Home prices and rent levels reveal housing slowdown
Although still technically recovering, housing has seen some hiccups of late, this time in the form of asking prices and rents, according to the September 2013 Trulia Price Monitor and Trulia Rent Monitor. Trulia reports that asking prices rose 2.0 percent in September compared to August, but notes that the quarter-over-quarter price gain of only 3.0 percent was the lowest quarterly increase since February.
Prices actually fell quarter-over-quarter in 11 of the 100 largest metros, including several in Florida and upstate New York, up from just 3 of 100 in June. Asking prices rose 11.5 percent over the last 12 months, but year-over-year changes should start to shrink in the coming months. At the metro level, 89 of the 100 largest metros had Q-o-Q price increases in September, down from 97 in June.
Price gains slowed in 68 percent of the largest metros, with California experiencing the most dramatic slowdowns, most apparent in Sacramento, Oakland, Orange County, and Los Angeles, where asking price gains had a slowdown of 2.0 percent or more, even though asking prices rose over 20 percent in these areas year-over-year. Atlanta was the only metro where prices are up at least 20 percent Y-o-Y and Q-o-Q price changes are accelerating significantly.
What is causing the slowdown?
Pointing to increasing mortgage rates, expanding inventory and declining investor activity as the cause of the recovery’s slowdown, the company also reports that the federal government shutdown has not affected prices yet, but a prolonged shutdown could hurt housing demand in areas reliant upon federal money. Trulia also states that in the unlikely event that hitting the debt ceiling later this month causes the government to stop paying its bills or – worst of all – default, the resulting financial panic could send the economy and the housing market into a tailspin.
“Asking home prices give us the first look at where home sale prices are headed, and they point to a slowdown,” said Dr. Jed Kolko, Trulia’s Chief Economist. “After rising rapidly in the first half of 2013, asking prices in two thirds of the largest metros are cooling. In fact, asking prices are falling – not just rising more slowly – in 11 of the 100 largest metros, the most markets to see prices slip in six months.”
Rents are rising, but at a slower pace
Nationally, rents rose 3.0 percent year-over-year in September, down from 3.9 percent in June. Locally, rent rose more slowly in September than in June in 18 of the 25 largest rental markets, including Seattle, Denver, and Houston. Trulia also notes that rents are rising fastest in the “artisan coffee belt” which includes Portland, Seattle, and San Francisco.
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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