ago.
Don’t miss what else Ingo has to say about the economy this month.
Click Here to see his FREE 6 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.
www.LocalMarketMonitor.com
info@localmarketmonitor.com
800.881.8653
Landlord Charged with Housing Discrimination for “No Teenagers Please”
BY BRAD BECKETT ON SEPTEMBER 21, 2018
The U.S. Department of Housing and Urban Development (HUD) recently announced that it was charging a landlord in New Orleans 
with housing discrimination for publishing an advertisement that discriminated against families with children. The ad included language that stated “No Teenagers Please.” Below is HUD’s complete release, reprinted here as a reminder to landlords about the importance of the Fair Housing Act:
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging a New Orleans landlord with housing discrimination for publishing an advertisement that discriminated against families with children. The ad, which was brought to HUD’s attention by the Greater New Orleans Fair Housing Action Center, included language that stated, “No Teenagers Please.” Read HUD’s charge.
The Fair Housing Act makes it unlawful to deny or limit housing because a family has children under the age of 18 and to make statements that discriminate against families with children. This includes publishing print, broadcast or internet advertisements that indicate a preference or otherwise discriminate against families with children. Housing may exclude children only if it meets the Fair Housing Act’s exemption for housing for older persons.
“Landlords do not have the right to deny a family a place to live just because they have children,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s enforcement action reaffirms HUD’s commitment to ensuring that housing providers meet their obligation to treat all applicants for housing the same, including families with children.”
“Discrimination against families with children – no matter the age – violates the law and limits the housing opportunities of those families,” said J. Paul Compton, HUD’s General Counsel. “HUD will continue to take action to protect the rights of families.”
The case came to HUD’s attention when the Greater New Orleans Fair Housing Action Center, a HUD Fair Housing Initiatives Program agency, filed a complaint based on fair housing tests it conducted after seeing an ad on Craigslist that prohibited teenagers. When testers contacted the owner to inquire about the unit, the owner said, “I don’t want any children. I don’t want teenaged children.”
HUD’s charge will be heard by a United States Administrative Law Judge unless any party to the charge elects to have the case heard in federal district court. If an administrative law judge finds after a hearing that discrimination has occurred, he may award damages to the complainant for harm caused by the discrimination. The judge may also order injunctive relief and other equitable relief, as well as payment of attorney fees. In addition, the judge may impose fines to vindicate the public interest. If the matter is decided in federal court, the judge may also award punitive damages.
April 2018 marked the 50th anniversary of the Fair Housing Act. In commemoration, HUD, local communities, housing advocates, and fair housing organizations across the country have coordinated a variety of activities to enhance awareness of fair housing rights, highlight HUD’s fair housing enforcement efforts, and end housing discrimination in the nation. For a list of planned activities, log onto www.hud.gov/fairhousingis50.
Persons who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY).
The Corporate Tax Cut Is Paying for Itself
BY BRAD BECKETT ON SEPTEMBER 21, 2018
Steve Moore of the Committee to Unleash Prosperity said “Trump economist Kevin Hassett was right — “Thanks to the booming economy, Trump’s tax cuts are well on the way to paying for themselves. The Laffer Curve is at work!” Below is his latest Wall Street Journal piece debunking the liberal myth that the Tax Cut and Jobs Act is blowing up the deficit. The following commentary. It appeared in the Wall Street Journal on 9/19/18.
The Corporate Tax Cut Is Paying for Itself
Faster-than-expected growth has produced a revenue windfall.Kevin Hassett, chairman of President Trump’s Council of Economic Advisers, caused a brouhaha by claiming last week that the corporate tax cut enacted last year has “about paid for itself.” I told Bloomberg it is a little premature to say that, and critics have asserted that even a Trump economic adviser disagrees with Mr. Hassett. But I’ve looked more closely at the numbers, and it turns out he is almost entirely right.
Compare the August 2018 economic forecast from the Congressional Budget Office with the one from June 2017, before the tax cuts passed, and we discover some very good news. The much higher than expected economic growth in the wake of the Trump tax cut means that U.S. gross domestic product will be higher than expected every year over the next decade.
Even if we assume a reversion to the pre-Trump 1.9% growth path, the ratchet up in GDP this year translates into $179 billion in unexpected output this year, $465 billion next year, $654 billion in 2020, and so on. This magic of compounding yields more than $6 trillion additional GDP over the decade thanks to the faster growth already achieved.
The federal government is expected to capture a bit more than 18% of that extra output in tax revenue—about $1.1 trillion over the 10-year window. That’s well above the $400 billion to $500 billion expected revenue loss from the corporate tax-rate cut.
Corporate tax revenues are down this year, but receipts from nearly every other tax source are rising at the federal and state levels. The higher growth this year alone will give states and cities almost $20 billion in windfall revenue. No surprise then that many states are reporting “unexpected” gains in tax collections this year and will have budget surpluses.
Perversely, because the economy is bigger now than expected, the CBO has revised upward its estimated “cost” of the tax cut. Because of lower tax rates, the government will get a smaller share of the larger-than-projected economy—even though the tax cut encouraged the faster growth.
One can argue about how much of the boom is a result of the corporate tax cut. My view is that the small-business tax cuts also have helped, as have deregulation and pro-energy-production policies.
The results we are seeing are perfectly consistent with the original game plan. We always believed that creating jobs and elevating growth from 2% to 3% or 4% should be the major focus of the economic revitalization strategy. Faster growth would make every other national problem—poverty, stagnant wages, funding Social Security, even drug abuse—easier to solve. Certainly the national debt is less frightening with $6 trillion more GDP.
This is the growth dividend we all hoped for when designing the tax cut. Although it is still early in the game, so far things are going even better than we expected.
Copyright © *2018* *Committee To Unleash Prosperity*, All rights reserved.
Most Expensive ZIP Codes for Rent
BY BRAD BECKETT ON SEPTEMBER 21, 2018
Where are America’s most expensive ZIP codes for rentals? Examining this data can reveal a lot about a town or community. To that end, RentCafe recently compared average apartment rents for all ZIP codes in 130 major U.S. markets using data from the Yardi Matrix. Ok…but, here’s where it gets interesting; their research shows that of the top 50 ZIP codes with the highest rent, 26 of them are in New York City’s Manhattan! Go figure? However, if you go through their findings it does yield some surprises and offers up some good data…..New York being the exception to the rule.
Adjusted for Inflation, Home Prices are 4% Less than in 2007
BY BRAD BECKETT ON SEPTEMBER 21, 2018
This one puts everything into perspective; A recent “chart of the week” from the Mortgage Bankers Association illustrates how home prices, when adjusted for inflation using the CPI, are still nearly 4% below the second quarter of 2007. The chart also shows the quarterly average for the NAR’s months supply of existing homes for sale, which is a measure of inventory that accounts for both the pace of sales and the number of homes for sale on that market.
“…we are now starting to see signs of deceleration in home prices, as data for the second quarter of 2018 shows that home prices increased at a rate of 6.5 percent over the year, compared to a 7.3 percent increase in the first quarter…”
