Tuesday, August 23, 2016
Thursday, August 18, 2016
In its July monthly survey of real estate agents from around the US – and regional analysis from 40 markets – shows that buyers are generally becoming tepid if not cautious amid historically low interest rates. After a June pull-back in home buyer traffic, July failed to provide a bounce as those actively looking to purchase a house dropped. There are numerous concerns – home prices are too high, for instance – but the real concern for some agents is how quickly demand disappeared.
Regionally, the report shows a mixed bag. The Pacific Northwest slowed, coming in-line with national averages, while certain regions inside Texas and the Southwest improved, but the Northeast, Midwest and California all worsened.
Macro real estate concerns across the country
Buyer weaker on Flordia coast than in Orlando, Las Vegas and Minneapolis
Wednesday, July 27, 2016
Friday, July 22, 2016
Less federal oversight of local housing markets
Hit the road, Dodd-Frank?
Friday, July 15, 2016
Friday, July 8, 2016
BOSTON--(BUSINESS WIRE)--All Property Management, a Buildium subsidiary and operator of the largest online network of property management services, today released findings from its inaugural Rental Ranking Report. This report features insights into the attractiveness of real estate investment in 75 major U.S. metropolitan areas, over all four quarters of 2015. The higher a metropolitan area’s ranking, the better ROI for rental housing within it. The report includes a breakdown of regional performance trends and a look into early indicators for Q1 2016 and the rest of the coming year.
The Rental Ranking Report is calculated with a combination of U.S. real estate, rental housing and jobs reports, along with property appreciation forecasts. A comparison of quarter-over-quarter and year-over-year data is analyzed to discover how rental markets are changing. The nine indicators that are used include: vacancy rate, rent variance, capitalization rate, property appreciation, job growth, days on market, future rental availability index, job availability index, and tax and insurance cost index.
With the U.S. homeownership rate falling to its lowest rate since 1967 in July 2015, this has been a banner year for many rental property owners, with vacancy rates at their lowest since 1993. The rental market in the U.S. reached $173B in 2016, and although rents rose significantly, they still increased at a lower rate than that of the median U.S. home price. In addition to these market statistics, some of the results from this year’s report include:
- Top Performing Metros
- The top five performing metros for the past year include: San Francisco (CA), Seattle (WA), San Jose (CA), Louisville (KY) and San Diego (CA).
- Top Performing Region
- The Western U.S. is currently the best region for rental property investment, thanks largely to the impressive rent increases and property value appreciation found there.
- Vacancy Rate
- Worcester (MA) had the lowest vacancy rate with 3.05%, and Birmingham (AL) came in the bottom spot with a 17.67% vacancy rate.
- Rent Variance
- The percent change in median rent was best in Buffalo (NY) at 16% and worst in Hartford (CT) at -6%
The report also looked at other factors pertaining to the quality of real estate investments. Some additional data points include the capitalization rate, or the comparison of median rental prices to median property values (Dayton (OH) had the highest percentage at 13.15%) and property appreciation, where San Francisco (CA) had the highest percentage at 7.34%. The report also looked into job growth (San Jose (CA) had the highest growth at 19.11%), days on the market (San Francisco (CA) had the lowest number of days at 33) and future rental availability, where Austin (TX) experienced the best percentage at -1.47%. Finally, the research also included data on job availability, where it compared population numbers to current job openings (San Jose (CA) had the highest availability at 36), and the cost of insurance premiums and property taxes, where Salt Lake City (UT) came in with the lowest cost.
Thursday, June 30, 2016
The chance of a widespread drop in local or statewide home prices in the next two years is practically nil, according to a new forecast from a private mortgage insurer.
Arch MI’s quarterly housing reports pegs the risk of a price drop based on a host of real estate trends, credit market factors and economic patterns. Recent economic turbulence has raised questions about the durability of housing’s rebound from its collapse and the Great Recession.
Based on first-quarter data, Arch calculated the risk of price drops in all of California – as well as in Orange, Los Angeles, Riverside or San Bernardino counties – at a “minimal” 2 percent vs. 5 percent nationwide. A year ago, California’s price-drop risk was 8 percent, equal to the national risk level in 2015’s first quarter.
“We see no housing bubble in Southern California,” says Ralph DeFranco, chief economist for Arch MI’s owner, Arch Capital. “Even though homes feel expensive, they are supported by the amount of income people have.”
Here’s how Arch sees the region:
In Orange County, risk of a price decline was 2 percent in the first quarter, down from 8 percent a year ago and its historically high risk of 27 percent dating to 1980.
Price momentum is solid, with O.C. home values up 6.3 percent in the 12 months ended in the first quarter vs. 4.8 percent in the previous year. By Arch’s estimates, Orange County homes were 3 percent overvalued in the first quarter compared with its economic fundamentals. At the last decade’s bubble peak, Orange County homes were 40 percent overvalued.
Those price gains came despite continued problems with financial affordability among buyers. Arch’s math shows O.C. house hunters in the first quarter had 30 percent less buying power than the average national shopper. O.C. affordability ran 17 percent below its historical trend vs. national averages.
Arch’s estimated 2 percent chance of housing depreciation in Los Angeles County was down from 5 percent a year ago and the county’s historical risk of 28 percent since 1980. L.A. County home prices rose 7.7 percent in the past year vs. 6.5 percent in the previous year. Arch saw L.A. homes as 4 percent undervalued in the first quarter vs. 50 percent overvalued in the previous decade’s buying frenzy.
L.A.’s market strength comes despite affordability 24 percent below the national average at the start of 2016, and 13 percent lower than historic affordability dating to 1980.
The Inland Empire’s 2 percent price-drop risk was down from 4 percent a year ago and below its historical average risk level of 28 percent.
Home prices in the Inland Empire rose 6.7 percent in the last year vs. 6.4 percent in the previous year. Arch saw Inland homes 2 percent undervalued in the first quarter vs. 60 percent overvalued in 2006.
The Inland Empire’s first-quarter affordability was 21 percent less than the national average and 12 percent under its historical levels.
Don’t think Arch is easy on real estate.
Its economists see plenty of risk in states with energy-dependent economies. North Dakota, with a 52 percent risk of price drops, is in the most precarious shape, followed by “elevated” risk in Wyoming (46 percent chance of a drop) and West Virginia (35 percent).
Arch found “moderate” risk in Alaska, New Mexico, Louisiana, Oklahoma and Texas – home to five of the seven diciest metro areas including Houston (national worst at 39 percent chance of price drop) and Fort Worth (16 percent chance).
“The risk of future price declines over the next two years is limited to mining and drilling areas hardest-hit by lower energy prices. Of course, for the nation as a whole, cheaper energy is a strong positive,” Arch’s report states. “Apart from some weakness in several energy-extraction states, home prices should rise faster than inflation over the next few years due to strong fundamentals.”