When floodwaters from now-Tropical Storm Florence finally subside and residents are allowed to return to their communities in North and South Carolina, the shift to recovery mode may seem overwhelming.
But what you do in the days after a devastating storm can mean the difference between a relatively fast cleanup and an expensive months-long demolition nightmare.
Experts advise these steps to help protect your safety and your wallet.
Taking care of your health
“The first thing you need to do is take care of yourself. Make sure you’re emotionally OK,” said Elaina Sutley, assistant professor of structural engineering at The University of Kansas. “Only then should you start assessing any structural damage.”
What materials do I need? You should make sure you have knee-high rubber boots, long-sleeve clothing, a respirator, a flashlight, a camera and liquid bleach.
Where do I start? Start by turning off any gas or power to prevent explosions or electrocution. Then begin drying out your home and addressing the structural damage such as a wall collapse or sinking ceilings. And remember: There may still be water left either in the basement or seeping from soaked furniture.
“You need to open up windows and doors. Let things dry out,” Sutley said. Fans and humidifiers can help speed up the drying process.
While everything dries, which can take a few days, homeowners are encouraged to toss any food left in the home along with any absorbent material that has come in contact with water.
“If there was salt-water flooding, there might be corrosion so get an electrician to look at that,” said Jeffrey Schlegelmilch of the National Center for Disaster Preparedness. “Even if it’s not salt water, things could still be dangerous. Fact-check with a professional before plugging anything in.”
What do I do with damaged items? Coastal areas that have experienced floods in the past will likely have protocols for picking up and handling debris such as drywall and large furniture.
What can I keep? Family heirlooms, jewelry, photographs and other valuables can be air-dried and saved. Clean and disinfect them if they came in contact with floodwater.
What should I avoid? Other than contaminated water flow, there could also be animals trapped in your home brought in by the floodwaters.
“Areas like North Carolina have a lot of poisonous snakes. Floodwaters can bring these into your home. Look out for any critters that could be lurking in hidden areas,” Schlegelmilch said.
What happens if I wait? “If your home is just left to sit, it will continue to deteriorate, and it becomes even more of a health threat,” Schlegelmilch said.
Summer’s heat and humidity make for prime conditions for mold, so act fast, Sutley said.
Taking care of your wallet
The sooner homeowners file claims with an insurance agency or the Federal Emergency Management Agency (FEMA), the faster a resolution can be reached. However, traditional homeowner policies don’t cover flooding. Only flood insurance policies reimburse families for water damage caused by flooding.
“After Hurricane Matthew hit the southeastern United States, I worked on a project where we spoke to households and businesses about receiving assistance from their insurance or FEMA,” Sutley said. “Most people who had insurance and filed a claim received help within 30 days. Most people who applied for FEMA had received it within a month.”
What do I need? Insurance documents, home deeds and your Social Security card can get you started on making an insurance claim.
Photos and videos of the property both before and after the flood are also essential since recovery agencies will likely request proof of the damage.
Where do I start? It’s important to contact your insurance agency before you remove anything from your home. “Insurance companies sometimes want to send someone down to investigate before anything is taken out,” Schlegelmilch said.
After contacting your insurance company, work can began. Homeowners are encouraged to remove any carpet or drywall that has come in contact with water before mold starts to form.
“I would look to CDC guidance for which bleach to use. You don’t want just to get surfaces to look clean, you want to make sure that there aren’t any living mold spores,” Schlegelmilch said.
What if I don’t have insurance? It’s pretty common for people not to have flood insurance, no matter their income level. In coastal regions, it may be mandatory. But for those who live further inland, there are often local aid options.
“Find out what types of public assistance is available in your area,” Schlegelmilch said. “There are a lot of charities that pop up to help people get back in their homes. Some move people to the top of the list who are low income or have disabilities.”
What happened: Sales of newly-constructed homes rose 3.5% compared to July, and edged past the MarketWatch consensus of a 625,000 pace. And the pace of sales in August was 12.7% higher than a year ago. But hefty revisions to prior months were all downward, a reminder that the housing recovery remains grudgingly slow.
The median selling price in August was $320,200, 1.9% higher than year-ago price.
Big picture: The government’s home-construction reports are based on small samples and are often revised heavily, making it hard to rely on any one month’s data. For the year to date, sales were 6.9% higher than the same period last year. That year-to-date comparison has declined steadily over the course of the year, a possible sign of flagging momentum.
Another sign may be rising inventories: at the current pace of sales, it would take 6.1 months to exhaust available supply, one of the highest ratios in recent years. In a note out after the release, Amherst Pierpont Securities Chief Economist Stephen Stanley noted that there were 318,000 homes available for sale in August, the highest number since 2011.
What they’re saying:Economists at Freddie Mac analyzed the pace of new housing construction and found that years of underbuilding has left the U.S. with a cumulative shortfall — that is, supply compared to historical averages — of 4.6 million housing units in the years since 2000. That number is especially stark considering that builders constructed a surplus of homes in the bubble years of the last decade.
Investors have turned bearish on publicly-traded builders, even as the fundamentals remain tilted in their favor. On a Tuesday call with analysts, KB Home KBH, -2.95% CEO Jeffrey Mezger addressed that issue, and reiterated the company’s commitment to lower-priced homes, where most housing-watchers think the greatest need — and the greatest opportunity — sits.
“I keep getting back to the current inventory levels which are low. While the national numbers are four months, many of the markets we’re in today at still two months, month-and-a-half, and then when you get into the price points we play at, it’s even less. So there’s not a lot of inventory out there at the affordable price band and much of the headlines, I think, are tied to higher price points that are seeing some slowdown and we’re trying to stay ahead of that,” Mezger said. “We think market conditions are very good and continue to see a great opportunity as we head into 2019.”
There’s a lot of fun stuff to do this fall in New York City. Take a look at these openings, concerts, festivals, performances and all-around-good-time events to find out why we’re excited (and be sure to mark down on your calendar whatever strikes your fancy).
1. The City’s biggest costume party hits the streets. The Village Halloween Parade of costumed revelers and larger-than-life spooky puppets makes its way through the West Village on Halloween night. Thanks to a crowd that’s often as dressed up as the parade goers, this downtown tradition takes people-watching to the next level. —Brian Sloan
2. Dogs, too, will be decked out. Brooklyn’s annual Great PUPkin canine costume contest and parade is certifiably the cutest and fluffiest way to celebrate Halloween. —Gillian Osswald
3. Speaking of daring fashion… Spring/Summer Fashion Week is your chance to see all the world’s top designers debut runway looks. Expect standout shows from Tom Ford, Anna Sui and Marc Jacobs. —Christina Parrella
4. The NYC Marathon is back. Sporting events don’t get much bigger than this November 4 race, during which nearly 50,000 professional and amateur runners run through all five boroughs. There are plenty of great viewing spots along the route, but you’ll see the most action at the finish line in Central Park near Tavern on the Green. —Jonathan Zeller
5. And don’t forget the other sports. The Yankees look like they’re in good shape for a return to baseball’s playoffs, so go see Giancarlo Stanton, Luis Severino and company during the stretch run. The Mets season hasn’t panned out as they hoped, but September offers the chance to cheer on Jacob deGrom as he aims for the National League Cy Young. Football’s Giants and Jets start up the same month; come October, the season kicks off for the NBA’s Knicks and Nets, and for the NHL’s Rangers and Islanders. —JZ
6. But you can have sports fun even if you don’t make it to the park. The Museum of the Moving Image takes a look back at six decades of sports video games —giving you the opportunity to test your chops at a few dozen of them. We’re personally hoping to see Vs. Tennis and Punch-Out. Look out, Glass Joe! —Andrew Rosenberg
8. There’s an open-door policy. Hundreds of buildings and landmarks take part in Open House New York, a fall weekend (October 12–14) that marks your chance to see the inner workings of structures sometimes off-limits. Unusual places like La Guardia’s Marine Air Terminal and the super-futuristic looking Newtown Creek Wastewater Treatment Plant have been part of past programs. —AR
9. You can get a taste of Japan in Sunset Park.Industry City’s new Eataly-style food fun house, Japan Village, will pack 20,000 square feet with ramen, sushi, soba, mochi and everything else you’d ever want to eat from the Land of the Rising Sun. It should be up and running in October. —GO
10. We believe in life after love. Or, at least, a musical about life after 50-plus years in show business. If you do too, check out The Cher Show, a new Broadway extravaganza covering Cher’s life, times and loves. It takes three actresses to play the title role. —BS
12. So will some of his collaborators. You gotta run, run, run to see the ambitious exhibition covering the origins, music and influence of the Velvet Underground, due in the West Village in October. —AR
13. We like to laugh. Alternative comedy’s big fall event is the Brooklyn Comedy Festival (September 17 –23), whose lineup includes Kevin McDonald, Jo Firestone and Nimesh Patel. The New York Comedy Festival (November 5–11) brings huge acts like Tracy Morgan, Yvonne Orji and Bill Burr. In non-festival news, club headliners will include the likes of Leslie Jones (September 5–8), Norm Macdonald (September 13–16) and Tom Green (September 21–22). Enjoy! —nycgo.com staff
14. The Coen Brothers’ latest hits the big screen.The Ballad of Buster Scruggs has its North American premiere at Lincoln Center as part of the New York Film Festival. Originally intended as a limited series for Netflix, the movie has been reconfigured into a feature-length anthology that tells six stories of the old West; the cast includes Tyne Daly, Tom Waits and James Franco. —BS
16. Oklahoma!comes to Brooklyn. Usually the big musical revivals are on Broadway, but this creatively staged and intimate production of a Rodgers and Hammerstein classic is set to play at St. Ann’s Warehouse on the Dumbo waterfront. —BS
17. You won’t have to leave NYC for a day in the country. Celebrate the harvest at the Queens County Fair—which starts on the first official day of fall, September 22. Located deep in the borough on Queens’ last working farm, the fair features carnival rides, hayrides, pie-eating contests and an actual corn maze.
The S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA) released their home price indices for July 2018. National home prices rose at the slowest annual growth rate since June 2014. Moreover, seven metro areas experienced home price declines in July.
The Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 1.9% in July. It was the lowest seasonally adjusted annual growth rate since June 2014. The Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 2.7% in April, slower than the 3.7% increase in June, confirming the deceleration in home prices for this month.
Figure 2 shows the annual growth rate of home prices for 20 major U.S. metropolitan areas.
Among the 20 metro areas, Las Vegas, San Francisco and Cleveland had the highest home price appreciation. Las Vegas led the way with 14.6%, followed by San Francisco with 11.4% and Cleveland with a 9.3% increase. Eleven out of the 20 metro areas had higher home price appreciation than the national level of 1.9%. In July, thirteen metro areas had positive home price appreciation while seven metro areas had negative home price appreciation, including San Diego (-0.2%), Detroit (-0.2%), Los Angeles (-0.5%), Dallas (-1.6%), Chicago (-1.8%), Boston (-2.4%) and New York (-5.5%).
A record number of farms are hitting the market in South Africa as white farmers try desperately to offload land and leave the country before the government confiscates their acreage.
According to a report in the Sunday Express, the African National Congress (ANC) — South Africa’s ruling party — suggested last week that it is considering confiscating farmland from white farmers without compensation. In a meeting on “reforming land ownership,” several civil servants claimed that its time to “expropriate” land from the country’s white farmers in reparations for Apartheid.
ANC’s chairman Gwede Mantashe “sparked panic” when he agreed with reparations activists, telling a crowd that no white landowner should be allowed to control more than 25,000 acres.
“You shouldn’t own more than 25,000 acres of land,” Mantashe said. “Therefore if you own more it should be taken without compensation.”
South Africans — both black and white — aren’t thrilled with the idea since a major re-appropropration and re-division of land would severely harm South Africa’s farming industry, destroying jobs and opportunities for both black and white workers. Others, with knowledge of history — particularly what happened after the government grabbed land from white farmers in neighboring Zimbabwe — say they’re terrified the government has no real plan for its seizure and could send the country tumbling into economic ruin.
That hasn’t stopped the rhetoric, though, and South African President Cyril Ramaphosa is reportedly working on a plan to rewrite the country’s constitution to allow for the land grab, under pressure from the far left within his own country who are challenging the ANC in upcoming elections by telling voters they’ll grab the land without approval.
“We are not advocating for a white genocide. But the land belongs to us. We will do everything we can to get it back,” one far left leader told media during a meeting last week.
White farmers aren’t waiting around to find out who wins in the race to grab their land; they’re leaving. Hundreds of farms are now for sale in South Africa as farmers take off to Australia and other countries where farmland is plentiful and immigration requirements are lenient.
House prices rose in 25 out of the 39 world’s housing markets which have so far published housing statistics, using inflation-adjusted figures.
The more upbeat nominal figures, more familiar to the public, showed house price rises in 32 countries. House prices fell in only 6 countries and remained stable in 1 country.
Most of Europe continues to experience strong price rises, especially Ireland and the Netherlands. In Asia Hong Kong and Macau have risen strongly over the past year. There have also been notable turnarounds in Thailand, Egypt, and Puerto Rico. But China, Ukraine, and most of the Middle East are experiencing either house price falls – or a sharp deceleration of house price rises
The strongest housing markets in our global house price survey during the year to Q2 2018 included: Hong Kong (+13.15%), Ireland (+11.57%), Netherlands (+7.24%), Macau (+6.31%), and Mexico (+5.12%) using inflation-adjusted figures.
The biggest y-o-y house-price declines were in Qatar (-16.91%), Kiev, Ukraine (-7.81%), Dubai, UAE (-7.63%), Turkey (-4.21%), and Shanghai, China (-3.51%), again using inflation-adjusted figures.
Momentum. Only 16 of the world’s housing markets for which figures are available showed stronger upward momentum during the year to Q2 2018, while 23 housing markets showed weaker momentum, according to Global Property Guide’s research. Momentum is a measure of the “change in the change”; simply put, momentum has increased if a property market has risen faster this year than last (or fallen less).
Inflation-adjusted figures are used throughout this survey. In the case of Kiev, Ukraine, the Global Property Guide adjusts using the official U.S. inflation rate since Ukrainian secondary market dwelling sales are denominated in U.S. dollars.
The strongest performing markets:
Hong Kong is now the strongest housing market in our global survey, up from fourth place in the previous quarter. Residential property prices surged 13.15% during the year to Q2 2018, after y-o-y rises of 12.28% in Q1 2018, 12.78% in Q4 2017, 13.41% in Q3 2017 and 19.27% in Q2 2017. Quarter-on-quarter, house prices increased 5.05% in Q2 2018.
The boom continues despite stamp duties being raised for all non-first time homebuyers (November 2016) and allowable loans on residential and commercial properties being cut in May 2017. In addition, Chief Executive Carrie Lam revealed in June 2018 another series of cooling measures, including a tax against vacant flats.
Ireland‘seconomy grew by 7.8% last year. It is not surprising that the housing market is growing at breakneck speed. Residential property prices were up by 11.57% during the year to Q2 2018, after y-o-y rises of 12.4% in Q1 2018, 11.7% in Q4 2017, 11.75% in Q3 2017, and 11.8% in Q2 2017. During the latest quarter, Irish house prices increased 2.22%. Ireland’s surging house prices are being driven by strong demand and supply shortages..
The Netherlands‘ housing market continues to perform very well, mainly due to robust demand, coupled with inadequate housing supply. The average purchase price of all dwellings rose by 7.24% during the year to Q2 2018, slightly up from the previous year’s 6.39% growth. On a quarterly basis, house prices were up 0.85% during the latest quarter.
During 2017, home sales surged 13% from a year ago. However in the first seven months of 2018, home sales dropped more than 7% from a year earlier due to supply shortages.
Macau’s housing market remains strong. The average transaction price of residential units rose by 6.31% during the year to Q2 2018, following y-o-y rises of 4.22% in Q1 2018, 4.93% in Q4 2017, 9.59% in Q3 2017 and 11.79% in Q2 2017. House prices increased by 5.21% q-o-q during the latest quarter. Macau’s housing market is buoyed by massive infrastructure investments, which will transform Macau’s connections to China and Hong Kong.
Mexico‘s housing market is strengthening, amidst improving economic conditions. The nationwide house price index rising by 5.12% during the year to Q2 2018, up from a y-o-y growth of just 0.73% in Q2 2017. On a quarterly basis, house prices increased 4.89% during the latest quarter.
Most Europe remains vibrant
European house price rises continue unabated. House prices have risen over the past year in no less than 13 of the 20 European housing markets for which figures were available.
Ireland remains the best performer in Europe, buoyed by its very strong economy. Residential property prices were up by 11.57% during the year to Q2 2018, after y-o-y rises of 12.4% in Q1 2018, 11.7% in Q4 2017, 11.75% in Q3 2017, and 11.8% in Q2 2017. During the latest quarter, Irish house prices increased 2.22%. Ireland’s surging house prices are mainly driven by strong demand as well as supply shortages. The Irish economy grew by around 7.8% last year and is projected to expand by another 5.6% this year, according to the European Commission.
The Netherlands‘ housing market remains strong, mainly due to robust demand, coupled with lack of adequate housing supply in the market. The average purchase price of all dwellings rose by 7.24% during the year to Q2 2018, slightly up from the previous year’s 6.39% growth. On a quarterly basis, house prices were up 0.85% during the latest quarter. During 2017, home sales surged 13% from a year ago, fuelled by low interest rates and robust economic growth. In the first seven months of 2018, home sales dropped more than 7% from a year earlier to 124,615 units, according to Statistics Netherlands. The Dutch economy grew by 3.1% in 2017, the highest growth since 2007. GDP is expected to grow by another 3.2% this year and by 2.4% in 2019, according to the IMF.
Portugal’s housing prices continue to rise strongly, fuelled by surging demand as well as improved economic conditions. Nationwide property prices rose by 4.53% during the year to Q2 2018, from y-o-y rises of 4.7% in Q1 2018, 3.03% in Q4 2017, 4.04% in Q3 2017 and 3.47% in Q2 2017. During the latest quarter, house prices were almost stable.
After more than three years of depression, house prices in Portugal started to recover in 2014. The Portuguese economy is expected to expand by 2.4% this year, after GDP growth of 2.7% in 2017, 1.6% in 2016, 1.8% in 2015, and 0.9% in 2014.
Other strong European housing markets included Iceland, with house prices rising by 4.18% during the year to Q2 2018, Spain (4.01%), and Riga, Latvia (2.68%). All, expect Latvia, recorded positive quarterly growth during the latest quarter. In terms of momentum, only Spain had stronger performance in Q2 2018 compared to a year earlier.
Minimal annual house price rises during the year to Q2 2018 were registered in Jersey (1.93%), Germany (1.74%), Slovak Republic (1.68%), Romania (1.66%), Athens, Greece (0.66%), Lithuania (0.48%) and Finland (0.43%). Only Germany, Slovak Republic, Finland and Lithuania saw quarterly growth during the latest quarter. On the other hand, only Jersey, Greece and Finland performed better in Q2 2018 compared to the previous year.
Other strong European housing markets included Jersey, with house prices rising by 8.91% during the year to Q1 2018, Macedonia (6.1%), Riga, Latvia (5.72%), Romania (4.71%), Portugal (4.7%), Germany (4.19%), and Estonia (3.72%). All recorded positive quarterly growth during the latest quarter. In terms of momentum, only Macedonia, Latvia, Portugal and Jersey had stronger performances in Q1 2018 compared to a year earlier.
Modest to very minimal annual house price rises during the year to Q1 2018 were registered in Sweden (2.97%), Slovak Republic (2.41%), Spain (2.37%), Vienna, Austria (1.68%), Finland (0.29%), and Lithuania (0.1%). Only Slovak Republic, Spain, and Austria saw quarterly growth during the latest quarter. On the other hand, only Spain, Austria and Finland performed better in Q1 2018 compared to the previous year.
The U.K.’s house prices were unchanged during the year to Q1 2018. London was the worst-performing region, with house prices falling by 3.4% y-o-y in Q1 2018. Some high-end London districts have experienced significant price-falls.
Europe’s weakest housing markets
Ukraine‘s housing market remains depressed, despite improved economic conditions. Secondary market apartment prices in Kiev fell by 7.81% (inflation-adjusted) during the year to Q2 2018, to an average price of US$ 1,071 per square metre (sq. m.) – worse than the previous year’s 5.13% decline. House prices fell 1.94% quarter-on-quarter in Q2 2018.
House prices in Ukraine have been falling over the past five years, particularly in 2014 (with prices plunging 37.38%) because ofhryvnia devaluation due to the Russian war. Ukraine’s economy is expected to expand by 3.2% this year, after expansions of 2.5% in 2017 and 2.4% in 2016, and contractions of 9.8% in 2015, 6.6% in 2014 and 0.03% in 2013.
Turkey’s housing market continues to weaken, amidst its plummeting currency (the lira), record-high inflation, and the country’s political conflict with the US. Nationwide residential property prices fell by 4.21% during the year to Q2 2018, in contrast with a 1.62 y-o-y rise in a year earlier – the fourth consecutive quarter of y-o-y price declines. On a quarterly basis, house prices dropped 1.99% during the latest quarter.
In June 2018, inflation rose to 15.39%, the highest level since 2004. The Turkish lira plunged to record lows, having shed more than 40% of its value against the US dollar in the past year. The government recently cut its 2018 GDP growth forecast to 3% – 4% from its earlier estimate of 5%.
Switzerland’s house prices fell 3.49% y-o-y in Q2 2018, the fourth consecutive quarter of annual price declines and the biggest fall in almost two decades. During the latest quarter, prices fell by 1.28% q-o-q.
After about 15 years of uninterrupted house price rises, the Swiss government’s efforts to cool the country’s overheated property market have finally succeeded. The Swiss economy is expected to expand by 2.3% this year and by another 2% in 2019, following annual growth of 1.1% in 2017, 1.4% in 2016, 1.2% in 2015 and 2.5% in 2014, according to the IMF.
Other weak European housing markets included Sweden, with house prices falling by 1.86% during the year to Q2 2018, Russia(-0.81%), Norway (-0.73%), and the UK (-0.09%). Only Norway and the UK saw quarterly growth during the latest quarter. All, except Russia, performed better in Q2 2018 compared to the previous year.
The Asia-Pacific region remains strong, but China slowing rapidly
Two of the five strongest housing markets in our global survey are in Asia-Pacific, with house prices rising in 6 of the 9 housing markets for which figures were available during the year to Q2 2018.
Hong Kong‘s housing market continues to boom, with residential property prices surging 13.15% during the year to Q2 2018, from y-o-y rises of 12.28% in Q1 2018, 12.78% in Q4 2017, 13.41% in Q3 2017, and 19.27% in Q2 2017. Quarter-on-quarter, house prices increased 5.05% in Q2 2018.
The latest house price rises come despite the government raising stamp duties for all non-first time homebuyers starting November 2016 and cutting allowable loans on residential and commercial properties in May 2017. In June 2018, Chief Executive Carrie Lam revealed another series of cooling measures, including a tax against vacant flats. In the first half of 2018, the total number of property transactions in Hong Kong increased 5.6% from a year earlier while sales values rose by 8.4%, according to the Ratings and Valuation Department (RVD). The economy expanded by 3.8% last year, the highest growth since 2011. The IMF recently raised its 2018 growth forecast for Hong Kong to 3.6%, up from its earlier estimate of 2.6%.
Macau’s housing market remains vibrant, amidst massive infrastructure investments, which will transform Macau’s connections to China and Hong Kong. The average transaction price of residential units rose by 6.31% during the year to Q2 2018, following y-o-y rises of 4.22% in Q1 2018, 4.93% in Q4 2017, 9.59% in Q3 2017 and 11.79% in Q2 2017. House prices increased strongly by 5.21% q-o-q during the latest quarter.
Macau’s economy grew by a spectacular 9.3% in 2017, a sharp turnaround from y-o-y declines of 0.9% in 2016, 21.6% in 2015, and 1.2% in 2014. Macau’s economy is expected to grow by 7% this year and by another 6.1% in 2019, according to the IMF.
Thailand’s housing market is rising strongly again, with nationwide house prices rising by 5.01% during the year to Q2 2018, in contrast to a y-o-y decline of 3.02% in the previous year. House prices fell slightly by 0.58% q-o-q in Q2 2018. During the first five months of 2018, nationwide land and building transactions rose by 3.2% y-o-y to THB 425.74 billion (US$ 13.1 billion). The Bank of Thailand recently raised its 2018 economic growth forecast for the fifth time to 4.4% from its earlier projection of 4.1% due to rising exports and strong private consumption.
Other Asia-Pacific housing markets with modest house price rises include New Zealand, with house prices rising by 4.3% during the year to Q2 2018, Tokyo, Japan (3.89%), and Indonesia (0.01%). All, except Japan, recorded positive quarterly growth during the latest quarter. In addition, all showed stronger upward momentum in Q2 2018 as compared to the previous year.
Sharp housing slowdown China
China’s housing market is now slowing, with new regulatory and monetary policies impacting developers and speculative buyers. In Shanghai, the price index of second-hand houses fell by 3.51% during the year to Q2 2018, in sharp contrast with a y-o-y rise of 6.76 in Q2 2017. During the latest quarter, house prices in Shanghai fell by 0.81%.
Despite this, the Chinese economy grew by 6.7% y-o-y in Q2 2018, only slightly lower than the 6.8% growth recorded the previous quarter. The economy is projected to expand by 6.6% this year, after expanding 6.9% in 2017 and 6.7% in 2016. China has achieved 27 straight years of above 6% growth.
Taiwan‘s housing market is still weak. Nationwide house prices fell by 0.27% during the year to Q2 2018, compared to a decline of 0.07% y-o-y in Q2 2017. Quarter-on-quarter, house prices fell by 0.15% in during the latest quarter.
South Korea‘s housing market is also fragile, with the nationwide housing purchase price index falling by 0.08% during the year to Q2 2018, from a y-o-y decline of 0.73% a year earlier. House prices dropped 0.04% q-o-q during the latest quarter.
Middle Eastern housing markets continue to struggle, but Egypt is an exception
TheMiddle East is now in the doldrums, with two of the three weakest housing markets in our global house price survey: Qatar and UAE. This is not surprising given the region’s ailing economy due to low oil prices and the ongoing political and diplomatic crisis. The Middle East’s economy grew by just 1.1% in 2017, the lowest level in eight years.
Qatar remains the weakest housing market in our global survey, amidst a sharp economic slowdown and the adverse impact of the blockade it is suffering from other Golf countries.
Qatar’s real estate price index dropped 16.91% during the year to Q2 2018, after y-o-y declines of 9.65% in Q1 2018, 10.42% in Q4 2017, 3.47% in Q3 2017, and 4.52% in Q2 2017. Property prices fell by 6.62% q-o-q during the latest quarter. The Qatari economy is expected to grow by a modest 2.6% this year, after annual average growth of 2.1% in 2016-17, 4.2% during 2012-15, and 15.7% in 2008-11.
Other Middle Eastern housing markets are also depressed.
In Dubai, residential property prices fell 7.63% during the year to Q2 2018, worse than the prior year’s 2.51% decline, amidst weak economic growth, low investor sentiment, and an oversupply of housing. During the latest quarter, house prices in Dubai dropped 1.33% q-o-q.
Likewise, Israel‘s decade-long house price boom is now over, with government cooling measures intensifying. The nationwide average price of owner-occupied dwellings fell by 1.21% during the year to Q2 2018, in sharp contrast with the previous year’s 4.06% growth. Israeli house prices fell 1.14% q-o-q in Q2 2018.
Egypt is an exception
Egypt’s housing market has risen over the past year, with the nationwide real estate index rising by 4.51% during the year to Q2 2018, in contrast with the y-o-y decline of 5.32% during the previous year. However house prices fell 9.91% quarter-on-quarter during the latest quarter.
Rapid house price rises should be expected in Egypt due to the dramatic inflation unleashed by more-than-halving of the currency’s value in November 2016. That house prices have not risen more is surprising.
President Abdel Fattah el-Sisi recently removed the last restrictions on foreign ownership of land and property in Egypt. He also allowed the government, the biggest landowner in Egypt, to use its land for public-private partnership schemes. The economy is expected to grow strongly by 5.2% this year, the fastest pace in a decade, according to the IMF.
The Americas are mixed
The U.S. remains strong but Canada is slowing sharply.
In Latin America, Mexico is strengthening while Chile has rebounded strongly. House prices are still falling in Brazil, despite some improvement.
After five years of strong house price growth, the U.S. housing market remains surprisingly vibrant. The Federal Housing Finance Agency’s seasonally-adjusted purchase-only U.S. house price index increased 3.67% y-o-y in Q2 2018 (inflation-adjusted), after annual rises of 4.93% in Q1 2018, 4.64% in Q4 2017, 4.68% in Q3 2017 and 4.77% in Q2 2017. The FHFA index rose by 0.07% q-o-q during the latest quarter.
U.S. housing demand and construction activity are mixed. In July 2018, sales of new single-family houses rose by 12.8% y-o-y while existing home sales were down by 1.5%. Building permits authorized for new housing units rose by 4.2% in July 2018 from a year earlier. On the other hand, new housing starts fell by 1.4% y-o-y in July 2018, while completions were slightly down by 0.8%.
The world’s biggest economy grew by 4.1% y-o-y in Q2 2018, nearly double the 2.2% growth the previous quarter and the fastest pace since Q3 2014. Growth was mainly driven by consumers spending their tax cuts and exporters rushing to get their goods delivered ahead of retaliatory tariffs. Recently, the IMF raised its 2018 US growth forecast from 2.3% to 2.7% and finally to 2.9%, an acceleration from the expansions of 2.3% in 2017 and 1.5% in 2016.
In December 2017, President Donald Trump signed a landmark tax law (known as the Tax Cuts and Jobs Act or TCJA) considered to be the largest overhaul of the U.S. tax code in over 30 years.
Canada‘s housing market is slowing sharply, amidst the introduction of more market-cooling measures and rising mortgage interest rates. House prices in the country’s eleven major cities rose by a meagre 0.41% during the year to Q2 2018, a sharp deceleration from last year’s 13.02% growth. Quarter-on-quarter, house prices increased 1.68% q-o-q in Q2 2018.
The Canadian Real Estate Association (CREA) expects home sales to fall by 11% this year, mainly due to higher home prices and interest rates, supply shortages, and heightened uncertainty. Demand is weak. In July 2018, actual sales activity dropped 1.3% from a year earlier. The Canadian economy grew by a healthy 3% in 2017, the highest growth since 2011. The economy is expected to expand by 2.1% this year and by another 2% in 2019.
The Latin Americas are improving
Mexico‘s nationwide house price index rose by 5.12% during the year to Q2 2018, up from just 0.73% y-o-y house price rises in Q2 2017. House prices increased 4.89% q-o-q during the latest quarter.
Chile‘s housing market continues to grow stronger, despite the introduction of a property sales tax in 2016. The average price of new apartments in Greater Santiago rose by 3.39% during the year to Q2 2018, up from the previous year’s 2.11% y-o-y growth. House prices fell by 1.07% q-o-q in Q2 2018.
Brazil’s house prices are still falling, but the outlook is now positive, amidst increasing construction and home sales, as well as a positive economic outlook. In Sao Paulo, house prices fell by 2.38% during the year to Q2 2018, after a y-o-y decline of 2.15% a year earlier. Quarter-on-quarter, house prices in Sao Paulo fell by 1.22% in Q2 2018.
Housing starts in August were above expectations, and starts for June and July were revised up. Most of the increase, and upward revisions, were due to the multi-family starts that are volatile month-to-month.
The housing starts report released this morning showed starts were up 9.2% in August compared to July (and August starts were revised up), and starts were up 9.4% year-over-year compared to August 2017.
Multi-family starts were down 38% year-over-year, and single family starts were down slightly year-over-year.
This first graph shows the month to month comparison for total starts between 2017 (blue) and 2018 (red).
Starts were up 9.4% in August compared to August 2017.
Through eight months, starts are up 6.9% year-to-date compared to the same period in 2017. That is a decent increase.
Note that 2017 finished strong, so the year-over-year comparisons will be more difficult in Q4.
Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).
These graphs use a 12 month rolling total for NSA starts and completions.
The blue line is for multifamily starts and the red line is for multifamily completions.
The rolling 12 month total for starts (blue line) increased steadily for several years following the great recession – but turned down, and has moved sideways recently. Completions (red line) had lagged behind – however completions and starts are at about the same level now (more deliveries).
It is likely that both starts and completions, on rolling 12 months basis, will now move mostly sideways.
As I’ve been noting for a few years, the significant growth in multi-family starts is behind us – multi-family starts peaked in June 2015 (at 510 thousand SAAR).
The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion – so the lines are much closer. The blue line is for single family starts and the red line is for single family completions.
Note the relatively low level of single family starts and completions. The “wide bottom” was what I was forecasting following the recession, and now I expect a couple more years, or more, of increasing single family starts and completions.
Baby Boomers are staying put and their kids are sticking with them.
A study released Thursday by Trulia examined the housing situations of homeowners 65 and older and compared it with a decade ago.
It uncovered a 3.4% jump in the number of seniors working in 2016 compared with 2005, and a 1.7% increase in the number living with younger generations.
It also showed that seniors appear to be holding off on downsizing just the same as they were 10 years prior.
Only 5.5% of seniors moved,according to Trulia, and of those who did, the split was pretty even between single-family and multifamily residences.
But Trulia analyst Alexandra Lee points out that while the percentage of downsizers hasn’t changed, the number of those moving actually has.
“Because the Boomer generation is so much larger than previous generations, that 5.5% moving rate translates into very different raw numbers across the years,” Lee wrote. “There were about 7 million more senior households in 2016 than 2005, meaning 386,000 more senior households moved in 2016.”
The age at which seniors decide to downsize has also shifted. The survey revealed that in 2005, seniors were moving into multifamily residences by age 75. By 2016, this had moved to 80.
The study sought to examine whether Baby Boomers holding onto their homes was driving up home prices. In looking at the nation’s top 100 metros, it determined that Boomers were not eroding affordability.
“Like the general population, seniors in expensive and unaffordable metros rent at much higher rates,” Lee wrote. “The higher the income required to purchase the median home, the lower the proportion of senior households that could downsize.”
MCLEAN, Va., Sept. 20, 2018 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates rose for the fourth consecutive week.
Sam Khater, Freddie Mac’s chief economist, says the 30-year fixed-rate mortgage increased once again to its highest level since May. “Mortgage rates are drifting upward again and represent continued affordability challenges for prospective buyers – especially first-time buyers,” he said. “Borrowing costs are moving right now for three main reasons: the very strong economy, higher U.S. government debt issuances and global trade tensions.”
Added Khater, “Amidst this four-week climb in mortgage rates, the welcoming news is that purchase applications have risen on an annual basis for five consecutive weeks. However, given the widespread damage caused by Hurricane Florence in the Carolinas, the next few months of housing activity will likely be somewhat volatile.”
30-year fixed-rate mortgage (FRM) averaged 4.65 percent with an average 0.5 point for the week ending September 20, 2018, up from last week when it averaged 4.60 percent. A year ago at this time, the 30-year FRM averaged 3.83 percent.
15-year FRM this week averaged 4.11 percent with an average 0.5 point, up from last week when it averaged 4.06 percent. A year ago at this time, the 15-year FRM averaged 3.13 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.