August 14, 2017

The Cost Of Housing Is Too Much

A report from KTNV in Nevada. “Rob Maes recently moved to Las Vegas to pursue a new career. On Sunday, the 23-year-old purchased his very first home. ‘Definitely excited,’ he said, ‘it still kind of really hasn’t sunk in.’ Maes’s new home, in a gated community near Elkhorn Road and Durango Drive, was listed as $218,000. However, his offer was more than $3,000 over the asking price. That’s a good move, according to GLVAR President David J. Tina. Tina tells 13 Action News buyers need to be aggressive in this current market. ‘You find the house,’ he said. ‘You’ve got to put a ring on it.’”

From My Northwest in Washington. “First-time buyers looking to purchase a home in King County may be cringing at the news of prices jumping by $100,000 in one year. The average home price in the county, according to Northwest Real Estate, is now $658,000. But a planning commissioner and advocate for expanding housing stock in San Francisco — another city that’s seen tremendous growth over the past decade — says it’s a good thing, up to a point. ‘The Seattle market is doing a lot of things that are good,’ Christine Johnson told KIRO Radio’s Ron and Don. ‘The big thing to remember is that this is a good problem to have.’”

From KFYR TV in North Dakota. “Across the country we’re seeing reports of housing shortages and skyrocketing home prices that are keeping new buyers out, but in Bismarck that’s not the trend. Unlike a couple of years ago when it was hard to find a new home, Bis-man is experiencing a housing surplus. While many areas of the country are experiencing a housing shortage, there are more than 800 listings in the Bismarck-Mandan area. ‘In our local market, however, we have a very abundant inventory right now which is a change from what things were like during more of the oil boom times,’ said Nancy Diechert, Executive Director of the Bismarck Mandan Board of Realtors.”

The New Orleans Advocate in Louisiana. “For the first time in eight years, home sale prices in New Orleans showed signs of cooling in the first half of 2017, actually dropping by a few percentage points on average — a development that some real estate experts reacted to with little surprise after years of steady price increases. ‘We’ve had this long run, and we’ve driven up prices to where they’re really getting quite high in relation to people’s income,’ said Wade Ragas, a local real estate consultant who compiled the numbers. ‘The way a market corrects that is the buyer stops paying full price and they start offering less, and then eventually enough of them do it that prices come down.’”

The Houston Chronicle in Texas. “Houston-area home prices were flat last month and the supply of houses for sale reached a five-year high. While experts say Houston housing is still in good shape, some neighborhoods where housing activity was once red hot are cooling. In The Woodlands, it’s a ‘buyer’s market’ for properties priced at more than $500,000, a report from Ken Brand, sales manager of Better Homes and Gardens Real Estate Better Homes Gary Greene, concluded.”

“Inventory in the master-planned suburb is up 9.4 percent over last year and half of the listings have had at least one price reduction. William Elser, who is renting a single-family house inside Loop 610 for his family of four said his rental house is worth about $800,000 but he’s paying a lot less than what he estimates it would take to pay the mortgage on it, along with taxes, insurance, maintenance and other costs. When his family and friends tell him he’s throwing money away on rent, he politely disagrees. He’s investing some of the money he’s not putting into home ownership.”

“‘The investment I’m getting with that money is roughly equal to or better than my house would have otherwise appreciated,” Elser said. ‘The cost of housing is too much.’”

From Mansion Global on New York. “A slow summer continues to dog Manhattan luxury real estate, according to a weekly report from Olshan Realty. Donna Olshan, president of Olshan Realty, attributed the slowdown to a lack of activity among new developments. ‘One reason for the persistently low totals: the paucity of sales by developers,’ Ms. Olshan wrote.”

“Developers found buyers for only four new condo units, including the most expensive unit last week. A five-bedroom unit at the new Skidmore, Owings & Merrill building at 252 East 57th St. went into contract with an asking price of $14.65 million. The nearly 5,000-square-foot home in Sutton Place has views over Central Park and the East River, as well as a library, large living room with a balcony and 10.5-foot ceilings. Since the unit first hit the market in 2015, the price has dropped by about 23%, from $19 million—something developers are loathe to do.”

From Marketplace on California. “President Donald Trump campaigned on a promise to ramp up immigration enforcement. From February through June, an average of 13,085 undocumented immigrants were arrested each month, according to U.S. Immigration and Customs Enforcement. That compares to an average of 9,134 arrests per month during the last three months of 2016. The economic ripple effects of arrests – and eventual deportations – are wide-ranging. But one little noticed consequence is their effect on the housing market.”

“Research shows that deportations lead to higher rates of foreclosure among Latino communities. That’s because the loss of an income for families – especially if it is the breadwinner who is detained – can make it harder for remaining family members to make mortgage payments. That reality is what spurred Maria, an undocumented immigrant who runs a Quinceañera shop in Los Angeles, to recently transfer the title of her house to her 22-year-old daughter, a U.S. citizen.”

“‘I refinanced it and took the money because if they come up and deport us, we have that money put away,’ Maria said in Spanish.”

“Maria is among the 31 percent of undocumented immigrants in the U.S. who own a home, according to the Migration Policy Institute. Without social security numbers, many undocumented immigrants are able to take out loans by using their Taxpayer Identification Number. The link between deportations and foreclosures is something Jacob Rugh, an assistant professor of sociology at Brigham Young University, has studied extensively. ‘Even in expensive markets, you could see that immigrants were pooling their resources across legal statuses, across families, to make the American dream possible,’ Rugh explained.”