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Contracts for new, single-family home sales inched down 0.7% in September to a 701,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. The decline came off a downwardly revised August estimate, which was decreased from an initial reading of 713,000 to a new estimate of 706,000. Year-over-year, the September estimate is 15.5% higher. Sales in September continue strength supported by lower mortgage rates.
Total sales for the first nine months of 2019 (527,000) were 7.2% higher than the comparable total for 2018 (491,000). We expect sales volume to continue to trend up slightly in the coming months as more new homes are built.
For the first nine months of 2019 (and relative to the first nine months of 2018), new home sales were up 12.8% in the South, 7.3% in the West, and down 10.3% in the Northeast and 10.6% in the Midwest, due to some tax reform related effects and affordability.
Compared to last month, inventory of new homes for sale declined 0.6% to 321,000 in September. It is the fourth straight decline since June 2019. The current months’ supply stands at a balanced level of 5.5.
Median new home sales price (price of a home in the middle of the distribution) dropped 7.9% in September to $299,400 compared to August ($325,200) and 8.8% lower than a year ago ($328,300). Median new home sales price dipped below $300,000 for the first time since May 2016.
About 15% of newly built home sales are priced under $200,000 in September, compared to 10% last month and 9% one year ago. While more affordable entry-level homes were sold in September, the number of new homes priced above $400,000 decreased.
The lack of affordable housing in New York City and its suburbs could threaten job creation and future economic job growth, according to a new report from the city’s Planning Department.
“The region’s housing supply has not been keeping up with job growth in recent years,” the report said. “This pattern would be expected to heighten affordability challenges and create headwinds to further business growth.”
Released Wednesday, the 32-page report found that New York averaged just 45,800 permits for new apartments and homes per year between 2009 and 2018. That’s down about 30 percent from the period between 2001 and 2008, when the city and its tri-state suburbs averaged 63,600 units per year.
The Central Park Tower, center, is under construction, Tuesday, Sept. 17, 2019 in New York. At 1550 feet (472 meters) the tower is the world’s tallest residential apartment building, according to the developer, Extell Development Co. (AP Photo/Mark L
Prior to the financial crisis, the city and its suburbs, including Long Island, Westchester, northern New Jersey and Connecticut, created an average of 2.2 new houses or apartments per new job. But that number has slipped in the decade since the recession as job growth skyrocketed, falling to just 0.5 units added per job.
Over the last 10 years, New York City averaged 20,000 new homes or apartments annually, granting far more housing permits than any of its suburbs.
City Hall said in a statement to the New York Post, which first reported the news, that in 2018, New York issued 22,000 new housing units.
“It’s key that we continue to produce housing at a high pace, and we need our neighbors to do the same if we are going to address regional housing affordability and support economic growth,” City Planning spokeswoman Rachaele Raynoff told the Post.
According to an “Affordability Index” published by Comptroller Scott Stringer, the impacts of expensive housing costs varied across households. Rent swallowed up 37 percent of the average single adult’s earnings, but that figure, at 47 percent, was even higher for single parents. It accounted for 26 percent of married couples’ budgets.
“New York City’s affordability crisis impacts every New Yorker and every community — and the numbers laid out in our affordability index shine a light on this worsening crisis,” Stringer said.
Connecticut’s governor proposed putting a toll gantry on the 1-mile section of I-684 that goes out of New York.
The proposal to put a tollbooth on the Connecticut mile of Interstate 684 apparently elicited negative reactions from Connecticut politicians as well as New Yorkers. Democrats in the Connecticut State Senate are less than enthusiastic about Gov. Ned Lamont’s plan for tolls at 14 spots throughout the state.
Lamont wants to put tolls on roads in his state to raise revenue and pay for repairs. One of the roads he picked is I-684, the “interstate highway” that runs down the east side of Putnam and Westchester counties in New York.
The toll plaza would go in the 1.4 mile stretch of I-684 that is in Connecticut. The toll gantry would be sandwiched between the exit for the Westchester County Airport to the south and the exit for Armonk, home of IBM, to the north.
Lamont met with the Democratic caucus Wednesday to go over his plan and hear questions and concerns from the caucus. Senate President Martin Looney told Patch that there was broad support for Lamont’s proposed transportation fixes, but disagreement on how to pay for them.
“We need to find something that is broadly palatable in the General Assembly and also to the public,” Looney said.
The caucus didn’t take a headcount on support for Lamont’s plan. Looney said Lamont was going to reflect on what he heard in the caucus meeting.
Senate Majority Leader Bob Duff said everyone acknowledges that it’s vitally important to upgrade Connecticut’s transportation infrastructure. He said Lamont carefully listened to concerns from legislators.
“How we get there and how we pay for it is certainly a different story,” Duff said. “But it was a very frank conversation with the governor.”
Lamont campaigned on truck-only tolling, but said after being elected it wouldn’t create enough revenue for the state and could run into some legal challenges from the trucking industry. Lamont rolled out a 50-toll gantry plan that took up part of the 2019 legislative session, but in the end never got a full vote. Any toll vote would likely become a hot-button issue in the 2020 election where state representatives and senators are up for re-election.
Legislative Republicans in Connecticut have been steadfast in their opposition to tolls. House Republican Leader Themis Klarides said that there is common ground in Lamont’s latest plan and it was more well-thought than previous iterations, but tolls are still a non-starter.
Non-starter was exactly the term New York State Senator Pete Harckham used, talking about his constituents in Dutchess, Putnam and Westchester counties who would be unfairly affected. “Governor Lamont’s plan to place a toll on I-684 is a nonstarter because it disproportionately impacts New York commuters. There are enough roads elsewhere in Connecticut to toll to fund infrastructure projects in Connecticut.”
“The modest uptick in mortgage rates over the last two months reflects declining recession fears and a more sanguine outlook for the global economy,” said Sam Khater, Freddie Mac’s Chief Economist. “Due to the improved economic outlook, purchase mortgage applications rose fifteen percent over the same week a year ago, the second highest weekly increase in the last two years. Given the important role residential real estate plays in the economy, the steady improvement of the housing market is a reassuring sign that the economy is on solid ground heading into next year.”
30-year fixed-rate mortgage averaged 3.75 percent with an average 0.6 point for the week ending November 14, 2019, up from last week when it averaged 3.69 percent. A year ago at this time, the 30-year FRM averaged 4.94 percent.
15-year fixed-rate mortgage averaged 3.2 percent with an average 0.5 point, up from last week when it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 4.36 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.
As the homeless crisis continues to simmer in Oregon’s largest city, local officials working with nonprofit groups have deployed mobile hygiene stations in a bid to clean up some of the largest encampments.
Portland, with a metropolitan area of about 2.4 million people, has joined West Coast cities such as Los Angeles and San Francisco in struggling with a growing homeless crisis that ranks among the worst in the country.
Safety resource website Security.org released a study on Monday that showed Oregon has the fourth-highest number of homeless people in the nation when adjusted for population. The study found Oregon has about 350 homeless people per 100,000 people, nearly double the national average of 168 per 100,000. The study also found that Oregon’s homeless rate has increased by nearly 14.10 percent since 2014.
Oregon has seen its homeless rate rise by nearly 14.10 percent since 2014, according to a recent study.
On any given night, thousands of people can be found sleeping on the streets of Portland. The latest count, released in August, shows that, in 2019, more people were sleeping outside in Multnomah County than at any time in the last decade. Of the 2,037 unsheltered people, nearly 80 percent reported having one or more disabilities.
In January, Portland launched a “Navigation Team” with outreach workers that have spent time going out to homeless encampments, focusing on specific locations in order to reduce impacts to area communities.
“These are campsites that for a very long time have been generating concerns and safety issues,” Denis Theiault, a spokesman for the Joint Office for Homeless Services, told FOX12 on Tuesday. “Not just public safety issues but health and safety issues for the folks who are camping there as well as the folks who are near those sites.”
Officials in Portland have deployed a mobile hygiene unit which is comprised of two portable toilets, hand-washing stations, a garbage can, sharp box and lockers to help improve areas near homeless encampments.
Part of that outreach includes offering sanitation services, such as a mobile hygiene unit that is comprised of two portable toilets, hand-washing stations, a garbage can, a sharp box, and lockers.
The mobile station deploys around various homeless encampments with the largest populations, according to officials. The current trailer on Southeast Flavel Street under Interstate 205 was moved to the underpass about two weeks ago.
Tracy Vargas, who has been camping out in southeast Portland for over three years, told FOX12 she appreciates that there is now a place where she is able to have access to a bathroom.
“You’ve got to find a business around the area that will let you come in and go,” Vargas told FOX12 Tuesday. “A lot of times you get left to going out in the woods or wherever you can go.”
In the summer of 2019, Fox News embarked on an ambitious project to chronicle the toll progressive policies has had on the homeless crisis in four west coast cities: Seattle, San Francisco, Los Angeles and Portland, Ore. In each city, we saw a lack of safety, sanitation, and civility. Residents, the homeless and advocates say they’ve lost faith in their elected officials’ ability to solve the issue. Most of the cities have thrown hundreds of millions of dollars at the problem only to watch it get worse. This is what we saw in Portland.
Vargas said she’s also working with the homeless outreach team to get her birth certificate, and agrees the program is a “wonderful idea.
Pat Perkins said she’s seen an influx in homeless people in the 14 years she’s lived in the area, and the garbage and human waste have grown exponentially in the past five years.
“It seems like it could be a health hazard, especially when you see needles and feces on the ground,” Perkins told FOX12, saying having a designated place to throw trash, hazardous materials and use the bathroom will hopefully improve conditions.
The sanitation services may be the most visible part of the outreach group but it’s not their only goal, according to Theiault. He told FOX12 the group’s ultimate plan is to get people permanently off the streets by providing them with necessary things to move forward.
“We’re going to get them their ID, we’re going to get them a birth certificate, we’re going to get them medical connections,” he told FOX12.
City officials said Tuesday that at least 15 people from the camp under Interstate 205 have been placed in shelters, including two families.
The Federal Reserve cut rates for a third time this year today. While the 25 basis point rate cut won’t have a direct impact on fixed-rate mortgages, Fed actions do impact the market which touches lending.
Here’s what the rate cut means for homebuyers and homeowners.
What will happen to long-term fixed mortgages?
The federal funds rate does not directly affect long-term fixed-interest mortgage rates; those rates are pegged to the yield of U.S. Treasuries, which are set by market forces. However, those market forces are influenced by Fed policy, as we saw in July when the 10-year Treasury yields dropped after the Fed cut rates.
While fixed-rate mortgages don’t move in lockstep with the Fed, they’re not immune to Fed policy.
“The Fed does have an effect on rates and consumer sentiment because we look to the Fed for the health of the economy and because policy action does have an impact on the market,” says Joel Kan, MBA’s associate vice president of economic and industry forecasting.
Variable-rate loans will get cheaper
Variable-rate loans, such as adjustable rate mortgages (ARMs) and home equity lines of credit (HELOCs) track with the Fed rate, so those borrowers will come out ahead.
A drop in the federal funds rate by 25 basis points means a 25-basis point drop in variable rates, as well. Usually, borrowers will see a change in their lender statements the month after the Fed lowers rates.
“To quantify this, on a HELOC of $100,000, every change of 0.25 percent in interest rate (either upwards or downwards) will cause a borrower’s interest expenses to rise or fall $250 per year. As this works out to only about $21 per month, it should not have a very significant impact on most borrowers unless they have a very large HELOC,” says Daniel Shlufman, Mortgage Banker at Classic Mortgage LLC.
Those with variable-rate mortgages may have to wait a while to see their payments fall. Such loans typically adjust annually on their anniversary dates. Some don’t adjust at all for the first two, three, five or even seven years.
What borrowers should do
Would-be homebuyers interested in a fixed-rate mortgage or those who want to refinance should take advantage of today’s low interest rates, experts say. There’s no way to time the market to get the best deal on rates, says Kan.
The best course of action for homebuyers is to decide whether they can afford the home they want based on their down payment and current mortgage rates. Today’s mortgage rates are low by historical standards, so waiting for even lower rates can mean missing an opportunity.
Equity Group president Sam Zell (Credit: Getty Images, iStock, Equity Apartments)
Sam Zell’s Equity Residential said rent control is having a “chilling effect” on capital going into development.
The real estate investment trust, which owns 80,000 units nationwide, saw its total revenue from rental income and fee and asset management increase to $685 million in the third quarter, from $652 million a year earlier. But on Wednesday’s third-quarter earnings call, executives pointed to how the recent overhaul of rent laws in New York and California were impacting the company’s bottom line.
Equity Residential, which owns 9,600 apartments in New York, said it experienced a 50 basis point drop in renewal increases on rentals in the second half of the year in the state — plus a $400,000 loss in application and late fees.
In June, application fees on rental apartments in New York were capped at $20 dollars for rental apartments. Late fees were also limited to $50 or 5 percent of the rent, whichever is less, and can only be charged after five days of non-payment. Equity Residential has been selling off some of its residential holdings in New York over the last year or so.
Meanwhile, in California, 70 percent of Equity Residential’s 36,805 units will be affected by the state’s new rent control measure, which caps annual rent increases to 5 percent above the consumer price index.
The firm also had stern words for lawmakers who enacted rent control in California and those who tightened regulations in New York, assuring investors that it would not sit idly by while activists continue to push for regulations.
“Through our trade associations, we’ll encourage lawmakers to remove regulatory barriers to new housing construction and incentives to build housing,” said CEO Mark Parrell.
Equity Residential, a member of the California Apartment Association, a real estate trade association that represents large owners and institutional investors, spent $4.3 million to oppose California’s Proposition 10 last year. While the measure was ultimately unsuccessful, the bill’s promoter, Aids Health Foundation CEO Michael Weinstein, is gathering signatures for another similar measure to lift restrictions on rent control.
On the company’s second-quarter earnings call in May, Parrell said, “rent control is a risk, just like climate change, just like the financial strength of the municipality.”
The REIT, a subsidiary of Zell’s Equity Group, has holdings primarily in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver.
Decades of misgovernance and misplaced priorities have left the state fighting fire with . . . blackouts.
California is staying true to its reputation as the land of innovation — it is making blackouts, heretofore the signature of impoverished and war-torn lands, a routine feature of 21st-century American life.
More than 2 million people are going without power in Northern and Central California, in the latest and biggest of the intentional blackouts that are, astonishingly, California’s best answer to the risk of runaway wildfires.
Power — and all the goods it makes possible — is synonymous with modern civilization. It shouldn’t be a negotiable for anyone living in a well-functioning society, or even in California, which, despite its stupendous wealth and natural splendor, has blighted itself over the decades with misgovernance and misplaced priorities.
The same California that has been the seedbed of world-famous companies that make it possible for people to send widely viewed short missives of 280 characters or less, and share and like images of grumpy cats, isn’t doing so well at keeping the lights on.
The same California that has boldly committed to transitioning to 50 percent renewable energy by 2025 — and 100 percent renewable energy by 2045 — can’t manage its existing energy infrastructure.
The same California that has pushed its electricity rates to the highest in the contiguous United States through its mandates and regulations doesn’t provide continuous access to that overpriced electricity.
California governor Gavin Newsom, who has to try to evade responsibility for this debacle while presiding over it, blames “dog-eat-dog capitalism” for the state’s current crisis. It sounds like he’s referring to robber barons who have descended on the state to suck it dry of profits while burning it to the ground. But Newsom is talking about one of the most regulated industries in the state — namely California’s energy utilities, which answer to the state’s public utilities commission.
This is not exactly an Ayn Rand operation. The state could have, if it wanted, pushed the utilities to focus on the resilience and safety of its current infrastructure — implicated in some of the state’s most fearsome recent fires — as a top priority. Instead, the commission forced costly renewable-energy initiatives on the utilities. Who cares about something as mundane as properly maintained power lines if something as supposedly epically important — and politically fashionable — as saving the planet is at stake?
Meanwhile, California has had a decades-long aversion to properly clearing forests. The state’s leaders have long been in thrall to the belief that cutting down trees is somehow an offense against nature, even though thinning helps create healthier forests. Biomass has been allowed to build up, and it becomes the kindling for catastrophic fires.
As Chuck DeVore of the Texas Public Policy Foundation points out, a report of the Western Governors’ Association warned of this effect more than a decade ago, noting that “over time the fire-prone forests that were not thinned, burn in uncharacteristically destructive wildfires.”
In 2016, then-governor Jerry Brown actually vetoed a bill that had unanimously passed the state legislature to promote the clearing of trees dangerously close to power lines. Brown’s team says this legislation was no big deal, but one progressive watchdog called the bill “neither insignificant or small.”
On top of all this, more people live in remote areas susceptible to fires, in part because of the high cost of housing in more built-up areas.
There shouldn’t be any doubt that California, susceptible to drought through its history and whipped by fierce, dry winds this time of year, is always going to have a fire problem. But there also shouldn’t be any doubt that dealing with it this poorly is the result of a series of foolish, unrealistic policy choices.
California’s overriding goal should have been safe, cheap, and reliable power, a public good so basic that it’s easy to take for granted. The state’s focus on ideological fantasies has instead ensured it has none of the above.
Home prices rose to a new high in the third quarter, according to a new report from ATTOM Data Solutions, curator of a property database and property data provider of Data-as-a-Service.
Home prices rise to new high | North Salem Real Estate Single-family homes and condos sold for a median price of $270,000 in the third quarter.
Homeowners are also getting more profit than ever on the sale of their home. Homeowners who sold their home in the third quarter earned a median profit that ticked up to a post-recession high of 34.5%, up from 34.4% in the second quarter of 2019 and 34.3% in the third quarter of 2018, according to the report.
And homeowners are getting more profit on their homes not only because of rising home prices, but also they are seeing their equity rise as the average homeownership tenure hit a new high of 8.19 years in the third quarter. This is up 3% from the previous quarter and previous year, according to the report. For reference, homeownership tenure averaged 4.2 years between the first quarter of 2000 and the third quarter of 2007.
“The seven-year U.S. housing boom is back in high gear,” said Todd Teta, ATTOM Data Solutions chief product officer. “After a series of relatively small price increase quarters, home prices saw quite the uptick, seller profits rose and the problem of distressed sales continued to fade, helping to make the third quarter the strongest in four years.”
“That all happened as mortgage rates sank back to near-historic lows, which clearly powered the market upward along with stock market surges and a continued strong economy,” Teta said. “There had been signs before the latest surge of a cooling market, but they seem to have diminished, at least for now.”
But while these rising home prices are great for homeowners and sellers, it is also creating an affordability crisis for homebuyers, especially at the lower end of the market.
As housing affordability continues to be a cause of concern for the nation’s homeowners, a report from the National Association of Homebuildersindicates that many Americans now perceive the problem to be a crisis.
August 2019 saw an annual increase of 3.2% for home prices nationwide, inching forward from the previous month’s pace, according to the Case-Shiller Home Price Index from S&P Dow Jones Indices and CoreLogic.
The 10-City and 20-City composites reported a 1.5% and 2% year-over-year increase, respectively. During the month, 11 of 20 cities reported increases before seasonal adjustment, whereas 17 of 20 cities reported increases after seasonal adjustment.
“The U.S. National Home Price NSA Index trend remained intact with a year-over-year price change of 3.2%,” said Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “However, a shift in regional leadership may be underway beneath the headline national index.”
According to the index, Phoenix, Charlotte, and Tampa reported the highest year-over-year gains among all of the 20 cities.
In August, Phoenix led with a 6.3% year-over-year price increase, followed by Charlotte with a 4.5% increase and Tampa with a 4.3% increase. Seven of the 20 cities reported larger price increases in the year ending August 2019 versus the year ending July 2019.
“Phoenix saw an increase in its year over year price change to 6.3% and retained its leading position,” Murphy said. “However, Las Vegas dropped from No. 2 to No. 8 among the cities of the 20-City Composite, falling from a 4.7% year-over-year change in July to only 3.3% in August.”
“Meanwhile, the Southeast region included three of the top four cities. Charlotte, Tampa, and Atlanta all recorded solid year-over-year performance with price changes of 4.5%, 4.3%, and 4.0%, respectively,” Murphy said. “In the Northwest, Seattle’s year-over-year change turned positive (0.7%) after three consecutive months of negative year-over-year price changes. The 10-City Composite year-over-year price change declined slightly from July to 1.5%, while the 20-City Composite year-over-year price change remained steady at 2.0%. San Francisco was the only city to record a negative YOY price change (-0.1%).”
The graph below highlights the average home prices within the 10-City and 20-City Composites: