The economy in light of the ongoing debt ceiling debate
According to the CoreLogic February MarketPulse report, housing plays a critical role in the recovery of the economy, addressing the potential influence of the Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) rules is analyzed.
CoreLogic’s Chief Economist, Dr. Mark Fleming reports that consumer spending levels will likely be impacted by the reduction in disposable income due to the expiration of the payroll tax holiday, and that purchase demand for homes may be negatively impacted by uncertainty created by ongoing debt ceiling debates as the nation faces another potential fiscal cliff as Congress delayed sequestration on spending cuts until March 1, 2013 as part of the American Taxpayer Relief Act of 2012.
Economic uncertainty and the fiscal cliff
Dr. Fleming notes, “While economic uncertainty was one of the major factors cited for holding back the economic recovery, much has been clarified since the end of December. Importantly, the fiscal cliff was temporarily averted and Consumer Financial Protection Bureau (CFPB) regulation announcements are beginning to arrive in earnest. In this rapidly evolving environment knowing where we are now is critical for figuring out where we’re headed.”
Further, Dr. Fleming noted, “Early indications are that the fiscal cliff deal done on New Year’s Day is having a modest impact on economic sentiment. The University of Michigan Consumer Sentiment Index, one of the earliest indicators, declinded slightly this month, driven by a large decline in the personal finance subcomponent. While broad-based marginal tax rate changes were avoided, the payroll tax holiday was allowed to expire, returning rates to their pre-holiday level. As a result, this yea’s first paycheck was just a little bit smaller.”
Mortgage originations, QM and QRM
CoreLogic reports that strong mortgage origination volumes in 2012 were dominated by refinance transactions, forecasting that over the coming two years, the refinance share of mortgage activity will decline.
Dr. Fleming states that only about half of the total mortgage originations today would qualify for QM coverage if there was no GSE exemption, leaving states like Nevada and Hawaii the most vulnerable.
“We now face the prospect of multiple mini-cliffs”
“Fortunately, the rise in housing wealth appears to be providing some counter to the reduction in consumer income,” said Dr. Fleming, “a small adjustment relative to the larger downsides that could have been triggered by the fiscal cliff.”
Dr. Fleming added, “We now face the prospect of multiple mini-cliffs in the coming months which could strain confidence levels and create economic drag regardless of their outcomes. The housing market, and in particular demand to buy homes, could be significantly impacted.”
CoreLogic MarketPulse report:
[ba-pdfviewer pdfurl=”https://theamericangenius.com/wp-content/uploads/2013/02/MarketPulse_2013-February.pdf” width=”100%” height=”900px”]
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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