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CoreLogic reports prices up 20% | Bedford Real Estate

The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through February 2022 and forecasts through February 2023.

CoreLogic HPI™ is designed to provide an early indication of home price trends. The indexes are fully revised with each release and employ techniques to signal turning points sooner. CoreLogic HPI Forecasts™ (with a 30-year forecast horizon), project CoreLogic HPI levels for two tiers—Single-Family Combined (both Attached and Detached) and Single-Family Combined excluding distressed sales.

The report is published monthly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes home price indices (including distressed sale); home price forecast and market condition indicators. The data incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.

HPI National Change

February 2022 National Home Prices

Home prices nationwide, including distressed sales, increased year over year by 20% in February 2022 compared with February 2021. On a month-over-month basis, home prices increased by 2.2% in February 2022 compared with January 2022 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).

Forecast Prices Nationally

The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.6% from February 2022 to March 2022 and on a year-over-year basis by 5% from February 2022 to February 2023.

Figure 1  HPI National Change

HPI & Case-Shiller Trends

This graph shows a comparison of the national year-over-year percent change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to present month with forecasts one year into the future. We note that both the CoreLogic HPI Single Family Combined tier and the CoreLogic Case-Shiller Index are posting positive, but moderating year-over-year percent changes, and forecasting gains for the next year.

Economic Impact on Home Prices

U.S. home price growth registered a year-over-year increase of 20% in February, another series high and marking 12 months of consecutive double-digit gains. Annual price growth has been recorded every month for the past decade. While prospective buyers outnumber sellers, a record-low number of homes for sale remains the primary culprit for the rapid price gains. The CoreLogic HPI Forecast shows national year-over-year appreciation slowing to 5% by February 2023, as rising interest rates are expected to sideline even more buyers.

“New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price. This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months. Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast.”

– Dr. Frank Nothaft 
Chief Economist for CoreLogic

HPI National and State Maps – February 2022

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

Nationally, home prices increased 20% year over year in February. No states posted an annual decline in home prices. The states with the highest increases year-over-year were Florida (29.1%), Arizona (28.6%) and Nevada (25.8%).

Figure 4 HPI Change By State

HPI Top 10 Metros Change

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

These large cities continued to experience price increases in February, with Phoenix on top at 30.4% year over year.

Markets to Watch: Top Markets at Risk of Home Price Decline

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Lake Havasu-Kingman, Arizona is at a high risk (50-70% probability) of a decline in home prices over the next 12 months. Prescott, Arizona is also at high risk (50-70%), while Bridgeport-Stamford-Norwalk, Connecticut; Hartford, Connecticut; and Urban Honolulu, Hawaii, are at a moderate risk (25-50%) of a decline.  

Summary

CoreLogic HPI features deep, broad coverage, including non-disclosure state data. The index is built from industry-leading real-estate public record, servicing, and securities databases—including more than 40 years of repeat-sales transaction data—and all undergo strict pre-boarding assessment and normalization processes.

CoreLogic HPI and HPI Forecasts both provide multi-tier market evaluations based on price, time between sales, property type, loan type (conforming vs. non-conforming) and distressed sales, helping clients hone in on price movements in specific market segments.

Updated monthly, the index is the fastest home-price valuation information in the industry—complete home-price index datasets five weeks after month’s end. The Index is completely refreshed each month—all pricing history from 1976 to the current month—to provide the most up-to-date, accurate indication of home-price movements available.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — “Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.

About Market Risk Indicator

Market Risk Indicators are a subscription-based analytics solution that provide monthly updates on the overall “health” of housing markets across the country. CoreLogic data scientists combine world-class analytics with detailed economic and housing data to help determine the likelihood of a housing bubble burst in 392 major metros and all 50 states. Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction. 

Source: CoreLogic
The data provided are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be resold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data are illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website.

For questions, analysis or interpretation of the data, contact Robin Wachner at  newsmedia@corelogic.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. The data are compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

Illustrated Report Highlights

As a courtesy you can download the national historic HPI data here. (Note: this link is a national historical trend report and not the current month CoreLogic Home Price Insights report).

About CoreLogic

CoreLogic is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, wo

The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through February 2022 and forecasts through February 2023.

CoreLogic HPI™ is designed to provide an early indication of home price trends. The indexes are fully revised with each release and employ techniques to signal turning points sooner. CoreLogic HPI Forecasts™ (with a 30-year forecast horizon), project CoreLogic HPI levels for two tiers—Single-Family Combined (both Attached and Detached) and Single-Family Combined excluding distressed sales.

The report is published monthly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes home price indices (including distressed sale); home price forecast and market condition indicators. The data incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.

HPI National Change

February 2022 National Home Prices

Home prices nationwide, including distressed sales, increased year over year by 20% in February 2022 compared with February 2021. On a month-over-month basis, home prices increased by 2.2% in February 2022 compared with January 2022 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).

Forecast Prices Nationally

The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.6% from February 2022 to March 2022 and on a year-over-year basis by 5% from February 2022 to February 2023.

Figure 1  HPI National Change

HPI & Case-Shiller Trends

This graph shows a comparison of the national year-over-year percent change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to present month with forecasts one year into the future. We note that both the CoreLogic HPI Single Family Combined tier and the CoreLogic Case-Shiller Index are posting positive, but moderating year-over-year percent changes, and forecasting gains for the next year.

Economic Impact on Home Prices

U.S. home price growth registered a year-over-year increase of 20% in February, another series high and marking 12 months of consecutive double-digit gains. Annual price growth has been recorded every month for the past decade. While prospective buyers outnumber sellers, a record-low number of homes for sale remains the primary culprit for the rapid price gains. The CoreLogic HPI Forecast shows national year-over-year appreciation slowing to 5% by February 2023, as rising interest rates are expected to sideline even more buyers.

“New listings have not kept up with the large number of families looking to buy, leading to homes selling quickly and often above list price. This imbalance between an insufficient number of owners looking to sell relative to buyers searching for a home has led to the record appreciation of the past 12 months. Higher prices and mortgage rates erode buyer affordability and should dampen demand in coming months, leading to the moderation in price growth in our forecast.”

– Dr. Frank Nothaft 
Chief Economist for CoreLogic

HPI National and State Maps – February 2022

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

Nationally, home prices increased 20% year over year in February. No states posted an annual decline in home prices. The states with the highest increases year-over-year were Florida (29.1%), Arizona (28.6%) and Nevada (25.8%).

Figure 4 HPI Change By State

HPI Top 10 Metros Change

The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

These large cities continued to experience price increases in February, with Phoenix on top at 30.4% year over year.

Markets to Watch: Top Markets at Risk of Home Price Decline

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Lake Havasu-Kingman, Arizona is at a high risk (50-70% probability) of a decline in home prices over the next 12 months. Prescott, Arizona is also at high risk (50-70%), while Bridgeport-Stamford-Norwalk, Connecticut; Hartford, Connecticut; and Urban Honolulu, Hawaii, are at a moderate risk (25-50%) of a decline.  

Summary

CoreLogic HPI features deep, broad coverage, including non-disclosure state data. The index is built from industry-leading real-estate public record, servicing, and securities databases—including more than 40 years of repeat-sales transaction data—and all undergo strict pre-boarding assessment and normalization processes.

CoreLogic HPI and HPI Forecasts both provide multi-tier market evaluations based on price, time between sales, property type, loan type (conforming vs. non-conforming) and distressed sales, helping clients hone in on price movements in specific market segments.

Updated monthly, the index is the fastest home-price valuation information in the industry—complete home-price index datasets five weeks after month’s end. The Index is completely refreshed each month—all pricing history from 1976 to the current month—to provide the most up-to-date, accurate indication of home-price movements available.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — “Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.

About Market Risk Indicator

Market Risk Indicators are a subscription-based analytics solution that provide monthly updates on the overall “health” of housing markets across the country. CoreLogic data scientists combine world-class analytics with detailed economic and housing data to help determine the likelihood of a housing bubble burst in 392 major metros and all 50 states. Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction. 

Source: CoreLogic
The data provided are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be resold, republished or licensed to any other source, including publications and sources owned by the primary recipient’s parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data are illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website.

For questions, analysis or interpretation of the data, contact Robin Wachner at  newsmedia@corelogic.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. The data are compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

Illustrated Report Highlights

As a courtesy you can download the national historic HPI data here. (Note: this link is a national historical trend report and not the current month CoreLogic Home Price Insights report).

About CoreLogic

CoreLogic is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, wo rkflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.

rkflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.

The campaign to ban gas stoves | Bedford Real Estate

Over the past three years, dozens of cities across the country have banned natural gas hookups in newly constructed buildings as part of a growing campaign to reduce carbon emissions from homes. The movement scored a major victory last month, when New York City’s outgoing Mayor Bill de Blasio signed into law a ban on gas hookups in new buildings.

Though new laws apply to the entire home, the policy debate often focuses on one room in particular: the kitchen. Gas stoves account for a relatively small share of the emissions released by a typical household, but they’ve become a proxy for a larger fight over how far efforts to curb at-home natural gas consumption in the name of fighting climate change should go.

Natural gas consumption accounts for 80 percent of fossil fuel emissions from residential and commercial buildings, according to the Environmental Protection Agency. One study estimated that New York’s ban on its own would create an emissions reduction comparable to taking 450,000 cars off the road. But the movement has met significant pushback. About 35 percent of U.S. homes use gas for cooking, and surveys show that many people are resistant to switching to an electric or induction range. The gas industry has also launched a massive lobbying campaign that has helped convince 19 Republican-led states to preemptively bar local governments from imposing bans on natural gas.

Beyond the climate implications of natural gas in general, there is also a movement to phase out gas stoves because of the harmful pollutants they release inside the home. Cooking on a gas stove releases nitrogen dioxide, carbon monoxide and formaldehyde, chemicals that have been connected with negative health conditions like asthma, with particular risk to children. One study found that gas stoves can create levels of nitrogen dioxide indoors exceeding the legal limits for outdoor air.

Why there’s debate

The debate over gas stoves is really a two-part conversation, with one element focusing on the environmental harms of at-home natural gas consumption in general, and the other specifically on the indoor pollution that gas cooktops create.

Climate change activists see gas bans as a powerful way to reduce the greenhouse gases created by buildings, which account for about 13 percent of total U.S. emissions. They argue that — unlike burgeoning technologies like a green power grid and electric vehicles — clean alternatives to gas heaters, appliances and stoves are readily available to most consumers. Critics of the bans, on the other hand, are skeptical of how much they’ll really reduce emissions, worry about increasing costs for homeowners and argue that market-based solutions will be most effective at promoting a transition to electrified homes.

When it comes to health, advocates say gas stoves are simply too toxic to be installed in new homes. They call for governments to create financial incentives to help homeowners switch to electric or induction stoves, an expense they argue will ultimately save money relative to the cost of potential health problems.

The gas industry makes the case that with proper ventilation, gas stoves can be safe. Conservatives also take issue with the idea of the government limiting individual choice. Others argue that focusing on gas stoves, a product many people have an intense loyalty to, will only increase resistance to electrification as a whole.

What’s next

The list of cities to ban gas hookups in new construction appears primed to grow in the coming years, and opposition is likely to ramp up in response. So far, no statewide bans have been put in place. California has come the closest. Starting next year, all homes built in the state may be required to be wired so they’re “electric ready” even if they have gas appliances installed. In New York, Gov. Kathy Hochul has proposed a statewide ban as part of a multipronged initiative to combat climate change.

Perspectives

Supporters

Gas bans are the only way to meaningfully reduce emissions from the home

“For the individual homeowner, as for society at large, managing harmful pollution eventually starts to seem a little silly when equally effective, affordable, and pollution-free alternatives are available. It’s time to start making new buildings all-electric and switching out all those existing gas appliances, including gas stoves, for electric alternatives.” — David Roberts, Vox

Gas stoves are a great entry point for the broader effort to electrify homes

“The humble stove may seem like a tiny part of a big problem — but it’s one of our most personal, immediate and tangible. It’s also one of the easiest to change.” — Brady Seals, Guardian

A combination of legal limits and financial incentives could supercharge a shift away from gas

“The government could speed things up mightily with subsidies and regulation. If the state provided a big credit for property owners to replace their gas stoves, with particular attention on older stoves in apartment buildings (they often leak or burn very inefficiently), and set up new regulations on the amount of air pollution appliances could produce that would gradually tighten over time, gas cooking could be replaced entirely.” — Ryan Cooper, the Week

Gas stoves are toxic to our health

“Cooking is the No. 1 way you’re polluting your home. It is causing respiratory and cardiovascular health problems; it can exacerbate flu and asthma and chronic obstructive pulmonary disease in children. … You’re basically living in this toxic soup.” — Shelly Miller, environmental engineer, to Mother Jones

Electrification of homes is one of the few climate transitions that’s possible right now

“Real estate developers already have most of the technology to replace furnaces with heat pumps, hot water heaters with electric boilers, and gas stoves with induction cooktops. And because cities and towns control building and energy codes, it’s one of the few areas where they have the power to push through deep emission cuts.” — Ysabelle Kempe, Grist

Climate change is too important to leave up to the free market

“The pursuit of market-based solutions … as a pathway to addressing the energy transition in low-income and disadvantaged communities is likely infeasible, and also ethically dubious. Market-based solutions have not achieved their desired goals, thus new ways of thinking need to emerge.” — Multiple authors, the Appeal

Opponents

Gas bans rob consumers of their freedom to choose what to have in their homes

“As for the gas stove, it’s the next target for elimination, because it uses gas. The Left, if they get control of everything, would ban it from new manufacture nationwide and then ban its replacement and ownership. … If someone in Montana or Florida or Seattle says, ‘But I prefer gas,’ you can only roll your eyes.” — James Lileks, National Review

The free market will be much more effective at promoting a transition from gas

“With respect to the goal of reducing greenhouse gas emissions, there would be no need to mandate building electrification if it were already cheaper than the fossil fuel alternatives for heat, hot water, and cooking. … In other words, the adoption of electric home heating has been proceeding expeditiously without mandates.” — Ronald Bailey, Reason

Attacking gas stoves is a great way to turn people off from electrification in general

“Home kitchens thus account for about 0.4% of U.S. natural gas use. … That’s not a lot! Gas cooking does, however, seem likely to be the biggest obstacle to the effort to electrify the American home in the name of slowing climate change. Why’s that? Mainly because people (myself included) like cooking with gas! It’s one of the few energy uses that inspires brand loyalty to the fuel consumed.” — Justin Fox, Bloomberg

Gas bans will actually increase emissions without a green energy grid

“It has evolved into the transitional fuel of our time, allowing the U.S. to quickly ditch coal while giving renewables time to expand to the scale needed to power the entire electricity-hungry country. Once those renewables have reached that scale, banning natural gas in residential construction starts making environmental sense. Until then, these proposals are ultimately increasing our carbon footprint.” — Ognjen Miljanić, The Hill

Gas stoves aren’t ideal, but aren’t as harmful as critics make them out to be

“It’s a good choice to avoid gas if you’re replacing your stove anyway. … But if you’re looking for personal ways to protect the environment and your health right now, you have much bigger fish to fry. Electrifying your space- and water-heating systems, or your car, will have a massively larger impact, as will ventilating your kitchen.” — Liam McCabe, New York Times.

read more…

news.yahoo.com/

NAR reports exisiting home sales fell 2% | Bedford Real Estate

Fueled by low mortgage interest rates and strong demand, existing home sales increased for a third straight month in November, according to the National Association of Realtors (NAR). However, supply has continued to lag due to ongoing supply-chain disruptions, keeping home price elevated and pricing out first-time and young buyers.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 1.9% to a seasonally adjusted annual rate of 6.46 million in November, the highest level since January. However, on a year-over-year basis, sales were 2.0% lower than a year ago, the fourth annual decline since August 2020.

The first-time buyer share fell to 26% in November, down from 29% in October and down from 32% a year ago. The November inventory level declined from 1.23 to 1.11 million units and is still down from 1.28 million units a year ago.

At the current sales rate, November unsold inventory sits at a 2.1-month supply, down from 2.3 month both last month and a year ago. This low supply of resale homes is good news for home construction.

Homes stayed on the market for an average of just 18 days in November, to the same as October and down from 21 days a year ago. In November, 83% of homes sold were on the market for less than a month.

The November all-cash sales share was 24% of transactions, equal to October’s share and up from 20% a year ago.

Tight supply continues to push up home prices. The November median sales price of all existing homes was $353,900, up 13.9% from a year ago, representing the 117th consecutive month of year-over-year increases, the longest-running streak on record. The median existing condominium/co-op price of $283,200 in November was up 4.4% from a year ago.

Geographically, three of four regions saw an increase in existing home sales in November, ranging from 0.7% in the Midwest to 2.9% in the South. Sales in the Northeast remained flat in November. On a year-over-year basis, however, sales declined in three major regions, ranging from 0.7% in the Midwest to 11.6% in the Northeast.

Meanwhile, the Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI increased 7.5% from 116.5 to 125.2 in October. On a year-over-year basis, sales were 1.4% lower than a year ago per the NAR data.

read more…

eyeonhousing.org

Fleeing NYC residents return after Covid | Bedford Real Estate

Since July 2021, the city has gained an estimated 6,332 permanent movers, indicating a gradual return to New York City.

Residents who fled New York City during the early days of the pandemic, particularly the wealthiest neighborhoods, are beginning to return.

New York City Comptroller Scott Stringer released a comprehensive analysis earlier this week (Nov. 15) of the pandemic’s impact on monthly migration patterns into and out of the city. Using data published by the United States Postal Service (USPS) from change of address forms, the analysis confirms that New York City’s net residential out-migration tripled from 2019 to 2020. The data show that the city’s wealthiest neighborhoods experienced the most population loss; residents in the wealthiest 10% of city neighborhoods, as measured by median income, were 4.6 times more likely to move than other residents during 2020.

In more recent months, the reopening of office buildings, the return of in-person school, and the rebirth of arts and entertainment have helped to attract movers to the city. Since July 2021, USPS data has shown an estimated net gain of 6,332 permanent movers, mainly in neighborhoods that experienced the greatest flight, according to the report.

“New York City is steadily reopening and New Yorkers are returning to the city we love—that’s why it’s vital that we invest in the value proposition that is New York City and make sure we continue to be the best place to live, work, and raise a family,” said New York City Comptroller Stringer. “That means investing in our classrooms and teachers so our children get the very best education, investing in affordable and accessible child care so parents can return to work, and investing in our streetscapes and green spaces to ensure that our neighborhoods are walkable and breathable. We have a once-in-a-generation opportunity to reimagine our city and build back stronger than ever from the losses of the pandemic.”

Despite recent gains, certain neighborhoods have a long road ahead to regain pre-pandemic population. Whether or not these gains continue and accelerate will depend on the trajectory of the pandemic and the city’s ability to maintain in-person activities and attractions, as well as the endurance of telework arrangements and workers’ ability and desire to live farther from their place of work as commuting becomes less burdensome.

Major findings of the analysis include:

• In the first three months of the pandemic, from March to May 2020, more than 60% of net moves from city addresses were marked as temporary, indicating that the person or household intended to return, but since then 79% of net moves have been marked as permanent.

• Excluding moves marked as “temporary,” net out-migration from the city increased by an estimated 130,837 from March 2020 through June 2021, as compared to pre-pandemic trends.

• Residents from the city’s wealthiest neighborhoods were the most likely to leave. Residents in the wealthiest 10% of city neighborhoods, as measured by median income, were 4.6 times more likely to leave than other residents during 2020, recording 109 net move-outs per 1,000 residents vs 24 elsewhere. Moves from wealthier neighborhoods were also more likely to be recorded as temporary. About half of net out-migration from the wealthiest 10% of neighborhoods was marked as temporary in 2020, compared to 44% in the next wealthiest decile and less than 30% elsewhere.

• In September 2021, New York City public schools and colleges opened to full-time, in-person learning; some employers, including city government, called office workers back; and the curtains rose on Broadway after an 18-month shutdown. Not surprisingly, these events coincided with an improvement in net residential migration to the city, particularly in the neighborhoods that experienced the greatest flight in the spring of 2020.

• Since July 2021, USPS data has shown an estimated net gain of 6,332 permanent movers, indicating a gradual return to New York City, mainly in neighborhoods that experienced the greatest flight. On a per-capita basis, the largest net gains over the summer were in Chelsea/Midtown, Murray Hill/Gramercy, Battery Park City/Greenwich Village, and Chinatown/Lower East Side.

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realestateindepth.com/news/

New York Case Shiller Index price rises 17% | Bedford 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 August 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 19.8% annual gain in August, remaining the same as the previous month. The 10-City Composite annual increase came in at 18.6%, down from 19.2% in the previous month. The 20-City Composite posted a 19.7% year-over-year gain, down from 20.0% in the previous month.

Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in August. Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a 26.2% increase and Tampa with a 25.9% increase. Eight of the 20 cities reported higher price increases in the year ending August 2021 versus the year ending July 2021. 

MONTH-OVER-MONTH

Before seasonal adjustment, the U.S. National Index posted a 1.2% month-over-month increase in August, while the 10-City and 20-City Composites both posted increases of 0.8% and 0.9%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.4%, and the 10-City and 20-City Composites both posted increases of 0.9% and 1.2%, respectively. In August, all 20 cities reported increases before and after seasonal adjustments.

ANALYSIS

“The U.S. housing market showed continuing strength in August 2021,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.

“In August 2021, the National Composite Index rose 19.84% from year-ago levels, marginally ahead of July’s 19.75% increase. This slowing acceleration was also evident in our 10- and 20-City Composites, which rose 18.6% and 19.7% respectively, modestly less than their rates of gain in July. Price gains were once again broadly distributed, as all 20 cities rose, although in most cases at a slower rate than had been the case a month ago.

“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. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred anyway over the next several years, or reflects a secular change in locational preferences. August’s data are consistent with either explanation. August data also suggest that the growth in housing prices, while still very strong, may be beginning to decelerate.

“Phoenix’s 33.3% increase led all cities for the 27th consecutive month. San Diego (+26.2%) continued in second place, but in August, Tampa (+25.9%) edged Dallas and Seattle for the bronze medal. As has been the case for the last several months, prices were strongest in the Southwest (+24.1%), but every region logged double-digit gains.”

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%268.62100.5%45.5%
20-City206.52Jul-06134.07Mar-12-35.1%274.99105.1%33.2%
10-City226.29Jun-06146.45Mar-12-35.3%287.1796.1%26.9%

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

August 2021August/JulyJuly/June1-Year
Metropolitan AreaLevelChange (%)Change (%)Change (%)
Atlanta194.241.9%2.2%20.2%
Boston279.480.5%1.2%17.7%
Charlotte214.781.5%2.2%21.7%
Chicago169.481.0%1.1%12.7%
Cleveland157.620.8%1.2%15.5%
Dallas250.201.8%2.4%24.6%
Denver285.650.9%1.8%21.5%
Detroit157.420.7%1.3%15.7%
Las Vegas251.872.2%2.8%23.8%
Los Angeles361.540.9%1.4%18.4%
Miami317.832.3%2.3%23.8%
Minneapolis217.540.3%1.1%14.0%
New York244.050.5%1.0%17.2%
Phoenix286.742.2%3.3%33.3%
Portland305.220.8%1.5%19.2%
San Diego357.110.5%1.6%26.2%
San Francisco339.940.4%1.1%21.2%
Seattle344.460.2%0.9%24.3%
Tampa296.712.5%2.9%25.9%
Washington284.920.6%0.9%15.1%
Composite-10287.170.8%1.3%18.6%
Composite-20274.990.9%1.5%19.7%
U.S. National268.621.2%1.7%19.8%
Sources: S&P Dow Jones Indices and CoreLogic
Data through August 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.

August/July Change (%)July/June Change (%)
Metropolitan AreaNSASANSASA
Atlanta1.9%2.1%2.2%2.3%
Boston0.5%0.7%1.2%1.2%
Charlotte1.5%1.7%2.2%2.4%
Chicago1.0%0.8%1.1%1.0%
Cleveland0.8%0.8%1.2%0.5%
Dallas1.8%2.1%2.4%2.4%
Denver0.9%1.4%1.8%1.9%
Detroit0.7%0.8%1.3%1.1%
Las Vegas2.2%2.4%2.8%2.5%
Los Angeles0.9%1.0%1.4%1.7%
Miami2.3%2.3%2.3%2.2%
Minneapolis0.3%0.6%1.1%1.0%
New York0.5%0.4%1.0%0.9%
Phoenix2.2%2.3%3.3%3.2%
Portland0.8%1.1%1.5%1.3%
San Diego0.5%1.0%1.6%1.3%
San Francisco0.4%1.0%1.1%1.2%
Seattle0.2%1.1%0.9%1.3%
Tampa2.5%2.5%2.9%2.9%
Washington0.6%0.8%0.9%1.1%
Composite-100.8%0.9%1.3%1.4%
Composite-200.9%1.2%1.5%1.5%
U.S. National1.2%1.4%1.7%1.6%
Sources: S&P Dow Jones Indices and CoreLogic
Data through August 2021

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

The single biggest risk to housing is rising mortgage rates | Bedford Real Estate

This is not a repeat of the 2008 housing bubble

The wounds from the Great Recession of the mid-2000s are still healing, especially when it comes to housing. An estimated 10 million people lost their homes to foreclosure from 2006 to 2014, following a period of frenzied and speculative home buying fueled by easy credit. The housing market is yet again on a tear with home prices up nearly 19% nationally compared with last year, and that has people rightfully worried that another housing bubble is brewing.

In order to determine if the current housing market is in a bubble, one needs to ask what constitutes a housing bubble. A bubble is present when the price of an asset is rising faster than the fundamentals can justify, often driven by overly optimistic speculation or loose financing. Moreover, a bubble requires conditions that would permit a crash—that is, a period of asset prices falling faster than fundamentals. Rising prices alone, however, are not a sign of a bubble.

Unlike the last housing boom, one could argue that home price growth since the start of the pandemic was justifiable. The demographics of the U.S. were already supporting housing growth and the desire to own only increased as people saved more and spent more time at home. The lifestyle change brought on by the pandemic caused many Americans to reassess their living arrangements, including some renters that turned into house hunters and some existing homeowners that sold to move into a larger home.

The jump in home buying demand hit right as existing housing supply declined rapidly for a variety of reasons, including fear of COVID-19. Home builders, most of whom became more prudent following the last cycle, were cautious with how many homes they were bringing to the market, resulting in equally tight new home inventory.

The supply and demand mismatch pushed prices upward, but that was just the tip of the iceberg for rising home values. Some Americans became much wealthier over the past year following a 31% run-up in the S&P 500 and a nearly 20% jump in home equity. Others became wealthier on a relative basis as remote work led to increased migration, often from higher cost areas to lower cost ones.

Of the contributors to rising prices, none have been more powerful than mortgage interest rates. The interest rate on a 30-year fixed mortgage averaged 6% from 2002 to housing’s peak in 2005. For comparison, the average mortgage rate from April 2020 through today is just 3%. 

Historically, a gut check of a housing bubble is the home-price-to-income ratio. While home prices appear high compared with incomes, this does not account for interest rates. When we look at the home-payment-to-income ratio, an important measure of affordability, levels are below last cycle, showing the power of cheap financing.

Further, safety measures have been put in place since the Great Recession to help prevent a similar housing collapse. Mortgage credit availability is starkly tighter than in the mid-2000s and the often more risky adjustable rate mortgages represent less than 5% of total purchase and refinanced loans compared with over 35% at the peak of the last cycle. 

However, there are unhealthy signs in housing as well. Investors, a staple of the last cycle, are back. One common measure of tracking investor activity is all-cash sales, which represent 23% of total transactions. While all-cash sales are up from 16% last year, they are still down from a high of 35% in 2011. Home shoppers are feeling the impact of investors active in today’s market, especially at the lowest price points. 

The fear-of-missing-out mentality has also returned, which has resulted in some making rash decisions. People are fearful that if they don’t buy today, they may miss their chance at home ownership forever. This thought process is leading to bidding wars and further upward pressure on pricing, which is resulting in first-time buyers and lower-income home shoppers finding themselves priced out of the market. Others believe that the frenzy has gone too far, and even some that are financially able to buy a home have reached a tipping point and are balking at prices.

As we move forward, we can take comfort that many of the mortgage guardrails in place are working, with creditworthiness strong and speculative lending largely absent from the market. While today’s prices can be justified, it is unwise to believe they can only go up. 

The single biggest risk to housing—rising mortgage rates—is a real possibility in the next year, and that could bring prices down. Further, other economic, financial, and confidence challenges could also result in a drop or flattening of home prices, even with solid buyers in place. But a drop or flattening in home prices is a far cry from the crash we saw during the Great Recession.

read more…

fortune.com/2021/housing-bubble

Prices of Residential Construction Inputs Up 23% Year-Over-Year | Bedford Real Estate

Prices paid for goods used in residential construction ex-energy rose 3.6% in May (not seasonally adjusted) and have increased 16.5% over the past 12 months, according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. Building materials (i.e., inputs to residential construction less food and energy) prices have declined just twice since December 2019.

The index for inputs to residential construction, including food and energy, increased more (+4.1%) and is up 22.5%, year-over year.  This increase closely mirrors the 26% increase found in a recent NAHB survey.

Building materials prices have increased 9.4% year-to-date (YTD), in stark contrast to the 0.4% YTD seen in 2020.  However, the 2021 increase YTD is an outlier when compared to pre-pandemic years as well, more than tripling the largest January-to-May increase since 2015 (the most recent data available).

Steel Products

Steel mill products prices climbed 2.4% in May, a substantial slowdown after three months during which increases averaged 15.9%.  Even so, prices are up 75.4% over the past 12 months and have risen 59.4% in 2021 alone.

Softwood Lumber

The PPI for softwood lumber (seasonally adjusted) rose 19.2%–the largest monthly increase since September 2020—and set a record high for the fourth consecutive month. Lumber prices have remained extremely volatile since the 88.5% increase between April and September 2020.

Since falling 22.9% between September and November, the softwood lumber PPI has risen 81.2%. However, recent data from Random Lengths suggests that the index will decline next month as weakening prices in late-May and the first half of June are captured by the BLS survey.

Lumber Futures

Good news has been found in the futures market of late, as July lumber futures have fallen precipitously in recent weeks.  Since May 10, the price of July futures has declined 44.2%.  It is worth noting the features of lumber futures as they explain why changes in the futures market may not be a practical leading indicator of how much builders will pay for framing packages in the months ahead.

First, the specifications of lumber futures contracts state that a futures contract:

  • Is for delivery of roughly 110,000 board feet (all of which is made up 2x4s), assuming the future is held to delivery.
  • Only delivers lumber that is manufactured in California, Idaho, Montana, Nevada, Oregon, Washington, Wyoming, or Alberta or British Columbia, Canada.
  • Is limited to Hem-Fir, Englemann Spruce, Lodgepole Pine, and/or Spruce-Pine-Fir.  Southern Yellow Pine is notably absent.

Second, if hoarding takes place in the middle of the supply chain as wholesalers and/or distributors attempt to protect against upside risk, these supply chain members may sell inventories if futures and/or mill prices fall.  But the current cash or futures price has little effect on prices paid by builders until prices have fallen to a sufficiently low level for long enough to counteract middlemen being “trigger shy” in an environment of falling mill prices.

Exchange Rate Effects

In addition to nominal price movements and tariffs on Canadian lumber, cross-border purchasers are affected by the strength of the U.S. dollar relative to the Canadian dollar.

The USD has depreciated 4.8% YTD and 10.3% over the past 12 months which has raised the price of Canadian imports in real terms above nominal increases due to other market forces.

Gypsum Products

Prices paid for gypsum products increased 3.4% in May, reaching a record high for the second consecutive month. The index has climbed 14.6% over the past year, but the whole of that increase has occurred since October 2020. The index for gypsum building materials (e.g., drywall) has increased 17.9% since last October.

Ready-Mix Concrete

Prices paid for ready-mix concrete (RMC) climbed 0.2% (seasonally adjusted), following a 1.1% increase in April. Price volatility has eased in 2021 as four of the five monthly price changes YTD have been between -0.2% and 0.3%.

Prices increased in the Northeast (+2.3%) and South (+0.2%) regions in May, while prices paid in the Midwest (-1.1) and South (-0.4%) declined.

Other Building Materials

The chart below shows the 12-month and year-to-date price changes of other price indices relevant to the residential construction industry.  As Congress continues to work on an infrastructure package, the Construction Materials index is particularly salient.  This index is much more heavily weighted with products necessary and used in large amounts in the production of “traditional” infrastructure (e.g., roads, bridges, rail).

read more…

eyeonhousing.org/2021/06/

Mortgage rates average 2.94% | Bedford Hills 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 2.94 percent.

“Since the most recent peak in April, mortgage rates have declined nearly a quarter of a percent and have remained under three percent for the past month,” said Sam Khater, Freddie Mac’s Chief Economist. “Low rates offer homeowners an opportunity to lower their monthly payment by refinancing and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option.”

Khater continued, “Additionally, the low mortgage rate environment has been a boon to the housing market but may not last long as consumer inflation has accelerated at its fastest pace in more than twelve years and may lead to higher mortgage rates in the summer.”

News Facts

  • 30-year fixed-rate mortgage averaged 2.94 percent with an average 0.7 point for the week ending May 13, 2021, down from last week when it averaged 2.96 percent. A year ago at this time, the 30-year FRM averaged 3.28 percent.
  • 15-year fixed-rate mortgage averaged 2.26 percent with an average 0.6 point, down from last week when it averaged 2.30 percent. A year ago at this time, the 15-year FRM averaged 2.72 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.59 percent with an average 0.3 point, down from last week when it averaged 2.70 percent. A year ago at this time, the 5-year ARM averaged 3.18 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.

Building materials prices continue to rise | Bedford Real Estate

Prices paid for goods used in residential construction ex-energy rose 1.7% in April (not seasonally adjusted) and have increased 12.4% over the past 12 months, according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. Building materials (i.e., inputs to residential construction less food and energy) prices have declined just twice since December 2019.

The index for inputs to residential construction, including food and energy, increased less (+1.3%) as the index for final demand energy declined 2.4% over the month.

Steel mill products prices climbed 18.4% in April following a 17.6% increase in March.  Prices are up 55.6%, year-to-date, and the month-over-month percentage increase set a record high for the third month in a row. Steel mill products price volatility is greater than it has been at any time since the Great Recession.

Over the past three months, prices have climbed 22.0%.  Perhaps more concerning than rising prices is that the pace of price changes has quickened each of the past nine months.

Prices paid for softwood lumber (seasonally adjusted) rose 6.5%, setting a new record high for the third consecutive month. Lumber prices have remained extremely volatile since the 88.5% increase between April and September 2020. Since falling 22.9% between September and November, the softwood lumber PPI has risen 52.0%.

In addition to nominal price movements and tariffs on Canadian lumber, cross-border purchasers are affected by the strength of the U.S. dollar relative to the Canadian dollar. The USD has depreciated 5.0%, year-to-date, and 13.1% over the past 12 months.

Prices paid for gypsum products increased 4.4% in March bringing the two-month increase to 6.6%. The PPI for all gypsum products has increased 12.5% over the past 12 months while the index for gypsum building materials (e.g., drywall) is up 13.3%.

Prices paid for ready-mix concrete (RMC) climbed 1.1% (seasonally adjusted), following a 0.2% increase in February. RMC prices have exhibited unusual volatility since early 2018. increasing or decreasing by 1.0% or more five times during the period. Since January 2000, RMC prices have moved by 1.0% or more 26 times and five have been over the past three years.

Prices increased in all four regions from March to April, up 2.8%, 2.0%, 0.8%, and 0.8% in thes Northeast, West, South, and Midwest, respectively. The index increased the most in the Northeast (+5.6%), followed closely by the West (+5.3%).  In contrast, prices held relatively steady in the Midwest (+2.0%) and declined 0.6% in the South, year-over-year.

read more…

eyeonhousing.org

Mortgage rates average 3.09% | Bedford 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 3.09 percent.

“As expected, mortgage rates continued to inch up but are still hovering around three percent, keeping interested buyers in the market,” said Sam Khater, Freddie Mac’s Chief Economist. “However, residential construction has declined for two consecutive months and given the very low inventory environment, competition among potential homebuyers is a challenging reality, especially for first-time homebuyers.”

News Facts

  • 30-year fixed-rate mortgage averaged 3.09 percent with an average 0.7 point for the week ending March 18, 2021, up from last week when it averaged 3.05 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.
  • 15-year fixed-rate mortgage averaged 2.40 percent with an average 0.7 point, up from last week when it averaged 2.38 percent. A year ago at this time, the 15-year FRM averaged 3.06 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent with an average 0.3 point, up from last week when it averaged 2.77 percent. A year ago at this time, the 5-year ARM averaged 3.11 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.