A report in the Washington Post by Jared Bernstein, Jim Parrott and Mark Zandi. “The nation is in the grip of an affordable housing crisis. A severe shortage of homes for working-class and low-income families is pushing up house prices and rents across the country, putting homeownership increasingly out of reach. The cost of constructing houses has risen significantly since the financial crisis and builders have struggled to make the economics work to construct housing that most Americans can afford. To cover these costs, builders have been focused on putting up houses in the top end of the market where they can still make a profit.”
“The country now has a glut of luxury apartments, high-end condos and large residences, and a dearth of workforce and affordable housing. In recent years prices for the lowest-priced houses have grown consistently twice as fast as prices for the highest-priced houses and now exceed what many families of modest means can pay. This wouldn’t be such a problem if wages kept up. But they haven’t.”
“The nation must address this housing crisis in earnest, lest an entire generation of families whose parents found in housing a critical path to building wealth, find it now blocking the way.”
From National Mortgage News.”Home sellers may be losing their clout in the market. Home sellers in some neighborhoods may have missed their chance to dictate the market. The number of real estate agents around the country who say they are in a sellers’ market slid below 50% for the first time in years, according to a fourth quarter survey by HomeLight. ‘It’s still a seller’s market across much of the country, but agents report a noticeable shift toward more balanced conditions,’ HomeLight reports. Agents said the biggest challenge facing U.S. home sellers in the coming year will be the tendency to overprice their properties.”
“‘As prices flatten or even decline in some areas, sellers will need to be aware of market conditions in their area and how that impacts their pricing strategy,’ the report warns. ‘Price the house wrong, and you look at price reduction after price reduction (which could attract lowball offers down the line) and months of extra costs. It’s not a fun road to go down.’”
From Curbed Boston in Massachusetts. “Sales prices in the Boston housing market—especially for condos—were trending downward toward the end of 2019. That is according to data tracking closed deals during November from the Greater Boston Association of Realtors and real estate research firm the Warren Group. The data back up a wider trend in the wider region: a once-unthinkable turn in the market toward buyers’ favor.”
“There also might be a psychological explanation for the slump in sales and the dips in prices. Prospective buyers could simply be done with years and years of escalating prices in the Boston market. Call it a correction or a rebalancing then—a trend borne out by months of data now, not just the November-into-December numbers.”
“‘There is less of a sense of urgency among today’s buyers, and they’re showing more sensitivity to price and condition as the market has showed signs of cooling,’ said Jim Major, president of the Greater Boston Association of Realtors. ‘As a result, homes are sitting on the market longer and owners need to be more realistic in their pricing if they expect their property to sell in the desired timeframe.’”
The Miami Herald in Florida. “The supply of single-family homes for sale decreased from 7,091 to 6,526, bringing the months supply of inventory to 6 months, making it a sellers’ market. The difference in pricing of houses and condos has pushed some buyers who would prefer single-family homes to opt for condos instead, said Ron Shuffield, CEO of Berkshire Hathaway HomeServices EWM Realty. The luxury condo market led the uptick in activity, with a 4.1% increase in sales year-over-year. That was good news in a market that has been saddled with an oversupply of new luxury units.”
“Total home sales decreased in Broward by 5.3%, from 2,460 to 2,330 sales. Danny Hertzberg, a sales associate for The Jills Zeder Group, said his colleagues in Broward credit the decline to ‘a misalignment between the buyer and sellers’ expectations’ — meaning sellers are asking more than buyers are willing to pay.”
The Atlanta Intown Paper in Georgia. “The real estate market in Atlanta’s Intown neighborhoods has seen a lot of changes over the last decade. Overall, they’ve been positive. Since 2010, home prices have skyrocketed. Over the last two years or so, however, things have leveled off a bit. ‘Homes are selling an average of 2% to 3% below list price, which is a fantastic statistic, but many properties had a price reduction prior to going under contract,’ said Alison Sternfels, Compass Atlanta.”
“Six months of inventory indicates a normal market regarding supply, she explained, and ‘we’re still below six months of inventory in all price ranges except $2 million and above. This is good news for sellers, and the moral of this story is to price right from the beginning.’”
The Ukiah Daily Journal in California. “Jeff Kram of Luxe Place ~ International Realty estimates baby boomers make up about 25-30% of homeowners in the county, and the family home may be lost due to reverse mortgages. Following a sea of predatory lending in previous years, many homeowners pulled out more money than what the house is currently worth. ‘When the property owner passes away, their heirs inherit that. There’s nothing left, and the home goes back to the bank,’ says the realtor. He has seen an increase in foreclosures in the last year and a half.”
“‘Right now, it’s about one percent of the market share. The average is about half-percent of market share,’ explains Kram. ‘The notices of default are through the roof.’”