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10/17/2018 4:18:06 PM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
October 16, 2018
✓ CAR Market Forecast predicts weaker market for 2019.
✓ Stocks shaky but don’t worry about housing.
✓ Housing affordability hits ten year low in LA.
✓ Millennials prioritize housing over marriage.
✓ Prop 5 will expand housing opportunity.
✓ How many Americans can’t afford a median priced home?
✓ Number of homes selling above asking drops.
✓ When’s the best time to buy a house?
✓ 42% of buyers are millennials.
✓ Apartment rents suddenly rising faster.
✓ 77 percent of consumers say now is a good time to sell.
 
 
WEAKER MARKET FOR 2019, REALTORS® SAY
Source: The Orange County Register
CALIFORNIA ASSOCIATION OF REALTORS® reveals 2019 market forecast at REimagine! 2018 conference.
 
 
STOCKS MAY BE SHAKY BUT DON'T WORRY ABOUT HOUSING
Source: Market Watch
Despite stock market volatility, housing experts argue that talk of a real estate bubble is without basis. 
 
 
HOUSING AFFORDABILITY HITS TEN-YEAR LOW IN LA 
Source: Curbed
Buying a home is now less affordable than it has been since the collapse of the housing bubble in 2008, report from Attom Data Solutions finds.
 
 
HOW CALIFORNIA'S NEXT GOVERNOR WILL TACKLE THE HOUSING CRISIS
Source: The San Francisco Chronicle
Here is how candidates John Cox and Gavin Newsom say they'd make California housing more affordable.
 
 
MILLENNIALS PRIORITIZE HOMEBUYING OVER MARRIAGE
Source: REALTOR® Magazine
72 percent of 23- to 40-year-olds value homeownership above getting married and having children, a Bank of America survey has found. 
 
 
WEEKLY MORTGAGE APPLICATIONS FALL 1.7 PERCENT
Source: CNBC 
Interest rates move above 5 percent according to the latest Mortgage Bankers Association.
 
 
WOMEN, MILLENNIALS MOST LIKELY TO FACE BUYING DELAY
Source: REALTOR® Magazine
Mounting student loan debt identified as the factor holding both buying groups back in an annual survey of 1000 U.S. adults.  
 
 
PROP 5 WILL EXPAND HOUSING OPPORTUNITIES
Source: The Mercury News
The initiative will clear up confusing and inconsistent law that varies throughout the state and encourage Baby Boomers to downsize, explains CALIFORNIA ASSOCIATION OF REALTORS® treasurer, Dave Walsh.
 
 
HOW MANY AMERICANS CAN'T AFFORD A MEDIAN PRICED HOME? 
Source: Realtor.com
The median priced home was out of reach for residents in 84 percent of counties across the U.S. in the third quarter of 2018, ATTOM Data Solutions finds.
 
 
FORECLOSED HOMES APPRECIATING AT A FASTER RATE
Source: Market Watch
Homes that were foreclosed upon during the recession are gaining value much faster than a typical U.S. home, according to new analysis from Zillow.
 
 
NUMBER OF HOMES SELLING ABOVE LIST PRICE DROPS
Source: Housing Wire
The proportion of homes that sold above list price dropped to sit at 2016 levels in the four weeks to September 23, nationwide data from Redfin indicates. 
 
 
MORTGAGE RATES RETREAT, FOR NOW
Source: The Washington Post
Mortgage rates dropped for the first time in more than a month this week, but are expected to resume rising.
 
 
WHEN'S THE BEST TIME TO BUY A HOME? 
Source: Business Insider
Timing your home purchase correctly – like during the winter or before you get married – can save you money, says a Nerdwallet mortgage analyst. 
 
 
42 PERCENT OF BUYERS ARE MILLENNIALS: ZILLOW
Source: Zillow Research
Group's Consumer Housing Trends report contains a wealth of data on today's homebuyers, sellers and renters from across the country. 
 
 
APARTMENT RENTS SUDDENLY RISING FASTER
Source: CNBC
National rents in the third quarter were up 2.9 percent compared with a year ago, according to a real estate analytics firm.
 
 
77 PERCENT OF CONSUMERS SAY NOW IS A GOOD TIME TO SELL
Source: REALTOR® Magazine
A new survey from the National Association of REALTORS® has found that homeowners in the west are most upbeat about their sale prospects.
 
 
MORTGAGE RATES REACH A SEVEN-AND-A-HALF YEAR HIGH
Source: Market Watch 
The jump in rates has raised fresh speculation that the era of easy money is coming to a close. 
 
 
MORE PEOPLE PUTTING THEIR HOMES ON THE MARKET IN THE BAY AREA
Source: The San Francisco Chronicle 
August listings increase year-on-year as this September shapes up to be biggest for new listings in many years.
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9/10/2018 10:42:57 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
September 10, 2018
✓ Prop 5 - *On Nov. Ballot*… Seniors Over 55, Veterans And The Disabled Will Be Able To Keep Their Tax Base And Move Anywhere In The US.
✓ Fewer Americans Willing To Move For A Job.
✓ Cities With Biggest Rebound After The Recession.
✓ Housing Recovery Isn’t Over Yet.
✓ California Counties With Highest Concentration At Risk Of Wildfires.
✓ Housing Slipping Back To A Buyer’s Market As Sellers Cut Prices.

 
IS RENT CONTROL BEHIND CALIFORNIA'S HOUSING CRISIS?
Source: Curbed
 
A UC Berkeley professor has released a new report claiming that rent control incentivizes withdrawals and discourages new investment in rental housing, predicting disaster if Proposition 10 passes in November.  
MILLENNIALS PUT PETS FIRST WHEN BUYING A HOME
Source: CNBC
 
79 percent of pet-owning homebuyers who closed on a property this year said they would pass up an otherwise perfect home if it didn't meet the needs of their pets, according to a Realtor.com survey.  
HOME FLIPS PLUNGE AS INVENTORY DRIES OUT
Source: REALTOR® Mag
 
The rate of home flipping in the U.S. plunged to an almost four-year low in the second quarter as the number of distressed
listings dropped, according to a new report by real estate data firm ATTOM Data Solutions.  
BABY BOOMERS WON'T DOWNSIZE HOMES ANYTIME SOON
Source: Housing Wire
 
A new study from Trulia has found that homeowners aged 65 and older are working longer than they were a decade ago and living with their adult children in increasing numbers.  
SAN JOSE AGAIN TOPS LIST FOR LEAST AFFORDABLE HOUSING IN U.S.
Source: The Mercury News
 
City is still the most expensive metro in the country to buy, with the average homeowner needing to spend more than half their income on a mortgage.  
MORTGAGE RATES CREEP UP
Source: Market Watch
 
Mortgage rates rose for a second week, buoyed by a selloff in the bond market, as Fannie and Freddie start a second decade in limbo.  
FIRST-TIME BUYERS HAVE BOUGHT 985K HOMES THIS YEAR
Source: REALTOR® Magazine
 
Home sales may be slowing overall, but not among first- time home buyers, according to a new report.
 
MAKING SENSE OF THE STORY
  • Genworth Mortgage Insurance culled all publicly available government and proprietary mortgage industry data to see how this segment of buyers is faring in the housing market. In the first half of the year, first-time buyers purchased 985,000 single-family homes, the most during the first six months of a year since 2005, according to Genworth’s First-Time Homebuyer Report. 

  • In the second quarter, first-time home buyers purchased 572,000 single-family homes, up just 1 percent from a year ago. But it’s the six- month snapshot over this year so far that economists say is important to take note of. 

  • “The market needs to put this quarter’s slowdown in first-time home buyer purchase growth in context,” says Tian Liu, Genworth’s chief economist. “Because while quarterly first- time home buyer purchase growth was nominal, on a semiannual basis this group recorded the most single-family home purchases since 2005. That is impressive considering overall home sales declined by 2 percent during the second quarter, with unusually slow activity in June.” 

  • The decrease in overall home sales was driven by an uptick in interest rates and home prices, which together raised monthly mortgage payments for first-time home buyers by 12.6 percent year over year, according to the report. Also, many markets have seen a decrease in supply of homes in the “affordable range” of $150,000 to $300,000, according to the report. 

  • Despite all of this, home buyers under the age of 35 have been increasing their homeownership rates and “showing a determination and resiliency to become homeowners,” according to the report. 

 
 
SF RESIDENTIAL PROJECTS LANGUISH AS RISING COSTS FORCE DEVELOPERS TO CASH OUT
Source: The San Francisco Chronicle
 
Just 3 miles separate 2675 Folsom St., a vacant former restaurant equipment warehouse in the Mission District, and 160 Folsom St., a former parking lot near the Transbay Transit Center where a condo tower is under construction. 
But in the current economic landscape of San Francisco’s housing development, the two properties are a world apart.
 
While the next crop of luxury condo towers like 160 Folsom, which developer Tishman Speyer has branded as Mira, continue to rise in the fast-growing eastern end of South of Market, other approved housing projects across the city, like 2675 Folsom St., are stalled and on the market because of soaring construction costs and fees, developers and other industry sources say.
 
The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens.  
TALKING POINTS
  • Total mortgage application volume decreased 1.7 percent last week and was 15 percent lower than a year ago, according to the Mortgage Bankers Association's seasonally adjusted report. 

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.78 percent from 4.81 percent, its lowest rate since the week ending July 20, with points increasing to 0.46 from 0.42 (including the origination fee) for loans with a 20 percent down payment. 

  • Applications to refinance a home loan, which are usually highly rate-sensitive, decreased 3 percent from the previous week. 

 
THIS MAY BE THE HOTTEST NEIGHBORHOOD IN THE U.S.
Source: Housing Wire
 
Just south of San Francisco’s Mission District, perched atop a steep hillside, sits Bernal Heights. Traditionally home to artists and progressive-types, this little neighborhood once enjoyed relative obscurity, even managing to fly under the gentrification radar following the dotcom boom.

But it appears all that’s about to change.
 
Home prices in Bernal Heights have appreciated 111 percent in the past six years, according to an article in Business Insider by Melia Robinson, who published an account of her day touring this quant Bohemian neighborhood.
 
Houses for sale spent a median number of 16 days on the market last year, according to Robinson, and they sold for 13 percent above asking.
 
Trulia lists the median sales price for a two-bedroom abode as $1.58 million, noting that the area has seen a $200,000 increase in median home sales over the past year.  
SOUTHERN CALIFORNIA SUPPLY OF UNSOLD NEW HOMES AT 6-YEAR HIGH
Source: The Orange County Register
 
According to data from MetroStudy, builders completed 3,336 homes for sale in Los Angeles, Orange, Riverside and San Bernardino in the second quarter. That’s up 19 percent in a year and the highest standing inventory since the early days of the economic recovery in 2012’s second quarter.
 
This growing supply of new homes in the region, in theory, should be welcome news to house hunters. But the added inventory comes amid an unusual year for existing homes coming to market and depressed overall sales activity.
 
Inventories for existing homes actually rose during the prime homebuying season. ReportsOnHousing found an average 29,684 existing homes listed for sale in the four counties in the second quarter, as inventory rose by 1,922 homes since the start of the year. In the previous five years, the traditional springtime homebuying rush lowered supply by an average 1,739 homes through June.
 
A key reason for bloated supply? Buyers balked. CoreLogic reports sales of all residences — new and existing — in the four counties in the April-to-June period were down 4.8 percent vs. the previous year.  
WANT TO BUY A HOME? YOU MIGHT WANT TO WAIT
Source: Market Watch
 
Home buyers who exercise patience over the next couple years may be handsomely rewarded. In a survey of 100 real-estate economists and experts conducted by real-estate website Zillow ZG, +0.44 percent and research firm Pulsenomics, a 43% plurality said that they believe the U.S. housing market will become a buyer’s market in 2020.
 
By then, the number of homes available for sale could finally outpace demand, allowing home buyers the chance to negotiate a lower and more affordable price on a property.
 
The researchers didn’t give estimates on what kind of discounts buyers could expect. They did, however, say that some markets will see the tide change sooner than others.  
10 YEARS AFTER THE FINANCIAL CRISIS, IS THE HOUSING MARKET STILL AT RISK?
Source: Curbed
 
The economy is booming. The stock market regularly hits new all-time highs. Unemployment is at record lows. Aside from a small recent downturn, the housing market is as hot as ever.
 
In many ways, the world has moved on from the cataclysmic 2008 financial crisis, triggered when sloppy mortgage lending popped the massive U.S. housing bubble. But the scars of the crisis are still visible in the American housing market, which has undergone a pendulum swing in the last decade.
 
In the run-up to the crisis, a housing surplus prompted mortgage lenders to issue loans to anyone who could fog a mirror just to fill the excess inventory. But lending today is stricter.
 
It is so strict, in fact, that some in the real estate industry believe it’s contributing to a housing shortage that has pushed home prices in most markets well above their pre-crisis peaks, turning younger millennials, who came of age during the crisis, into a generation of renters.
 
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7/11/2018 8:32:43 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
July 10, 2018
✓ US Home Prices Are Going To Rise At Twice The Speed Of Inflation And Pay
✓ Home Flipping Activity Reached Six Year High Nationally - FALLS IN LA!!
✓ Most Baby Bloomers Plan To Delay Retirement
✓ Millennials Are Flooding To This US City
✓ Mortgage Investor Want To Make It Easier For Gig Economy Workers
✓ Run Up On Home Price Is Not Sustainable

Baby Bust: Bay Area Housing Prices Go Up, Births Go Down
Source: The Mercury News
 
A new study by real estate website Zillow suggests many Bay Area women may be putting motherhood on hold at least partly because of the region’s housing market. The fertility rate is dropping across the country for women between the ages of 25 and 29, but the dip is most pronounced in counties where home prices are rising rapidly — including Santa Clara, Alameda and San Francisco.

MAKING SENSE OF THE STORY
  • Nationally, on average, every 10 percentage point increase in home values was associated with a 1.5 percentage point drop in birth rates for women ages 25 to 29, according to the study, which chose that group as the age when women are most likely to be considering children but do not yet own their own home.
  • The drop in births was even more pronounced in the Bay Area. In Santa Clara County, home values rose 58 percent between 2010 and 2016, while the fertility rate of women ages 25 to 29 dipped 20 percent. In Alameda County, home values rose 60 percent and the fertility rate dropped 24 percent. And in San Francisco, home values rose 61 percent while the fertility rate dropped 22 percent.
  • Nationally, the birth rate for women ages 25 to 29 was 97.9 births per 1,000 women last year — down 4 percent from 2016, and a record low for the age group, according to the Centers for Disease Control and Prevention’s Division of Vital Statistics.
  • While Zillow researchers are quick to clarify that their analysis does not suggest rising home prices alone are causing falling birth rates, they say the housing market likely is a contributing factor..
 
Bad Credit Could Tack An Extra $15,000 Onto Your Mortgage   
Source: Housing Wire

Have terrible credit but still want to buy a home? You can get a mortgage, but it will cost you, according to a new lender survey by LendingTree.
 
If you have bad credit, you could be looking at an additional $15,000 in extra costs over the life of your loan (numbers based off of a 30-year mortgage and the average purchase loan amount of $236,697). According to LendingTree’s report, you can chalk this up to higher interest rates and larger fees.
 
With a credit score in the 620-639 range, lenders could slap you with an APR of nearly 5.6 percent. That’s up nearly 1 percentage point over last year at this time.
 
TALKING POINTS
  • Mortgage application volume jumped 4.1 percent last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted report. Volume was 2 percent lower than a year ago, largely due to weakness in refinances.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.75 percent from 4.84 percent, with points decreasing to 0.46 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio loans. 
  • That is the lowest rate since the week ending April 20.
 
US House Prices Are Going To Rise At Twice The Speed Of Inflation And Pay: Reuters Poll   
Source: CNBC
 
An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.
 
The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.
 
U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.
 
The latest poll comes after weak existing and new home sales data for April.
 
A further breakdown of the April data showed the inventory of existing homes had declined for 35 straight months on an annual basis while the median house price was up for a 74th consecutive month.
 
About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall from here over the next 12 months.
 
Home Flipping Activity Reaches Six-Year High Nationally, Falls In LA  
Source: Market Watch
 
Home flippers in today’s market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment.
 
Homes flipped during the first quarter represented 6.9 percent of all sales, up from 5.9 percent in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions.
 
As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago.
 
And as homes get snatched up quickly due to the historically low inventory, some markets present fewer opportunities for would-be flippers. The home flipping rate is down from a year ago across 55 per cent of markets including Los Angeles, Las Vegas and Miami.
 
Most Baby Boomers Plan to Delay Retirement
Source: Housing Wire
 
The majority of working baby boomers ages 50 and over say they expect to delay retirement, according to a survey by The NHP Foundation, a nonprofit real estate corporation supporting affordable housing. The cost of housing may be one reason why.
 
Prospective retirees say their top three concerns are an inability to afford quality health care (36 percent); dependency on children (28 percent); and being forced to choose a living situation inferior to their preference (22 percent), according to the survey. Eighty-five percent of respondents say they would prefer to stay in their current home, but many may be forced to consider renting a room or seeking out more affordable housing options.
 
Older homeowners are carrying nearly double the mortgage debt than people their age a decade ago, according to data from the Consumer Financial Protection Bureau. The NHP Foundation speculates that this may be why a growing number of baby boomers plan to delay retirement.
 
“With one in four in desperate need of affordable housing—equating to 2,500 new retirees every day—there needs to be a priority to create an adequate supply of affordable rental housing for boomers now and in the future,” says Richard Burns, president and CEO of The NHP Foundation.
 
Forget SF, This California City Is Where Millennials Are Moving, Study Says     
Source: The San Francisco Chronicle
 
Millennials are flocking to California's state capital, a new study found.
 
Sacramento was the third most popular destination for those ages 20 to 34 in 2016, behind Seattle and Columbia, the capital of South Carolina, according to analysis of U.S. Census data by investment site SmartAsset.
 
SmartAsset determined the ranking by calculating total net migration in the cities — i.e. the number of people who moved in versus moved out.
 
Sacramento saw more than 16,000 new Millennial-aged residents in 2016, with 9,500 out-migrations. Seattle and Columbia saw net migrations of 7,302 and 6,937 respectively.
 
Just missing out on the top five was San Jose, with a net migration of 5,500, proving Silicon Valley continues to have a pull to the young, despite the high cost of living.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.” 
 
San Franciscans Moving To Sacramento, Seattle, Las Vegas
Source: Curbed
 
The populations of both San Francisco and California remain on the rise, with the state recently approaching the 40 million mark. Even so, real estate platforms are busy trying to figure out where outgoing Californians are heading when they do pull up tent stakes from the Golden State.
 
MAKING SENSE OF THE STORY
  • Real estate aggregate site Redfin released another of its quarterly “migration reports” last week, presenting much the same findings as its previous reports: The site still ranks San Francisco as the city with the highest “net outflow”—i.e., the number of locals browsing home ads in other cities that exceeds the number of people from other cities eyeing SF properties.
  • As in the past, Redfin attests that Sacramento is the city San Franciscans peruse most often, with Seattle, Washington remaining the most common out of state prospect.
  • The problem with Redfin’s analysis is that it only tells us what Redfin users—rather than the general Bay Area population—are up to, and there’s no real way to tell how many San Franciscans shopping for homes in Sacramento or Seattle actually end up buying and making tracks.
  • The biggest beneficiary of California fallout, according to Trulia: Las Vegas, Nevada, where 8.1 percent of fleeing Golden Staters end up, followed by New York City at 7.3 percent. Phoenix, Arizona came in third on the list at seven percent even with Dallas, Texas moving into fourth place at 5.5 percent. Seattle rounded out the top five at 5.1 percent.
  • U.S. Census’ Longitudinal Employer-Household Dynamics as the source for Trulia’s data, which provides a more robust look at where Californians actually ended up moving, rather than just where they were considering. However, the site does caution, “The data captures job-to-job moves specifically and may not capture the full picture of migration, e.g. those not in the workforce such as recent graduates and retirees.”
 
Granny Flats And Renters’ Tax Credits: The California Housing Bills That Will Live To See Another Day                     
Source: The Mercury News 
 
An array of bills aimed at easing California’s housing crisis, from banning fees on “granny flats” to pushing housing development on BART property, cleared a key hurdle last week, while others died quietly in fiscal committees.
 
One such fatality was a proposal to help teachers and other middle-income tenants live closer to their jobs , one of many bills aiming to shore up the supply of badly needed affordable housing for low- and middle-income families. California housing officials estimate that shortfall has ballooned to a staggering 3.5 million homes.
 
Also stopped in its tracks was a bipartisan bill by Assemblyman Rob Bonta, D-Alameda, and Marc Steinorth, R-Rancho Cucamonga, that would have helped aspiring homeowners save up for a down payment through a special savings plan with tax benefits, similar to a 529 college savings account.
 
TALKING POINTS
  • Total mortgage application volume decreased 2.9 percent for the week, seasonally adjusted, according to the Mortgage Bankers Association. That marked the sixth straight week of losses.
  • Applications to refinance a home loan fell 5 percent for the week to the lowest level since December 2000.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent.
 
Mortgage Investors Want To Make It Easier For Gig-Economy Workers To Get Loans   
Source: The Washington Post
 
The two biggest sources of home-mortgage money in the country — investors Fannie Mae and Freddie Mac — are quietly working on ways to make qualifying for a home purchase easier for participants in the booming “gig” economy.
 
The gig economy refers to hundreds of income-earning activities that allow workers to set their own hours, work for as long or as little as they choose, and function as independent contractors or freelancers as opposed to salaried employees. Prominent examples include people who work as drivers for Uber or Lyft, assemble Ikea furniture through TaskRabbit and offer rooms in their homes on Air B&B.
 
Estimates vary, but anywhere from just under 20 percent to 30 percent or more of the U.S. workforce participates in some way in the gig economy. Last year, Intuit, which owns TurboTax, estimated that 34 percent of the workforce earned money in gig pursuits and projected that this could rise to 43 percent by 2020.
 
But when buying a home, the challenge for these workers is to make their gig-sourced earnings count as income for mortgage-qualification purposes. Lenders typically look for stable and continuing income streams: two years of documented income plus reasonable prospects that those earnings will continue for another several years.
 
Run-Up In Home Prices Is 'Not Sustainable': NAR Chief Economist
Source: CNBC 
 
Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Unlike the last housing boom, the gains are not driven by fast and easy mortgage money, but instead by solid buyer demand and very low supply. Still, like the last housing boom, some are starting to warn these price gains cannot continue.
 
"The continuing run-up in home prices above the pace of income growth is simply not sustainable," wrote Lawrence Yun, chief economist for the National Association of Realtors, in response to the latest price reading from the much-watched S&P Core Logic Case Shiller Home Price Indices. "From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent while the average wage rate has grown by only 14 percent."
 
Yun also pointed to rising mortgage interest rates as a factor that would weaken affordability.
 
Military Members Most Likely To Utilize Zero-Down Mortgages
Source: Housing Wire
 
The National Association of Realtors released an infographic, which shows how the home buying preferences of service members and veterans differ from the rest of the population.
 
Military members often face very different lives than the rest of the population, so it stands to reason that their preferences and actions when it comes to buying a home would also be different.
 
One of the most notable differences is the down payment, or lack thereof, according to NAR’s 2018 Veterans and Active Military Home Buyers Profile. About 56 percent of active duty members and 41 percent of veterans take advantage of zero down or 100 percent financed mortgages, compared to just 7 percent of non-military members.
 
Of course, while there are some zero-down mortgage options available to certain homebuyers, it is much easier for military members and veterans to take advantage of these programs through the U.S. Department of Veterans Affairs.
 
The ‘Trifecta’ Holding Up Home Shoppers      
Source: REALTOR® Mag
 
Home sales are still on track to eke out a gain in 2018, but buyers are encountering three big obstacles as they shop: Swift price growth, climbing mortgage rates, and low supply of homes for sale. 
 
Freddie Mac researchers are calling it a “trifecta” of challenges for home buyers in the first five months of 2018. Nevertheless, researchers say they expect the healthy economy and strong consumer confidence to lead to a 3 percent increase in total home sales (new and existing) for this year, according to the company’s May Outlook report. 

“While this spring’s sudden rise in mortgage rates is taking up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should,” says Sam Khater, Freddie Mac’s chief economist.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.” 
 
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7/10/2018 5:57:20 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
July 10, 2018
✓ US Home Prices Are Going To Rise At Twice The Speed Of Inflation And Pay
✓ Home Flipping Activity Reached Six Year High Nationally - FALLS IN LA!!
✓ Most Baby Bloomers Plan To Delay Retirement
✓ Millennials Are Flooding To This US City
✓ Mortgage Investor Want To Make It Easier For Gig Economy Workers
✓ Run Up On Home Price Is Not Sustainable
 
Baby Bust: Bay Area Housing Prices Go Up, Births Go Down
Source: The Mercury News
 
A new study by real estate website Zillow suggests many Bay Area women may be putting motherhood on hold at least partly because of the region’s housing market. The fertility rate is dropping across the country for women between the ages of 25 and 29, but the dip is most pronounced in counties where home prices are rising rapidly — including Santa Clara, Alameda and San Francisco.
 
MAKING SENSE OF THE STORY
  • Nationally, on average, every 10 percentage point increase in home values was associated with a 1.5 percentage point drop in birth rates for women ages 25 to 29, according to the study, which chose that group as the age when women are most likely to be considering children but do not yet own their own home.
  • The drop in births was even more pronounced in the Bay Area. In Santa Clara County, home values rose 58 percent between 2010 and 2016, while the fertility rate of women ages 25 to 29 dipped 20 percent. In Alameda County, home values rose 60 percent and the fertility rate dropped 24 percent. And in San Francisco, home values rose 61 percent while the fertility rate dropped 22 percent.
  • Nationally, the birth rate for women ages 25 to 29 was 97.9 births per 1,000 women last year — down 4 percent from 2016, and a record low for the age group, according to the Centers for Disease Control and Prevention’s Division of Vital Statistics.
  • While Zillow researchers are quick to clarify that their analysis does not suggest rising home prices alone are causing falling birth rates, they say the housing market likely is a contributing factor..
 
Bad Credit Could Tack An Extra $15,000 Onto Your Mortgage   
Source: Housing Wire
 
Have terrible credit but still want to buy a home? You can get a mortgage, but it will cost you, according to a new lender survey by LendingTree.
 
If you have bad credit, you could be looking at an additional $15,000 in extra costs over the life of your loan (numbers based off of a 30-year mortgage and the average purchase loan amount of $236,697). According to LendingTree’s report, you can chalk this up to higher interest rates and larger fees.
 
With a credit score in the 620-639 range, lenders could slap you with an APR of nearly 5.6 percent. That’s up nearly 1 percentage point over last year at this time.  
TALKING POINTS
  • Mortgage application volume jumped 4.1 percent last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted report. Volume was 2 percent lower than a year ago, largely due to weakness in refinances.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.75 percent from 4.84 percent, with points decreasing to 0.46 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio loans. 
  • That is the lowest rate since the week ending April 20.
 
US House Prices Are Going To Rise At Twice The Speed Of Inflation And Pay: Reuters Poll   
Source: CNBC
 
An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.
 
The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.
 
U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.
 
The latest poll comes after weak existing and new home sales data for April.
 
A further breakdown of the April data showed the inventory of existing homes had declined for 35 straight months on an annual basis while the median house price was up for a 74th consecutive month.
 
About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall from here over the next 12 months.  
Home Flipping Activity Reaches Six-Year High Nationally, Falls In LA  
Source: Market Watch
 
Home flippers in today’s market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment.
 
Homes flipped during the first quarter represented 6.9 percent of all sales, up from 5.9 percent in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions.
 
As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago.
 
And as homes get snatched up quickly due to the historically low inventory, some markets present fewer opportunities for would-be flippers. The home flipping rate is down from a year ago across 55 per cent of markets including Los Angeles, Las Vegas and Miami.  
Most Baby Boomers Plan to Delay Retirement
Source: Housing Wire
 
The majority of working baby boomers ages 50 and over say they expect to delay retirement, according to a survey by The NHP Foundation, a nonprofit real estate corporation supporting affordable housing. The cost of housing may be one reason why.
 
Prospective retirees say their top three concerns are an inability to afford quality health care (36 percent); dependency on children (28 percent); and being forced to choose a living situation inferior to their preference (22 percent), according to the survey. Eighty-five percent of respondents say they would prefer to stay in their current home, but many may be forced to consider renting a room or seeking out more affordable housing options.
 
Older homeowners are carrying nearly double the mortgage debt than people their age a decade ago, according to data from the Consumer Financial Protection Bureau. The NHP Foundation speculates that this may be why a growing number of baby boomers plan to delay retirement.
 
“With one in four in desperate need of affordable housing—equating to 2,500 new retirees every day—there needs to be a priority to create an adequate supply of affordable rental housing for boomers now and in the future,” says Richard Burns, president and CEO of The NHP Foundation.  
Forget SF, This California City Is Where Millennials Are Moving, Study Says     
Source: The San Francisco Chronicle
 
Millennials are flocking to California's state capital, a new study found.
 
Sacramento was the third most popular destination for those ages 20 to 34 in 2016, behind Seattle and Columbia, the capital of South Carolina, according to analysis of U.S. Census data by investment site SmartAsset.
 
SmartAsset determined the ranking by calculating total net migration in the cities — i.e. the number of people who moved in versus moved out.
 
Sacramento saw more than 16,000 new Millennial-aged residents in 2016, with 9,500 out-migrations. Seattle and Columbia saw net migrations of 7,302 and 6,937 respectively.
 
Just missing out on the top five was San Jose, with a net migration of 5,500, proving Silicon Valley continues to have a pull to the young, despite the high cost of living.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.”   
San Franciscans Moving To Sacramento, Seattle, Las Vegas
Source: Curbed
 
The populations of both San Francisco and California remain on the rise, with the state recently approaching the 40 million mark. Even so, real estate platforms are busy trying to figure out where outgoing Californians are heading when they do pull up tent stakes from the Golden State.
 
MAKING SENSE OF THE STORY
  • Real estate aggregate site Redfin released another of its quarterly “migration reports” last week, presenting much the same findings as its previous reports: The site still ranks San Francisco as the city with the highest “net outflow”—i.e., the number of locals browsing home ads in other cities that exceeds the number of people from other cities eyeing SF properties.
  • As in the past, Redfin attests that Sacramento is the city San Franciscans peruse most often, with Seattle, Washington remaining the most common out of state prospect.
  • The problem with Redfin’s analysis is that it only tells us what Redfin users—rather than the general Bay Area population—are up to, and there’s no real way to tell how many San Franciscans shopping for homes in Sacramento or Seattle actually end up buying and making tracks.
  • The biggest beneficiary of California fallout, according to Trulia: Las Vegas, Nevada, where 8.1 percent of fleeing Golden Staters end up, followed by New York City at 7.3 percent. Phoenix, Arizona came in third on the list at seven percent even with Dallas, Texas moving into fourth place at 5.5 percent. Seattle rounded out the top five at 5.1 percent.
  • U.S. Census’ Longitudinal Employer-Household Dynamics as the source for Trulia’s data, which provides a more robust look at where Californians actually ended up moving, rather than just where they were considering. However, the site does caution, “The data captures job-to-job moves specifically and may not capture the full picture of migration, e.g. those not in the workforce such as recent graduates and retirees.”
 
Granny Flats And Renters’ Tax Credits: The California Housing Bills That Will Live To See Another Day                     
Source: The Mercury News 
 
An array of bills aimed at easing California’s housing crisis, from banning fees on “granny flats” to pushing housing development on BART property, cleared a key hurdle last week, while others died quietly in fiscal committees.
 
One such fatality was a proposal to help teachers and other middle-income tenants live closer to their jobs , one of many bills aiming to shore up the supply of badly needed affordable housing for low- and middle-income families. California housing officials estimate that shortfall has ballooned to a staggering 3.5 million homes.
 
Also stopped in its tracks was a bipartisan bill by Assemblyman Rob Bonta, D-Alameda, and Marc Steinorth, R-Rancho Cucamonga, that would have helped aspiring homeowners save up for a down payment through a special savings plan with tax benefits, similar to a 529 college savings account.  
TALKING POINTS
  • Total mortgage application volume decreased 2.9 percent for the week, seasonally adjusted, according to the Mortgage Bankers Association. That marked the sixth straight week of losses.
  • Applications to refinance a home loan fell 5 percent for the week to the lowest level since December 2000.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent.
 
Mortgage Investors Want To Make It Easier For Gig-Economy Workers To Get Loans   
Source: The Washington Post
 
The two biggest sources of home-mortgage money in the country — investors Fannie Mae and Freddie Mac — are quietly working on ways to make qualifying for a home purchase easier for participants in the booming “gig” economy.
 
The gig economy refers to hundreds of income-earning activities that allow workers to set their own hours, work for as long or as little as they choose, and function as independent contractors or freelancers as opposed to salaried employees. Prominent examples include people who work as drivers for Uber or Lyft, assemble Ikea furniture through TaskRabbit and offer rooms in their homes on Air B&B.
 
Estimates vary, but anywhere from just under 20 percent to 30 percent or more of the U.S. workforce participates in some way in the gig economy. Last year, Intuit, which owns TurboTax, estimated that 34 percent of the workforce earned money in gig pursuits and projected that this could rise to 43 percent by 2020.
 
But when buying a home, the challenge for these workers is to make their gig-sourced earnings count as income for mortgage-qualification purposes. Lenders typically look for stable and continuing income streams: two years of documented income plus reasonable prospects that those earnings will continue for another several years.  
Run-Up In Home Prices Is 'Not Sustainable': NAR Chief Economist
Source: CNBC 
 
Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Unlike the last housing boom, the gains are not driven by fast and easy mortgage money, but instead by solid buyer demand and very low supply. Still, like the last housing boom, some are starting to warn these price gains cannot continue.
 
"The continuing run-up in home prices above the pace of income growth is simply not sustainable," wrote Lawrence Yun, chief economist for the National Association of Realtors, in response to the latest price reading from the much-watched S&P Core Logic Case Shiller Home Price Indices. "From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent while the average wage rate has grown by only 14 percent."
 
Yun also pointed to rising mortgage interest rates as a factor that would weaken affordability.  
Military Members Most Likely To Utilize Zero-Down Mortgages
Source: Housing Wire
 
The National Association of Realtors released an infographic, which shows how the home buying preferences of service members and veterans differ from the rest of the population.
 
Military members often face very different lives than the rest of the population, so it stands to reason that their preferences and actions when it comes to buying a home would also be different.
 
One of the most notable differences is the down payment, or lack thereof, according to NAR’s 2018 Veterans and Active Military Home Buyers Profile. About 56 percent of active duty members and 41 percent of veterans take advantage of zero down or 100 percent financed mortgages, compared to just 7 percent of non-military members.
 
Of course, while there are some zero-down mortgage options available to certain homebuyers, it is much easier for military members and veterans to take advantage of these programs through the U.S. Department of Veterans Affairs.  
The ‘Trifecta’ Holding Up Home Shoppers      
Source: REALTOR® Mag
 
Home sales are still on track to eke out a gain in 2018, but buyers are encountering three big obstacles as they shop: Swift price growth, climbing mortgage rates, and low supply of homes for sale. 
 
Freddie Mac researchers are calling it a “trifecta” of challenges for home buyers in the first five months of 2018. Nevertheless, researchers say they expect the healthy economy and strong consumer confidence to lead to a 3 percent increase in total home sales (new and existing) for this year, according to the company’s May Outlook report. 
 
“While this spring’s sudden rise in mortgage rates is taking up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should,” says Sam Khater, Freddie Mac’s chief economist.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.” 
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7/9/2018 10:44:17 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
July 9, 2018
✓ US Home Prices Are Going To Rise At Twice The Speed Of Inflation And Pay
✓ Home Flipping Activity Reached Six Year High Nationally - FALLS IN LA!!
✓ Most Baby Bloomers Plan To Delay Retirement
✓ Millennials Are Flooding To This US City
✓ Mortgage Investor Want To Make It Easier For Gig Economy Workers
✓ Run Up On Home Price Is Not Sustainable
 
Baby Bust: Bay Area Housing Prices Go Up, Births Go Down
Source: The Mercury News
 
A new study by real estate website Zillow suggests many Bay Area women may be putting motherhood on hold at least partly because of the region’s housing market. The fertility rate is dropping across the country for women between the ages of 25 and 29, but the dip is most pronounced in counties where home prices are rising rapidly — including Santa Clara, Alameda and San Francisco.
 
MAKING SENSE OF THE STORY
  • Nationally, on average, every 10 percentage point increase in home values was associated with a 1.5 percentage point drop in birth rates for women ages 25 to 29, according to the study, which chose that group as the age when women are most likely to be considering children but do not yet own their own home.
  • The drop in births was even more pronounced in the Bay Area. In Santa Clara County, home values rose 58 percent between 2010 and 2016, while the fertility rate of women ages 25 to 29 dipped 20 percent. In Alameda County, home values rose 60 percent and the fertility rate dropped 24 percent. And in San Francisco, home values rose 61 percent while the fertility rate dropped 22 percent.
  • Nationally, the birth rate for women ages 25 to 29 was 97.9 births per 1,000 women last year — down 4 percent from 2016, and a record low for the age group, according to the Centers for Disease Control and Prevention’s Division of Vital Statistics.
  • While Zillow researchers are quick to clarify that their analysis does not suggest rising home prices alone are causing falling birth rates, they say the housing market likely is a contributing factor..
 
Bad Credit Could Tack An Extra $15,000 Onto Your Mortgage   
Source: Housing Wire
 
Have terrible credit but still want to buy a home? You can get a mortgage, but it will cost you, according to a new lender survey by LendingTree.
 
If you have bad credit, you could be looking at an additional $15,000 in extra costs over the life of your loan (numbers based off of a 30-year mortgage and the average purchase loan amount of $236,697). According to LendingTree’s report, you can chalk this up to higher interest rates and larger fees.
 
With a credit score in the 620-639 range, lenders could slap you with an APR of nearly 5.6 percent. That’s up nearly 1 percentage point over last year at this time.  
TALKING POINTS
  • Mortgage application volume jumped 4.1 percent last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted report. Volume was 2 percent lower than a year ago, largely due to weakness in refinances.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.75 percent from 4.84 percent, with points decreasing to 0.46 from 0.47 (including the origination fee) for 80 percent loan-to-value ratio loans. 
  • That is the lowest rate since the week ending April 20.
 
US House Prices Are Going To Rise At Twice The Speed Of Inflation And Pay: Reuters Poll   
Source: CNBC
 
An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.
 
The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.
 
U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.
 
The latest poll comes after weak existing and new home sales data for April.
 
A further breakdown of the April data showed the inventory of existing homes had declined for 35 straight months on an annual basis while the median house price was up for a 74th consecutive month.
 
About 80 percent of nearly 40 analysts who answered an extra question said the already tight supply of affordable homes in the United States will either stay the same or fall from here over the next 12 months.  
Home Flipping Activity Reaches Six-Year High Nationally, Falls In LA  
Source: Market Watch
 
Home flippers in today’s market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment.
 
Homes flipped during the first quarter represented 6.9 percent of all sales, up from 5.9 percent in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions.
 
As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago.
 
And as homes get snatched up quickly due to the historically low inventory, some markets present fewer opportunities for would-be flippers. The home flipping rate is down from a year ago across 55 per cent of markets including Los Angeles, Las Vegas and Miami.  
Most Baby Boomers Plan to Delay Retirement
Source: Housing Wire
 
The majority of working baby boomers ages 50 and over say they expect to delay retirement, according to a survey by The NHP Foundation, a nonprofit real estate corporation supporting affordable housing. The cost of housing may be one reason why.
 
Prospective retirees say their top three concerns are an inability to afford quality health care (36 percent); dependency on children (28 percent); and being forced to choose a living situation inferior to their preference (22 percent), according to the survey. Eighty-five percent of respondents say they would prefer to stay in their current home, but many may be forced to consider renting a room or seeking out more affordable housing options.
 
Older homeowners are carrying nearly double the mortgage debt than people their age a decade ago, according to data from the Consumer Financial Protection Bureau. The NHP Foundation speculates that this may be why a growing number of baby boomers plan to delay retirement.
 
“With one in four in desperate need of affordable housing—equating to 2,500 new retirees every day—there needs to be a priority to create an adequate supply of affordable rental housing for boomers now and in the future,” says Richard Burns, president and CEO of The NHP Foundation.  
Forget SF, This California City Is Where Millennials Are Moving, Study Says     
Source: The San Francisco Chronicle
 
Millennials are flocking to California's state capital, a new study found.
 
Sacramento was the third most popular destination for those ages 20 to 34 in 2016, behind Seattle and Columbia, the capital of South Carolina, according to analysis of U.S. Census data by investment site SmartAsset.
 
SmartAsset determined the ranking by calculating total net migration in the cities — i.e. the number of people who moved in versus moved out.
 
Sacramento saw more than 16,000 new Millennial-aged residents in 2016, with 9,500 out-migrations. Seattle and Columbia saw net migrations of 7,302 and 6,937 respectively.
 
Just missing out on the top five was San Jose, with a net migration of 5,500, proving Silicon Valley continues to have a pull to the young, despite the high cost of living.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.”   
San Franciscans Moving To Sacramento, Seattle, Las Vegas
Source: Curbed
 
The populations of both San Francisco and California remain on the rise, with the state recently approaching the 40 million mark. Even so, real estate platforms are busy trying to figure out where outgoing Californians are heading when they do pull up tent stakes from the Golden State.
 
MAKING SENSE OF THE STORY
  • Real estate aggregate site Redfin released another of its quarterly “migration reports” last week, presenting much the same findings as its previous reports: The site still ranks San Francisco as the city with the highest “net outflow”—i.e., the number of locals browsing home ads in other cities that exceeds the number of people from other cities eyeing SF properties.
  • As in the past, Redfin attests that Sacramento is the city San Franciscans peruse most often, with Seattle, Washington remaining the most common out of state prospect.
  • The problem with Redfin’s analysis is that it only tells us what Redfin users—rather than the general Bay Area population—are up to, and there’s no real way to tell how many San Franciscans shopping for homes in Sacramento or Seattle actually end up buying and making tracks.
  • The biggest beneficiary of California fallout, according to Trulia: Las Vegas, Nevada, where 8.1 percent of fleeing Golden Staters end up, followed by New York City at 7.3 percent. Phoenix, Arizona came in third on the list at seven percent even with Dallas, Texas moving into fourth place at 5.5 percent. Seattle rounded out the top five at 5.1 percent.
  • U.S. Census’ Longitudinal Employer-Household Dynamics as the source for Trulia’s data, which provides a more robust look at where Californians actually ended up moving, rather than just where they were considering. However, the site does caution, “The data captures job-to-job moves specifically and may not capture the full picture of migration, e.g. those not in the workforce such as recent graduates and retirees.”
 
Granny Flats And Renters’ Tax Credits: The California Housing Bills That Will Live To See Another Day                     
Source: The Mercury News 
 
An array of bills aimed at easing California’s housing crisis, from banning fees on “granny flats” to pushing housing development on BART property, cleared a key hurdle last week, while others died quietly in fiscal committees.
 
One such fatality was a proposal to help teachers and other middle-income tenants live closer to their jobs , one of many bills aiming to shore up the supply of badly needed affordable housing for low- and middle-income families. California housing officials estimate that shortfall has ballooned to a staggering 3.5 million homes.
 
Also stopped in its tracks was a bipartisan bill by Assemblyman Rob Bonta, D-Alameda, and Marc Steinorth, R-Rancho Cucamonga, that would have helped aspiring homeowners save up for a down payment through a special savings plan with tax benefits, similar to a 529 college savings account.  
TALKING POINTS
  • Total mortgage application volume decreased 2.9 percent for the week, seasonally adjusted, according to the Mortgage Bankers Association. That marked the sixth straight week of losses.
  • Applications to refinance a home loan fell 5 percent for the week to the lowest level since December 2000.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.84 percent from 4.86 percent.
 
Mortgage Investors Want To Make It Easier For Gig-Economy Workers To Get Loans   
Source: The Washington Post
 
The two biggest sources of home-mortgage money in the country — investors Fannie Mae and Freddie Mac — are quietly working on ways to make qualifying for a home purchase easier for participants in the booming “gig” economy.
 
The gig economy refers to hundreds of income-earning activities that allow workers to set their own hours, work for as long or as little as they choose, and function as independent contractors or freelancers as opposed to salaried employees. Prominent examples include people who work as drivers for Uber or Lyft, assemble Ikea furniture through TaskRabbit and offer rooms in their homes on Air B&B.
 
Estimates vary, but anywhere from just under 20 percent to 30 percent or more of the U.S. workforce participates in some way in the gig economy. Last year, Intuit, which owns TurboTax, estimated that 34 percent of the workforce earned money in gig pursuits and projected that this could rise to 43 percent by 2020.
 
But when buying a home, the challenge for these workers is to make their gig-sourced earnings count as income for mortgage-qualification purposes. Lenders typically look for stable and continuing income streams: two years of documented income plus reasonable prospects that those earnings will continue for another several years.  
Run-Up In Home Prices Is 'Not Sustainable': NAR Chief Economist
Source: CNBC 
 
Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Unlike the last housing boom, the gains are not driven by fast and easy mortgage money, but instead by solid buyer demand and very low supply. Still, like the last housing boom, some are starting to warn these price gains cannot continue.
 
"The continuing run-up in home prices above the pace of income growth is simply not sustainable," wrote Lawrence Yun, chief economist for the National Association of Realtors, in response to the latest price reading from the much-watched S&P Core Logic Case Shiller Home Price Indices. "From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent while the average wage rate has grown by only 14 percent."
 
Yun also pointed to rising mortgage interest rates as a factor that would weaken affordability.  
Military Members Most Likely To Utilize Zero-Down Mortgages
Source: Housing Wire
 
The National Association of Realtors released an infographic, which shows how the home buying preferences of service members and veterans differ from the rest of the population.
 
Military members often face very different lives than the rest of the population, so it stands to reason that their preferences and actions when it comes to buying a home would also be different.
 
One of the most notable differences is the down payment, or lack thereof, according to NAR’s 2018 Veterans and Active Military Home Buyers Profile. About 56 percent of active duty members and 41 percent of veterans take advantage of zero down or 100 percent financed mortgages, compared to just 7 percent of non-military members.
 
Of course, while there are some zero-down mortgage options available to certain homebuyers, it is much easier for military members and veterans to take advantage of these programs through the U.S. Department of Veterans Affairs.  
The ‘Trifecta’ Holding Up Home Shoppers      
Source: REALTOR® Mag
 
Home sales are still on track to eke out a gain in 2018, but buyers are encountering three big obstacles as they shop: Swift price growth, climbing mortgage rates, and low supply of homes for sale. 
 
Freddie Mac researchers are calling it a “trifecta” of challenges for home buyers in the first five months of 2018. Nevertheless, researchers say they expect the healthy economy and strong consumer confidence to lead to a 3 percent increase in total home sales (new and existing) for this year, according to the company’s May Outlook report. 
 
“While this spring’s sudden rise in mortgage rates is taking up a good chunk of the conversation, it’s the stubbornly low inventory levels in much of the country that are preventing sales from really taking off like they should,” says Sam Khater, Freddie Mac’s chief economist.
 
“The underlying demand for buying a home is holding up, and will continue to do so, as long as the economy is generating solid job and income growth. Most markets simply need a lot more new and existing supply to cool price growth and give buyers enough choices.” 
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4/30/2018 10:10:29 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
April 30, 2018
✓ First time homeowners struggle amid rising affordability challenge
✓ LA becoming increasingly out of reach - survey finds
✓ Fear of loosing out drive Young Buyers toward Ownership
✓ Millennial Home Ownership suddenly drops after a good run 
✓ Housing Crisis in San Francisco and LA - due to Tech Companies
✓ Major Calif. Housing Bill dies in first Committee
 
 
Who are today’s homebuyers?
Source: Housing Wire

New demographics have emerged as the leaders in the home buying market in 2018, according to a new report from Veritas Urbis Economics.
 
MAKING SENSE OF THE STORY
  • The first point the report observed was that women are taking a higher market share when it comes to buying homes. The share of homebuyers comprised of women increased to 46.4 percent in 2017. Compared to just a generation ago, in 1981, women made up only 18.9 percent of the market share.
  • A rising share of these women are also single. The share of single women homebuyers reached an all-time high of 18.9 percent in 2017, compared to last generation when this demographic made up just 9.1 percent of homebuyers in 1981.
  • The second category to increase is households over the age of 55, which increased to 27.8 percent in 2017, compared to 16.1 percent in 1981. 
  • But even as the share of homebuyers among older generations increases, the share of homebuyers that are under 35 hit an all-time low, falling to 33.7 percent in 2017. Back in 1981, this demographic sat at an all-time high of 52 percent.
  • Having children may be becoming less of an incentive to buy a home. The share of homebuyers with children fell to an all-time low of 40.7 percent in 2017, down from 51.4 percent in 1981. 
  • The share of homebuyers made up of single-person households increased to 21.2 percent in 2017, up from 15.3 percent in 1981.
 
Why, Where Buyers Get Denied Mortgages     
Source: Realtor Mag
 
Nearly one in 10 borrowers get denied a mortgage, according to a new analysis by LendingTree, based on a review of 10 million mortgage applications.
 
The company found that the top reasons home shoppers face this rejection is poor credit history and credit score, too high a debt-to-income ratio, too low an appraisal, and an incomplete application.
 
Credit history and debt-to-income ratios are the chief barriers for denial, accounting for 26 percent each of denied loans. The debt barrier is biggest issue for borrowers living in California, according to the analysis.
 
Three California cities—Los Angeles, San Francisco, and San Jose—had the highest share of borrowers who were denied a mortgage because of their debt-to-income ratio. On the other hand, credit histories are proving the biggest obstacle in Louisville, Ky.; Memphis, Tenn.; and Philadelphia.  
TALKING POINTS
  • Total mortgage application volume fell 0.2 percent for the week and was 0.8 percent lower than a year ago, according to the Mortgage Bankers Association's seasonally adjusted survey.
  • Applications to refinance a home loan fell 0.3 percent last week and were 16 percent lower than a year ago. 
  • The refinance share of applications fell to 37.2 percent of all applications, the lowest level since September 2008
 
Yelp CEO calls on Google, Facebook to help housing crisis 
Source: The San Francisco Chronicle
 
Days after a controversial state bill to allow more housing near public transit was stopped dead in its tracks, one of its biggest supporters — Yelp CEO Jeremy Stoppelman — called on other tech leaders to pressure their local governments to expand housing near their campuses.
 
Google and Facebook have started to engage locally, Stoppelman said, and he’s surprised that “more tech leaders weren’t paying attention to this problem as it was developing.”
 
Stoppelman spoke alongside the bill’s author, state Sen. Scott Wiener, D-San Francisco, and other backers at C.A.R.’s Center for California Real Estate recent event at Yelp headquarters.
 
Asked how his San Francisco local-reviews company is helping employees find housing, Stoppelman replied, “You end up paying (them) more. That’s the most straightforward solution.”
 
Wiener’s bill, SB827,  would have stopped cities from using planning, zoning and other barriers to block certain high-density housing projects up to five stories near public-transit stops.
 
Contrary to what critics contended, the bill would not have “wiped away all local control,” Wiener said. Cities could still impose their own approval process, design standards, affordable-housing requirements and demolition controls.
 
Many business, real estate and housing groups supported the bill. But it faced stiff opposition from cities that didn’t want to give up any local control, neighborhood groups afraid of overcrowding and some affordable-housing advocates who thought it would displace low-income residents.  
Rent control measure on its way to California ballot   
Source: The Sacramento Bee
 
California voters this year will likely decide whether cities across the state should have more power to enact stronger rent control.
 
Rent control proponents behind a proposed November ballot initiative that would allow cities and counties to pass strong rent control laws say they now have enough signatures to qualify the measure.
 
The initiative seeks to repeal a 1995 state law called the Costa-Hawkins Rental Housing Act. If repealed, cities and counties would be able to strengthen existing rent control policies, or pass new laws that go further than what's currently allowed.
 
At present, laws in jurisdictions with rent control are prevented from covering large amounts of housing, including single-family homes, condos and duplexes. All units built after 1995 also are exempt.  
Millennial homeownership suddenly drops after a good run
Source: CNBC 
 
Homeownership was crawling slowly back from its record low two years ago, but it just stalled, and the youngest homebuyers are behind that.
 
Millennials had been driving the nation's overall homeownership rate, showing the biggest gains throughout 2017, but they dropped back in the first quarter of this year.
 
Millennial homeownership fell from a three-year high of 36 percent in the fourth quarter of last year back to 35.3 percent in the first quarter of this year, according to the U.S. Census.
 
Meanwhile, the homeownership rate for Americans aged 35 to 64 rose.
 
That caused the overall homeownership rate to stall at 64.2 percent, unchanged from the last quarter, after rising steadily from 63.6 percent one year ago. Homeownership fell to a 50-year low of 62.9 percent in 2016, following the worst housing crash in history.   
Nightmare 90-minute ‘super commutes’ more common as Bay Area housing shortage intensifies
Source: Housing Wire
 
The Stockton region now leads the nation in its share of commuters who spend 90 minutes or more getting to work, according to a study released Wednesday by Apartment List.
 
Ten percent of the region’s commuters made the grueling “super commute” in 2016 — up from 7 percent in 2005, according to the study.
 
Across the Bay Area, workers are spending more time sitting in bumper-to-bumper traffic or squeezed into crowded trains and buses — further evidence of the intensifying struggle to balance a well-paying job with an affordable place to live. 
 
Modesto, another de facto Silicon Valley bedroom community, ranked second in the country, with 7 percent of commuters qualifying as super commuters, according to the study, which analyzed the nation’s 100 largest metro areas.
 
The San Francisco metro area, including the East Bay, ranked sixth on the list with nearly 5 percent of commuters enduring super commutes — and that share has more than doubled since 2005. The San Jose area, which ranked 23rd, almost doubled its share of super commuters in 2016, with about 3 percent of commuters traveling 90 minutes or more one way. Riverside, New York and Bridgeport, Connecticut also ranked in the top five.  
Southern California house prices hit 10 1/2-year high, Realtors report
Source: The Orange County Register
 
Fierce competition for a limited number of homes pushed house prices higher in March, with Southern California homebuyers paying the highest median prices in more than a decade, new REALTOR® figures show.
 
MAKING SENSE OF THE STORY
  • Prices showed significant year-over-year gains throughout the region. The median price of an existing Los Angeles County house, for example, jumped 13.6 percent to $528,980, Realtor figures show. That’s up $63,000 from March 2017.
  • Orange County’s median – or price at the midpoint of all sales – rose 8.5 percent or more than $64,000 to an all-time high of $824,450. That’s was the seventh highest median among California’s 58 counties.
  • The state’s priciest homes still can be found in six Bay Area counties, four of them with median prices north of $1 million: San Francisco ($1.7 million), San Mateo ($1.6 million), Santa Clara ($1.5 million), Marin ($1.4 million), Alameda ($955,000) and Santa Cruz ($910,000).
  • Inland Empire prices are more affordable, but still rising fast: Riverside County’s median hit $398,000 – also the highest since the Great Recession and up 6.1 percent (or $23,000) from March 2017. In San Bernardino County, the median was $280,000, up 7.7 percent or $20,000 year over year.
  • Transactions fell 5.9 percent in Los Angeles and Orange counties and were down 5.7 percent in the Inland Empire, Realtor figures show. San Bernardino County was Southern California’s only county with an increase: Transactions there rose 0.4 percent.
  • “The housing market performed solidly throughout the state in March, especially in the San Francisco Bay Area, … (with) the median price surging by double-digits in seven of nine counties,” said CAR President Steve White.
  • Sales were slightly stronger in the state as a whole, rising 1.6 percent from March 2017 levels.
 
Who caused the Bay Area's housing shortage? Hint: It's not just tech      
Source: The Sacramento Bee
 
Everyone has a theory about who's to blame for the housing shortage that's driving up prices and chasing Bay Area families out of the region.
 
A new poll offers surprising insights into where most of us point the finger: not at the government officials who control what homes are built where, but at the tech companies that have flooded this region with jobs and the real estate developers trying to maximize profits.
 
Experts say finding someone to blame is not that simple.
 
The real answer, they say, lies entangled in a complicated web that implicates everyone involved, from businesses to local elected officials to your next door neighbor. And the stakes are high for policy makers trying to untangle that web as the housing crisis intensifies.
 
To solve the problem, it's crucial to understand the factors that turned the Bay Area's real estate market into one of the country's most dysfunctional.  
TALKING POINTS
  • Total mortgage application volume jumped 4.8 percent from the previous week, according to the Mortgage Bankers Association.
  • Refinance applications rose 7.3 percent last week from the previous week but was still down more than 10 percent from a year ago.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) increased to 4.69 percent from 4.68 percent for 80 percent loan-to-value ratio loans.
 
Major California housing bill dies in first committee hearing  
Source: The Mercury News
 
A sweeping bill that would have given the state unprecedented power over local development failed in its first committee hearing, crushing the hopes of those who saw it as the key to making housing in the state more affordable.
 
At a lively and crowded hearing Tuesday, the Senate Transportation and Housing Committee blocked Senate Bill 827, a bill to force cities to allow apartments and condominiums of roughly four to five stories within a half mile of rail and ferry stops — as well as denser housing near bus stops with frequent service.
 
The vote abruptly halted a feverish debate over one of the biggest housing proposals introduced in Sacramento this year — one which took aim at cities reluctant to embrace larger developments. Its demise also underscored the political realities and pace of change at the Capitol, even as pressure mounts for the state to respond to runaway housing costs.  
FOMO Drives Young Buyers Toward Ownership 
Source: Realtor Mag
 
Fear of missing out—or FOMO, as millennials have coined it—has become a powerful motivator for young buyers to pursue homeownership, according to a new Bank of America survey. 
 
In particular, social media platforms such as Facebook and Instagram, where users often post about their lives as homeowners, are big influencers on prospective buyers, the survey of 2,000 U.S. adults finds.
 
“I think it’s motivating them to think about homeownership,” says D. Steve Boland, BofA’s head of consumer lending.
 
“Their interest level is high, and it’s driven by what they see.”
 
According to the survey, a third of millennials say that when viewing social media posts about homes their peers have purchased, they think: “If they can buy, why can’t I?”
 
And a quarter of all consumers say they fear missing out on an opportunity for themselves to purchase when viewing others’ home photos on social media. Twenty-three percent of consumers—16 percent of whom are first-time buyers—say they are jealous of the homes bought by their friends and acquaintances.  
L.A. is becoming increasingly out of reach, survey finds
Source: The Los Angeles Times 
 
According to a survey released Monday by the Luskin School of Public Affairs at UCLA, residents across L.A. County are increasingly anxious about the cost of living, with housing costs at the top of their worries. Young people are feeling it the most.
 
"It's a perfect storm for young people who are spending a disproportionate amount of their income just to have shelter over their head, and as a result, some of them tend to live farther out where housing is cheaper and so their commutes are longer," said Zev Yaroslavsky, a former county supervisor and current lecturer at UCLA who led the survey.
 
As a result, younger residents rate their quality of life the lowest.
 
"What troubles me about this trend line is that young people are supposed to be optimistic and have a lot to look forward to," Yaroslavsky said. "L.A. has always been a place of optimism — that's what makes this place a magnet."
“L.A. has always been a place of optimism — that’s what makes this place a magnet.”
 
The findings are part of a broader annual survey on quality of life as measured by nine categories, including cost of living, transportation/traffic, education, healthcare and the economy.  
First-time homebuyers struggle amid rising affordability challenges    
Source: Housing Wire
 
Affordability continues to slip across the U.S., falling even further from last year as home prices continue to rise and mortgage rates increase, according to a joint report from the National Association of Realtors and realtor.com.
 
The report showed that housing affordability is down from a year ago, and fewer households can afford the active inventory of homes for sale based on their income.
 
Using data on mortgages, state and metro area-level income and listings on realtor.com, the Realtors Affordability Distribution Curve and Score is designed to examine affordability conditions at different income levels for all active inventory on the market. A score of one or higher generally suggests a market where homes for sale are more affordable to households in proportion to their income distribution.
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3/8/2018 7:37:58 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News
 
March 8, 2018
✓ Tax Reform Handouts
✓ Get Involved with the Property Fairness Initiative
✓ Why Are So Many Californians Leaving 
✓ Renters are Getting Frustrated
✓ As Prices Soar, Buyers Turn to Riskier Mortgages
✓ Could the Inventory Crunch Worsen
 
CCRE MLS Report Now Available
In mid-January, C.A.R.’s think tank, the Center for California Real Estate, held an important industry event focusing on the challenges and opportunities of the MLS.
 
C.A.R. CEO Joel Singer led the panel of industry heavyweights, which included:
  • Art Carter, CEO, California Regional Multiple Listing Service (CRMLS)
  • David Charron, Chief Strategy Officer, Bright MLS
  • Rebecca Jensen, President/CEO, Midwest Real Estate Data LLC (MRED)
  • Mark McLaughlin, CEO, Pacific Union
  • Jeanne Radsick, NAR Mergers & Consolidations Task Force; Broker, Century 21 Tobias Real Estate
  • Dale Ross, CEO, Realtors
  • Property Resource, LLC
  • Wes Burk, Owner/Broker, Patterson Realty
  • Craig Cheatham, President/CEO, The Realty Alliance
  • Jeremy Crawford, CEO, Real Estate Standards Organization (RESO)
  • Sandra Deering, Broker, Coldwell Banker Residential Brokerage
  • Jim Harrison, President & CEO, MLSListings, Inc.
  • David Silver-Westrick, Partner, Keller Williams OC Coastal Realt
A report from the event was produced, which discussed the efficiency of the current MLS model, as well as challenges associated with data sharing, cooperation, compensation, third-party public portals, and much more.
 
C.A.R. encourages all REALTORS® to download the report.
 
The Affordable Housing Recording Fee Does Not Apply to Sales Transactions
The new Building Homes and Jobs Act (SB 2), went into effect January 1st, 2018. This law was enacted as part of a larger package of bills aimed at addressing the state’s housing affordability crisis and imposes a fee of $75 on the recording of any “real estate instrument” (such as a deed, easement, or deed of trust) that is not recorded in connection with a sales transaction or any transfer to an owner-occupant.  For transactions where the recording fee does apply, there is a cap of $225 per transaction. To be clear, this recording fee does not apply, and should not be charged, on any documents that are recorded in connection with a sales transaction or any transfer to an owner-occupant.
 
In recent weeks, C.A.R has received reports that some title companies and county recorders are improperly charging buyers this fee for documents which are exempt under the law. In response, C.A.R. has prepared resources for you and your buyers to prevent an improper charge from occurring or, if a buyer has already been charged, to assist in the recovery of improperly charged funds.
 
When in Life Do Most People Achieve Ownership?
The average consumer’s life is filled with financial milestones, and buying a home is a major one. But when do most people reach the milestone of homeownership? Researchers at Comet Financial Intelligence, a student loan refinancing resource, surveyed 1,200 Americans on how long it took them to complete their financial “rites of passage” with homeownership and other savings hurdles. Among their findings:
 
The millennial respondents surveyed say they expect to purchase their first home three years before paying off their student loans. As such, millennials may be prioritizing paying down their student loans before buying a home, and that may explain some of their delay into homeownership compared to previous generations, the survey says.
 
The average age at which people buy their first home is 29.1 years old. Regardless of which generation they belong to, most Americans will be homeowners by age 35.

Three-quarters of millennials surveyed do not yet own homes, and they will be 34.4 years old, on average, by the time they take out their first mortgages.
 
When consumers do become homeowners, they tend to feel a happy sentiment toward homeownership. Female homeowners surveyed showed greater feelings of excitement about a place to call their own. However, men surveyed expressed pride in their homes more often, the survey found. Recent studies have shown single women are buying homes at a faster pace than single men.
 
Tax Reform Handouts for You, Your Clients
Since the Tax Cuts and Jobs Act was signed into law, many are concerned about the impact this tax reform plan will have on them. To help explain some of the major provisions affecting housing in California, C.A.R. has created various one-sheet handouts detailing the impact that this tax reform plan may have on first-time buyers, home sellers, homeowners, and REALTORS®. There also are sheets that provide examples of how a first-time buyer's taxes may change under this plan, as well as how a REALTOR®'s taxes could change. Check out these one-sheets and share them with your clients. 
 
Also, if you missed the tax reform webinars offered by C.A.R.’s research team and legal department, you can find recordings for both here.
 
Renters Are Getting Frustrated
The majority of renters say they want to own a home in the future and believe that homeownership is a critical piece of the American dream. But making the leap into homeownership is facing bigger hurdles as the market sees higher home prices and a shortage of homes for sale, according to the NATIONAL ASSOCIATION OF REALTORS®’ newly released Aspiring Home Buyers Profile
 
Non-homeowners surveyed say the main reason why they do not currently own is because they are unable to afford homeownership. Swift price increases and a shortage of homes for sale in most of the country have shaken the confidence of non-owners as they consider buying. As such, the share of non-owners who say now is a good time to buy fell to 58 percent at the end of 2017, following a high of 62 percent in the third quarter of 2017.
 
Until they do buy, non-homeowners expect to face increasing rents. Fifty-one percent of renters surveyed say they expect their rent to increase this year. However, only 15 percent of renters said the increase in rental costs would make them consider purchasing a home.
 
Could the Inventory Crunch Worsen?
Housing permits, a gauge of new-home activity, slipped in the final quarter of 2017, which could worsen a housing shortage already shaking many markets across the country.

Single-family permits are running at only 56 percent of normal activity, according to the National Association of Home Builders/First American Leading Markets Index.
 
Permit levels are at or above normal in only 62 of the 337 metro areas tracked in the NAHB/First American Index, which is a drop of 7.5 percent compared to the third quarter of 2017.
 
Despite sluggish permits, the index showed that many markets are showing a stronger recovery in their economy and home prices. Housing markets in 195 of the 337 metro areas tracked nationwide returned to or exceeded their last normal levels of economic and housing activity in the fourth quarter of 2017. The LMI measures three components: housing permits, employment, and home prices.
 
Get Involved With the Property Tax Fairness Initiative
Hopefully by now you’re aware of the historic effort C.A.R. is spearheading to qualify a ballot initiative for the November 2018 ballot. Known as the Property Tax Fairness Initiative, this measure would allow homeowners 55 years of age or older to transfer their Prop. 13 tax base to a home of any price, anywhere in the state, any number of times, These protections also would be extended to people who are disabled and those who have lost their homes to a natural disaster. It’s a carefully written initiative that includes appropriate safeguards while eliminating California’s property tax “moving penalty.”
 
In order to qualify the initiative for the ballot, C.A.R. must collect approximately one million signatures from California registered voters. Petitions were mailed to each C.A.R. member in early January, urging them to sign the petition and to obtain four additional signatures of registered voters within the same county, and mail it back to C.A.R.
 
C.A.R. needs your help to get this important initiative on the ballot. If you haven’t already signed and returned your petition, please do so. Additionally, please contact your local association of REALTORS® about any upcoming events that your local association may be hosting regarding this initiative.
 
Fast Facts
 
Calif. Median Home Price: December 2017:
  • California: $549,560
  • Calif. highest median home price by region/county: San Mateo, $1,500,000
  • Calif. lowest median home price by region/county: Lassen, $175,000 
Mortgage Rates: Week ending 2/1/18
  • 30-year fixed: 4.22%
  • Fees/points: 0.5%
  • 15-year fixed: 3.68%
  • Fees/points: 0.5%
 
Pending home sales tumble to a 3-year low as housing ‘crisis’ worsens
Source: Market Watch
   
Pending home sales fell 4.7 percent to 104.6 in January, the National Association of Realtors said Wednesday. That’s the lowest reading since October 2014, after the biggest monthly decline since 2010, when the recovery was just getting started.
 
MAKING SENSE OF THE STORY
  • The NAR’s index of pending home sales, which tracks real-estate transactions in which a contract has been signed, but the transaction hasn’t closed, had been grinding slowly higher. But December’s reading was revised down, and the index is now 3.8 percent below year-ago levels. The Econoday consensus was for a 0.3 percent increase.
  • NAR called the lack of housing-market inventory a “crisis” when it reported on existing-home sales in January. Realtors are seeing lots of traffic, the industry group said, even as the number of available listings at the end of January was at an all-time low for the month and 9.5 percent lower than a year earlier. The NAR called the number “startling.”
  • Contract signings precede sales by approximately 45 to 60 days, so the January figures don’t bode well for February sales data, nor the overall economy. 
  • Sales throughout 2017 were only 1.1 percent higher than in 2016, and the REALTORS® expect the recent tax-law changes affecting the deductibility of property taxes and mortgage interest to take a bite out of home sales in 2018.
 
As home prices soar, buyers turn to riskier mortgages
Source: CNBC
 
With interest rates on home loans climbing, homebuyers — or homeowners looking to refinance — might be tempted by the lower initial cost of an adjustable-rate mortgage. 
 
At last count, 6.7 percent of mortgage loan applications were for ARMs. While that's still a relatively small portion, it's up from 5 percent in early January.
 
At the same time, the average rate on a traditional 30-year mortgage ticked up to 4.64 percent from 4.23 percent, according to data from the Mortgage Bankers Association. This marks the highest it's been since January 2014.
 
The average interest rate on one popular ARM — one whose interest rate is fixed for five years and then adjusts yearly — has gone to 3.85 percent from 3.5 percent during that time.
 
TALKING POINTS
  • Total mortgage application volume increased 2.7 percent from the previous week, the Mortgage Bankers Association said Wednesday in its seasonally adjusted report
  • Compared with a year ago volume was 2.4 percent lower.
  • Mortgage applications to purchase a home rose 6 percent for the week but were just 3 percent higher than a year ago
 
More Buyers Gamble with sight-unseen offers 
Source: Realtor Mag
 
Thirty-five percent of home buyers who purchased a home in November and December said they made an offer on the home without seeing it first in person, according to a newly released survey of more than 1,500 home purchasers conducted by the real estate brokerage Redfin. That is up from 33 percent in May 2017 and from 19 percent in June 2016.
 
By age group, millennial home buyers are the most likely to make an offer on a home without visiting it first, at 45 percent, researchers found. Younger adults may be more comfortable with relying on information they find online about properties for sale and the neighborhoods, researchers note.
 
Californian cities recorded some of the highest percentages of buyers making an offer sight-unseen, with Los Angeles recording 57 percent, San Diego 46 percent, San Francisco 44 percent and Sacramento 30 percent. 
 
If California’s the future, why are so many leaving?
Source: Curbed
 
California, many say, is the future. A center for creative industries and new technology—look at its impressive rollout of electric vehicles and autonomous cars—it’s also a diverse state, pushing progressive policies that could be models for the rest of the country.
 
And people are leaving in droves for opportunities elsewhere.
 
The actual migration patterns in California aren’t quite as bad as that sounds—at least not yet. But a recent report by the California Legislative Analyst’s office looking at domestic migration patterns shows that cracks continue to form in the state’s bright facade. Between 2007 and 2016, a million more people have left the state than have moved in from other states.
 
Spread over a decade, that’s not terrible. It’s actually less severe than domestic out-migration during the previous decade. But the patterns of who’s moving in, and who’s moving out, underline some of the social and economic pressure that have made California, and other coastal areas, so prohibitively expensive.
 
More browsers, fewer home buyers in hot Bay Area real estate market
Source: The East Bay Times
 
The New Year brought lots of home shoppers, but not so many home buyers.
 
Bay Area residents continued to show strong interest in home ownership in January, despite rising mortgage rates and home prices, according to a study by real estate brokerage Redfin. Demand hit record levels across the country for the typically slow winter month.
 
“This is the highest level we’ve seen to lead off the year,” said Nela Richardson, chief economist at Redfin. Even the surging home prices, she added, haven’t dampened demand.

But the strong interest may show more people browsing, not buying. Redfin saw home tour requests jump nearly 14 percent from the previous year, while actual offers on homes dropped about 10 percent.
 
Demand in the Oakland metropolitan area hit levels typically seen in the early summer, while San Francisco also hit a January high for the last three years, according to Redfin. The brokerage’s housing demand index, which has tracked demand for four years, factors in the number of buyers requesting home tours and making offers.
 
Hidden cost of housing: How a shortage of construction workers is making our crisis worse              
Source: The Mercury News
 
As the Bay Area scrambles to find housing for its growing population, developers are running into another kind of shortage: There aren’t enough construction workers to build the homes the region needs.
 
Builders throughout the area say they are struggling to recruit skilled laborers. Some bring in employees from Southern California or even Seattle, putting them up in hotels. Others hire workers from the Central Valley who spend hours driving to job sites in the wee hours of the morning only to arrive exhausted, forced to squeeze in quick naps before the workday starts.
 
The challenge of finding workers only exacerbates the Bay Area’s housing shortage. Despite a dramatic increase in permits for residential construction since 2009, construction jobs have increased at less than one tenth the pace of permits. As a result, wages and the overall cost of building are increasing, forcing some developers to delay projects or, in some cases, not build at all.
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1/9/2018 2:04:07 PM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News

✓ Economists Predict the Strong Seller Market to Continue
✓ The Most Valuable Housing Markets in the US
✓ Tax Changes Could Hit Affordability at the High End of the Housing Market
✓ California Housing Issues to Watch Out for in 2018
✓ Survey Says Tax Law will Change Buyer’s Plans to Buy a Home

RENT CONTROL, PROPERTY TAXES AND TALLER APARTMENT BUILDINGS: CALIFORNIA CONSIDERS MAJOR HOUSING BILLS IN 2018
Source: The Mercury News
 
The state’s housing crisis is back on the agenda as California lawmakers return to work after a months-long recess. Proposals floated on the first week of the year would bring major changes to laws governing property taxes, rent control, and local zoning rules. Senate Democrats are also proposing a work-around for the recent GOP tax overhaul, which set a $10,000 cap on state and local tax deductions.
 
MAKING SENSE OF THE STORY
  • Deduction cap: A bill introduced Thursday would allow Californians to instead donate to the state, receiving a dollar-for-dollar tax credit, so they can — in theory — deduct the full amount from their federal taxes. There is no cap on deductions for charitable contributions.
  • Rent control fight: Should California repeal a landmark 1995 law that keeps local rent control ordinances in check? The law, known as Costa Hawkins, blocks cities from applying rent-control policies to homes built after 1995 or to single-family homes. It is hugely popular among landlords, but some advocacy groups for renters are demanding that the state lift those restrictions, allowing cities to address runaway rents as they see fit. 
  • New tax breaks for homeowners? Proposition 13, passed in 1978, keeps annual property tax increases to a minimum, even if a house quadruples in value, until a property changes hands. The California Association of Realtors is gathering signatures to qualify an initiative that would let those over 55 take their low property tax base with them anywhere in the state, as many times as they move.
  • Down payment help: Assemblyman Marc Steinorth is bringing back a revised version of a proposal he introduced last year: to help aspiring first-time home buyers save up for a down payment with a special savings plan. The money would be withdrawn, tax-free, as with a Roth IRA or 529 college savings plan.
  • Homeowner Bill of Rights: Portions of this 5-year-old state law expired Jan. 1, and Senator Jim Beall has introduced legislation — Senate Bill 818 — to renew mortgage and foreclosure protections, such as the right to appeal when a loan modification application is denied. 
  • More apartment buildings: Senator Scott Wiener is set to introduce Senate Bill 827, which would require cities to allow denser housing developments to be built within a half mile of transit hubs.

HISPENNIALS? HISPANIC MILLENNIALS CALLED THE FUTURE OF HOME BUYING
Source: The Orange County Register

Real estate professionals call them “Hispennials.” The label, a mash-up of Hispanics and millennials, defines a group of consumers, aged 20 to 36, which the housing industry is eagerly courting.

“If you look at the Latino population, their demographic is younger and they are just starting to buy homes,” said Rick Arvielo, CEO of Tustin-based New American Funding, a fast-growing lender with 35 offices in Southern California.

“Millennials and Hispennials are the biggest waves in home buying.”

Today, just 45 percent of Latinos in the U.S. own homes, 20 percentage points lower than the home ownership rate of non-Hispanic whites.

But that’s changing quickly. Last year, Latinos accounted for 75 percent of the net growth in overall home ownership. Their numbers grew by 209,000 to a total of 7.3 million, according to the National Association of Hispanic Real Estate Professionals.
TALKING POINTS
  • Higher interest rates, attributed to optimism over the tax bill, sent total mortgage application volume down 2.8 percent in the last two weeks of 2017.
  • Applications to refinance a home loan, which are most rate-sensitive, fell 7 percent during the two-week period.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged for the last week of the year at 4.25 percent

NO END IN SIGHT: HOUSING MARKET STILL HAS LEGS, ECONOMISTS SAY
Source: The Orange County Register

After nearly six years of rising home prices, what’s next?

Will 2018 be the seventh year home prices go up? Or the year the market stalls? Will this be the year that tenants get the upper hand over landlords? Or will rent hikes just keep coming?

In other words, will the seller’s market of the past 69 months continue in 2018?

We interviewed 10 economists and reviewed nine forecasts to find an answer to that question. It can be summed up in one word.

Yes.

Yes, home prices and home sales are projected to keep rising in the year ahead, although the gains will be smaller. Yes, the supply of homes for sale will fail to keep pace with demand, fueling more cutthroat bidding wars. And yes, rents will keep rising while apartment vacancies stay near all-time lows.

The economists all cite the same reason: “As long as the economy keeps growing, that’s going to give a push to the housing market,” said Anil Puri, director of the Woods Center for Economic Analysis and Forecasting at Cal State Fullerton.

Southern California home prices are expected to rise at about the same pace as California: 4.2 percent, according to the California Association of Realtors. That would put next November’s median price of an existing house at about $525,000.

Sales have plateaued across the state and region, said California Association of Realtors Chief Economist Leslie Appleton-Young.

“The lack of inventory and affordability are really … keeping a lid on the California housing market,” Appleton-Young said. “We have fewer transactions … today than when we had 10 million fewer people living in California.”
HERE ARE THE MOST VALUABLE HOUSING MARKETS IN THE U.S. 
Source: Business Insider 

The value of the nation’s housing stock grew by 6.5 percent to $31.8 trillion this year — with Los Angeles and New York City far outpacing the rest of the country’s top-valued metro markets and Miami landing at No. 4.

The Los Angeles market’s $2.7 trillion valuation topped that any other metro across the country after growing 5.7 percent over the past year. That’s a smidgen higher than New York City’s $2.6 trillion valuation, up 7.9 percent from last year.

Los Angeles and NYC were the only two markets worth more than $1 trillion, with Washington ($996.7 billion), Miami ($865.2 billion) and Chicago ($821.3 billion) rounding out the top five.

San Jose saw the largest percentage growth — 13.5 percent — of the nation’s top 10 markets, while Columbus, Ohio’s 15.1 percent growth was the highest of the top 35 markets.

The nation’s yearly growth is the highest since 2013, according to a Zillow report cited by Bloomberg. The $31.8 billion figure is 1.5 times the nation’s Gross Domestic Product (GDP) and nearly three times the GDP of China.  
ELLIE MAE: MILLENNIAL HOMEBUYER CREDIT SCORES DECREASING
Source: HousingWire
 
The latest Ellie Mae Millennial Tracker report shows a slight decline in the average credit scores of closed loans to Millennials from the previous year.
 
The report, which covers November 2017, shows that the trend was most noticeable for FHA and VA loans.
 
According to Ellie Mae, in November 2016, the average FICO score on a closed FHA refinance loan to a Millennial borrower was 678, but that dropped to 669 in November 2017. On VA loans, the average FICO scores on closed VA refinance loans dropped from 725 in 2016 to 710 in 2017.
 
“With the average credit score dipping, lenders are extending credit to borrowers who may have had no previous access to the housing market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae.
 
“While these scores are still significantly above the levels seen a few years ago, it is encouraging to see increased accessibility, especially as the millennial population continues to pursue home ownership.”  
TAX CHANGES COULD HURT AFFORDABILITY AT HIGH END OF THE HOUSING MARKET
Source: NPR
 
The new tax law is forcing a lot of people to reconsider whether they want to buy a home and how much they can pay, and that could affect housing prices, says Mark Zandi, chief economist at Moody's Analytics.
 
By the summer of 2019, housing prices nationwide will be about 4 percent less than they otherwise would have been, Zandi predicts. Prices could actually decline for higher-priced homes in parts of the country such as the Northeast, South Florida and the West Coast, he says.
 
Homebuyers will take a hit in several ways.

Starting in 2018, homeowners can deduct interest on mortgages only up to $750,000. The previous cap was $1 million, with an additional $100,000 allowed for home equity loans. Interest on home equity loans and lines of credit will no longer be deductible.
 
Not many Americans have mortgages that large, so relatively few will be hurt, says Sam Chandan, associate dean and head of New York University's Schack Institute of Real Estate.
 
The doubling of the standard deduction on federal income tax will be much more consequential, he says.  
PREPAYING YOUR PROPERTY TAX? I.R.S. CAUTIONS IT MIGHT NOT PAY OFF
Source: The New York Times 
 
The Internal Revenue Service has a message for the homeowners rushing to prepay their property taxes before new rules take effect on New Year’s Day: Not so fast.
 
The tax bill that President Trump signed into law last week sharply limited the itemized deductions for state and local taxes while raising the standard deduction for individuals and couples. Those rules do not take effect until 2018, however. That has led some homeowners, particularly in high-tax, affluent areas, to try to prepay their 2018 property taxes before the deduction disappears.
 
Making sense of the story:
  • In an advisory notice posted to its website on Wednesday, the I.R.S. said that maneuver could work, but only under limited circumstances.
  • To qualify for the deduction, property taxes not only need to be paid in 2017, they must also be assessed in 2017 — meaning that homeowners who prepaid their taxes based on estimated assessments, or who tried to pay several years’ worth of taxes at once, will probably be out of luck.
  • It is not clear how many people have tried to prepay their taxes. In Fairfax, Va., hundreds of people lined up to prepay taxes on Tuesday, according to local media reports, and communities in New York, New Jersey and other states have likewise reported a rush of prepayments.
  • The I.R.S. guidance is advice to taxpayers and tax preparers, not a legal ruling. And the agency did not define what it means for a tax to be “assessed.”
  • Property tax schedules vary widely from state to state and even county to county. Some states have already sent out tax assessments for part of 2018, even if the payments are not due until next year. In those states, tax lawyers said, homeowners who prepay taxes will almost certainly be able to deduct their taxes under the 2017 rules.
  • Other states have not even begun the 2018 assessment process. In those states, prepayment almost certainly will not help taxpayers.
 
CALIFORNIA WILL SOON SEE IMPACT OF GOP TAX PLAN WITH LOSS OF AFFORDABLE HOUSING

Source: The Orange County Register
 
The new Republican tax overhaul will likely chop plans for thousands of new affordable homes in California and further squeeze low-income renters, but experts say the impact could have been more severe.
 
The tax law, signed by President Donald Trump last week, preserved two threatened federal programs that are key to building tens of thousands of affordable homes in California — low-income housing tax credits and tax-exempt private activity bonds.
 
But experts estimate the new tax rules could still reduce federal funding for subsidized housing in the state by 20 percent, translating to roughly $500 million a year of projects and 4,000 new units lost.
 
“The worst possible hits were taken out of the bill,” said Carolina Reid, assistant professor of city and regional planning at UC Berkeley.
 
But, she added, “It does nothing to actually promote affordable housing.”

Advocates say the need for affordable housing has become more visible and urgent, as Bay Area residents priced out of expensive apartments turn to alternatives — from sharing crowded houses and apartments with family, friends and strangers, to living in vehicles and RVs.  
TALKING POINTS
  • As expected, mortgage rates felt the effect of last week’s surge in long-term interest rates in the final, shortened week of 2017.
  • The 30-year fixed mortgage rate increased 5 basis points to 3.99 percent in this week’s Freddie Mac survey.
  • Although this week’s survey rate represents a five-month high, 30-year fixed mortgage rates are still below the levels seen at the end of last year and early part of 2017. 

THREE CALIFORNIA HOUSING ISSUES TO WATCH IN 2018
Source: The Los Angeles Times
 
Rising rents and home prices forced California’s housing crisis to the front of Gov. Jerry Brown’s and lawmakers’ agenda in 2017.
 
Legislators passed the most comprehensive package of housing bills in recent memory designed to increase spending on low-income development and encourage more construction in general.
 
But the bills, according to independent analyses, won’t do much to make housing cheaper in the state. Expect more focus on housing issues at the Capitol and on your statewide ballot in 2018.
 
Here are three to watch:

1. A rent control battle

2. The future of Proposition 13

3. How lawmakers will follow up on this year’s housing efforts.  
ACCESSORY DWELLING UNITS ARE ADDING MUCH NEEDED HOUSING IN SAN FRANCISCO
Source: CNBC
 
In 2014, San Francisco passed legislation allowing property owners to add accessory dwelling units, or ADUs, to their homes and buildings.
 
The law was then expanded in late 2016 so that any building with at least five existing apartments could add an unlimited number of units, the San Francisco Chronicle reports.
 
As property owners take advantage of the new law, the city has seen an explosion of ADUs over the past year.
 
"There are now 1,046 ADUs in the pipeline, with building permits approved for 531 of them," according to the Chronicle.
 
These units, often called "granny flats," typically consist of converted garages or basements.
"Pretty much every multi-unit building with crappy old storage rooms is taking a look at this," John Pollard of the SF Garage Co. told the Chronicle.
 
"You've got all these property owners that realize they are sitting on dead equity." That means everything from a boiler room to basement storage has the potential to become a new housing unit.
 
One landlord in San Francisco's Nob Hill neighborhood is turning a ground-floor dining hall into seven individual units, the Chronicle reports. The apartments will be between 220 and 381 square feet and cost anywhere from $2,400 to $2,800 a month.t.  
SURVEY: MOST SAY TAX LAW WILL CHANGE THEIR PLANS TO BUY A HOME   
Source: The Mercury News
 
Three out of four potential homebuyers responding to a recent online survey said the newly passed GOP tax overhaul will alter their plans to buy a home, according to a nationwide poll released Thursday, Dec. 21, by Realtor.com.
 
Nearly 30 percent said they plan to speed up their home purchase, with 31 percent saying they’ll postpone a purchase, the survey showed.
 
Twenty-six percent said they either will buy a less expensive home or buy in a different location.
 
Just 23 percent said the tax bill will not change their plans to buy a home. On the seller side, most said the tax bill won’t affect them.
 
Fifty-seven percent said the new tax law will have no impact on plans to sell their home.
 
Congress voted Wednesday, Dec. 20, to send the bill to President Donald Trump for his signature. The findings are based on a survey of 2,324 randomly selected respondents surveyed Monday and Tuesday.
 
Almost a fourth of those surveyed said they had planned to buy a home in the next year, while just over a fifth said they’re planning to sell their home in the next year…  
EXISTING HOME SALES SET TO END THE YEAR AT HIGHEST POINT SINCE 2006       
Source: HousingWire
 
Pending home sales inched up slightly in November, indicating that existing home sales will also inch up in December, according to the latest release from the National Association of REALTORS®.
 
But even as home sales increase at the end of this year, headed into 2018, NAR forecasts existing home sales and home price growth will slow primarily due to the altered tax benefits of homeownership in some high cost areas.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 0.2 percent to 109.5 in November, up from 109.3 in October.
 
This modest increase means the index remains at its highest reading since June, and is up 0.8 percent from last year.
 
“All of the leading indicators of housing activity, pending home sales, purchase applications from the MBA's mortgage applications survey, and the National Association of Homebuilder's housing market index, have pointed higher in recent months, suggesting that home sales ended the year on a high note,” Nationwide Chief Economist David Berson said.
 
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12/5/2017 6:21:59 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News

✓ California - Leader in Outbound Moves
✓ Mortgage Cap would hit CA, FL and NY Hardest
✓ Return to Multi-Generational Living Shifts Housing Market
✓ California Realtors Launch Drive to Expand Prop 13 for Senior Homeowners
✓ Equity Rich Properties Surge in US
✓ So Cal’s Housing Prices Shoot up in October
 
FANNIE, FREDDIE TO UP LOAN LIMITS BY $43,500 IN MOST OF BAY AREA NEXT YEAR
Source: Curbed
 
Borrowers will be able to take out a substantially bigger home loan backed by Fannie Mae and Freddie Mac next year, thanks to a 6.8 percent increase in home prices nationwide.
 
Making sense of the story:
  • The two government agencies will raise the maximum-size loan they can guarantee on a single-family home or condo by 6.8 percent next year — to $453,100 from $424,100 in most parts of the country, and to $679,650 from $636,150 in high-cost areas, including most Bay Area counties.
  • That’s the biggest jump in the so-called conforming loan limit since 2006, when the nationwide limit rose to $417,000 from $359,650. As home prices plunged, it remained stuck at $417,000 until this year, when it rose to the current $424,100.
  • Starting in 2008, Fannie and Freddie allowed higher limits in certain high-cost areas. In those counties, the limit is based on the area’s home prices, but it still cannot exceed an overall limit, which will be $679,650 next year. That will be the max in all Bay Area counties except Sonoma, where it’s going to $648,600 and Solano, where it will hit $460,000.
  • The agency’s regulator sets the limit each year based on the average change in the nationwide home price since the previous year. It’s higher for homes with two to four units.
  • For Realtors, this is the best news to come out of Washington in months. “It’s outstanding,” said Steve White, president of the California Association of Realtors. In San Francisco, where the median price of a new or existing home is over $1.1 million, “I don’t know if it will have a significant effect. But in many areas, especially the East Bay, this will allow thousands of Californians to secure a conforming loan for a new home.”
 
ANGELENOS ARE RENTING OUT RVS, BOX TRUCKS LIKE APARTMENTS

Source: Curbed
 
With Los Angeles rental prices surging, some enterprising Angelenos are renting out RVs and box trucks to those who can’t afford other accommodations, as KPCC reported.
 
That may not be the case for long, though. Only a day after the KPCC story aired, City Councilmember Mitchell Englander cited it in a motion calling on the city attorney “prohibit and/or regulate” the rental of RVs, vans, and panel trucks to those who plan on living in them.
 
According to Englander, the rental of these vehicles is “creating a dangerous environment” for those who live in them, since the city has few rules in place regulating vehicles that are being used as residences.
 
“A traditional landlord must comply with all city building codes,” reads Englander’s motion.
 
“Vehicles more often than not don’t have running water, a reliable source of power, and often lack a source for heating and/or cooling.”

According to KPCC, RVs rent for as little as $10 per day, on up to $1,000 per month.
 
If eventually passed into law, restrictions on RV rentals would constitute another step toward what homeless advocates have described as a “ban” on living out of a vehicle. New restrictions on sleeping in vehicles on residential streets went into effect earlier this year.  
TALKING POINTS
  • Total mortgage applications fell 3.1 percent for the week, according to the Mortgage Bankers Association's seasonally adjusted report.
  • Applications to refinance a home fell 8 percent for the week, marking the lowest level since January. They were down 18 percent from a year ago.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less remained unchanged from the week prior at 4.20 percent, with points decreasing to 0.34 from 0.42, including the origination fee, for 80 percent loan-to-value ratio loans.

MORTGAGE CAP WOULD HIT CALIFORNIA, FLORIDA, NEW YORK HARDEST
Source: Bloomberg
 
Property owners in California, Florida and New York have the most to lose if Congress limits tax deductions for interest payments on home mortgages, according to a Bloomberg analysis of Zillow data.
 
Assuming a 20 percent down payment, the three states together are estimated to have more than 80,000 homes currently listed for sale where the mortgage could reach at least $500,000, the limit laid out for new home sales in the House Republican tax plan.
 
In California, that’s 44 percent of homes on the market. Colorado and Massachusetts follow with one third of the number of homes on the market.
 
Hawaii, though it has fewer homes for sale than California, New York and Florida, could see a high percentage of mortgages that would be affected by the proposed cap -- more than half.  
CALIFORNIA REALTORS® LAUNCH BALLOT DRIVE TO EXPAND PROP. 13 FOR SENIOR HOMEOWNERS
Source: The Orange County Register
 
An overhaul of Proposition 13, California’s landmark tax-control measure, could go before state voters next year under a plan adopted last month by the California Association of REALTORS®.
 
The trade group is launching a signature drive to put a new proposition on the November 2018 ballot that would expand tax breaks for homeowners age 55 and older or those who are disabled.
 
If passed, the proposition would allow senior and disabled homeowners to transfer their low, existing Prop. 13 tax assessment to a new home anywhere in the state, using the option as often as they choose and paying any price for their new home.
 
REALTORS® say the provisions would help older owners “locked in their homes” because they’re reluctant to give up low Prop. 13 tax assessments when buying a new residence. REALTORS® maintain at least 70 percent of seniors haven’t moved in 17 years.
 
“It’s to make it easier for senior homeowners who want to move but don’t want to see a big tax bill,” said CAR President Steve White, owner of two Keller Williams brokerages in north Los Angeles County.  
HOUSING CRISIS MAY PROMPT SOFTENING OF RULES FOR MIXED-USE URBAN PROJECTS
Source: The San Diego Union-Tribune 
 
A new plan could help solve San Diego’s housing shortage and reduce a rash of vacant storefronts in buildings that were intended to have ground-floor commercial tenants operating below multiple stories of housing.
 
The many ground-floor vacancies in such buildings, which are called “mixed-use,” is prompting city officials to explore softening requirements they be filled by commercial tenants.
 
The change could allow ground floor housing there instead. Supporters say the new approach would eliminate blight caused by empty storefronts and quickly produce additional housing units on the ground floors of many buildings.
 
Developers could also more easily secure financing for proposed projects if they are no longer required to reserve the entire ground floor for tenants they are unlikely to ever find.  
MILLENNIALS: WE DON’T WANT TO BE RENTERS
Source: National Association of REALTORS® (Realtors Mag)
 
Though many are stuck renting out of financial necessity, millennials show the same desire for homeownership as their parents and grandparents—and traditional suburban properties appeal to them more than renting or buying in cities, Bloomberg reports.
 
Many economists have acknowledged that the slow path to homeownership for young adults is contributing to record-low homeownership rates. But for two consecutive quarters, the homeownership rate among those ages 35 and younger has been on the rise.
 
Some economists predict that millennials will eventually own homes at similar rates as their parents.
 
Rents, however, are taking a bigger bite out of household budgets, making it difficult for young adults to save enough for a down payment.
 
Student loan debt is also delaying homeownership by up to five years, according to a 2016 study by the National Association of REALTORS®. Millennials also have less job security than prior generations, and their careers are more likely to require relocation.  
HOW A RETURN TO MULTIGENERATIONAL LIVING IS SHIFTING THE HOUSING MARKET
Source: Curbed
 
Multigenerational living, when more than one generation lives under one roof (not counting young children or teens), has hit record levels in the U.S.

Growing life expectancy, changing immigration patterns, and affordability issues all contributing to the increase and developers and architects are scrambling to respond. 
 
Making sense of the story:
  • In 2014, according to Pew Research Center data, 60.6 million people, or 19 percent of the U.S. population, lived in multigenerational homes, including 26.9 million three-generation households. 
  • That’s up from a 1980 low point, when the rate was 12 percent. It’s nearly a return to the 1950 rate of 21 percent
  • The nation’s growing and increasingly diverse immigrant population plays a big role in the shift. In 2014, 28 percent of Asian and 25 percent of Hispanic households were multigenerational, both up from five years prior—and a significant jump from the rate found in white households, just 15 percent.
  • A report by the Harvard Joint Center for Housing Studies, the number of Americans over 80 will double, from 6 million to 12 million, in the next two decades. And by 2035, one out of three U.S. households will be headed by someone over 65. 
  • A 2016 survey found that 44 percent of home shoppers in a group of 20,000 hoped to accommodate their elderly parents, and 42 percent planned to accommodate their adult children.
 
CALIFORNIA IS A NATIONAL LEADER IN OUTBOUND MOVES: WHERE DID THEY GO?
Source: The Orange County Register
 
California continues to see more folks moving elsewhere in the nation rather than relocating here, a sign the state looks relatively unappealing to others.

Last year, California had 142,932 more residents exit to live in other states than arrive, according to an analysis of a new report from the U.S. Census Bureau, released Wednesday, Nov. 15.
 
This “domestic net outmigration” was the second-largest outflow in the nation behind New York and just ahead of Illinois and New Jersey. And it was up 11 percent (13,699 net departures) vs. 2015.California’s net outmigration has been ongoing for two-decades-plus.
 
Yet the state’s population continues to grow: By this count, up 108,301 in 2016 — or 0.3 percent — to 38.8 million.  
TALKING POINTS
  • The average rate on the 30-year, fixed-rate mortgage went up one basis point, the 15-year fixed rose two basis points, and the 5/1 ARM dropped one basis point, according to a NerdWallet survey of daily mortgage rates published by national lenders Monday.
  • The 30-year fixed is the same as it was a week ago and eight basis points lower than one year ago.
  • A holiday-shortened week means the likely absence of economic reports that have the power to move mortgage rates much in either direction. 

SOCAL HOUSE PRICES SHOOT UP IN OCTOBER
Source: The Orange County Register
 
The median price of an existing, detached single-family home rose significantly in Southern California in October compared with the same month a year ago, the California Association of REALTORS® reports.

San Bernardino had the greatest increase: 12 percent.
 
Los Angeles County’s median climbed 8.1 percent Riverside County went up by 7.5 percent, and Orange had the smallest hike of the four counties: 4.8 percent.
 
The median price — the midpoint of sales – was $786,000 in Orange; $580,360 in Los Angeles; $382,500 in Riverside and $274,450 in San Bernardino.
 
Statewide, the median price was $546,430, up 6.1 percent from $515,170 in October 2016. Sales were down 3.4 percent from a year ago.
 
A low supply of homes on the market continued to put a crimp on sales, especially in the relatively affordable price ranges.  
BAY AREA RESIDENTS SEEK THE CALIFORNIA DREAM — IN SACRAMENTO
Source: The Mercury News
 
Drawn by lower housing prices, Bay Area residents are pouring into California’s capital and its surrounding areas, trading a temperate climate for triple-digit summers; hustle-and-bustle for a slower pace of life; and redwood hiking trails for expansive fields and distant, snow-capped mountains.
 
The region has become the top destination in the country — ahead of trendy Seattle and Portland — for those looking to flee the jammed roads and high costs of the tech-dominated Bay Area, according to new migration data from Redfin, a popular real estate site.
 
Each year, nearly 20,000 Bay Area residents are resettling in cities stretching from Davis to Sacramento and further east to the Sierra foothills, according to census data analyzed by the Greater Sacramento Economic Council.
 
“It’s becoming a place for the next generation to live,” said Sacramento’s mayor, Darrell Steinberg.   
EQUITY RICH PROPERTIES SURGE NATIONWIDE
Source: National Association of REALTORS® (Realtor Mag)
 
Homeowners should be feeling richer. The share of equity-rich properties rose to a new high—26 percent of homeowners with a mortgage in the third quarter, according to ATTOM Data Solutions’ Q3 2017 U.S. Home Equity & Underwater Report.
 
In the third quarter, there were more than 14 million U.S. properties considered equity rich, which is when the combined loan amount secured by the property is 50 percent or less of the estimated market value of the property.
 
The number of equity-rich properties is up by 905,000 compared to a year ago, according to the report.
 
“Median home prices nationwide are up 9.4 percent so far in 2017, the fastest pace of appreciation through the first three quarters of a year since 2013,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.
 
“Continued home price appreciation is helping to grow the number of equity-rich homeowners across the country compared to a year ago.”  
HOME BUILDER CONFIDENCE HITS 8-MONTH HIGH IN NOVEMBER 
Source: CNBC
 
The nation's homebuilders may not be happy with the Republican tax plan, but they are seeing more buyers, and that is boosting confidence.
 
A monthly reading of homebuilder sentiment rose two points in November to 70, according to the National Association of Home Builders. This comes after rising four points in October.
 
Anything above fifty is considered positive sentiment. November's reading is the highest since March of this year and the second highest on record since before the recession. The index stood at 63 in November 2016.
 
"Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory," said NAHB Chief Economist Robert Dietz.
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11/13/2017 11:12:07 AM

News From Julie | C.A.R Market Matters



The Latest in Real Estate News

✓ California Prices on track to hit record high in 2018 
✓ Current Proposed Tax Reform Package - Review details affecting real estate
✓ Home Prices Out Pace the Nation by 7.8%, Seattle, La Vegas and San Diego
✓ Home Ownership Rises to Highest Level since 2012
✓ Student Loans making it hard for 1st Time Home Buyers
✓ Watch Out for Co-Borrowers Programs
✓ Parents helping Kids in Bidding Wars
 
SOCIAL BENEFITS OF HOMEOWNERSHIP
Source: The Journal of the Center for Real Estate Studies
 
Improved educational performance, higher civic participation, lower crime rates, and improved health remain the biggest social benefits linked to homeownership, according to a new research paper by NAR Chief Economist Lawrence Yun and research economist Nadia Evangelou, which appears in The Journal of the Center for Real Estate Studies.
 
Some findings from the latest research cited in the paper include:
  • Health. Children of homeowners tend to be happier and healthier than children of nonowners, even after factoring in income and education levels. More recently, studies have found the wealth-building effect of homeownership and the sense of control it often brings in a stable housing market can positively affect homeowners’ mental and physical health. On the other hand, some studies suggest that areas where housing distress is high tend to see greater rates of mental health and stress-related health diagnoses among residents.
  • Crime. Research has confirmed homeowners have a lower instance of involvement in crime than nonowners. Also, neighborhoods with stable housing options—regardless of ownership structure—are more likely to have lower crime rates. Some studies have found, however, that foreclosure levels do influence burglary and violent crime rates.
  • Education. Researchers have found homeowners tend to accrue more wealth and save more money—such financial practices are associated with lower rates of homeowners’ children dropping out of school.
  • Civic engagement. Homeownership and residential stability continues to be linked with an increased likelihood of electoral participation. Homeowners remain more likely to participate in local elections and civic groups than renters, the paper states.
  • “Owning a home embodies the promise of individual autonomy and is the aspiration of most American households,” the researchers note. “Homeownership allows households to accumulate wealth and social status, and is the basis for a number of positive social, economic, family, and civic outcomes.
 
FED HOLDS INTEREST RATES STEADY

Source: USA Today
 
The Federal Reserve held its key interest rate steady Wednesday but provided an upbeat economic outlook that leaves the door open to an anticipated rate hike in December despite persistently weak inflation.
In a statement after a two-day meeting that occurred against a backdrop of imminent changes in the central bank’s leadership, the Fed said it left its benchmark federal funds rate unchanged at a range of 1 percent to 1.25 percent as expected.
 
But Fed policymakers said, “the labor market has continued to strengthen” and “economic activity has been rising at a solid rate despite hurricane-related disruptions.” The economy grew at a surprisingly strong 3 percent annual rate in the third quarter despite Hurricane Harvey in Texas and Hurricane Irma in Florida, the government said last week.  
TALKING POINTS
  • In the Mortgage Bankers Association’s weekly report on mortgage applications noted a decrease of 2.6 percent in the group's seasonally adjusted composite index for the week ending October 27.
  • During the week, mortgage loan rates rose on all five loan types that the MBA tracks with four rising to multi-month highs.
  • Mortgage loan rates rose to their highest level since July on 30-year fixed, 15-year fixed and FHA loans last week. Rates for adjustable-rate loans rose to their highest level since March. 
  • According to the MBA, last week's average mortgage loan rate for a conforming 30-year fixed-rate mortgage rose from 4.18 percent to 4.22 percent. The rate for a jumbo 30-year fixed-rate mortgage rose from 4.11 percent to 4.16 percent. The average interest rate for a 15-year fixed-rate mortgage increased from 3.48 percent to 3.52 percent.
  • The contract interest rate for a 5/1 adjustable rate mortgage loan increased from 3.29 percent to 3.33 percent. Rates on a 30-year FHA-backed fixed rate loan rose from 4.04 percent to 4.07 percent.
 
HOUSE REPUBLICAN TAX REFORM PLAN WILL SLASH MORTGAGE DEDUCTION
Source: Housing Wire
 
Republicans announced their new tax plan, Tax Cuts and Jobs Act, Thursday, and its implications on the housing market are much larger than expected. The bill, H.R. 1, cuts the mortgage interest deduction in half. It’s previous limit was $1 million.
 
Many experts feared the increase in the standard deduction, which the new plan increased from $12,000 to $24,000 per household, saying it could make the mortgage interest tax deduction less appealing, however, lowering the tax deduction has brought even more outcry from the housing industry.
The National Association of Realtors, who has been one of the most vocal defenders of the mortgage interest deduction, released this statement on the new plan:
 
“We are currently reviewing the details of the tax proposal released today, but at first glance it appears to confirm many of our biggest concerns about the Unified Framework,” NAR President William Brown said. “Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, and from a cursory examination this legislation appears to do just that. We will have additional details upon a more thorough reading of the bill.”  
SAN DIEGO HOME PRICE INCREASES OUTPACE NATION
Source: Los Angeles Times
 
San Diego had the third highest annual home price increase in the nation in August, a distinction not reached since 2014, said a top real estate index released Tuesday.
 
San Diego County home prices have risen 7.8 percent in a year, said the S&P Case-Shiller Indices, which are adjusted for seasonal swings. Only Seattle and Las Vegas had bigger increases in the 20-city index.
In the last two years, the San Diego region has averaged around 10th place in the index, making August’s jump noteworthy to industry watchers. San Diego’s yearly increases outpaced the nationwide gain of 6.1 percent and the rest of California
 
The indices go beyond just looking at the median home price of a region, evaluating home transaction prices to track repeat sales of identical single-family houses as they turn over through the years.
The median home price in San Diego County was $535,000 in September, CoreLogic reported last week.  
HOMEOWNERSHIP RATE RISES TO HIGHEST LEVEL SINCE 2014
Source: Housing Wire
 
The national homeownership rate continued its slow trek back above last year’s historic lows in the third quarter, rising to levels not seen since 2014.The latest data from the U.S. Census Bureau released this week shows that the homeownership rate rose to 63.9 percent in the third quarter from 63.7 percent in the second quarter. In last year’s third quarter, the homeownership rate was 63.5 percent.
 
While the Census Bureau notes that neither increase was “statistically different,” the homeownership rate is now a full percentage point above 2016’s second quarter, when the homeownership rate fell to it lowest level since 1965.
 
Before falling to that historic low, the homeownership rate trended down since it peaked above 69 percent during the height of the housing boom. But now, the downward trend appears to be finally turning in a positive direction with the homeownership rate climbing, albeit modestly, over the last several quarters – as seen in the chart below.  
STUDENT LOANS MAKING IT HARD FOR FIRST-TIME HOMEBUYERS 
Source: CNBC
 
As the economy and wages improved in 2017, first-time homebuyers were finally moving back into the market — until that turned around again. The share of sales to first-time buyers fell to 34 percent in 2017, down from 35 percent in 2016, according to the National Association of Realtors' annual Profile of Home Buyers and Sellers. That is the fourth-lowest share in the survey's 36-year history. First-time buyers historically make up closer to 40 percent of homebuyers.
 
The drop in buyers is, in part, due to a rise in student-loan debt. For those who did buy, 41 percent said they had student debt, up from 40 percent in 2016. The average amount of debt also increased to $29,000 from $26,000 last year.
 
More than half of buyers owed at least $25,000, and a sizable share said that debt delayed their saving for a down payment. And that down payment had to be larger, given the lack of affordable homes for sale.  
DEADLY CALIFORNIA FIRES STRETCH AN ALREADY TIGHT HOUSING MARKET
Source: Bloomberg
 
Areas of California affected by wildfires may have an inadequate supply of emergency housing for victims because those markets were already facing severe inventory shortages, industry experts warn. The fires have torn through Northern California’s wine country, destroying thousands of homes and businesses.
 
Making sense of the story:
  • The fires continue to burn in California, with more than 221,000 acres of land and an estimated 3,500 homes and other structures destroyed, according to the California Department of Forestry and Fire Protection. At least 40 people have died in the wildfires.
  • In particularly hard-hit Santa Rosa, rents are already among the highest in the country. Inventory shortages and skyrocketing home values there may leave displaced homeowners with few options while their houses are being rebuilt. Prior to the fires, the Santa Rosa apartment occupancy rate was 96.5 percent, according to RealPage data.
  • Burbank Housing, Sonoma County’s largest operator of affordable housing units, had 15,000 people on its waiting list for low-income apartments even before the fires began. 
  • Housing shortages have been common across the country, and a natural disaster can make it even worse, says Nela Richardson, chief economist at Redfin. “The housing system can’t handle the shock,” she says. “Any event—even a big rainstorm that floods out several basements in a neighborhood—something as trivial as that can overwhelm the system.”
  • Housing supply is short across the entire Bay Area. Displaced homeowners looking to relocate would find the most comparable home values to Sonoma County in Contra Costa County, to the east of San Francisco, Trulia’s Ralph McLaughlin said. Renters may have to travel as far as San Benito County, south of San Jose, based on comparable rents. Meanwhile, the onslaught of permit applications and heightened demands on construction labor will likely lengthen the rebuilding process.
 
RENT PRICE HIKES ARE EASING

Source: National Real Estate Investor
 
Renters may finally be getting some relief. Apartment rents are not increasing as much as they have in the last few years.
 
None of the major metro areas studied had seen annual rent growth of more than 10 percent. Rents rose 2.2 percent, on average, in the U.S. over the 12 months that ended in the third quarter, according to Yardi Matrix.
 
That marks the slowest rate of increase in rental prices since April 2011.
 
The markets where rents increased the most quickly in 2016 have slowed down by the most in 2017, according to data from Axiometrics. Sacramento still has the strongest rent growth in the U.S., but apartment rents grew by 6.9 percent over the 12 months that ended in the third quarter of 2017. For comparison, a year ago rents rose by nearly 12 percent in that time frame.
 
Many of the markets that saw home prices plunge by the most during the housing crash are seeing some of the highest rent upticks still.  
TALKING POINTS
  • A slight decrease in mortgage rates brought refinancers and home shoppers back to lenders last week.
  • Total mortgage application volume for refinancings and home purchases rose 3.6 percent week-over-week on a seasonally adjusted basis, the Mortgage Bankers Association reported Wednesday. However, the volume still is nearly 19 percent below the same week a year ago. Interest rates were lower a year ago.
  • Home purchase applications increased 4 percent last week and are up 9 percent compared to a year ago, the MBA reports.
  • Applications for refinancing rose 3 percent, but remain down 36 percent from a year ago.
  • The 30-year fixed-rate averaged 4.14 percent, down from 4.16 percent the week prior, the MBA reports.
CALIFORNIA HOME PRICES ON TRACK TO HIT A RECORD HIGH IN 2018
Source: Orange County Register
 
California’s five-year run of rising home prices is expected to last another three to five years, with median house prices on track to beat the record highs set during the housing bubble, a Realtor economist said.
 
The California Association of Realtors forecast home prices will increase an additional 4.2 percent in 2018, rising to $561,020. If the forecast proves accurate, that existing single-family home price will exceed the record high of $560,270 set in 2007. Prices, however, will remain well below pre-recession records when taking inflation into account.
 
Single-family home sales also are projected to increase in the state next year, but at a much more modest pace, the Realtor forecast said. CAR projected 426,200 houses will change hands, up 1 percent from this year’s level.
 
Overall, the gains in both house prices and sales are lower than in past years, perhaps signaling the California housing market’s “rate of acceleration has been slowing,” said CAR Chief Economist Leslie Appleton-Young. “Southern California home prices are expected to rise at roughly the same pace in 2018 and to match the statewide median.”  
PARENTS HELPING KIDS COMPETE IN BIDDING WARS
Source: Wall St. Journal
 
To help their adult children, more parents are reportedly taking out equity in their own home so their child can buy a home of their own. 
 
More parents are finding that their adult children need the extra financial footing in order to compete in areas where bidding wars have become commonplace. 
 
The additional funds are helping adult children avoid making a deal contingent on financing and also helping to make their offers more attractive to sellers.
 
Parents have several options for tapping the equity in their homes, such as cash-out refinances or a home equity loan.
Even millennials with high-paying jobs and sizable down payments have been losing out in some bidding wars due to high competition, particularly in markets like Washington, Boston, and Seattle, says Nela Richardson, Redfin's chief economist. By having a parent take out a home equity line of credit to give their child a full purchase price, some millennials are better positioned to then win against multiple bids.  
SURVEY: AMERICAN DREAM VARIES BY GENDER, AGE
Source: Hearth Insights
 
When it comes to the American dream, women are more concerned about affordability and financial security than men, according to a recent survey from Hearth, a financial tech startup focusing on home renovation loans.
 
In a survey of 2,000 Americans, both genders ranked owning a home they love as the most important element of attaining the American dream, with 46 percent of women and 42 percent of men putting it at the top of their list.
 
However, women ranked “affording rent and living expenses without hardship” closely behind homeownership at 41 percent. This element of the American Dream ranked fourth at 27 percent for men, who put starting a family (34 percent) and finding a fulfilling career (33 percent) second and third.
 
Another area that men and women ranked differently was savings. Women said saving money to send their children to college (27 percent) is key to achieving the American dream, while men prioritized building retirement savings (23 percent).
 
Survey responses also varied by generations, with millennials being 77 percent more likely than baby boomers to see homeownership as a primary way to build wealth. However, all generations said creating a living space for family was the most important reason for owning a home.  
COULD YIMBY BE THE NEW NIMBY?
Source: Builder Magazine
 
Young adults are forming a new movement known as YIMBY—“yes in my backyard”—as they advocate for more affordable housing in their communities.
 
Young adults reportedly are turning out in bigger numbers to zoning, planning, town, and city board meetings to advocate for more affordable housing in their districts. Activist groups are gaining momentum, particularly in markets that have faced surging rental costs and home prices the last few years.
The housing industry expects the YIMBY movement to get louder as millennial advocates seek housing solutions to the affordability problem and beyond.
 
Now, though, builders and developers find themselves new allies of convenience, a new and progressively powerful force of people, who themselves are changing the narrative. Young voters, mostly renters who fear that if they don't speak up and act now in support of more plentiful, more attainable housing, they're going to have to move out.
 
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