Market Matters

Think California's housing crisis is tough in LA? Try Coachella. Source: KPCC Bob Soloman, head of UC Irvine Law School’s Community and Economic Development Clinic, commented the following about the housing crisis in the Coachella Valley: “Really, the housing shortage is abysmal. It’s worse than anything I’ve seen. […] Mobile home parks are springing up. But they’re springing up in fairly haphazard ways, they’re not well maintained. They’re often un-permitted." Many areas where working class families are living lack adequate electrical systems and waters systems, such as the trailer parks cited by Soloman. Blown fuses and dirty water in115 degree weather has made for poor living conditions for such residents, but due to a lack of housing options, poor families have been forced to make due. Read the full story   Do Home Builders Understand What Buyers Want?  Source: Wall St. Journal   Are home builders doing a good job of determining what home buyers want? Not according to Nela Richardson, chief economist for brokerage Redfin Corp., and Selma Hepp, chief economist for Zillow Group’s Trulia real-estate website. Richardson and Hepp noted that builders aren’t constructing enough entry-level housing to meet demand; instead, they are tailoring construction toward luxury buyers with ample credit. While builders may not be so sure about the financial prospects of entry-level buyers, the economists say this demographic has demand that is adequate and increasing. Read the full story HUD Secretary Op-Ed: Make Sure Every Child in America Can Chase Their Dreams Source: Quartz   Julián Castro, United States Secretary of Housing and Urban Development (HUD), is calling for greater investment in public schools, infrastructure, and housing in order to ensure that every child – no matter where they live or how much they earn – can make it in America. Castro notes, “We must promote smart, inclusive planning in every community. We can’t have one plan for the suburbs and another for cities. Instead, we must view our communities as connected, because they are.” The HUD secretary touts a new initiative that HUD is launching in partnership with the U.S. Departments of Energy and Education called “STEM, Energy, and Economic Development” or “SEED.” SEED will leverage federal investments and partnerships to connect public housing residents to energy-sector training and jobs. Read the full story      Bay Area Housing: Pay $900 a month to live in a tent near Google Source: SF Gate   In a sign of just how bad the housing market has gotten in the Bay Area, a man has offered a tent to rent in his backyard for $900 due to the lack of available rental options in the region. The owner stated, “It kind of is (outrageous). But maybe they should build more affordable housing in Mountain View." As a way to lure a renter for the tent, the owner advertised it as a "safe and friendly" neighborhood, "very close to Caltrain," and "in a beautiful garden."  Read the full story Poll: Housing Scarcity Concerns Surpass Water Worries in San Francisco Source: KQEDSan Francisco is the epicenter of housing concern for the whole Bay Area, as finding an affordable place to live ranked higher than worries about California’s extreme drought in the 2015 Bay Area Council Poll. More than three-quarters of Bay Area residents support building more low- to middle-income housing, and a growing number of people favor greater density in their neighborhoods if it would create more places to live. Bay Area Council President Jim Wunderman commented, “Water isn’t the only thing that’s in short supply in the Bay Area. We need a bold regional response to our historic housing crisis that is on par with the aggressive and immediate action we’re taking to combat the drought.” Read the full story Renting: Awful for just about everyone right now Source: Atlantic  Apartment vacancy rates are very low, thereby pushing up prices. Construction in many cities is still slow, as new tenants move in but few move out, which has resulted in high rental prices. For those who live in major metro areas, it’s become virtually impossible not to have one’s housing costs exceed about one-third of a person’s pay. As prices rise, even those who make median incomes are finding that their rent eats away at a more significant portion of their pay than it once did for those in the middle class. Complicating the problem is the fact that fewer households are making the transition from renting to owning, which means more competition for limited inventory. Read the full story

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Market Matters

New-Home Prices Are on Fire Source: Wall St. Journal The uptrend in resale values is nothing compared to the speedy rise in new-home prices, according to research by economists at TD Securities. New homes generally command a 10 to 20 percent premium over existing houses because new construction tends to be of higher quality and have more up-to-date amenities, the TD economists said. But by 2014, the price gap between new and existing houses had widened to 40 percent. Bargain-seeking plus the flood of existing homes into the market caused the median resale price to plummet by about one third during the bust; meanwhile, the median price for a new home fell only about 25 percent during the bust and surpassed its boom peak way back in early 2013. Read the full story   'Stale' homes are tightening up the housing market Source: CNBC   A lack of listings is the biggest barrier to a more robust spring housing market. Unfortunately, nearly three-quarters of the homes on the market are "stale," which is to say that they have sat on the market for more than a month with little to no interest from buyers, according to a Redfin report. With demand and sales increasing, there is just a 4.6-month supply of listings; a six-month supply is considered to be a healthy market balance between buyers and sellers.  Read the full story Home sales vault to 18-month high as supply improves Source: Reuters   As a sign of strength in the housing market ahead of the spring selling season, U.S. home re-sales surged to their highest level in 18 months in March as more homes came on the market.  Existing home sales increased 6.1 percent to an annual rate of 5.19 million units in March, the highest level since September 2013. The percent rise was the largest since December 2010. Last month's sales outpaced economists' expectations for a 5.03 million-unit rate. Read the full story   These Charts Will Tell You Where the Housing Market Is Headed This Year Source: Bloomberg   The Federal Reserve is preparing to raise its benchmark interest rate for the first time since 2006, but there has not been any evidence of panic in the healing housing industry. After all, housing has been one of the biggest beneficiaries of rock-bottom borrowing costs in this economic recovery. According to analysts, there are several key things to watch this year to determine the performance of the housing market: Inventory, prices, affordability for first-time buyers, credit availability, and wages. Read the full story How to win a bidding war in today’s outrageous housing market Source: HousingWireWith supply tight and demand high, the spring home buying season can be frustrating for Americans looking to purchase a home. One REALTOR® has put together nine tips to succeed in any ensuing bidding wars that stem from a lack of inventory. The tips include financing issues, cash, closing costs, and more. Read the full story If You Want to Buy a Home, Here’s What You Need to Do Now Source: CNN Money  If you’ve been sitting on the sidelines, this may be the time to act—or at least to do some serious number crunching as the housing market continues to improve. While inventory is low in many markets, it is expected to loosen up, with 1.9 million units on the market this year—far below the flooded supply of 4 million we saw in 2008. The number of homes that were “flipped” (bought for a quick-sale investment) has dropped for the second year in a row, while the foreclosure rate is less than half what it was two years ago. Those are healthy signs for everyone. Read the full story

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