November 24, 2013

What Is A Healthy Housing Market?

A poster suggested this for the weekend topic. “What constitutes a ‘healthy’ housing market seems to differ wildly depending on whose lens you see the world through. Examples:

Broker: Healthy = lots of sales
Individual without liquidity: Healthy = low mortgage standards
Individual with liquidity: Healthy = low prices
Banker: Healthy = few mortgage defaults
Builder: Healthy = strong demand for new homes

What is a ‘healthy’ housing market?”

Go Local Worchester. “Central Massachusetts has recently seen greater stability and improvement in the housing market — and now home values are beginning to rise after remaining stagnant over the past few years. The region has not seen two consecutive periods of positive indexing since the last two quarters of 2006. The index saw record lows in 2008, during a time of worldwide economic decline, but a slow and steady climb upwards has finally net positive results.”

“‘You definitely see it moving in the right direction,’ said Michael Barbara of Real Living Barbara Associates in Worcester. ‘Central Massachusetts has seen an increase in transaction volume, and a slight stabilization of home prices.’”

“‘This year we’ve seen Baby Boomers on the move, and they are doing what we call ‘right-sizing’,’ said Erika Hall of Keller Williams Realty in Worcester, ‘who are looking to move out of a large family home now that they have two or three empty bedrooms and are paying to heat a much larger house than they need.’”

“With a number of ‘boomerang children’ of Generation Y moving back in with their parents after college, a greater number of larger homes will be on the market in the coming year. ‘A new construction trend we’ve seen this year is multi-generational homes with in-law suites,’ said Hall, ‘We are not sure who will be absorbing these homes already on the market.’”

Culture Map Houston. “Houston’s existing home sales broke more records in October, as the city’s strong economy and low mortgage rates extended a phenomenal run for real estate. Houston realty veteran Martha Turner said one of her Memorial-area listings, a townhome priced at $995,000, drew offers from 11 bidders. ‘It’s never been like this before,’ says Turner. ‘There’s not a part of the city that’s not doing well.’”

“Lower inventory drives up home prices and creates bidding wars between buyers. Buyers must be nimble and be prepared to offer all-cash or be prepared to close quickly. Sellers are dictating the terms in this market. Prices are going up.”

The San Francisco Bay Guardian. “San Francisco’s Housing Element, a study of housing needs mandated by state law to ensure that cities are addressing their affordable housing obligations, called for the city to build 31,193 housing units from 2007-2014. Partially as a result of the 2008 financial meltdown, San Francisco fell far short of that goal, with just 11,130 units getting permitted, most of those market-rate units.”

“But that was enough to meet 60.6 percent of the projected need for serving those earning 120 percent of area median income and above, whereas the city entitled just 360 units for moderate income San Franciscans — 5.3 percent of the projected need — and 3,313 units for low-income (80 percent of AMI and below), or 27.3 percent of the need.”

“So it isn’t that San Francisco is facing a ‘housing crisis,’ as Housing Action Coalition and others often proclaim, it’s that the city is facing an affordable housing crisis driven by not building enough below-market-rate housing and allowing real estate speculators to cannibalize the city’s rent-controlled housing.”

“The trend in what’s being built in San Francisco and what those units are going for only increases the pressure on tenants in rent-controlled apartments, who are now being displaced at rates not seen since the last dot-com bubble, both through evictions and buy-outs. Contrary to the supply-and-demand arguments made by pro-development cheerleaders, there’s no evidence that the housing supply now being built is doing anything to help most San Franciscans.”

“‘Trickle down theory is going to f*ck San Francisco, it’s not going to help it,’ said Peter Cohen, a housing activist who also works for the San Francisco Council of Community Housing Organizations.”

Bits Bucket for November 24, 2013

Post off-topic ideas, links, and Craigslist finds here.