Tag Archives: South Salem Homes for Sale

Mortgage rates now 4.94% | South Salem Real Estate

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that mortgage rates rose significantly across the board.

Highest mortgage rates in seven years

Sam Khater, Freddie Mac’s chief economist, says, “The economy continued to show resilience as strong business activity and growth in employment drove the 30-year fixed mortgage rate to a seven year high of 4.94 percent – up 11 basis points from last week.”

Added Khater, “Higher mortgage rates have led to a slowdown in national home price growth, but the price deceleration has been primarily concentrated in affluent coastal markets such as California and the state of Washington. The more affordable interior markets – which have not yet experienced a slowdown home price growth – may see price growth start to moderate and affordability squeezed if mortgage rates continue to march higher.”

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.94 percent with an average 0.5 point for the week ending November 8, 2018, up from last week when it averaged 4.83 percent. A year ago at this time, the 30-year FRM averaged 3.90 percent. 
  • 15-year FRM this week averaged 4.33 percent with an average 0.5 point, up from last week when it averaged 4.23 percent. A year ago at this time, the 15-year FRM averaged 3.24 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent with an average 0.3 point, up from last week when it averaged 4.04 percent. A year ago at this time, the 5-year ARM averaged 3.22 percent.

Checking on your flood insurance | South Salem Real Estate

Home insurance will cover damage from a volcano, but not a flood

Homeowners picking up the pieces from Hurricane Michael will quickly learn an important lesson: not all hurricane- related damage is covered by home insurance.

Before making landfall Wednesday, Michael rapidly intensified to an extremely strong storm packing 155 mile-per-hour winds, just shy of Category 5 status. The storm ranked as the third-most intense hurricane to hit the continental United States, according to Accuweather (https://www.accuweather.com/en/weather-news/by-the-numbers-michael-ranked-as-3rd-most- intense-hurricane-to-hit-continental-us/70006313), and was the strongest storm to ever hit the Florida Panhandle.

Towns and cities along the Panhandle coast were left in ruins, and damage extended well inland into southern Georgia. The storm’s high winds stripped roofs and caused trees to fall on homes (https://www.accuweather.com/en/weather-news/ storm-surge-damaging-winds-from-michael-to-rip-a-path-of-destruction-across-southeastern-us/70006307) and cars. Coastal communities were walloped by a massive storm surge, which forecasters predicted (https://www.wired.com/story/why- hurricane-michaels-storm-surge-is-so-high/) could reach as high as nine to 13 feet before the storm.

See more:Footage from Florida Panhandle shows the incredible force of Hurricane Michael (http://www.marketwatch.com/ story/footage-from-florida-panhandle-shows-the-incredible-force-of-hurricane-michael-2018-10-10)

For homeowners, what precisely caused the damage to their home will prove important for insurance purposes, because coverage will depend on how the damage was caused. During a hurricane, if high winds cause roof damage that leads to significant water accumulation within the house, insurance will likely cover it. But if a nearby river crests because of the heavy rainfall and then causes flooding, the damage to homes will only be covered if the owners have flood insurance.

That’s why most homeowners in the path of September’s Hurricane Florence’s torrential rains would have been better off if their home had been hit by a wildfire or volcanic eruption — at least from an insurance perspective.

Damage caused by flooding isn’t covered by standard home insurance policies. Only homeowners who bought separate flood insurance for their homes were covered if water from Florence damaged their house. And there weren’t many people in that boat.

Florence caused between $20 billion and $30 billion in losses to both commercial and residential properties across the Southeast due to flood and wind damages, according to estimates (https://www.corelogic.com/news/the-aftermath-of- hurricane-florence-is-estimated-to-have-caused-between-20-billion-and-30-billion-in-flood-and-wind-losses-cor.aspx) from property data firm CoreLogic (CLGX).

Most homeowners affected by Florence will be stuck footing the bill: CoreLogic also estimated that 85% of the losses to residential properties were uninsured. Before the storm hit, actuarial firm Milliman (http://us.milliman.com/insight/ 2018/Four-ways-Hurricane-Florence-could-ricochet-across-the-insurance-industry/) estimated that fewer than 10% of households in North Carolinahad flood insurance.

A similar refrain could now play out because of Hurricane Michael. When Hurricane Irma struck Florida last year, only 14% of the 3.3 million households in the nine counties affected by the disaster had flood insurance coverage, according to data from Pew Charitable Trusts (http://www.marketwatch.com/story/only-14-of-the-3-million-households-hit-by-irma- have-flood-insurance-2017-09-12). That’s in spite of the fact that Florida households comprise 35% of policies under the National Flood Insurance Program.

Don’t miss:How to find a contractor after a hurricane (http://www.marketwatch.com/story/how-to-find-a-contractor- after-a-hurricane-2017-09-25)

Even when insurance does cover the damage from a certain catastrophe, deductibles are still at play. Hurricane deductibles vary from policy to policy, but are often assessed as a percentage of the home’s overall value.

Coverage for other disasters operates similarly. In volcanic eruptions, damage caused by lava flows or resulting fires is covered by a standard homeowner’s policy, but if the eruption causes seismic activity, homeowners will not be reimbursed unless they have purchased a separate earthquake policy.

Buying additional insurance policies for disasters like floods and earthquakes might seem like a no-brainer, but it’s an expensive proposition. “They have to do a cost benefit analysis,” said Michael Crowe, co-founder and CEO of Clearsurance (https://clearsurance.com/), a site where consumers can review and compare insurance companies.

The average annual premium for a policy through the National Flood Insurance Program was $878 as of April 2017 (https: //web.archive.org/web/20170623131915/https:/nfip-iservice.com/Stakeholder/pdf/bulletin/Attachment%20A%20-%20Summary% 20of%20the%20NFIP%20April%202017%20Program%20Changes%20Final.pdf). But flood insurance premiums can easily cost thousands of dollars in regions that are determined to be at the highest risk of flooding.

But flooding is just one type of natural disaster that isn’t covered by standard home insurance policies. And in the case of disasters like hurricanes, where damage can be caused by a variety of factors including wind, rain and storm surge, it can quickly get confusing–and frustrating– for homeowners who are trying to figure out whether their insurance policy covers certain damage.

Here is what homeowners need to know about insurance and natural disasters:

What is covered under a standard homeowner’s insurance policy

Some natural disasters are always covered by homeowner’s insurance, including wildfires, tornadoes and hail storms. But other natural disasters are never or rarely covered under a standard homeowner’s insurance policy. They generally fall into two categories: floods and “earth movements.”

The first category comprises disasters caused by rising water, which includes everything from floods caused by extensive rainfall and hurricane-induced storm surges to dam failures and tsunamis. “Earth movements” include disasters such as earthquakes, landslides and sinkholes.

Unfortunately, many Americans are unaware that these disasters are not covered by a standard homeowner’s policy, according to the Insurance Information Institute (https://www.iii.org/sites/default/files/docs/pdf/pulse-wp-020217- final.pdf).

Certain natural disaster typically aren’t covered because of the level of the destruction they create, said Lynne McChristian, a spokeswoman for the Insurance Information Institute and executive director of the Center for Risk Management Education and Research at Florida State University.

With these disasters, “the damage is usually so widespread, and it’s typically a total loss,” McChristian said. ” Insurance companies can’t price it appropriately to make it a viable line of business for them.”Are you covered with a standard homeowner’s insurance policy? Typically covered Sometimes or partially covered Rarely covered Tornado Hurricane Flooding (including storm surge and tsunamis) Wildfire Volcano Earthquakes Hail storm Sinkhole Mud- and landslides Blizzard or ice storm Sewer backup

The government provides flood insurance

In the case of insurance for flooding, the federal government has stepped in. The National Flood Insurance Program was created in 1968 after insurance companies struggled to pay off claims following a slew of floods in the 1950s. Homeowners have the option to buy flood insurance through this program or to get a private insurance policy. In certain cases, homeowners may be required to purchase flood insurance by their mortgage lender if their home is located within a flood zone.

Private flood insurance now accounts for roughly 15% of all flood premiums nationwide, according to a March report from Insurance Journal (https://www.insurancejournal.com/blogs/right-street/2018/03/18/483689.htm). And for many homeowners, a policy from a private insurer rather than through the federal insurance program could be cheaper. A July 2017 briefing from Milliman (http://www.milliman.com/uploadedFiles/insight/2017/private-flood-insurance-cheaper- nfip.pdf)found that private flood policies would have lower premiums for 77% of all single-family homes in Florida, 69% in Louisiana and 92% in Texas.

Read more:Congress just dodged hard decisions about flood insurance again (http://www.marketwatch.com/story/congress- just-dodged-hard-decisions-about-flood-insurance-again-2018-07-31)

Earthquakes

Similarly, homeowners will need to purchase a separate policy or a rider to their standard home insurance policy from a private insurer to be covered for an earthquake. California residents also have the option (https://www.iii.org/ article/earthquake-insurance-for-homeowners) to purchase coverage through the California Earthquake Authority. That said, if an earthquake causes a house fire, some damage might be covered by the standard policy alone.

Sinkholes

As for sinkholes, coverage options vary from state to state (https://www.iii.org/article/sinkholes-and-insurance). A standard home insurance policy may cover minor damage caused by a sinkhole — but catastrophic damage (generally defined as damage to more than half of the structure) is excluded. People can either get sinkhole insurance in the form of a standalone policy or an endorsement to the standard insurance policy, depending on where they live.

Tennessee and Florida require insurers to offer optional sinkhole coverage. Insurers in Florida are also required to provide insurance for “catastrophic ground cover collapse” through their standard policies.

Read more:Your easy step-by-step guide to paying off all kinds of debt (http://www.marketwatch.com/story/your-easy- step-by-step-guide-to-paying-off-all-kinds-of-debt-2018-09-19)

Did the homeowner take care of the property?

The property’s upkeep can also play a role in whether or not damage caused by a storm or other natural disaster is covered. For instance, if winter storms cause an ice dam to form on the roof of the home and the owner is not proactive about removing it, the insurer may choose to deny coverage for water damage.

You have some options if you skip insurance

If homeowners don’t buy specialized insurance coverage and then get hit by some sort of disaster, they do have some options to offset their losses. They can get a grant from the Federal Emergency Management Agency or a loan from the Small Business Administration.

“Those are not designed to bring you back to a pre-disaster condition — they’re designed just to get you back on your feet,” McChristian said. “Insurance is designed to get you back to where you were before the disaster occurred.”

How to decide whether you need coverage

For starters, homeowners need to consider whether or not they are at risk. They should check government flood zone maps. They are generally available from county governments, or you can search by address on the FEMA website (https:// msc.fema.gov/portal/search). But they aren’t foolproof because they are only periodically updated.

Other factors to consider include the property’s elevation (if it’s at or just a few feet above sea level it’s more prone to flooding) and whether there has been a lot of construction in the area. This could displace vegetation that would soak up rainfall and prevent flooding.

As for earthquakes, homeowners shouldn’t assume they’re not at risk just because they don’t live on the West Coast. Earthquakes have caused damaged in all 50 states at some point since 1900, according to the Insurance Information Institute(https://www.iii.org/press-release/few-homes-have-insurance-coverage-for-earthquake-or-tsunami-although-the- us-is-at-risk-for-both-032311) (a trade group that of course has a vested interest in people getting insurance). And fracking for oil and natural gas has led to seismic activity (https://e360.yale.edu/digest/fracking-linked-to-increase- in-texas-quakes-according-to-new-study)in parts of the country that had never before experienced it.

How to get to the front of the line when you need help

Regardless of whether or not a homeowner has insurance coverage for a specific natural disaster, getting their property assessed is critical in beginning the rebuilding process.

Following a natural disaster, a consumer’s first step should be to contact their insurance agent or company immediately. That is critical because insurance claims are handled on a triage basis, McChristian said.

“Those with the most damage get to the front of the line because those people have the most need for recovery assistance,” McChristian said.

By clarifying how to file a claim and conveying the state of their property, homeowners can improve the chances of having their case handled more quickly by their insurer. Homeowners should also learn the ins and outs of how to file their claim, including what information is needed and how long they have to file. Now is also the time to determine what their policy’s deductible is.

Also see:What to do about your home and mortgage if you’re hit by a disaster (http://www.marketwatch.com/story/what- to-do-about-your-home-and-mortgage-if-youre-hit-by-a-disaster-2018-09-17)

Make a head-start on assessing damage

The insurance company will send its own adjuster free of charge to inspect the property and assess the total cost of the damage. Homeowners can take steps to prepare for this by documenting what was damaged or destroyed by the natural disaster, getting bids from contractors and keeping track of receipts for any expenses they incur following the storm. Homeowners shouldn’t hesitate to make temporary repairs to protect their property from further damage.

A pricier option: Hire a third-party insurance adjuster to assess their property. Given the backlog insurers will experience following widespread disasters, it can take a while to receive a payout. To expedite this process, a homeowner can choose to hire an independent or public adjuster to assess their property.

Studies have shown that hiring public adjusters leads to higher insurance settlements. But these professionals don’t come cheap — they generally charge a fee (https://www.bankrate.com/finance/insurance/hiring-a-public-adjuster-1.aspx) that’s anywhere from 10% to 20% of the insurance settlement. And it’s critical to hire a reputable professional. (Check the websites of the National Association of Independent Insurance Adjusters (https://www.naiia.com/) and the National Association of Public Insurance Adjusters(https://www.napia.com/about).)

Always have someone look at damaged property

And even if homeowners aren’t covered for flood insurance, they should still have their insurance company assess their property and whatever damage occurred.

Crowe has experienced this firsthand. In 2006, an extended period of rainfall in Newburyport, Mass., where Crowe and his family lived, caused their newly remodeled basement to flood. However, their insurance policy did not include flood coverage. He thought he would have to pay for all the damage.

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Rental Glut Sends Chill Through the Hottest U.S. Housing Markets | South Salem Real Estate

Seattle is known for its hip neighborhoods, soaring home prices, and being home to Amazon.com Inc., the world’s most valuable company. So why is its rental housing market experiencing the most severe slowdown in the U.S.?

Seattle-area median rents didn’t budge in July, after a 5 percent annual increase a year earlier and 10 percent the year before, according to Zillow data on apartments, houses and condos. While that’s the biggest decline among the top 50 largest metropolitan areas, it’s part of a national trend. Rents in Nashville and Portland, Oregon, have actually started falling. In the U.S., rents were up just 0.5 percent in July, the smallest gain for any month since 2012.

“This is something that we first started to see two years ago in New York and D.C.,” Aaron Terrazas, a senior economist at Zillow, said in a phone interview. “A year ago, it was San Francisco and most recently, Seattle and Portland. It’s spreading through what once were the fastest growing rental markets.”

Tenants are gaining the upper hand in urban centers across the U.S. as new amenity-rich apartment buildings, constructed in response to big rent gains in previous years, are forced to fight for customers. Rents are softening most on the high end and within city limits, Terrazas said. Landlords also have been losing customers to homeownership as millennials strike out on their own, often moving to more affordable suburbs.

Boom to Bust  –  Rents go from double-digit gains to declines in four years

Realtor Roy Powell last month was helping his clients, two women in their mid-20s find an apartment in Seattle. They looked at seven places and narrowed it down to two — a five-story building with a rooftop dog park and an air-conditioned gym, and a newly remodeled seven-story tower that won their business by throwing in a year of free underground parking, normally $175 a month.

Even condo owners with just one or two units to rent are offering concessions to compete with new buildings, Powell said. “A lot of them are going from absolutely no pets to allowing pets. That’s a big deal in Seattle, where everybody has a dog or cat.”

‘Tremendous Competition’

Batik, a new 195-unit Seattle apartment building, has views of the downtown skyline and Mount Rainier, a giant rooftop deck with a garden where tenants can grow fruits and vegetables, a community barbecue and an off-leash pet area. New tenants can receive Visa gift cards worth as much as $6,000, with half paid at signing and the rest a month later.

“There is tremendous competition for tenants,” said Lori Mason Curran, spokeswoman for landlord Vulcan Real Estate, Microsoft co-founder Paul Allen’s company, which launched Batik in March. “Over time, we think long-term demand is solid. But there is so much supply tamping down rent growth right now.”

In Seattle, another factor contributed to the glut of rentals. While the city is in the midst of a building boom — with more cranes dotting the skyline than any other in the U.S. — much of the residential multifamily construction has been apartments. Developers have shied away from condos because of state laws that allow buyers to more easily sue if there are defects in the construction.

Booming Construction

U.S. multifamily apartment construction for the past few years have been at levels not seen since the 1980s and rapid rent gains have also encouraged owners of single-family homes and condos to fill them with tenants. Projects opening now were conceived by developers a few years ago when rent gains in the U.S. were peaking at an annual gain of 6.6 percent, according to Zillow data.

The most expensive markets slowed first as new supply became available and tenants struggled to afford rapidly-rising lease rates. Rents in the San Francisco area jumped 19 percent in the year through July 2015. Now, they have been flat since last July. New York rents, which were up 7 percent in 2015, have been decelerating for a couple years, declining 0.4 percent in July.

For the first time since 2010, it’s now easier to build wealth over an eight-year period by renting a home and investing in stocks and bonds, rather than by buying and accumulating equity, according to a national rent-versus-buy index of 23 cities produced by Florida Atlantic University and Florida International University faculty. That’s because home prices are high and rising mortgage rates are adding to the cost of homeownership.

That could be bad for sellers, especially in markets like Dallas and Denver, where renting is now so much more favorable than buying, according to Ken Johnson, a real estate economist at Florida Atlantic University, a co-creator of the Beracha, Hardin & Johnson Buy vs. Rent Index.

Reminiscent of the Bubble

Already, housing markets in strong economies are cooling, in part because incomes haven’t kept pace with rising prices and borrowing costs. Dallas and Denver have reached so far into favorable rental territory that they look like Miami right before it crashed in the last decade, Johnson said.

The difference now is that neither market is experiencing the kind of speculation and risky lending that inflated the last housing bubble, he said.

“What’s interesting is that cities that suffered the least in 2007 and 2008 — Dallas and Denver — now are experiencing the most exposure to risk,” Johnson said.

The slowdown in the rental market coincides with a rise in homeownership among millennials, which jumped to 36.5 percent in the second quarter from 35.3 percent a year earlier.

 

read more…

 

https://www.bloomberg.com/news/articles/2018-09-07/rental-glut-sends-chill-through-the-hottest-u-s-housing-markets?srnd=premium

U. S. housing starts rise again | South Salem Real Estate

The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential housing starts. The latest reading of 1.350M was above the Investing.com forecast of 1.310M and an increase from the previous month’s revised 1.286M. March figures were also revised.

Here is the opening of this morning’s monthly report:

Housing Starts

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent (±10.2 percent)* above the revised April estimate of 1,286,000 and is 20.3 percent (±14.4 percent) above the May 2017 rate of 1,122,000. Single-family housing starts in May were at a rate of 936,000; this is 3.9 percent (±10.6 percent)* above the revised April figure of 901,000. The May rate for units in buildings with five units or more was 404,000. [link to report]

Here is the historical series for total privately owned housing starts, which dates from 1959. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

The Population-Adjusted Reality

Here is the data with a simple population adjustment. The Census Bureau’s mid-month population estimates show substantial growth in the US population since 1959. Here is a chart of housing starts as a percent of the population. We’ve added a linear regression through the monthly data to highlight the trend.

read more…

 

https://seekingalpha.com/article/4182741-new-residential-housing-starts-may

Housing starts fall again | South Salem Homes

Construction on new houses fell in May for the third month in a row even though builders are optimistic about the economy, perhaps a sign a shortage of skilled workers is holding the industry back.

The pace of so-called housing starts declined by 5.5% to an annual rate of 1.09 million, marking the lowest level in eight months. Economists polled by MarketWatch had forecast housing starts to total 1.23 million.

Home builders are now working at a slower pace than they were one year ago. They’ve especially pared back on apartment buildings and other large multi-dwelling units, giving more emphasis to single-family homes.

Part of the recent slowdown might reflect a bit of a pause after an unusually warm winter during which builders were much busier than usual. Some economists contend a higher level of construction that occurred earlier in the year would have normally taken place in the spring.

Yet builders increasingly complain they cannot find enough good construction workers to get the job done and that could be constricting them. Consider the recent slide in building permits. They fell 4.9% in May to an annual rate of 1.17 million, the lowest level in 13 months.

Permits are also below year-ago levels,

In May, the biggest drop-off occurred in the South and Midwest. Construction rose slightly in the West and was flat in the Northeast.

For years the housing market has experienced a mini-renaissance of sorts as a steadily growing economy, rising employment and ultra-low interest rates enabled home people to buy homes.

The outlook might not be as favorable now, though. Aside from widespread labor shortages, prices for wood and other raw materials have also risen. And the Federal Reserve has embarked on a series of increases in a key U.S. interest rate that helps determine the cost of borrowing, a potential brake on future sales..

 

read more…

http://www.marketwatch.com/story/home-builders-cut-back-for-third-straight-month-2017-06-16?siteid=bnbh

New-home sales tumble | South Salem Real Estate

Sales of newly constructed homes stumbled in April, as builders retreated after a March surge that marked the strongest selling pace in a decade.

New-home sales ran at a seasonally adjusted annual rate of 569,000, the Commerce Department said Tuesday. That was well below the MarketWatch consensus forecast of a 610,000 annual rate, but was offset by sharp upward revisions to data from prior months.

In particular, March’s pace was raised to a pace of 642,000, the highest since October 2007.

April’s figures were 11.4% lower for the month, but 0.5% higher than in the same period a year ago.

The government’s new-home sales data are based on small samples and are often heavily revised. Total sales in the first four months of the year are 11% higher compared with the same period a year ago.

In April, the median sales price for a new home was $309,200, down from $318,700 in March and $321,300 in the year-ago period. As the pace of selling decelerated, there were 5.7 months’ worth of homes available, up from 4.9 months in March. A market with a healthy balance between supply and demand typically has about 6 months’ worth of inventory.

One factor worth noting, April was one of the rainiest months in decades, and that may have helped dent sales. Ralph McLaughlin, Trulia chief economist, said while he wasn’t worried about data from one month, builders still have a way to go before residential construction normalizes.

“If we compare the share of new home sales to total sales, that share needs to more than double,” McLaughlin wrote in a Tuesday note. New-home sales made up nearly 12% of total sales, about half the historical average, he said.

The 12-month rolling total of sales rose to 88.3% of their 50-year average, McLaughlin added.

 

read more…

 

http://www.marketwatch.com/story/new-home-sales-tumble-in-april-after-soaring-to-10-year-high-in-march-2017-05-23

Housing bubble, then and now | South Salem Real Estate

You can’t blame a homeowner in Fresno, California, for viewing the thriving metropolis to its northwest with both envy and dismay. While San Francisco home values have surged since the recession, Fresno’s housing market is stuck in a rut. Less than 3 percent of homes in the city and its environs have returned to their pre-recession peak, according to a new study from Trulia. Median home values are a teeth-clenching $78,000 below their pre-recession peak.

The difference between the two California markets helps explain a key dynamic of U.S. housing a decade after the foreclosure crisis. Popular measures of the landscape, like S&P CoreLogic Case-Shiller Index and the FHFA House Price Index, show the market has recovered to levels last seen before the housing market went bust. But according to Trulia, this isn’t the whole, significantly bleaker picture.

Nationally, just 1 in 3 homes are worth more now than they were at their peak. While tech hubs in the Bay Area and Denver and job centers like Dallas or Nashville have seen home values explode past earlier highs, there are more losers than winners when you look across the country, Trulia’s analysis shows. And it’s really bad news if you live in Las Vegas, Tucson—or Fresno.

Many of the losers aren’t just losing—they’re getting trounced. There were 28 metros where fewer than 10 percent of homes have recovered their value since the bubble burst. Las Vegas has seen less than 1 percent of its homes returning to or surpassing what they were worth before the recession. The median sales price there is down a full $91,000 from its peak.

“It’s a reflection of just how well a metro area has recovered, broadly speaking,” said Ralph McLaughlin, chief economist at Trulia, adding that his findings largely correlate with other measures of metro-level growth, such as gains in income and total population.

As a result, it’s tempting to view these results through the prism of the 2016 election. Many of the metropolitan areas where home values lag the most are Rust Belt towns with little prospect for an immediate comeback, or Sunbelt cities whose peak home values were a product of the bubble that preceded the collapse.

McLaughlin says a zip code-level analysis offers a more nuanced view of the haves and have-nots. In much of the middle of the country, cities have stagnated while less populated regions lead the recovery. While it’s true coastal markets have experienced the lion’s share of appreciation, the majority of homes in pricey markets like New York, Los Angeles, Silver Spring, Maryland, and Fairfield County, Connecticut, are still worth less than a decade ago.

To be sure, Trulia’s research is based on its own estimates of home values, while the big indices are based on actual sales. Other research suggests a hot economy gives rural workers more choice, causing an outflow of potential employees to better jobs, often in the cities or on the coasts, potentially speeding a decline in home value elsewhere.

read more…

 

https://www.bloomberg.com/news/articles/2017-05-03/most-u-s-homes-are-worth-less-than-before-the-crash

Property Taxes by State | South Salem Real Estate

The 2015 American Community Survey data shows that New Jersey still leads the nation with the highest average annual real estate tax (RET) bill of $8,180—$7,528 more than RETs paid by Alabama’s homeowners. The overall distribution remained roughly unchanged since 2014, as the composition of the top and bottom ten remained the same. The map below clearly illustrates that the highest property tax states are found in the Northeast while—with the exception of Texas—southern states boast the lowest RET bills for their resident homeowners.

Source: U.S. Census Bureau, 2015 American Community Survey, NAHB calculations

As property values vary widely by state, controlling for this variable produces a more instructive state-by-state comparison. In keeping with prior analyses, NAHB calculates this—the effective property tax rate as measured by taxes paid per $1,000 of home value—by dividing aggregate real estate taxes paid by the aggregate value of owner-occupied housing units within a state. As shown below, New Jersey has the dubious distinction of imposing the highest effective property tax rate—2.13% or $21.25 per $1,000 of home value. Hawaii levies the lowest effective rate in the nation—0.28%, or $2.84 per $1,000 of value.

Source: U.S. Census Bureau, 2015 American Community Survey, NAHB calculations

Interstate differences among home values explain some, but not all, of the variance in real estate tax bills across the country.  Texas is an illustrative example of a state in which home values hardly, if at all, explain real estate tax bills faced by homeowners.  While Texas ranks only 32nd in the country for average home values, it is 12th in average real estate taxes paid.  Other factors are clearly at play, and state and local government financing turns out to be a major one.

Property taxes account for 35% of state and local tax receipts, on average, but some state and local governments rely more heavily on property taxes as a source of revenue than others. Texas serves as an excellent example once again.  Unlike most states, Texas does not impose a state income tax on its residents.  Even though per capita government spending is tame compared with other states—7th lowest in the country—Texas and its localities must still find a way to fund government obligations.  Local governments accomplish this by levying the 7th highest effective property tax rate (1.63%) in the country, on average.  The state government partly makes up for foregone individual income tax revenue by imposing a tax on corporate revenue rather than income

Where are the Nation’s Second Homes? | South Salem Real Estate

According to NAHB estimates, the total count of the second home stock reached 7.5 million in 2014, an increase of 0.6 million over 2009 when NAHB Economics last produced these estimates. The share of second homes among the total housing stock also increased from 5.4% to 5.6%.

It is worthwhile to understand the patterns of second homes because they could have a significant economic impact on local housing markets and thus have important policy implications. This analysis focuses on the number and the location of second homes qualified for the home mortgage interest deduction using the Census Bureau’s 2014 American Community Survey (ACS).

The county with the largest share of second homes is Hamilton County, NY with 79.3%, followed by Forest County (74%), PA, and Rich County (72.7%), UT. As one might expect, the top 10 counties with the largest share of second homes are mostly tourist destinations.

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In-depth analysis, however, shows that the concentration of second homes is not simply restricted to conventional locations like beachfront areas. There were 913 counties spread over 49 states, where second homes accounted for at least 10% of the local housing stock. Only Connecticut and Washington D.C. were exceptions. 357 counties, 11% of all counties in the U.S., had at least 20% of housing units that were second homes.

27 counties in 14 states had over half of housing units qualified as second homes. Of these counties, five counties are in Michigan, four in Colorado and Wisconsin, two in California, Massachusetts, Pennsylvania, Utah, and one county each in Idaho, Missouri, North Carolina, New Jersey, New Mexico, and New York. These national patterns are mapped below.

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Of course, the geographic locations of second homes also correspond to population density. Counties with more than 25,000 second homes are mostly located in or near metropolitan areas. The table below lists the top 10 counties with the most second homes. States with at least one such county are Arizona, Florida, California, Massachusetts, Illinois, New York, New Jersey, Nevada, South Carolina, Delaware, Texas, Michigan, and Maryland.

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NAHB estimates are based on the definition used for home mortgage interest deduction: a second home is a non-rental property that is not classified as taxpayer’s principal residence. Examples could be: (1) a home that used to be a primary residence due to a move or a period of simultaneous ownership of two homes due to a move; (2) a home under construction for which the eventual homeowner acts as the builder and obtains a construction loan (Treasury regulations permit up to 24 months of interest deductibility for such construction loans); or (3) a non-rental seasonal or vacation residence. However, homes under construction are not included in this analysis because the ACS does not collect data on units under construction.

 

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http://eyeonhousing.org/2016/12/top-posts-of-2016-where-are-the-nations-second-homes/

National Home Prices Re-accelerated | South Salem Real Estate

S&P Dow Jones Indices released the Case-Shiller (CS) National Home Price Index for July. The index rose at a seasonally adjusted annual growth rate of 5.0%, faster than the 2.1% in June. House prices have decelerated since the beginning of 2016 due to the sharp decline in existing home sales at the end of 2015. But, home prices started to accelerate in May and home price appreciation increased to 5.0% in July.

The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 5.8% in July, following 3.4% in June, confirming the reacceleration in home prices.

figure1_jul16

However, local housing markets varied greatly. Figure 2 shows home price appreciation for 20 major U.S. metropolitan areas in July.

Twelve out of the 20 metro areas had positive home price appreciation. The highest one in the list was Portland, OR with an annual rate of 8.2%, followed by Denver with an annual rate of 6.6%. Phoenix placed third with an annual rate of 5.9%.

Home price appreciation in the remaining eight metro areas was negative. They are San Francisco, Washington, DC, Atlanta, Chicago, Boston, Detroit, Minneapolis, and New York. Home price appreciation in Chicago was -5.9%, the lowest among 20 metro areas.

figure2_jul16

 

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http://eyeonhousing.org/2016/09/national-home-prices-reaccelerated-local-home-prices-varied-in-july/