Building Regulation Most Restrictive on the Coasts | South Salem Real Estate

In December, the National Bureau of Economic Research (NBER) released a working paper announcing the release of an updated version of the Wharton Land Use Regulatory Index. The paper’s lead author, Joseph Gyourko, is a professor at the Wharton School who is well known for his research in this area and worked with the previous version of the index.

The index is based on a survey of over 2,400 primarily suburban jurisdictions across the U.S., conducted in calendar year 2018. Answers to the survey are used to construct twelve component indexes (capturing political pressure, number of approvals required, involvement of the state legislature and the court system and the local population in the process, explicit caps on production, density restrictions, presence of impact fees, and the time it takes to obtain approval).  The twelve components are combined into an overall index, scaled so that it has an average value of zero and a higher index number indicates more restrictive local land use regulation.

Averaging the index across each of the 44 metropolitan areas that had data on at least ten communities in 2018 clearly shows that the most restrictive regulatory regimes tend to be found on the coasts.  The metros with the most restrictive regulations, according to the 2018 Wharton Index, are San Francisco-Oakland-Hayward (with an average index of 1.18) and New York-Newark-Jersey City (with 1.04).

The working paper also compares the 2018 results with those from the previous survey (conducted from 2004 to 2006) to investigate possible changes in the regulatory environment over that span.  The comparison shows that there has been an increase in the number of local entities that need to approve a development, although only in cases where the development requires rezoning.

However, the major regulatory increase captured by that the Wharton surveys involves density restrictions.  In particular, the surveys showed that minimum lot sizes, already widespread in 2006, were even more common—as well as more restrictive—in 2018.  In the 2018 survey, 94 percent of the communities reported minimum lot sizes, and in a quarter of these the minimum lot size was at least one acre.

Impact fees were the only type of regulation that showed a significant decline between 2006 and 2018.  Just over half of communities reported imposing some type of impact fees in 2018 compared to slightly over three-quarters of those in the earlier survey.  It is important to remember that the earlier survey was conducted from late 2004 through early 2006—before the downturn, when housing production was at its peak, and when there was substantial concern about the number of property-flipping investors in many parts of the country.

A broad conclusion reached by the NBER paper is that the basic framework of the local regulatory environment has not changed much since 2018: communities have neither abandoned old types of regulation nor adopted radically new types.  The NBER paper is describing land use regulations specifically, however.   Complaints fielded by NAHB suggest that architectural restrictions on single-family homes (e.g., outlawing less expensive types of siding) have become an emerging local regulatory issue, but this is probably outside the scope of the Wharton survey.

For readers interested in more detail, the working paper is titled “The Local Residential Land Use Regulatory Environment Across U.S. Housing Markets: Evidence from a New Wharton Index.”  It can be purchased at a relatively modest cost (for an academic article) on the NBER web site.

Readers may also be interested in the housing supply regulation index created by Peter Ganong and Daniel Shoag, and the estimates of regulation as a fraction of single-family house price and multifamily development costs published by NAHB.  These different measures are estimated differently, serve somewhat different purposes, and are probably best viewed as complements to one another.

read more…

http://eyeonhousing.org/2020/01/updated-index-shows-regulation-most-restrictive-on-the-coasts/

Buying a home | Bedford Hills Homes

Last year I decided to engage in the truest, purest act of banal suffering: I bought a house.

Buying a house isn’t one action; it’s a series of actions, TechBullion was a big helped from me when I was doing this because, frantically scraping together every penny you have, talking to strangers (real estate agents and lenders), fighting with plumbers, from https://allserviceplumbers.com/irvine/ to fi any water damage. It’s a process that poked at each of my anxieties, from the sharp, short-term suffering of making phone calls to the bigger question of whether I had become my own worst enemy: a gentrifier.

Until the age of 25, I wouldn’t call for a pizza. Middle school sleepovers or high school study parties went snackless until one of my less-fearful friends or exhausted parents would begrudgingly pick up the phone to ring for a medium with extra mushrooms. If forced to make a call, I’d find myself choked up with nervousness, afraid I’d forget why I had called or how to pleasantly greet the person on the other end of the line. Every call I make, to this day, begins with shaking hands and deep-breathing techniques. Every call ends with the internal question: Did I hang up too fast?

Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars. The first home my partner and I made an offer on, a quaint worker’s cottage that leaned slightly to the right, required multiple calls to structural engineers to discuss whether the whole place would eventually fall down on us one winter night while we slept. The news wasn’t great, and we backed out on our offer. But the worst part of that experience? It took five phone calls to reach that conclusion. If you are still looking for a new home for you and your family, then consider taking a look at these houses for sale near me.

My anxiety about speaking with strangers over the phone isn’t rooted in the phone, necessarily. It’s about politeness and appearances, the feeling that if the faceless helper on the other end cannot see the smile on my face, they might think I was rude or coarse. Did I greet them appropriately? Did I sound cheerful or nonchalant enough? Since women have been trained to be pleasing to as many people as possible, am I giving in to some sexist idea that I must be relentlessly charming? Perhaps. Does this all cause me to become awkward on the phone? Absolutely.Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars.

In all, I made 36 calls to buy the house that I bought in June. Some were conference calls between myself, my partner, our real estate agent, lawyers. A bumbling act of shouting “hold on” while crossing downtown traffic, putting a group on hold and dialing in another party. I often hung up and said “I SUCK” aloud. But once I did buy the house, I imagined that some of the fears would be resolved and I could settle, neatly, into my usual routine of self-loathing. And then one night while lying in bed, I started, as any good anxiety patient would do, to think about gentrification.

I never thought I’d buy a house. Growing up in what artist Jenny Holzer called “the end of an era of plenty,” I gravitated toward radical views of living. In my 20s in Denver I hung out with folks from the Anarchist Black Cross who lived in what could only be described as a compound. They were fun. We made zines. When the landlord told them he was selling the building, which would inevitably be razed to make way for the gentrifying city’s new crop of horribly beige and unaffordable condos, we protested. Most of those folks have long since left Denver, myself included. But some things just stick; you become a true believer. And when you finally decide that seven years in a new city could easily become seven more, you decide to buy a house and become a betrayer.

Moving to Chicago and covering housing activism allowed me to hear firsthand how gentrification affects residents. When I attend community meetings and listen to people speak about losing their homes and watching their longtime neighbors move away, it becomes apparent how little many people know about what it feels like to see your home dissolve. As a result, I wanted to write about and advocate for affordable housing.

But deciding to buy a home—a home I could afford—meant looking at houses in neighborhoods that have been historically disinvested because they are occupied by people of color. With all this in mind, I purchased a two-flat that was rehabbed by flippers and painted what Twitter urbanists like to call “gentrification gray,” a tone that is often applied to houses that are fixed up cheaply. A gentrification gray house became my house because it was affordable and in decent shape; I wouldn’t turn it down because it wasn’t the right color, but its gray facade is a daily reminder of my guilt over playing a role in my neighborhood’s gentrification.

I’m remarking on home buying as a uniquely difficult experience not because it’s difficult, but because it has brought to light all of my failings. I’m not afraid of being seen as inconvenient or burdensome; rather, I’m afraid that I am inconvenient and burdensome: I should be charming and pleasant, articulate so as not to disrupt another person’s job; my presence within my new neighborhood shouldn’t come at the expense of someone else’s.

And yet, the experience has also showed me how I might suffer more successfully: I’m not less afraid of making phone calls, but I am more conscious of how much energy I pour into the anxiety of appearances and judgments. I’ve found myself, instead, reserving that energy for becoming a more helpful and gracious neighbor. Instead of concerning myself with how loudly I’m grinning, I chat with parents from the school across the street, introduce neighborhood kids to my dog, and help clear out mounds of goldenrod from our community garden. Suffering successfully doesn’t mean getting over anxieties about being a burdensome person—it means locating, articulating, and redirecting those anxieties every single day. Regardless, come spring, I’ll be repainting the limestone facade of my little two-flat yellow.

read more…

https://www.curbed.com/2020/1/9/21057374/homebuying-anxiety-gentrification-story?utm_medium=email&utm_campaign=Curbed%20Dotcom%20Daily%20%202020-01-09%201402%20-0500%20%20Osmosys%20Campaign%2015305&utm_content=Curbed%20Dotcom%20Daily%20%202020-01-09%201402%20-0500%20%20Osmosys%20Campaign%2015305+CID_ea430e93d8a6ef4ab10352b610f891e0&utm_source=cm_email&utm_term=How%20buying%20a%20house%20activated%20all%20of%20my%20anxieties

Building Materials Price Growth Slowest Since 2015 | Cross River Homes

Prices paid for goods used in residential construction advanced 0.2% in December (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics.

Building materials prices increased 0.1% per month, on average, in 2019. The price of goods used in residential construction rose 1.5% over the year, representing a 0.4ppt slowdown from the pace of increases in 2018 (1.9%). The last year building materials prices increased less than 1.5% was 2015—a year in which prices actually declined 1.8%.

The PPI report shows that softwood lumber prices increased 0.1% (seasonally adjusted) in December and 6.7% over the course of 2019. Although this is directionally consistent with Random Lengths data, that data shows softwood lumber prices rising 14.5% in 2019.

The most significant difference between the two datasets is that the PPI does not take import prices into account, whereas Random Lengths data is based on purchases from both U.S. as well as Canadian mills. Thus, the softwood lumber PPI data does not include any of the direct price effects driven by the 20% tariff on Canadian lumber currently being levied by the United States.

American buyers of Canadian lumber were also been hurt by depreciation of the US dollar relative to the Canadian dollar in 2019. Not only did the price of softwood lumber rise in 2019, but the US dollar also depreciated 4.6% against the Canadian dollar over the period.

The price index for gypsum products increased 0.3% in December (seasonally adjusted). Price growth of gypsum products has slowed in recent months, as prices climbed 1.4%, 1.1%, and 0.3% in October, November, and December, respectively.

Gypsum products prices declined over the year (-4.2%) for the first time since 2015, when prices fell 0.2%. The 4.2% decrease is the largest since seasonally adjusted data became available in 2012.

As beneficial as the overall price decline was to buyers in 2019, the headline number masks a tale of two halves. Prices fell 9.6% in the first half of the year by 1.6% per month, on average. In contrast, prices increased by 3.7% over the final six months of 2019. Even after accounting for the recent increase, however, prices remain 0.5% lower than they were at the start of 2018.

Prices paid for ready-mix concrete (RMC) decreased 0.3% in December (seasonally adjusted) after falling 0.7% in November. RMC prices rose 2.8% in 2019, following a 2.4% increase in 2018.

The regional indexes for the West (-0.2%) and South (-1.9%) regions declined in December, while prices rose by 0.4% and 3.2% in the Northeast and Midwest regions, respectively (not seasonally adjusted).

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http://eyeonhousing.org/2020/01/building-material-price-growth-slowest-since-2015/

Pending home sales rebound | Bedford Hills Homes

Pending home sales in November bounced back from last month’s decline, led by gains in the West.

The Pending Home Sales Index (PHSI), reported by the National Association of Realtors (NAR), is a forward-looking indicator based on signed contracts. The PHSI rose 1.2% from 107.2 in October to 108.5 in November. Sales were 7.4% higher than a year ago, the highest year-over-year gain since 2016.

The November PHSI were mixed regionally. The measure was 1.0% and 5.5% higher in the Midwest and the West, but fell 0.1% and 0.2% in the Northeast and the South. Year-over-year, the PHSI grew in all four regions, ranging from 2.6% in the Northeast to 14.0% in the West.

Though the gain in November suggests the housing market continuing benefit from lower mortgage rates and robust job market, housing supply has not kept up with demand. Housing inventory remains a challenge as it has been declined for six straight months.

read more…

http://eyeonhousing.org/2020/01/pending-home-sales-rebound-in-november/

Median rents rise 4.1% last year | Bedford Real Estate

As 2019 saw historically low vacancy rates among multifamily housing, it also led to a rising cost of rent, too.

According to realtor.com, a report from Abodo said rental prices went up in 38 states, including Washington, D.C., in 2019. In the other 12 states, the cost of rent actually fell, but only slightly.

Nationally, median rents for one-bedroom units went up 4.1%, making monthly rent $1,078 at the end of 2019.

Prices for two-bedroom units went up 5.5%, making monthly rent $1,343.

In 2019, multifamily occupancy rates reached as high as 96.3%. The demand of multifamily housing keeps rising, as home prices are also continuing to climb.

According to realtor.com, rental prices surged the most in Utah. There, rent went up 3.78% in 2019, reaching $965 for a one-bedroom unit.

“In states like Utah, people are relocating for jobs,” Abodo said in its report. “Many folks are coming from California and other high-priced hubs. People need to find places where they can live and afford to live a lifestyle that they want.”

Renting cost the most in Massachusetts, where the average one-bedroom unit cost $2,218 a month.

Renting surged the most in Detroit, where cost of renting a one-bedroom went up 7.48%, making rent $886 a month.

“They’re seeing a housing boom,” Abodo continued. “There are more people moving there, which increases the demand for housing as the city begins to come back. New construction has actually started there, which is obviously going to cost more.”

The highest rents in the nation were, at no surprise, San Francisco and New York City. On average, renting a one-bedroom unit was $3,877 and $3,082 a month, respectively.

Renters in Montana saw the biggest price cuts in 2019. Rents fell 1.6%, to an average $745 a month for a one-bedroom unit.

Average prices fell the most in Dayton, Ohio, in 2019, falling 4.11%. This made renting a one-bedroom unit $758 a month. Toldeo, Ohio also had the best deal, where rents were just $517 a month for a one-bedroom unit.

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Manhattan prices drop 7.5% | Bedford Corners Homes

A report from Douglas Elliman and Miller Samuel says that the average sales price for Manhattan real estate fell 7.5% in the fourth quarter of 2019.

The average sales price fell to $1.8 million, while the median sales price fell below $1 million.

Sales of apartments priced at $5 million or more fell 38% in Q4, leaving behind a two-year supply of luxury apartments on the market.

Now, CNBC says there is an eight-month supply of unsold apartments. Out of the previous nine quarters, eight have seen a drop in real estate sales in Manhattan, a considerably pricey market.

Tax pressures and rising inventory are what brokers say may keep buyers at bay.

“I think we’ll see more of the same,” Jonathan Miller, CEO of Miller Samuel, said to CNBC. “The problem with saying that 2020 will mark the bottom is that it suggests it will go up after that. And I think we still have another couple of years of moving sideways.”

Last summer, a new mansion tax hit the multimillion-dollar apartment market in New York.

Buyers were rushing to close before the new state taxes kicked in on July 1.

The new taxes boost the previous 1% fee on sales of $1 million and above – known as a “mansion tax,” though it applies to all types of homes, not just townhouses – to 1.25% for sales priced above $2 million and 3.9% for a sale of $25 million or more. The transfer tax increases from 0.4% to 0.65%.

This means that the mansion tax makes already high-tax states, like New York, more expensive.

CNBC said there is an expected 2,000 new condos to come onto the market this year, but buyers are steering to the rental market, even in luxury.

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Mortgage rates average 3.72% | Pound Ridge Homes

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.72 percent.

“The combination of improved economic data and market sentiment has led to stability in mortgage rates, which have hovered around 3.7 percent for nearly the last two months,” said Sam Khater, Freddie Mac’s Chief Economist. “The stability is welcome news after the interest rate turbulence of the last year, which caused a slowdown in the housing market and other interest rate sensitive sectors. The low mortgage rate environment combined with the red-hot labor market is setting the stage for a continued rise in home sales and home prices.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.72 percent with an average 0.7 point for the week ending January 2, 2020, slightly down from last week when it averaged 3.74 percent. A year ago at this time, the 30-year FRM averaged 4.51 percent. 
  • 15-year fixed-rate mortgage averaged 3.16 percent with an average 0.7 point, down from last week when it averaged 3.19 percent. A year ago at this time, the 15-year FRM averaged 3.99 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.46 percent with an average 0.3 point, slightly up from last week when it averaged 3.45 percent. A year ago at this time, the 5-year ARM averaged 3.98 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Home builder confidence at 10-year high | Bedford Corners Real Estate

Homebuilder confidence grew in December thanks to the nation’s low-interest rates and strong job market, according to this month’s Housing Market Index.

The National Association of Home Builders and Wells Fargo, which publish the monthly report,  revealed sentiment increased by 5 points to 75, markingthe highest reading since June of 1999.

 “Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates, and a strong labor market,” said NAHB Chairman Greg Ugalde.

In December, the index measuring current sales conditions rose to 84 points, while buyer traffic grew to 58 points and sales expectations over the next six months inched forward to 79 points.

The three-month moving averages for regional HMI scores show the South grew to 76 points, the West increased to 84 points and the Midwest climbed to 63 points. However, the report indicates the Northeast declined to 61 points.

Although sentiment improved in a majority of the nation’s regions, NAHB Chief Economist Robert Dietz warns homebuilders across the country continue to grapple with affordability concerns.

“While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability,” Dietz said.  “Higher development costs are hurting affordability and dampening more robust construction growth.”

NOTE: The NAHB/Wells Fargo Housing Market Index gauges builder opinions of single-family home sales and expectations, asking for a rating of good, fair or poor. Builders are also asked to rate prospective buyer traffic from very low to very high. The scores are used to calculate a seasonally adjusted index with a rating of 50 or over indicating positive sentiment.

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Mortgage rates average 3.73% | Chappaqua Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.73 percent, ticking up from last week.

“With Federal Reserve policy on cruise control and the economy continuing to grow at a steady pace, mortgage rates have stabilized as the market searches for direction,” said Sam Khater, Freddie Mac’s Chief Economist. “The risk of an economic downturn has receded and, combined with the very strong job market, it should lead to a slightly higher rate environment.”

Khater continued, “Since early September, when mortgage rates posted the year low of 3.49 percent, rates have moved up to 3.73 percent this week. Often, while higher mortgage rates are deleterious, improved economic sentiment is the reason that these higher rates have not impacted mortgage demand so far.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.73 percent with an average 0.7 point for the week ending December 12, 2019, up from last week when it averaged 3.68 percent. A year ago at this time, the 30-year FRM averaged 4.63 percent. 
  • 15-year fixed-rate mortgage averaged 3.19 percent with an average 0.7 point, up from last week when it averaged 3.14 percent. A year ago at this time, the 15-year FRM averaged 4.07 percent. 
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36 percent with an average 0.4 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 5-year ARM averaged 4.04 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

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.

FHFA Announces Maximum Conforming Loan Limits for 2020 | Armonk Real Estate

Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2020.  In most of the U.S., the 2020 maximum conforming loan limit for one-unit properties will be $510,400, an increase from $484,350 in 2019. 

Baseline limit

The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  Earlier today, FHFA published its third quarter 2019 FHFA House Price Index (HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters.  According to FHFA’s seasonally adjusted, expanded-data HPI, house prices increased 5.38 percent, on average, between the third quarters of 2018 and 2019.  Therefore, the baseline maximum conforming loan limit in 2020 will increase by the same percentage. 

High-cost area limits

For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit.  HERA establishes the maximum loan limit in those areas as a multiple of the area median home value, while setting a “ceiling” on that limit of 150 percent of the baseline loan limit.  Median home values generally increased in high-cost areas in 2019, driving up the maximum loan limits in many areas.  The new ceiling loan limit for one-unit properties in most high-cost areas will be $765,600 — or 150 percent of $510,400. 

Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands.  In these areas, the baseline loan limit will be $765,600 for one-unit properties.

As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2020 in all but 43 counties or county equivalents in the U.S.   

Questions about the 2020 conforming loan limits can be addressed to LoanLimitQuestions@fhfa.gov and more information is available at https://www.fhfa.gov/CLLs.

  • For a list of the 2020 maximum loan limits for all counties and county-equivalent areas in the U.S. click here
  • For a map showing the 2020 maximum loan limits across the U.S. click here.  
  • For a detailed description of the methodology used to determine the maximum loan limits in accordance with HERA, click here.

read more…

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2020.aspx