Market Trends

Did You Know?

- 09/27/21

The amount of equity in mortgaged real estate increased by $2.9 trillion in Q2 2021, an annual increase of 29.3%. (Corelogic)

U.S. homebuilders started construction on 1.615 million homes in August, up 3.9% from July 2021 and 17.4% higher than a year ago, according to a new report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Across the country, 1.728 million building permits were pulled, which is 6% above the revised rate from a month prior and 13.5% higher than the August 2020 rate. Additionally, 1.33 million homes were completed, a decrease of 4.5% from July 2021, but this is still 9.4% higher than a year prior. (Housingwire)

U.S. single-family rent growth increased 8.5% in July 2021, the fastest year-over-year increase in 16.5 years. (CORELOGIC)

Did You Know?

- 08/30/21

The U.S. Supreme Court ended the Centers for Disease Control and Prevention (CDC’s) eviction moratorium Thursday night, giving much-needed relief to America’s small housing providers facing financial hardship for more than a year. In a 6-3 ruling, a majority of justices agreed that the stay on the lower court’s order finding the CDC’s eviction moratorium to be unlawful was no longer justified. (NAR)

Rents continued on a strong trajectory and have pushed beyond where they are projected to have been if pre-pandemic trends had held, according to the July 2021 Zillow Real Estate Market Report, erasing the small affordability gains renters made during the brief period of rent softening that ended this spring. And while U.S. home value appreciation again broke records in July, there are signs of a rebalancing in the for-sale market to come, with inventory rising for the third consecutive month and home value appreciation slowing in almost half of the nation’s largest markets. (Zillow)

Many folks have been anticipating a wave of foreclosures to sweep the country as moratoriums to protect struggling homeowners expire. However, it’s not expected to be nearly as severe as what happened during the Great Recession or lead to an influx of homes going on the market. Homeowners who haven’t made mortgage payments during the pandemic make up just a fraction of the housing stock—just 3.26% of mortgages were in forbearance as of Aug. 8, according to the most recent data from the Mortgage Bankers Association. Many of these folks will resume payments or work something out with their lenders. But at least some of these 1.6 million homes will hit the market. (Realtor.com)

Did You Know?

- 08/19/19

DID YOU KNOW? Tax-wise, the most significant benefits available to investors are the 1031 exchange and 721 exchange, both designated by the IRS that allow for a property to be sold and the funds reinvested into another similar property (or fund) while deferring the taxes owed. (FORBES)

Refinance applications were up a stunning 116% this week compared with a year ago, according to the Mortgage Bankers Association. Millennials were especially reactive to the rate drop. In June 2018, just 8% of millennial mortgage applications were to refinance; the rest were to buy a home. This June that jumped to 14%. (CNBC)

A recent BANKRATE survey asked 1,000 investors: “For the money, you wouldn’t need for more than 10 years, which ONE of the following do you think would be the best way to invest it—stocks, bonds, real estate, cash, gold/metals, or bitcoin/cryptocurrency?”.......and the winner—by a large margin—was real estate. In every other stock market bear market since the 1950s, the Case-Shiller Home Price Index rose in all but one. And in that lone bear market prior to 2007 in which the index did fall, it did so by just 0.4%. The Case-Shiller index is only 40% as volatile as the overall stock market. Perceptions to the contrary that real estate is riskier than equities derive from the leverage we typically use when purchasing real estate. Note carefully that the risk comes from the leverage, not real estate inherently. (Marketwatch)

Zoning the “Ultimate Constraint” to Housing in California

- 04/19/19

A recent report shows that it could take 1,000 years for some California markets to reach a housing equilibrium under the current process.

By Kelsi Maree Borland | April 17, 2019 at 04:00 AM

The California market is suffering from a housing shortage, which is in turn contributing to a severe affordability crisis throughout the state. The problem is serious. A recent report from Next 10 analyzing the housing shortage found that it could take 1,000 years for some California submarkets to reach a housing equilibrium under the current regulatory environment. While the problem is complicated, Scott Choppin of developer Urban Pacific says that zoning is the ultimate constraint to housing in the state.

"The ultimate constraint is zoning in California," Choppin, founder of Urban Pacific Group of Cos., tells GlobeSt.com. "There is an oversupply of single-family zoned sites in California, and this is at the municipal and county levels. Most zoning maps are 80% to 90% low density, single-family zoned. Developers are always having to work within already zoned multifamily sites or have to do a rezone, and in this environment, rezoning is high contested. San Francisco and Berkeley are really good examples of onerous zoning."