Category Archives: Waccabuc NY

Oregon bans real estate buyer love letters | Waccabuc Real Estate

A real estate firm seeks to block a new Oregon law that bans real estate agents from forwarding “love letters” from homebuyers to sellers.

A lawsuit filed in federal court Friday by the conservative Pacific Legal Foundation on behalf of Total Real Estate Group alleges the state’s ban on these communications violates the First Amendment rights of real estate brokers and their clients.

“This censorship is based on mere speculation that sellers might sometimes rely on information in these letters to discriminate based on a protected class,” according to the lawsuit.

Oregon Attorney General Ellen Rosenblum and Oregon Real Estate Commissioner Steve Strode could not be reached for comment.

Oregon is the first state to ban the practice. Under the law, which is scheduled to take effect in January, real estate agents will not be allowed to pass along personal pitches from buyers that can include details about people’s lives along with photographs and videos. Buyers will still be allowed to communicate directly with home sellers.

In hot markets where multiple bidders jockey for the same house, buyers will do just about anything to get their offer noticed – and that includes writing “love letters” in hopes of making a personal connection with a seller.

Increasingly, the real industry has grown uneasy that “love letters” could violate state and federal fair housing laws by revealing the buyer’s race, color, religion, sex, sexual orientation, national origin, marital status or familial status. Many real estate agents refuse to accept or deliver them.

Democratic Rep. Mark Meek, the state lawmaker who sponsored the legislation, told USA TODAY in August that Oregon is not impeding free speech.

“We are limiting transmission of communications that are not relevant and could potentially be breaking fair housing laws,” he said.

No other state has followed Oregon’s lead.

Daniel Ortner, an attorney with the Pacific Legal Foundation, said the law is “a blatant First Amendment violation.”

“Love letters” can help first-time buyers compete with cash-rich buyers or institutional investors and can help sellers searching for buyers who will care for their homes and be good neighbors, Ortner said. The letters signal genuine interest in a property, he said.

Ortner said the law’s proponents have not produced any examples of fair housing complaints or lawsuits as a result of love letters.

“This is a solution in search of a problem. There is no evidence that it is a real problem that’s really resulting in discrimination,” he said. “And you can’t just go and ban whole types of communication in the fear that some small portion of it might somehow be used by someone.”

The backlash against love letters is part of an industrywide reckoning with its complicity in decades of housing discrimination and segregation that kept Black Americans from homeownership.

In 2019, Newsday published the findings of a three-year undercover investigation that exposed discriminatory home-selling practices by real estate agents that helped keep neighborhoods in Long Island, New York, segregated. Agents treated people of color unequally, especially Black residents, the investigation found.

Efforts to reform racist practices and increase Black homeownership intensified after the murder of George Floyd in Minneapolis.

Last year, the National Association of Realtors warned members love letters were not as harmless as they seemed.

But as stratospheric prices and record low housing inventory fuel bidding wars, love letters are more popular than ever.

Realtors said they don’t want to put their buyers at a disadvantage in competitive situations by refusing to pass them along. Besides, they said, sellers are swayed first and foremost by the offering price and terms.

But the right words can be persuasive. In 2019, the Redfin real estate brokerage studied the most effective strategies to win a bidding war. All-cash offers more than tripled a buyer’s odds. Writing a love letter came in second, increasing a buyer’s chances by 59%.

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This article originally appeared on USA TODAY: Oregon sued over law banning real estate ‘love letters’ in hot market

30-Year mortgage rates Fall to Lowest in More Than a Month | Waccabuc Real Estate

The average interest rates on 30- and 15-year mortgages fell to their lowest levels in more than a month as rates offered on home loans retreated across the board. 

The average rate offered to homebuyers using a conventional 30-year fixed mortgage, the most popular type of home loan, fell to 3.25% from 3.29% the previous business day. The average for a 15-year fixed mortgage fell to 2.48% from 2.52% the previous business day. Both are the lowest they’ve been since early October.

Fixed mortgage rates tend to track 10-year Treasury yields, which usually rise with heightened inflation fears (and fall when those fears subside.) Investor concerns about soaring inflation have generally pushed yields to a much higher range since the summer, plus everyone is closely watching how the Federal Reserve interprets the latest inflation data and whether it will take drastic action to control it. Yields have fallen some since last week, when the Fed said it would begin to pull back on the easy money policies it put in place to help the economy through the pandemic.

The average 30-year rate hit a six-month high of 3.48% late last month, but even at that level, it was pretty low by historic standards. According to a Freddie Mac measure that dates back farther than our data, the 30-year hasn’t gone more than about half a percentage point higher than its record low of last winter. Three years ago, it was almost 5% and at the start of the 1990s, around 10%.

During the pandemic, these relatively low rates have bolstered buying power, allowing house hunters to buy more expensive homes with the same monthly budget and helping to fuel a fiercely competitive residential real estate boom that has only recently begun to cool slightly. For the same reasons, the uptick in rates over the past few months has discouraged borrowing, in particular refinancing activity. An index measuring the volume of applications to refinance an existing mortgage is at its lowest level since January 2020, according to the Mortgage Bankers Association. 

Mortgage rates, like the rates on any loan, are going to depend on your credit score, with lower rates going to people with better scores, all else being equal. The rates shown reflect the average offered by more than 200 of the country’s top lenders, assuming the borrower has a FICO credit score of 700-759 (within the “good” or “very good” range) and a loan-to-value ratio of 80%.

30-Year Mortgage Rates Drop

A 30-year fixed mortgage is by far the most common type of mortgage because it offers a consistent and relatively low monthly payment. (Shorter-term fixed mortgages have higher payments because the borrowed money is paid back more quickly.) 

Besides conventional 30-year mortgages, some are backed by the Federal Housing Authority or the Department of Veterans Affairs. FHA loans offer borrowers with lower credit scores or a smaller down payment a better deal than they might otherwise get; VA loans let current or past members of the military and their families skip a down payment.

  • 30-year fixed: The average rate fell to 3.25%, down from 3.29% the previous business day. A week ago, it was 3.37%. For every $100,000 borrowed, monthly payments would cost about $435.21, or $6.61 less than a week ago.
  • 30-year fixed (FHA): The average rate fell to 3.04% from 3.08% the previous business day. A week ago, it was 3.19%. For every $100,000 borrowed, monthly payments would cost about $423.76, or $8.16 less than a week ago.
  • 30-year fixed (VA): The average rate fell to 3.08% from 3.12% the previous business day. A week ago, it was 3.25%. For every $100,000 borrowed, monthly payments will cost about $425.93, or $9.28 less than a week ago.

A lower rate can lower your monthly payment, but it can also give you more buying power, something you’ll want if you’re considering jumping into this fiercely competitive real estate market. For example, at 3% on a 30-year mortgage, your payments for a $380,000 home would be about $1,900 a month, assuming a 20% down payment, typical homeowners’ insurance costs, and property taxes, per our mortgage calculator. If you lock in a rate at 2.9%, though, you’ll have the same monthly payment for a $383,500 home.

15-Year Mortgage Rate Falls

The major advantage of a 15-year fixed mortgage is that it offers a lower interest rate than the 30-year and you’re paying off your loan more quickly, so your total borrowing costs are far lower. But for the same reason—that the loan is paid back over a shorter time frame—the monthly payments will be higher.

  • 15-year fixed: The average rate fell to 2.48% from 2.52% the previous business day. A week ago, it was 2.57%. For every $100,000 borrowed, monthly payments would cost about $665.85, or $4.24 less than a week ago.

Besides fixed-rate mortgages, there are adjustable-rate mortgages (ARMs), where rates change based on a benchmark index tied to Treasury bonds or other interest rates. Most adjustable-rate mortgages are actually hybrids, where the rate is fixed for a period of time and then adjusted periodically. For example, a common type of ARM is a 5/1 loan, which has a fixed rate for five years (the “5” in “5/1”) and is then adjusted every one year (the “1”).

Jumbo Mortgage Rates Are Down

Jumbo loans, which allow you to borrow bigger amounts for more expensive properties, tend to have slightly higher interest rates than loans for more standard amounts. Jumbo means over the limit that Fannie Mae and Freddie Mac are willing to buy from lenders, typically $548,250 for a single-family home (except in Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $822,375).

  • Jumbo 30-year fixed: The average rate fell to 3.44% from 3.45% the previous business dayA week ago, it was 3.54%. For every $100,000 borrowed, monthly payments would cost about $445.70, or $5.58 less than a week ago.
  • Jumbo 15-year fixed: The average rate fell to 3.24% from 3.26% the previous business day. A week ago, it was 3.32%. For every $100,000 borrowed, monthly payments would cost about $702.18, or $3.90 less than a week ago.

Refinance Rates Decline

Refinancing an existing mortgage tends to be slightly more expensive than getting a new one, especially in a low-rate environment. 

  • 30-year fixed: The average rate to refinance fell to 3.36% from 3.4% the previous business day. A week ago, it was 3.5%. For every $100,000 borrowed, monthly payments would cost about $441.27, or $7.77 less than a week ago.
  • 15-year fixed: The average rate to refinance fell to $2.58% from 2.62% the previous business day. A week ago, it was 2.68%. For every $100,000 borrowed, monthly payments at that rate will cost about $670.56, or $4.74 less than a week ago.

Methodology

Our rates for “today” reflect national averages provided by more than 200 of the country’s top lenders one business day ago, and the “previous” is the rate provided the business day before that. Similarly, the week earlier references compare the data from five business days earlier (so bank holidays are excluded.) The rates assume a loan-to-value ratio of 80% and a borrower with a FICO credit score of 700 to 759—within the “good” to “very good” range. They’re representative of the rates customers would see in actual quotes from lenders, based on their qualifications, and may vary from advertised teaser rates.

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thebalance.com/mortgage-rates

Case Shiller price index up 19.7% | Waccabuc Real Estate

S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for July 2021 show that home prices continue to increase across the U.S. More than 27 years of history are available for the data series and can be accessed in full by going to https://www.spglobal.com/spdji/.

YEAR-OVER-YEAR 

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.7% annual gain in July, up from 18.7% in the previous month. The 10-City Composite annual increase came in at 19.1%, up from 18.5% in the previous month. The 20-City Composite posted a 19.9% year-over-year gain, up from 19.1% in the previous month.

Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in July. Phoenix led the way with a 32.4% year-over-year price increase, followed by San Diego with a 27.8% increase and Seattle with a 25.5% increase. Seventeen of the 20 cities reported higher price increases in the year ending July 2021 versus the year ending June 2021. 

MONTH-OVER-MONTH

Before seasonal adjustment, the U.S. National Index posted an 1.6% month-over-month increase in July, while the 10-City and 20-City Composites both posted increases of 1.3% and 1.5%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.5%, and the 10-City and 20-City Composites both posted increases of 1.4% and 1.5%, respectively. In July, all 20 cities reported increases before and after seasonal adjustments.

ANALYSIS

“July 2021 is the fourth consecutive month in which the growth rate of housing prices set a record,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The National Composite Index marked its fourteenth consecutive month of accelerating prices with a 19.7% gain from year-ago levels, up from 18.7% in June and 16.9% in May. This acceleration is also reflected in the 10- and 20-City Composites (up 19.1% and 19.9%, respectively). The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country. In July, all 20 cities rose, and 17 gained more in the 12 months ended in July than they had gained in the 12 months ended in June. Home prices in 19 of our 20 cities now stand at all-time highs, with the sole outlier (Chicago) only 0.3% below its 2006 peak. The National Composite, as well as the 10- and 20-City indices, are likewise at their all-time highs.

“July’s 19.7% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. This month, New York joined Boston, Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quintile of historical performance; in 15 cities, price gains were in the top five percent of historical performance. 

“We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. July’s data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.

“Phoenix’s 32.4% increase led all cities for the 26th consecutive month, with San Diego (+27.8%) and Seattle (+25.5%) not far behind. As has been the case for the last several months, prices were strongest in the Southwest (+24.2%) and West (+23.7%), but every region logged double-digit gains and recorded all-time high rate increases.”

SUPPORTING DATA

Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.

2006 Peak2012 TroughCurrent
 Index Level Date Level DateFrom Peak
(%)
 LevelFrom Trough
(%)
From Peak
(%)
National184.61Jul-06134.00Feb-12-27.4%265.3598.0%43.7%
20-City206.52Jul-06134.07Mar-12-35.1%272.34103.1%31.9%
10-City226.29Jun-06146.45Mar-12-35.3%284.7494.4%25.8%

Table 2 below summarizes the results for July 2021. The S&P CoreLogic Case-Shiller Indices could be revised for the prior 24 months, based on the receipt of additional source data.

July 2021July/JuneJune/May1-Year
Metropolitan AreaLevelChange (%)Change (%)Change (%)
Atlanta190.522.2%2.5%18.5%
Boston278.011.1%1.3%18.7%
Charlotte211.492.2%2.6%20.9%
Chicago168.101.2%1.7%13.3%
Cleveland156.021.1%2.3%16.2%
Dallas245.802.3%3.0%23.7%
Denver283.181.8%2.3%21.3%
Detroit156.191.2%2.2%16.1%
Las Vegas246.362.8%3.4%22.4%
Los Angeles358.501.4%1.9%19.1%
Miami310.502.2%3.0%22.2%
Minneapolis217.141.2%1.8%14.5%
New York241.861.1%0.8%17.8%
Phoenix280.473.3%3.6%32.4%
Portland302.711.5%2.2%19.5%
San Diego355.331.6%2.5%27.8%
San Francisco338.681.2%2.7%22.0%
Seattle343.920.9%1.6%25.5%
Tampa289.592.9%3.0%24.4%
Washington283.680.8%1.6%15.8%
Composite-10284.741.3%1.8%19.1%
Composite-20272.341.5%2.0%19.9%
U.S. National265.351.6%2.2%19.7%
Sources: S&P Dow Jones Indices and CoreLogic
Data through July 2021

Table 3 below shows a summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data. Since its launch in early 2006, the S&P CoreLogic Case-Shiller Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked.

July/June Change (%)June/May Change (%)
Metropolitan AreaNSASANSASA
Atlanta2.2%2.2%2.5%2.2%
Boston1.1%1.2%1.3%1.0%
Charlotte2.2%2.4%2.6%2.4%
Chicago1.2%1.1%1.7%1.2%
Cleveland1.1%0.7%2.3%1.7%
Dallas2.3%2.4%3.0%2.8%
Denver1.8%2.0%2.3%2.2%
Detroit1.2%1.0%2.2%1.3%
Las Vegas2.8%2.5%3.4%3.1%
Los Angeles1.4%1.7%1.9%1.7%
Miami2.2%2.0%3.0%3.1%
Minneapolis1.2%1.2%1.8%1.2%
New York1.1%1.0%0.8%1.0%
Phoenix3.3%3.2%3.6%3.4%
Portland1.5%1.4%2.2%1.8%
San Diego1.6%1.8%2.5%2.4%
San Francisco1.2%1.4%2.7%2.7%
Seattle0.9%1.4%1.6%1.5%
Tampa2.9%3.0%3.0%3.1%
Washington0.8%1.1%1.6%1.2%
Composite-101.3%1.4%1.8%1.6%
Composite-201.5%1.5%2.0%1.8%
U.S. National1.6%1.5%2.2%1.8%
Sources: S&P Dow Jones Indices and CoreLogic
Data through July 2021

For more information about S&P Dow Jones Indices, please visit https://www.spglobal.com/spdji/.

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit https://www.spglobal.com/spdji/.

Northeast new homes sales rise 48% | Waccabuc Real Estate

After notable and expected downward revisions for prior months, May recorded a decline of 5.9% for sales of newly-constructed single family homes, according to estimates from the Census Bureau and HUD. The May seasonally adjusted annual rate (769k) was the lowest in a year, due to builders slowing sales as a consequence of higher material costs and declining availability of labor, material and lots.

Residential demand continues to be supported by low interest rates, a renewed consumer focus on the importance of housing, and solid demand in lower-density markets like suburbs and exurbs. However, higher building costs, longer delivery times, and general unpredictability in the residential construction supply-chain are having measurable impacts on new home prices. In May, the median price of a newly-built home was 18% higher than a year ago, at $374,400. As NAHB has estimated, higher lumber costs alone are increasing new home prices by $36,000 on average.

Higher costs have priced out buyers, particularly at the lower end of the market. A year ago, 44% of new home sales were priced below $300,000. In May 2021, only 26% of new home sales were priced below $300,000.

Looking back to the spring of last year, the April 2020 data (570,000 annualized pace) marks the low point of sales for the 2020 recession. The April 2020 rate was 26% lower than the prior peak, pre-recession rate set in January. Sales then mounted a historic surge from April until July, outpacing gains in actual construction. Sales have been above the pace of the post-Great Recession trend since the second half of last year. However, since January the trend has been declining and has now dipped below the long-run trend (as indicated by the blue dashed line in the graph above).

Sales-adjusted inventory levels remained healthy in May, although they did increase to a 5.1 months’ supply.

Completed ready-to-occupy homes continue to fall as a share of new home inventory. Such homes were just under 24% of inventory a year ago. They are only a little more than 11% of the total in May 2021.

Moreover, to see how sales patterns have changed in a high demand, low supply market — the count of new homes sold that had not started construction is up 76 percent over the last year. The count of new homes sold that are completed and ready to occupy is down 33 percent.

Regionally on a year-to-date basis new home sales rose in all four regions, up 48.7% in the Northeast, 33.5% in the Midwest, 32.3% in the South, and 5.6% in the West. These significant increases are due in part to lower sales volume during the Covid crisis a year ago.

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Eyeonhousing.org

Mortgage rates average 3.00% | Waccabuc Real Estate

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.00 percent.

“After a run up over the first few months of the year, rates have paused and hovered around three percent since March,” said Sam Khater, Freddie Mac’s Chief Economist. “Despite this favorable rate climate, there remains a shortage of homes for sale. The lack of housing supply has been compounded by labor disruptions and expensive building materials that are driving up the cost of new housing, making it difficult for homebuyers to find homes to purchase.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.00 percent with an average 0.6 point for the week ending May 20, 2021, up from last week when it averaged 2.94 percent. A year ago at this time, the 30-year FRM averaged 3.24 percent.
  • 15-year fixed-rate mortgage averaged 2.29 percent with an average 0.7 point, up from last week when it averaged 2.26 percent. A year ago at this time, the 15-year FRM averaged 2.70 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.59 percent with an average 0.3 point, unchanged from last week. A year ago at this time, the 5-year ARM averaged 3.17 percent.

The PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. 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.

Freddie Mac predicts 6.6% home price increase in 2021 | Waccabuc Real Estate

According to Freddie Mac’s (OTCQB: FMCC) Quarterly Forecast, mortgage rates will continue to move up with the 30-year fixed-rate mortgage averaging just above three percent through the end of 2021.

“As the economy continues to improve, we expect conditions to remain generally favorable for the housing and mortgage market,” said Sam Khater, Freddie Mac’s Chief Economist. “Higher mortgage rates have the potential, however, to dampen the robust demand we’ve been experiencing, and we therefore forecast total originations to decline to $3.5 trillion in 2021.”  

Khater continued, “Other important obstacles to consider include high home prices and low housing supply that will certainly influence the trajectory of purchase activity specifically.”

According to Freddie Mac’s Forecast:

  • The average 30-year fixed-rate mortgage is expected to be 3.2 percent in 2021 and 3.7 percent in 2022.
  • House price growth is expected to be 6.6 percent in 2021, slowing to 4.4 percent in 2022.
  • Home sales are expected to reach 7.1 million in 2021, falling to 6.7 million homes in 2022.
  • Purchase originations are expected to increase to $1.7 trillion in 2021 before dropping to $1.6 trillion in 2022.
  • Refinance originations are expected to be $1.8 trillion in 2021 before falling to $770 billion in 2022. 
  • Overall, annual mortgage origination levels are expected to be $3.5 trillion in 2021 and $2.4 trillion 2022.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.

Housing starts up 27% | Waccabuc Real Estate

Single-family housing starts ended 2020 on a high note, rising 12% in December to a 1.338 million unit pace – the highest pace since 2006, according to the Census Bureau.

That’s up 27.8% from one year ago, a remarkable figure given the economic effects of the COVID-19 pandemic, per industry officials.

“2020 will go down, quite unexpectedly, as one of the best years for home builders in recent memory, and proof that great challenges — and not just those posed by COVID — can be overcome with hard work and creativity,” said Matthew Speakman, Zillow economist. “Demand for homes remains sky high, despite the still-raging pandemic, as people look to take advantage of historically low mortgage rates and find their next home. “

An estimated 1.380 million housing units were started in 2020 – 7% percent above the 2019 figure of 1.29 million

Remarkably, most industry experts believe construction rates will climb even higher in 2021.

“We expect single-family construction to move up 9% in 2021 — a much-needed relief valve for homebuyers,” said Danielle Hale, chief economist at Realtor.com. “While buyer demand has slowed since December, it remains notably higher than one year ago, giving builders a strong incentive to keep building.”

Hale added that builder optimism is higher than it was one year ago, but rising material costs and low land inventory are weighing on builder confidence in the short term.

“Supply-side headwinds will remain in 2021,” added Odeta Kushi, First American deputy chief economist. “Given the underbuilding that took place in the decade following the Great Recession, it will take years for builders to close the deficit.”

Even with the promise of additional relief funding from President Joe Biden’s American Rescue Plan, most homebuyers are still looking for houses with large work-from-home areas — a sign that confidence in the eradication of the virus, and a restart of face-to-face interaction, remains low.

“The past year has also cemented the smooth transition towards touring homes virtually and digitalizing many parts of the mortgage process, making homebuying much safer in light of the ongoing public health situation,” said John Pataky, executive vice president at TIAA Bank.

Privately-owned housing starts in December also jumped from November — a 5.8% rise with a seasonally adjusted annual rate of 1.669 million. That’s also 5.2% above the December 2019 rate of 1.587 million.

Austin Niemiec, Rocket Pro TPO executive vice president, urged brokers to maintain a focus on purchasing and ensuring solid internal processes.

“Brokers should be ready to support clients looking to secure their dream home,” he said. “This will be another strong year for loan officers, and new houses will play an important role in making sure we assist buyers at a high level.”

In authorizations, units in buildings with five units or more were authorized at a rate of 437,000 in December. Privately owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,709,000 — 4.5% above the revised November rate of 1.635 million.

Single-family authorizations in December were at a rate
of 1.226 million, a rise of 7.8% above the November figure of 1.137 million.

Lawrence Yun,  National Association of Realtors chief economist, is optimistic the housing sector will be a major player in the economy’s recovery in 2021.

“More construction also means more local job creation,” he said. “The worst of the housing shortage could soon come to an end.”

read more…

housingwire.com/articles/

Homeowners are $1 trillion richer thanks to the pandemic-driven housing boom | Waccabuc Real Estate

  • In the past year, homeowners with mortgages, representing about 63% of all properties, have seen their equity increase by 10.8%, according to CoreLogic.
  • That equates to a collective $1 trillion in gained equity, or an average $17,000 per homeowner.
  • This is the largest equity gain in more than six years.
Rick Nazarro of Colonial Manor Realty waits in the driveway as a couple enters a property he is trying to sell on May 2, 2020 in Revere, Massachuetts.

Blake Nissen | The Boston Globe via Getty Images

American homeowners are $1 trillion richer as the pandemic-driven housing boom pads their pockets.

As prices rise, home equity multiplies. In the past year, homeowners with mortgages, representing about 63% of all properties, have seen their equity increase by 10.8%, according to CoreLogic.

That equates to a collective $1 trillion in gained equity, or an average $17,000 per homeowner, the largest equity gain in more than 6 years.

Homeowners in some states saw greater equity gains than others. States with the hottest home prices saw the biggest gains.

In Washington state, homeowners banked an average of $35,800. In California they gained $33,800 and in Massachusetts an average of $31,200.

However, homeowners in North Dakota, which was particularly hard-hit by the pandemic, saw the lowest annual equity gain of just $5,400.

“Over the past year, strong home price growth has created a record level of home equity for homeowners,” said Frank Nothaft, chief economist for CoreLogic. “The average family with a home mortgage loan had $194,000 in home equity in the third quarter. This provides an important buffer to protect families if they experience financial difficulties.”

It has contributed to historically low foreclosure rates, although part of that is also due to mortgage forbearance programs put in place at the start of the pandemic. Still, it will help those borrowers who are struggling most and may not be able to keep their homes. They can sell into the market and potentially still make a profit.

Prices are rising so quickly because demand for housing is incredibly strong and supply equally lean. The work and school-from-home culture of the pandemic only increased demand that had already been rising, as the millennial generation aged into their homeowning years. Mortgage rates, which have set 14 record lows so far this year, have helped even more buyers get in the game.

So far, homebuying has not eased much, especially for newly built homes. Signed contracts on existing homes, however, fell slightly in September and October. This may be less a demand issue and more a problem with continued tight supply, as well as weakening affordability.

Some, however, claim the run on housing may actually be running out of steam.

“With pent-up demand from the spring now largely expended, mortgage interest rates unlikely to fall further, inventory at record lows and early signs that the exodus from cities is slowing, home sales will edge back further over 2021,” wrote Matthew Pointon, property economist with Capital Economics. “That, alongside tight credit conditions, suggest the current boom in house prices will prove short-lived.”

The exodus from major cities also appears to be slowing, with some buyers heading back in looking for bargains.

While home price gains may ease, prices are unlikely to weaken dramatically, simply because of the supply and demand imbalance. That will continue to help those borrowers who have the least amount of equity.

As it stands now, the share of borrowers in a negative equity position, owing more on their mortgages than their homes are worth, is down over 18% from a year ago. There are now just 3%, 1.6 million mortgaged properties, in a negative equity position.

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cnbc.com

Hamptons Sales Prices Reach 15-Year High | Waccabuc Real Estate

The Covid-19 pandemic has pushed real estate sales activity and prices to new records in New York’s Hamptons, North Fork and Long Island regions.

The median sales price of a Hamptons home spiked 40% year-over-year in the third quarter, according to a report Thursday from Douglas Elliman. That price, $1.2 million, is the highest in 15 years, since the company began tracking prices in the region.

Sales also were up more than 50% in the third quarter, compared to the same time last year, the data showed. That’s the largest year-over-year sales increase in nearly seven years.

Sales also were up 40.2% compared to the second quarter, the report found.

“Sales surged quarter over quarter, rebounding quickly from the restraint of spring market activity at the onset of the Covid crisis,” according to Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman reports.

Sales of luxury homes, defined as the top 10% of the market, were up 38.6% in the third quarter compared to the second, Elliman found. Year-over-year, sales were up 48.8%.

Luxury prices dipped 9.7% to $5.8 million from the second-quarter number of $6.4 million, the report showed. But year-over-year, prices rose 65.7%.

The North Fork has also seen increased demand in the third quarter because of concerns over Covid-19, according to Elliman.

In that part of Long Island, the number of sales was up 71% quarter-over-quarter and 41.3% year-over-year, according to the report. In addition, the median sales price rose 18.1% to $702,500 in the third quarter, compared to the previous quarter, the highest level in more than 14 years of tracking.

Luxury sales in the North Fork rose 71.4% in the third quarter, from 14 in the second quarter to 24 in the third. The median sales price for high-end homes was $1.97 million, a 29.3% year-over-year rise, Elliman found.

At the same time, the total volume of sales in both areas was up 101.5% in the third quarter, compared to the same time the previous year, according to the third-quarter report for the Hamptons and North Fork from Brown Harris Stevens.

Sales for the third quarter amounted to more than $973 million, compared to $483 million in the same quarter of 2019, according to the report, also released Thursday.

“The easing of restrictions at the end of [the second quarter] had a dramatic impact on Q3 2020, and the market embraced a frenetic pace, resulting in a doubling of the dollar volume of Q3 2019,” Philip V. O’Connell, managing director of Brown Harris Stevens in the Hamptons, said in the report. “The end of Q3 2020 has settled into a strong market, which we expect to continue throughout the year.”

Sales on Long Island, overall, also surged in the third quarter, according to Elliman.

The number of closed sales was up 56.9% quarter-over-quarter, with the median sales prices up 6.6% to $500,000, the report showed.

On the luxury side, sales increased 56%, from 459 in the second quarter to 716 in the third, Elliman found. The median sales price jumped 12.3% to $1.24 million in the third quarter, compared to $1.1 million the previous quarter.

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mansionglobal.com/articles/hamptons

Gen Z Faces Housing Affordability Challenges | Waccabuc Real Estate

Developers struggle to build apartments in busy, social neighborhoods at a price Gen Z is willing to pay.

In October, AvalonBay Communities will open 238 new apartments at Kanso Twinbrook in Rockville, Md., near Washington, D.C. Courtesy AvalonBay Communities
In October, AvalonBay Communities will open 238 new apartments at Kanso Twinbrook in Rockville, Md., near Washington, D.C. Courtesy AvalonBay Communities

Developers often want their new developments to appeal to the youngest renters. That may be difficult with the young people of Generation Z, now graduating from college and looking for places to live.

They are notoriously frugal. The oldest—born from the mid- to late 1990s—came of age during the long, slow recovery from the global financial crisis. They were used to living on a budget long before the new economic crisis caused by the spread of the novel coronavirus.

“Gen Z tends to value experiences more than they value things or possessions,” says Lela Cirjakovic, executive vice president of operations for Waterton, an apartment company based in Chicago. “They also place a high value on community… Spending time with people doing things is more valuable to them than having luxury items.”

That frugality might keep Generation Z away from new buildings in the most expensive housing markets—even though they are drawn to social areas.

“Land costs in the urban core likely preclude the delivery of new apartments that most Gen Z renters can afford,” says Greg Willett, chief economist for RealPage, a technology and data company based in Richardson, Texas. “Those who can afford new developments at all probably will opt for suburban settings.”

New Apartments Designed for Frugality

In October, AvalonBay Communities will open 238 new apartments at Kanso Twinbrook in Rockville, Md., near Washington, D.C.

Kanso Twinbrook does not have a leasing office. Instead, it has a prospect self-entry showroom with a sample finishes and a digital screen to describe the community. Courtesy AvalonBay Communities
Kanso Twinbrook does not have a leasing office. Instead, it has a prospect self-entry showroom with a sample finishes and a digital screen to describe the community. Courtesy AvalonBay Communities

“Kanso will be our first new development without any physical amenities or even a leasing office,” says Karen Hollinger, senior vice president of strategic initiatives for AvalonBay Communities, headquartered in Arlington, Va. “I’m not sure any one generation has the lock on frugality, but certainly there is a growing demand by a younger generation for a lower net cost housing model.”

Willett adds that research typically paints Gen Z as a practical group with frugal spending patterns. “So many of them grew up in cash-strapped households. … Housing affordability has been a challenge for the group, especially for those with substantial student debt.”

However, these young adults do require strong, fast Internet and cellphone service.

“Tech is a deal breaker,” says Cirjakovic. “On a very basic level, reliable and robust service in apartments and common spaces is critical.”

Young renters are also more likely to expect their homes to include Internet-enabled devices like smart thermostats and electronic locks. Elie Rieder, CEO of Castle Lanterra Properties, says, “Smart homes are a gimmick to previous generations but a must for Generation Z, as conservation and control are simply standard with them.”

Being frugal, these younger renters are often less likely than older renters to pay a premium of extra rent for this Internet-enabled gear. “It will be the base expectation versus a differentiator for them,” says Rieder.

Gen Z May Choose Roommates Despite Pandemic

When times get tough, young renters often double up with roommates or move home to live with their parents for a time.

“Younger cohorts are typically disproportionately affected by employment losses in recessions, a fact already reflected in the April and May job reports,” says Andrew Rybczynski, managing consultant in the Boston office of CoStar Portfolio Strategy. “We expect household consolidation for economic reasons, which could also prevent move-outs from parents’ households.”

Apartment developers had begun to build new “co-living” communities based around the idea that renters would want to share space as roommates.

“The model of large-scale shared housing fits well with a desire for lowered costs and increased socialization, but it certainly doesn’t fit well with the need to quarantine,” says AvalonBay’s Hollinger. “If financing was tough before, it just got much tougher.”

In the aftermath of the pandemic, tough economic times and the ability to work remotely may steer young renters away from the most expensive urban markets, like San Francisco and New York City. “Markets with high rents will likely suffer the most, as Gen Z decides to seek markets where they can achieve a much more favorable balance,” says Cirjakovic.

Young renters may also have less need to live near job centers. “Post-pandemic, almost anyone who is not a service provider can potentially work remotely,” says Cirjakovic.

However, these young renters will probably still want live near entertainment, dining, and other people in their age group. “Culture, connectivity, and proximity to similar people will be the draw,” says Rieder. “True walkable live-work-play locations are key. That usually means very urban.”

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https://www.multifamilyexecutive.com/property-management/rent-trends/