January home sales spur optimism for 2020 New York State housing market
Albany, NY – Closed sales and pending sales were up in January in year-over-year comparisons, fueling optimism for a robust 2020 housing market, according to the housing market report released today by the New York State Association of REALTORS®.
Closed sales improved 4.1-percent to 9,204 units from 8,842 houses at the start of 2019. Pending sales were also up in year-over-year comparisons, escalating to 8,895 houses – a 5.6-percent increase over January 2019’s total of 8,421 homes.
The median sales price continued to appreciate as the calendar turned to 2020. The statewide median sales price was $300,000 – an increase of 9.1-percent from the January 2019 median of $275,000.
New listings were down to 14,370 homes – a 2.9-percent decrease from 14,806 homes in January of 2019.
The monthly average commitment rate for a 30-year fixed mortgage continues to be affordable, dropping to 3.62-percent in January according to Freddie Mac. Days on the market remained unchanged from January 2019 at 77 days.
Data and analysis compiled for the New York State Association of REALTORS® by Showing Time Inc.
Home prices increased in November, rising only 0.2% from the previous month’srevised pace, but up 4.9% from 2018, according to the latest monthly House Price Index from the Federal Housing Finance Agency.
The FHFA monthly HPI is calculated using home sales price information from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac. Because of this, the selection excludes high-end homes bought with jumbo loans or cash sales.
The report explains that across the nine census divisions, the East North Central division saw the strongest appreciation growth, increasing by 0.8% November, whereas the Mountain division experienced no growth, as appreciation declined 0.1%.
However, the FHFA highlights that the 12-month changes were all positive, with the New England and the West South Central divisions posting the smallest gain of 3.8%, and the Mountain division leading the way with a 6.3% increase.
These are the states located in each division mentioned:
East North-Central: Michigan, Wisconsin, Illinois, Indiana, Ohio
Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, New Mexico
New England: Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut
West South Central: Oklahoma, Arkansas, Texas, Louisiana
The chart below compares 12-month price changes to the prior year:
From a boat on the Hudson or a riverbank in Rockland County, Indian Point is hard to miss: two hulking, gray domes perched on the river’s edge. The facility appears otherworldly — a structure that might look more at home on the moon, rather than the sleepy village of Buchanan.
Over the years, Indian Point’s impact on Westchester life — from economics to ecology to energy — has also been hard to miss. From the power plant’s opening in the 1960s up to present day, it’s been a source of controversy: “Wood, Field and Stream; Con Edison Engineers Trying to Halt Mass Killing of Fish in Hudson,” reads a New YorkTimes headline from 1963. Fifty-one years later, the Times was still reporting a similar theme, claiming that as many as a billion fish eggs and other small aquatic organisms were being ”parboiled” each year by the plant’s river-water cooling system.
You may have also spotted the “Close Indian Point” bumper stickers or those ominous bright-blue evacuation signs, even the occasional protest.
But the power plant has brought boons, too: thousands of high-paying jobs for Westchester residents; monumental tax payments to nearby municipalities; and, of course, energy. The plant’s two active reactors generate a combined 2,000 megawatts of electricity — enough to power millions of homes.
In recent years, however, safer energy sources, like wind power, and cheaper energy sources, like natural gas, have emerged — all while critics of Indian Point have found some prominent allies. Governor Andrew Cuomo says often that the plant’s proximity to New York City, and its potential for disaster, is unacceptable. In this changing environment, questions about the power plant’s demise began to be framed not as “if” but “when.” In early 2017, when New York State and Entergy (which owns and operates Indian Point) announced they would shutter the plant over the course of four years, the decision wasn’t shocking.
The first of the plant’s two active reactors will go offline in April 2020, the second in April 2021. (A third reactor closed decades ago.) Then comes years, maybe even decades, of decommissioning. In 2021, Entergy plans to sell the property to Holtec International, a company with experience dismantling nuclear plants that has a presence in the U.S., the U.K., India, and elsewhere. “They have special expertise that Entergy doesn’t have,” explains Jerry Nappi, Entergy’s director of communications. “They can decommission the plant decades sooner than we would be able to.”
But even if the closure isn’t a shock, the impact is still monumental on a region that has become deeply entwined with its power plant. Despite careful planning for the shutdown, a range of Westchester players — from local governments and taxpayers to Entergy employees and environmental advocates — are anticipating big changes. And they won’t just affect the 2,200 people who call Buchanan home or the 42,000 residents of the town of Cortlandt. The economic, environmental, and energy impacts will be felt across the entire county, experts say.
Cortlandt Town Supervisor Linda Puglisi, Hendrick Hudson School Superintendent Joseph Hochreiter, and Buchanan Mayor Theresa Knickerbocker.
Linda Puglisi has served as town supervisor of Cortlandt for 14 terms — some 28 years. “Did we know Indian Point was going to close eventually? Of course,” says Puglisi. “We just didn’t know they were going to close now.”
Few people understand Indian Point’s relationship with Westchester better than Puglisi, who, unsurprisingly, holds the distinction of Cortlandt’s longest-serving supervisor. But when the closure announcement was made in 2017, Puglisi says she found out at the same time as everyone else.
“The economic fallout of this is extremely significant,” Puglisi says. “It’s the largest taxpayer in the town of Cortlandt,” referring to the $800,000 a year the town receives from Indian Point. Meanwhile, in Buchanan, about one-half of the village’s annual revenue comes from Indian Point taxes. A local fire district and library are set to lose the lion’s share of their funding, too, Puglisi explains.
One of Cortlandt’s school districts, Hendrick Hudson, will suffer, as well. The district gets $24 million from Indian Point — “one-third of their revenue,” Puglisi says.
In total, “It adds up to $32 million a year that all the [affected] entities are going to lose,” Puglisi continues. “This is a huge challenge, one of the biggest challenges in New York State.” And that already prodigious number doesn’t even contemplate millions more dollars that Entergy pumps into the community in sponsorships, donations, intiatives and volunteerism.
It’s a challenge without a clear solution. A PILOT (payment in lieu of taxes) agreement between Entergy and municipal governments, negotiated in 2015, will provide some tax revenue over 10 years. “Payments ramp down for three years after the shutdown and then hold at a certain level,” explains Nappi. The payments will decrease by 30% after the first year, 60% the following year, and 90% the third year. “And then [payments] hold at 10 percent until the PILOT is over in 2025,” Nappi says.
Attempts to remedy the shortfall include Cortlandt seeking vacant or underused land to capitalize on. Puglisi says she hopes for new industries or perhaps a new corporate park. Local officials are also seeking state and federal cessation funds — support for communities facing shortfalls from energy company closings. But the state fund that Puglisi is lobbying only has about $45 million for all state communities that have energy plants closing, she says, not nearly enough to cover the $32 million-per-year shortfall for Indian Point alone.
What about new development projects to fill that tax void — some new taxpayer on Indian Point’s 240 acres, many of which are waterfront? “We lobbied for that,” Puglisi explains, but building on a former nuclear site isn’t so easy. “The decommissioning of the plants could take up to 60 years,” she says, citing NRC data. (Some radioactive materials will remain on the site for a period even after the plant stops functioning.)
Westchester County will be affected by all this, too, as approximately 1% percent of the county’s property tax comes from Indian Point. “It has less of an impact on Westchester County tax roll, although it’s not insignificant,” says Catherine Borgia, the county legislator representing parts of Cortlandt and Peekskill, among other areas. Borgia says her focus is supporting the economic redevelopment of the most affected municipalities, like Cortlandt and Buchanan, and maintaining the environmental safety of the site of the power plant.
Tax revenue is one thorny problem; jobs are another. Indian Point presently has about 950 employees, from control-room operators to security personnel, and around 170 of them live in Westchester. Despite one of the reactors going offline in 2020, the entirety of that staff will remain until the plant fully closes down, in April 2021. “[Entergy] committed to no reduction in workforce prior to April 2021,” Nappi explains.
The New York State Department of Labor has also stepped in. According to the state’s most recent annual closure report, the agency is deploying a rapid-response team to assist Indian Point employees with résumé services, LinkedIn training, interview best practices, and job leads.
Still, these developments aren’t enough to allay local anxieties. “It’s our largest employer,” Puglisi says, “[with] good-paying jobs.” According to her, the loss of those jobs will impact close to 5,000 people when you take into account employees’ children, grandchildren, and other family members in the vicinity. “Entergy is based in New Orleans,” says Puglisi, “a lovely place to visit, but we don’t want our people to have to move far away. We want them to stay in the area and be retrained and reskilled.”
A local task force — made up of unions and lawmakers, among others — is hoping to mitigate the fallout through retirement packages and retraining programs. There’s also state-level legislation, S5305B, a bill by New York State Senator Pete Harckham to address the issue. The bill aims to protect union jobs and wages during the decommissioning process. The bill “will help keep families in place by preventing a decommissioning company from coming in and displacing our well-trained workforce, replacing them with unskilled, non-union, low-wage out-of-towners,” Harckham explained in a recent press release. (At press time, the bill still needed to pass in the state assembly before proceeding to the governor’s desk.)
Employees and their families won’t be the only ones affected by the closure — Westchester businesses will be, too. “[Employees] go to local delis; they go to local gas stations; they go to local restaurants,” Puglisi explains. “There’s a trickle-down impact on our community.”
Deb Milone, president of the Hudson Valley Gateway Chamber of Commerce, says the chamber is working closely with Entergy and the Indian Point staff as the plant and the region prepare for the shutdown. Nestled in a side street in downtown Peekskill, the chamber represents more than 520 members spread across Croton, Cortlandt, Peekskill, and Putnam Valley, and other municipalities. “It’s mostly small and medium-sized businesses,” Milone explains, defining “small” as businesses with 10 or fewer employees. (Some big businesses are members, too — including Entergy, BASF, and NewYork-Presbyterian Hudson Valley Hospital.)
Many of the small businesses have April 2021 on their minds. “The effect the shutdown will have on the local business community is a concern, but having the decommissioning process done quickly, safely, and efficiently is of paramount importance and will benefit the entire region including the business community,” Milone says. “The closer you are to the plant, the more it’s being discussed.” She expects that restaurants, mechanics, and dry cleaners in places like Buchanan and Montrose will feel the impact worse than, say, businesses in Peekskill or Yorktown.
Milone says it’s difficult for those small businesses to prepare or even anticipate what will happen come 2021. Some are pessimistic: One merchant she spoke with expects to lose 40% of its business. Others are more optimistic, including Milone herself. She recently spoke with members of a chamber of commerce in Vermont, within a community that already lost its nuclear power plant. “[They] said there really wasn’t a major downturn to their small business community,” Milone reports.
“Entergy is based in New Orleans. A lovely place to visit, but we don’t want our people to have to move far away. We want them to stay in the area.”
—Cortlandt Town Supervisor Linda Puglisi
Comiserating with the merchants, of course, are homeowners in Cortlandt, Peekskill, and the surrounding area. At present, “there’s really no impact on the values of the homes,” explains Joseph Lippolis, an associate real estate broker with River Towns Real Estate in Peekskill. (Lippolis also serves on the local task force, alongside Puglisi.) “We don’t see any massive exodus from the area, and the area is at fair market value.”
Lippolis doesn’t foresee a future exodus, either: “You’re going to see a normal flow of home sales over the next several years,” he predicts. Lippolis says longstanding local perks — strong schools, proximity to the Hudson and Manhattan — will continue to prove alluring to buyers. He does, however, anticipate a hike in property taxes, which might prove burdensome to retirees in Buchanan and Cortlandt.
Might there be a real estate silver lining? Over the years, some families shopping for a new home have balked at the idea of living in the shadow of a nuclear power plant. Now, with Indian Point shutting down, might there be an influx? Lippolis doubts it: “It’s not like we’ve ever had homes that remained vacant because of Indian Point.”
How to Decommission a Nuclear Power Plant Decommissioning Indian Point will be a meticulous and time-consuming process — for several years, experts will be on-site handling and carting away radioactive materials. According to Joe Delmar, senior director of Government Affairs and Communications at Holtec, the company being considered to be tasked with dismantling the plant, the decommissioning process breaks down into these five steps: Turning it off. First up is taking the reactors offline. “Entergy will shut down Unit 2 by April 30, 2020, and Unit 3 by April 30, 2021, permanently defuel each reactor and place the used fuel in their respective spent-fuel pools.” Dealing with the fuel. Then it’s time to transport that radioactive fuel. “Once sufficiently cooled, the fuel will be placed in stainless-steel and concrete canisters and transported to the Independent Spent Fuel Storage Facility on the Indian Point property.” Dismantling. Holtec begins disassembling the facilities. “Radioactive equipment and components are dismantled per an approved decommissioning plan.” Removal. In order for the Indian Point property to eventually become usable real estate, all these radioactive substances and parts need to be carted away. “Contaminated components are securely packaged and transported to a licensed off-site facility.” Inspection. Last, the site has to meet government standards. “The site is inspected by state and federal agencies to ensure the property has been returned to conditions outlined in the decommissioning plans. Both the state and federal agencies will continue to monitor the site.”
Lawmakers, employees, and merchants aren’t rejoicing over the plant’s closure, but another demographic is: environmental advocates. For those touting ecological and safety concerns, Indian Point’s closure is cause for celebration. “We think it’s very good news,” says Richard Webster, legal director at Riverkeeper, an environmental watchdog agency based in Ossining. “It’s had a huge impact on the environment; there’s a huge safety risk.”
The nonprofit — which protects the Hudson River and its offshoots — has come into conflict with the nuclear plant more than once. “We originally got involved with Indian Point because the cooling system was killing millions of fish,” Webster says. “It was having a major impact on the ecology of the Hudson.”
That first melee started in the early 2000s, but others followed. Webster continues: “As we looked at the plant more, we realized there were many other problems,” including earthquakes, apparently. “Turns out there were more faults than they thought,” he says. Degradation was another: “The bolts that hold the inside of the reactor together were fatigued and broken,” he says. Then, there was the problem of evacuation: “There’s very high population density around the area,” Webster explains, and in case of an accident, he believes, realistic evacuation would be “next to impossible.”
Webster makes clear that the closure doesn’t solve all environmental problems: “Some challenges remain the same, and there are some new ones.” The spent fuel in the reactors have to be carefully handled and stored, for example. “It’s very radioactive; it’s really unsafe to work around,” Webster explains. Riverkeeper is also a critic of Holtec, the company proposed to be purchasing and dismantling Indian Point. “Holtec in particular has some serious problems. They’re the worst entity out there to do the job,” Webster says, likely referencing bribery and corruption allegations that triggered a two-month debarment and $2 million administrative fee imposed on Holtec in 2010 by the Tennessee Valley Authority (TVA). This followed an investigation by the TVA’s Office of the Inspector General that claimed Holtec made illegal payments to a TVA supervisor in Alabama in return for a contract to build a storage system for the facility’s spent nuclear fuel rods. Then, in 2014, Holtec CEO Kris Singh gave a false answer on an application to the state of New Jersey (for a $260 million tax break for a new power plant in Camden), having answered “no” to a question asking if the applicant had ever been barred from doing business with a state or federal agency. But in a statement to Westchester Magazine, a spokesperson for Holtec said: “In December 2010, the brief debarment was removed and Holtec was cleared of any wrong doing [sic]. TVA restored full business relationships with Holtec, including on October 1, 2012, awarding Holtec a ten (10) year contract valued at approximately $300 Million. TVA currently remains a valued client of Holtec today,” adding that the false answer was “an oversight” that Holtec had revised with the New Jersey Economic Development Authority.
When unpacking the economic and environmental impacts of the closure, one might overlook another big question: How do you replace 2,000 megawatts of electricity? Indian Point’s output — which is distributed throughout Con Ed’s infrastructure — is enough to power about 5% of the state, according to Riverkeeper. Where will that come from after April 2021?
“It does not appear that there will be a significant shortage in energy availability,” says Borgia, the county legislator. “The grid is very interconnected; if there’s a [local] shortage, we’re able to draw from other sources.” Borgia sees the shift as a chance to invest in renewable energy: “It’s an economic-development opportunity — [renewables] are a burgeoning field right now.”
When New York announced the closure in 2017, Governor Cuomo noted: “The state is fully prepared to replace the power generated by the plant at a negligible cost to ratepayers.” That “negligible cost” works out to about a net 1% increase on consumers’ electricity bills, according to a report by Synapse Energy Economics, an energy-research firm. The replacement energy could come from hydropower generated in Quebec, among other venues.
In March, residents got a small taste of life without Indian Point. During a partially unplanned two-week shutdown, the region drew power not from nuclear reactors but rather natural gas and renewables. “The grid’s operating fine without Indian Point, and we’ll have more than enough energy to compensate for its 2021 shutdown,” said Cliff Weathers of Riverkeeper — which is a party to the shutdown agreement — during a March interview.
Borgia sees [the closure] as a chance to invest in renewable energy. “It’s an economic-development opportunity.”
Any breakup is tough — especially when the entities are a sprawling metropolitan area and a 50-year-old nuclear power plant. As Westchester untangles itself from Indian Point, all the major players are keen to avoid unnecessary fallout.
“We’re doing every single thing we can think of,” explains Puglisi, the Cortlandt supervisor. “I do not want this beautiful community to ever become distressed. I’ll do everything in my power to make sure that never happens.”
What may take even longer than sorting out the economic and energy impacts is the decommissioning — that is, dismantling those hulking gray domes and the nuclear equipment and waste within — which could take decades. Still, Westchester residents are willing to look that far in the future: “It’s very important that we clean up that area and get that acreage back for future uses and environmental uses,” Puglisi says.
Riverkeeper’s Webster is equally forward-looking: “Eventually we are going to be able to restore this site. In its time, it was the technological marvel of the day, but now, technology has moved on.”
Millennials are moving more often and living in their homes for a shorter period than previous generations. The share of young adults who have lived in their current home for less than two years is nearly 12 percentage points higher than in 1960, according to a new Zillow® analysis.
While 33.8% of people between 25- and 34-years-old had lived in their home for less than two years in 1960, that share rose to 45.3% by 2017.
Millennials are marrying and having children later in life than their predecessors, which likely plays a role in their shorter housing tenure as these major life milestones are often catalysts for settling into a more stable housing situation, Zillow said.
The majority (53.5%) of young adults who move do so within the same metro area, perhaps to be closer to work or into a larger place as their family grows. An increasing share are moving to a different metro within the same state. Young adults today are more likely than previous generations to live in urban cores, so these could be job-related moves from college towns or rural areas into nearby cities where job growth has been concentrated in recent years. Movers Montreal are great, they are a good option to hire when you need services and the price is reasonable. These guys are packing a 20” truck, lots of soft furniture wraps, good moving experience, and definitely a great attitude.
“Shifting demographic headwinds and evolving workplace norms have significantly altered the housing decisions of young adults today. Untethered from family and enticed by new job opportunities, young adults are more mobile today than they have been over the past nearly 60 years,” said Sarah Mikhitarian, senior economist at Zillow. “Instead of getting married or starting a family in their early to mid-twenties as was the norm in past decades, many are waiting until they are established in their careers. And the typical career trajectory has fundamentally changed since the 1960s as well – rather than climbing a corporate ladder, many are choosing to hop from one role or function to the next, often requiring a move to a new location.”
Among the 35 largest metros in the U.S., the greatest increases in the share of young adults that had recently moved were in Boston (up 22 percentage points since 1960), Pittsburgh (up 20.9), Detroit (up 17.7) and Philadelphia (up 17.4). This share of recently moved young adults has fallen since 1960 in four metros –Las Vegas (down 6.7 percentage points), Riverside (down 6.3), San Diego (down 3.8) and Orlando (down 1.3).
1960 – Share of Young Adults Who Had Lived in Home Less Than Two Years
2017 – Share of Young Adults Who Had Lived in Home Less Than Two Years
Growth in residential remodeling spending is expected to slow considerably by the middle of next year, 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 annual gains in homeowner expenditures for improvements and repairs will shrink from 6.3 percent in the current quarter to just 0.4 percent by the second quarter of 2020.
“Declining home sales and homebuilding activity coupled with slower gains in permitting for improvement projects will put the brakes on remodeling growth over the coming year,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “However, if falling mortgage interest rates continue to incentivize home sales, refinancing, and ultimately remodeling activity, the slowdown may soften some.”
“With the release of new benchmark data from the American Housing Survey, we’ve also lowered our projection for market size about 6 percent to $323 billion,” says Abbe Will, Associate Project Director in the Remodeling Futures Program at the Center. “Spending in 2016 and 2017 was not nearly as robust as expected, growing only 5.4 percent over these two years compared to 11.9 percent as estimated.”
More information about the newly released benchmark data and changes to the projected LIRA market size can be found here.
Click image for full-size chart.
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 October 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 Center also trains and inspires the next generation of housing leaders.
Select a quarter and then press “Play” to initiate the interactive map. To get the performance ranking for a specific MSA, zoom in or scroll over the map or click on the numerical ranking legend for wider comparisons.N
2019Q2 HoHM Report: Housing market looking more sustainable
While home sales data have been a bit slower so far in 2019, the national LIHHM* sees positive, more sustainable trends from the housing sector. With the highest reading in three years, the index points to healthy housing activity over the next year or so.
Slower house price gains are improving housing sector sustainability, while reduced mortgage rates, solid job gains, and rising wages should lift home buyer demand this year. Although supply constraints remain, these fundamentals are positive for housing demand
More than half of the country’s 400 MSAs have a positive rating as house price gains in many areas have decelerated over the past year. The slowdown is more pronounced in larger cities, especially along the Pacific Coast where price appreciation is now below average.
Existing home sales dropped during 2018 as rising mortgage rates squeezed potential home buyers. Data show that the declines were sharper in states with the highest median sales prices. The outlook for the remainder of 2019 has improved with lower mortgage rates
* Leading Index of Healthy Housing Markets (LIHHM): A data-driven view of the near-term performance of housing markets based upon current health indicators for the national housing market and 400 metropolitan statistical areas (MSAs) and divisions across the country.
Housing outlook continues to brighten with the LIHHM in positive territory
The national LIHHM rose to a positive reading of 106.3 this quarter, the highest reading in three years. Demand metrics (led by solid job growth and strong household formations) remain highly positive and are indicative of near term health for the housing market. National house price growth continues to decelerate and is near the long-term trend, a positive for sector sustainability. Home buyer demand should respond positively to lower mortgage rates and faster income growth, although continued supply constraints are likely to cap any sales gains. Regionally, more than half of the LIHHM performance rankings are positive and indicate a healthy outlook for housing in those local markets. Demand factors at a regional level are generally supportive with low unemployment rates and faster household formations. Moreover, housing affordability is improving in many local areas as income growth outpaces house price gains while mortgage financing costs have declined.
Chinese investors have been the biggest purchasers of U.S. residential real estate for six consecutive years, but President Trump’s trade war, and China’s efforts to reduce its national debt and boost economic growth, could change that.
In 2018 dollars, Chinese buyers accounted for roughly 25% of total foreign investment in U.S. residential real estate. Canada was No. 2 at 9%.
Of the 284,000 properties sold to foreign buyers last year, some 40,400, or 15%, were bought by Chinese nationals. Five years earlier, Chinese nationals had purchased 23,075 homes, representing just 12% of all properties sold to foreign buyers.
Even China’s growing share in recent years represents a small percentage of overall investment in U.S. residential real estate. As of 2018, foreign buyers in aggregate accounted for just 3% of U.S. home sales, the association added. That figure had been rising, but experienced a modest decline between 2017 and 2018. The figures for 2019 are expected to be similar to the 2018 levels.Long before the current trade dispute, the Chinese government had been creating hurdles for its citizens who wanted to invest abroad. The country started restricting outbound investments in 2016, allowing residents to take only the equivalent of $50,000 out of the country, as a means of propping up the country’s currency. This not only made it more difficult to purchase real estate in America but prompted some Chinese investors to sell their U.S. assets.
A Chinese pullback could have serious effects for some West Coast markets
Unlike foreign buyers from other countries who spread their investments more evenly across the U.S., Chinese residential real-estate investment is highly concentrated on the Pacific Coast. Nearly 40% of Chinese buyers have purchased in California, home to a large Asian community.
But California isn’t the only place where a fall in Chinese buyers would make a difference. Chinese nationals represent a significant share of the foreign buyers of residential real estate in the New York City metropolitan area and growing shares of buyers in states including Florida and Texas.
Chinese buyers also play a big role in the residential-real-estate markets of college towns, as more Chinese students have opted to study at American universities, Yun said.
However, a retreat by Chinese buyers could be good news for Americans looking to purchase a home, especially in such costly Golden State markets as San Francisco, Los Angeles and San Diego. These are among the most expensive in the entire country, and their popularity had contributed to double-digit home-price appreciation in recent years.
The rate at which home prices are climbing has recently slowed as buyers have struggled with affordability. The lack of competition from foreign buyers, who typically enter competitive all-cash offers, could provide an opportunity to get a better deal on a home for locals looking to buy.
In a recent analysis, LendingTree surveyed 2,095 American homeowners aged 22 and older about their perceptions of owning a property versus renting.
According to the company’s study, 67% of American homeowners believe owning a home is a better option than renting. However, LendingTree discovered that for many American homeowners, renting is still a viable option.
“About 15% of homeowners believe renting is easier than owning a home, and another 18% are neutral on the topic,” LendingTree writes. “Just 13% of homeowners across all ages wish they could go back to renting, but when broken down by age, 1 out of every 5 homeowners ages 22 to 37 say they miss renting.”
Interestingly, LendingTree says this breakdown is highly dependent on the number of years a homeowner has lived in their home.
“In most cases, the longer that survey respondents have been in their homes, the more likely they are to believe owning is easier,” LendingTree writes. “That changes for those who have owned for a decade or longer. Nearly 72% of homeowners who have spent seven to nine years in their home agree with the statement, compared with 65% of those with at least 10 years in their home.”
Additionally, the report found that age also plays a major role in homeowner satisfaction.
According to the study, 23% of Gen Xers claimed to be dissatisfied with their home purchases, this was followed by 21% of Millennials who expressed the same sentiment.
When it came to Baby Boomers and those aged 73 and older, LendingTree reports that only 14% and 3% held the same regrets, respectively.
Overall, the study revealed that homeownership tenure is a tremendous indication of whether or not a person is likely to return to the rental market.
“Our survey found that the longer you own your home, the less likely you’ll want to rent again,” LendingTree writes. “Only 7% of respondents who have owned their home for at least 10 years wish they could go back to renting, compared with 19% of those who have owned for three years or less.”
The image below highlights the percentage of Americans who wish to return to renting after owning a home:
(Click to enlarge)
Note: LendingTree commissioned Qualtrics to collect the responses of 2,095 American homeowners aged 22 and older from the dates of March 22-27, 2019.
But Oregon’s new law will not fix the underlying problem of high housing costs, and it could even make matters worse for vulnerable families.
THE U.S. HAS TWO HOUSING AFFORDABILITY PROBLEMS. RENT CONTROL WON’T FIX EITHER OF THEM.
The first affordability problem is that the nation’s poorest 20 percent have too little income to afford minimum quality housing without receiving subsidies. That’s not a failure of housing markets, but a function of the low wages and unstable incomes generated by labor markets. Poor families could be helped by expanding existing programs such as housing vouchers or the Earned Income Tax Credit (EITC) to cover more poor households. But to fund those programs, middle- and higher-income households would have to pay more in taxes—which state and federal lawmakers have been reluctant to propose.
The only effective long-term fix to the housing scarcity challenge is to build more housing—especially building less expensive housing in cities and neighborhoods where demand is high. This would require substantial changes to local zoning in nearly every U.S. city. But homeowners are a powerful lobby at every level of government, and only a fewboldelectedofficials have dared to challenge the NIMBYs.
EVEN WELL-DESIGNED RENT CONTROL POLICIES CAN REDUCE HOUSING SUPPLY, HARMING VULNERABLE FAMILIES.
The Oregon law tries to foresee and forestall some ways in which rent control can push landlords and developers into harmful responses. For instance, when landlords cannot raise rents, they often choose to not provide adequate maintenance. The Oregon law allows relatively generous annual rent increases of 7 percent plus inflation to avoid this problem. Although the bill is thoughtfully designed, any such regulations create incentives for developers and landlords to seek out loopholes. Past research shows that property owners in rent controlled cities are more likely to convert apartment buildings into condominiums. A developer considering building an eight-unit apartment building might revise their plans to build only five apartments, just under the cap set by Oregon’s law—thus contributing less new housing overall. Landlords may pre-emptively raise the rent more as they approach the 15 year mark when controls kick in. Even the increased tenant protections could backfire, encouraging landlords to screen out less desirable tenants—including many low-income families with young children.
FIXING HOUSING AFFORDABILITY WILL REQUIRE COURAGE FROM POLITICIANS, AND SOME SACRIFICES FROM AFFLUENT VOTERS.
Rent control is similar to another popular housing policy, inclusionary zoning, in that it tries to push the onus for improving housing affordability onto for-profit developers and landlords. Self-identified progressive homeowners may be willing to support politicians who advocate these policies. But neither rent control nor inclusionary zoning address the underlying causes of housing affordability, and indeed have the potential to discourage new supply and make the problem worse. Politicians need to be honest with their constituents about the cost of better policies as well as the costs of failing to act. Affluent households should pay more taxes to support poor families, and should allow new apartments in their own backyards.
Con Edison has requested a rate increase that, if approved, could have Westchester County customers paying about 6 percent more for electricity each month.
The company filed a rate request with the New York State Public Service Commission Jan. 31, seeking approval for rate requests totaling $695 million for the company’s electric and natural gas delivery systems. The increase would go into effect in 2020.
Con Edison supplies natural gas to 1.1 million customers and electricity to 3.4 million customers in New York City and Westchester.
With the increase, the bill for a residential costumer in Westchester using 300 kilowatt hours would rise $6.10, to an average of $114.04 per month. The average monthly bill for a New York City customer for the same usage would increase $4.45, to $81.78. For a typical commercial customer in the region, the monthly bill would increase $80.96 to $1,970.67, an increase of 4.3 percent.
The average monthly bill for a residential gas customer, using on average 100 therms per month, would increase $17.28 to $176.34, according to Con Edison, an increase of 10.9 percent.
The utility said the rate increase would fund infrastructure improvements and other investments in clean energy, energy savings and customer service.
“Our proposal will build on the progress we have made in putting tools in the hands of our customers to help them manage their energy usage,” Con Edison President Timothy Cawley said. “We’re making it easier for them to take advantage of energy efficiency, charge electric vehicles and communicate with us. We’re also improving our response to severe weather events and taking steps to protect the environment.”
Through a rate case proceeding, the state Public Service Commission will render a decision on how much the utility can raise rates. The state is required to provide a decision within 11 months.
“Our number one priority is ensuring utility rates are fair and reasonable, and we will not allow a multibillion-dollar utility to line shareholders’ pockets at the expense of ratepayers,” state Department of Public Service spokesman James Denn said. “Today, Con Edison is seeking a rate increase, but to be crystal clear, one has not been approved.”
The state has assembled what it said is a panel of 50 experts to review the rate filing. The process also allows for public comment, which often draws from industry groups, consumer advocates and large-scale electricity and gas users.
The utility last sought a rate increase in 2016. The company asked the state to approve an electric increase of $482 million and a gas increase of $154 million. After a joint-agreement involving 22-separate parties, the PSC authorized a three-year rate plan in 2017 that allowed for annual electric increases of $199 million, and a gas increase of $35.5 million in year one, $92.3 million in year two and $89.5 million in year three. The decision, according to the PSC, included measures to boost the availability of energy efficiency and smart-grid technologies.
While Con Edison’s proposal is for 2020, the company indicated in its announcement that it intends to discuss multiyear rate plans with the PSC. A multiyear plan, the company said, could result in lower annual increases and provide more cost certainty. It also agreed to a two-year rate plan in its 2014 rate case.
Among the efforts Con Edison said it would fund with the rate increase is its $100 million plan to increase the storm resiliency in Westchester. The four-year plan would strengthen the county’s overhead electric system. The company announced the plan last year amid public pressure from elected officials after a series of snow storms in March caused some of the most significant outages in company history.