Category Archives: Bedford Hills

Home remodeling slowdown expected | Bedford Hills Homes

After several years of solid acceleration, annual growth in national home improvement and repair spending is expected to soften in 2019, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that year-over-year increases in residential remodeling expenditures will reach a decade high of 7.7 percent this year and then start to drift downward to 6.6 percent through the third quarter of 2019.

“Rising mortgage interest rates and flat home sales activity around much of the country are expected to pinch otherwise very strong growth in homeowner remodeling spending moving forward,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “Low for-sale inventories are presenting a headwind because home sales tend to spur investments in remodeling and repair both before a sale and in the years following.” 

“Even so, many other remodeling market indicators including home prices, permit activity, and retail sales of building materials continue to strengthen and will support above-average gains in spending next year,” says Abbe Will, Associate Project Director in the Remodeling Futures Program at the Joint Center. “Through the third quarter of 2019, annual expenditures for residential improvements and repairs by homeowners is still expected to grow to over $350 billion nationally.”

The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.

The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is January 17, 2019.

The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.

The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Joint Center also trains and inspires the next generation of housing leaders. 

read more…

http://www.jchs.harvard.edu/press-releases/slower-growth-anticipated-home-remodeling

Housing starts up y-o-y | Bedford Hills Real Estate

Total housing starts posted a decline in September due to flat conditions for single-family construction and a pullback for apartment development. Total starts declined 5.3% in September but are 6.4% higher for 2018 on a year-to-date basis, according to the joint data release from the Census Bureau and HUD.

The pace of single-family starts was roughly flat in September, decreasing 0.9% to a seasonally adjusted annual rate of 871,000. Slight gains off the summer soft patch for single-family mirror a minor uptick of the NAHB/Wells Fargo Housing Market Index, now registering a score of 68. While builders are benefitting from recent declines in lumber prices (at least relative to spring and summer’s elevated levels), they continue to report concerns about labor access issues.

On a year-to-date basis, single-family starts are 6% higher as of September relative to the first nine months of 2017. Single-family permits, a useful indicator of future construction activity, were up slightly (2.9%) in September and have registered a 5.6% gain thus far in 2018 compared to last year.

Multifamily starts (2+ unit production) pulled back in September to a 330,000 annual rate. After a strong start to the year, multifamily development is moving closer to our forecast of leveling-off conditions. On a year-to-date basis, multifamily 5+ unit production is 7.3% higher thus far in 2018, while multifamily 5+ unit permitting is trending lower with just a 0.8% year-to-date increase relative to 2017.

With respect to housing’s economic impact, 54% of homes under construction in September were multifamily (607,000). The current count of apartments under construction is down slightly from a year ago. In September, there were 522,000 single-family units under construction, a gain of more than 9% from this time in 2017.

Regional data show – on a year-to-date basis – mixed conditions. Single-family construction is down 1% for the year in the Midwest and flat in the Northeast. Single-family starts are up in the larger building regions of the South (4.9%) and the West (14.6%).

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Single-Family Starts Flat in September

Framing Lumber Prices Down Year-over-year | Bedford Hills Real Estate

Here is another monthly update on framing lumber prices.   Lumber prices declined further in September from the recent record highs, and are now down year-over-year.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through October 5, 2018 (via NAHB), and 2) CME framing futures.

image: https://1.bp.blogspot.com/-E7wGkKJYGas/W7ucQh1Nf0I/AAAAAAAAwMU/LJGNuvCZt5kIOIsajkK6SxxCf0JM997twCLcBGAs/s320/LumberOct82018.PNG

Lumcber Prices

Click on graph for larger image in graph gallery.

Right now Random Lengths prices are down 12% from a year ago, and CME futures are also down 12% year-over-year.

There is a seasonal pattern for lumber prices. Prices frequently peak around May, and bottom around October or November – although there is quite a bit of seasonal variability.



Read more…

https://www.calculatedriskblog.com/2018/10/update-framing-lumber-prices-down-year.html#dMwLgSHUwZtbJW2a.99

Housing Inventory Tracking | Bedford Hills Real Estate

I love Bill McBride’s Calculated Risk blog

Update: Watching existing home “for sale” inventory is very helpful. As an example, the increase in inventory in late 2005 helped me call the top for housing.

And the decrease in inventory eventually helped me correctly call the bottom for house prices in early 2012, see: The Housing Bottom is Here.

And in 2015, it appeared the inventory build in several markets was ending, and that boosted price increases.

I don’t have a crystal ball, but watching inventory helps understand the housing market.

Inventory, on a national basis, was unchanged year-over-year (YoY) in July, this followed 37 consecutive months with a YoY decline.

The graph below shows the YoY change for non-contingent inventory in Houston, Las Vegas, Sacramento (through August) and also Phoenix (through July) and total existing home inventory as reported by the NAR (through July).

image: https://4.bp.blogspot.com/-q5HBzFd0njM/W5q8p0StEDI/AAAAAAAAwAU/rQCgnKAobAsQ2a5xzlfVUzGANmCIoFzDgCLcBGAs/s320/InventoryPreAug2018.PNG

Click on graph for larger image.

This shows the YoY change in inventory for Houston, Las Vegas, Phoenix, and Sacramento.  The black line is the year-over-year change in inventory as reported by the NAR.

Note that inventory in Sacramento was up 22% year-over-year in July (inventory was still very low), and has increased YoY for eleven consecutive months.

Also note that inventory was up 20% YoY in Las Vegas in August (red), the second consecutive month with a YoY increase.

Houston is a special case, and inventory was up for several years due to lower oil prices, but declined YoY recently as oil prices increased.  Inventory was up slightly in Houston in August (but the YoY change might be distorted by Hurricane Harvey last year).

Inventory is a key for the housing market, and I am watching inventory for the impact of the new tax law and higher mortgage rates on housing.   I expect national inventory will be up YoY at the end of 2018 (but still be low).

This is not comparable to late 2005 when inventory increased sharply signaling the end of the housing bubble, but it does appear that inventory is bottoming nationally (but still very low).

 

Read more at https://www.calculatedriskblog.com/#DgT40fTJtpLyGmFz.99

Home prices make the biggest jump in four years | Bedford Hills Real Estate

It is a seller’s market, undeniably. The supply of homes for sale is low, demand is high, and now prices are heating up even more. But sellers today see more reasons to stay put than to profit.

Home prices jumped 7.1 percent annually in May, according to a new report from CoreLogic. That’s the biggest jump in four years. Annual price gains had been shrinking slightly, as mortgage rates rose, but apparently higher rates are not hurting demand. They are, however, exacerbating the already critical supply shortage.

“During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less,” said Frank Nothaft, chief economist for CoreLogic. “May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.”

Rising costs could hurt entry level housing supply

Rising costs could hurt entry level housing supply  

If mortgage rates were to rise further, fewer homeowners would want to move. In fact, if today’s homeowners just considering a move were faced with a mortgage rate 1 percentage point higher than their current one, 24 percent would not move, according to a survey by John Burns Real Estate Consulting. Thirty-six percent said they “may not” move. The average rate on the 30-year fixed is now slightly more than 1 percentage point higher than the lows following the recession.

The median price of an existing home sold in May was $264,800, according to the National Association of Realtors. Of course, all real estate is local, and certain markets are hotter than others. Seattle, Denver, and San Francisco continue to see some of the biggest price gains, as they also have the leanest supply.

The supply of homes for sale has been dropping on an annual basis for the past 36 months, according to the National Association of Realtors. The shortage is most acute at the lower end of the market, where demand is highest and where investors bought thousands of distressed properties during the housing crash, turning them into lucrative rentals.

Younger potential buyers have already delayed homeownership due to the recession and high levels of student loan debt. They have also been hampered by high rents, making it more difficult to save for a downpayment.

Higher rents, combined with higher home prices, are the number one reason for the decline in young homeowners, followed by lower marriage and fertility rates, according to a recent study by Freddie Mac.

“Historically low mortgage rates and increasingly favorable employment conditions should have generated a far greater number of home purchases by young adults, especially in the last five years,” said Sam Khater, Freddie Mac’s chief economist. “Unfortunately, home-price and rent growth above incomes — driven primarily by a severe shortage of housing supply — have been too high of a hurdle for many would-be buyers to clear.”

read more…

https://www.cnbc.com/2018/07/02/housing-is-getting-more-expensive-as-home-sellers-retreat.html?__source=newsletter%7Ceveningbrief

Mortgage Rates Move Up to Highest Level in Seven Years | Bedford Hills Real Estate

Freddie Mac (OTCQB:FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that after plateauing in recent weeks, mortgage rates reversed course and reached a new high last seen eight years ago.

Sam Khater, Freddie Mac’s chief economist, says the 30-year fixed mortgage rate edged up to 4.61 percent, which matches the highest level since May 19, 2011. “Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” he said. “Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

Added Khater, “While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels for buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.61 percent with an average 0.4 point for the week ending May 17, 2018, up from last week when it averaged 4.55 percent. A year ago at this time, the 30-year FRM averaged 4.02 percent.
  • 15-year FRM this week averaged 4.08 percent with an average 0.4 point, up from last week when it averaged 4.01 percent. A year ago at this time, the 15-year FRM averaged 3.27 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.82 percent this week with an average 0.3 point, up from last week when it averaged 3.77 percent. A year ago at this time, the 5-year ARM 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.

U.S. construction spending barely rises | Bedford Hills Real Estate

U.S. construction spending rose less than expected in February amid a steep decline in investment in public construction projects.

The Commerce Department said on Monday construction spending edged up 0.1 percent after being unchanged in January.

Economists polled by Reuters had forecast construction spending accelerating 0.5 percent in February. Construction spending increased 3.0 percent on a year-on-year basis.

February’s marginal increase in construction spending could have implications for first-quarter gross domestic product growth estimates, which are mostly below a 2 percent annualized rate.

In February, spending on public construction projects tumbled 2.1 percent, almost reversing January’s 2.3 percent rise. February’s drop was the largest since June 2017.

Spending on federal government construction projects plunged 11.9 percent, the biggest decline since October 2004, after surging 13.4 percent in January.

State and local government construction outlays fell 1.0 percent after rising 1.3 percent in January.

Spending on private construction projects increased 0.7 percent after falling 0.7 percent in January. Outlays on private residential projects edged up 0.1 percent to the highest level since January 2007. They rose 0.1 percent in January.

Spending on nonresidential structures rebounded 1.5 percent in February after dropping 1.7 percent in the prior month.

 

read more…

 

https://www.reuters.com/article/us-usa-economy-construction/u-s-construction-spending-barely-rises-in-february-idUSKCN1H918R?il=0

Construction spending at all time high | Bedford Hills Real Estate

Construction spending in the US was unchanged at an all-time high of USD 1.26 trillion in January 2018, following an upwardly revised 0.8 percent increase in December and missing market expectations of 0.3 percent. Spending on private construction fell 0.5 percent to USD 962.7 billion after hitting a record high of USD 967.9 billion in the previous month, due to a decline in nonresidential projects (-1.5 percent). Meanwhile, outlays on public construction projects increased 1.8 percent to USD 300.0 billion in January, the highest level since August 2015, as spending on federal government construction projects surged 14.9 percent to the highest level since September 2011 and that on state and local government construction rose 0.5 percent to a near two-year high. Construction Spending in the United States averaged 0.45 percent from 1964 until 2018, reaching an all time high of 5.90 percent in April of 1978 and a record low of -4.80 percent in February of 1975.

https://tradingeconomics.com/united-states/construction-spending

Bedford Hills Nor’easter update

Storm Update – Warming Centers
            Our thanks to the Bedford Hills Fire Department and the Katonah Fire Department for opening their facilities (2d floor of each fire house) as a warming center up to 10 PM tonight.   We ask that you take extra care in driving over there as there are downed trees and wires throughout town.
The forecast for strong wind gusts have proved correct with resulting downed trees and wires in several areas in Town.   There are outages for approximately 1700 NYSEG customers and 100 Con Edison customers.  We have been working with NYSEG and Con Edison to expedite making conditions safe (de-energized lines to allow removal of downed trees/limbs).  NYSEG’s press release (click here) describes the protocol.  Our Highway Department, of course, is working to ensure safe passage on the roads.
Be safe – do not approach any downed wires.  To report power outages, downed lines, utility poles or damaged equipment, for NYSEG call 800-572-1131 or online at nyseg.com/outage and for Con Edison 800-752-6633 (electric) https://apps.coned.com/cemyaccount/CSOL/ReportOutage.aspx?lang=eng and 914-921-3720 (gas).  Call Bedford Police at 241-3111 or Bedford Highway at 666-7669 to report downed wires or trees blocking roads. We also have been coordinately closely with NYSEG and Con Edison should power outages occur and they activate their storm damage assessment reporting systems.  Our objective is to respond quickly and effectively to the situation.
Also, please do not hesitate to contact me  at  supervisor@bedfordny.gov or call me at 666-6530.

How Westchester Will Shift Under the Senate Tax Bill | Bedford Hills Real Estate

Pushed through by a single vote in the early hours of Saturday morning, the Senate Republican proposed tax bill was and continues to be divisive. Westchester, like New York City and much of the Northeast and California, is in a unique position to be hit disproportionately hard by the proposed changes. Here’s what you, as a resident of Westchester County, need to know:

Property Taxes

One of the bill’s key features is to place a cap on property tax deductions: $10,000. Fortune estimated the average property tax bill in 2015 to be about $5,500, but in Westchester the average was more than double that. As a result, the average Westchester homeowner under these new provisions would be almost guaranteed to lose thousands of dollars in tax deductions, essentially being federally taxed on income already paid to local taxes.

As a result, the tax revisions as proposed would make it increasingly less affordable to live and own property in Westchester County, dealing a significant blow to the housing and commercial real estate industry. While a chief argument of the tax plan was to foster economic growth by cutting corporate tax rates, it seems unlikely these businesses would choose to spend their newfound funding in municipalities with higher tax rates for both its properties and employees.

Standard and Itemized Deductions

One of the greatest touted benefits of the Republican-drafted tax plan is that it doubles the standard deduction to $12,000. For the approximately two-thirds of U.S. households that take the standard deduction this would be helpful, however high-tax regions (like Westchester) see a greater percentage of taxpayers choosing to itemize their deductions for a larger return. With additional cuts to what can be considered tax deductible, a good chunk of residents may end up losing money on this deal. Speaking of lost deductions…

SALT Deductions

State and Local Tax (SALT) deductions are what allow residents to deduct on their federal taxes the amount they pay in certain local taxes — such as property or estimated sales tax for their purchases made throughout the year — thus reducing their overall taxable incomes and potentially even dropping them down into a lower tax bracket. Taxes paid for local school systems and emergency services are also currently considered tax-deductible, and reduce federally taxable income.

The proposed tax plan would completely eliminate SALT deductions, effectively collecting federal taxes without regard to how much is paid in state and other local (i.e. city) taxes. As the New York Times reports, of the dozen counties with the highest reliance on SALT deductions in the U.S., half are in the NYC Metro area. Westchester specifically is the fifth highest on the list, with 47% of taxpayers taking an average deduction of just over $34,000 — far greater than the $12,000 standard deduction allowable under the proposed plan.

Manhattan, for reference, takes a $64,000 deduction on average, but only 45% of taxpayers utilize the method. Yes, Westchesterites would be harder hit than Manhattanites.

I.O.U.

All this results in a large number of Westchester residents paying significantly more in taxes right away. The remainder will likely see a small decrease in taxes for the next decade or so, before provisions in the plan begin shifting the tax burden more heavily onto middle-class incomes, increasing the national deficit by well over $1 trillion. (Yes, “trillion” with a T.)

As a result of a law in place since 2010, that increase in deficit would trigger automatic cuts to spending in Medicare and other social programs, services which many Westchester residents depend on, especially the elderly and those in lower-income households.

Added together, a bulk of Westchester residents would see their federal deductions significantly decreased under the proposed legislation, while simultaneously seeing a corresponding decrease both in the value of their homes and in the availability of public services.

Local politicians on both sides of the aisle have come out in opposition to the Senate tax plan, including Governor Andrew Cuomo (D), County Executive Rob Astorino (R), and County Executive-Elect George Latimer (D), as well as officials from New York City, New Jersey, and the Metro area.

Optimistically, the tax plan is not final. Rather than coming from the House of Representatives and moving to the Senate, the Senate chose to follow House Republicans’ tax bill with one of their own. Even following their narrow victory, this bill will have to be reconciled with the House’s before a revised plan can be sent to the president for ratification. Many House Republicans were displeased with various compromises in the Senate plan, so any final bill may end up bearing little resemblance to what is now being deciphered.

 

read more…

http://www.westchestermagazine.com/How-the-Senate-Tax-Plan-Will-Affect-Westchester/