Gray needs to go! Other design trends that are on their way out:Link to Article
Category Archive: ‘Jim’s Take on the Market’
The slowdown started during the summer, so there was some evidence of it by the beginning of August – and it has been in the news non-stop ever since.
Are sellers getting the message?
Maybe, but they must think it applies to someone else:
NSDCC Average List-Price-Per-SF:
Lower their price? They’d rather not sell – and this is December, when you’d think the sellers who are on the open market must be motivated.
Don’t get your hopes up about seeing a big dump on price in Spring, 2019. If it were to happen, it will happen quietly, and you’ll only see it after the fact in late summer, once sellers have exhausted their optimism.
Older news now but once the federal government seizes these homes and tries to resell them, they will find out that there isn’t much equity.
Paul Manafort’s prized possession — a 5,574-square-foot home in the Hamptons, which includes a putting green, pool house, pergola and “waterfall pond” and where hundreds of red and white flowers were planted in the shape of an M — will be owned by the U.S. government.
It’s one of five properties, bank accounts and a life insurance policy Donald Trump’s former campaign chairman agreed to turn over to the government as part of his plea deal, where he admitted to conspiracy against the U.S. and witness tampering.
How can the market keep going? Generational wealth distribution!
Among respondents with an annual income over $100,000 who anticipate familial help with a down payment, the average expected level of support is over $50,000, enough for a 20 percent down payment on the national median condo price.
This is more than twice the expected down payment assistance of those making between $50,000 and 75,000, and over ten times that of those making less than $25,000, who expect to receive $4,358 on average.
This finding highlights the chronic nature of wealth inequality — not only do lower-income millennials have less purchasing power themselves, but their families have less support to offer.
We find that when it is available, familial down payment assistance can put homeownership much closer in reach.
Among millennials earning more than $50,000 and expecting help with a down payment, we estimate that 32.8 percent will be able to acquire a 20 percent down payment within the next five years, compared to 19.8 of those with similar earnings but no expected down payment assistance.
Among those earning less than $50,000, the prospects are notably worse, but those who expect down payment help still see a significant step up compared to those expecting no help. While help from family can make homeownership a more attainable goal, this option is available to a minority of millennials, with the largest benefits accruing to those earning the highest incomes.Link to Article
Are you looking for one more reason to move away?
It sounds like if/when the Big One starts shaking, you will need to grab everything you own and move to Yuma.
The Nuclear Regulatory Commission (NRC) admits in their November 28, 2018 NRC Inspection Report and Notice of Violation, every Holtec canister downloaded into the storage holes is damaged due to inadequate clearance between the canister and the divider shell in the storage hole (vault). The NRC states canister walls are already “worn”. This results in cracks. Once cracks start, they continue to grow through the wall.
The NRC stated Southern California Edison (and Holtec) knew about this since January 2018, but continued to load 29 canisters anyway. Edison’s August 24, 2018 press release states they plan to finish loading mid 2019.
The NRC states Edison must stop loading canisters until this issue is resolved. However, there is no method to inspect or repair cracking canisters and the NRC knows this.
The NRC should require all San Onofre thin-wall canisters be replaced with thick-wall transportable storage casks. These are the only proven dry storage systems that can be inspected, maintained, repaired and monitored in a manner to prevent major radiological releases and explosions.
California state agencies should revoke San Onofre permits and withhold Decommissioning Trust Funds until these issues are resolved.
The Navy should consider revoking the San Onofre Camp Pendleton lease until Edison agrees to replace thin-wall canisters with proven thick-wall transportable storage casks. This is a national security issue. If the NRC cannot do their job, maybe it’s time to bring in the Marines. The Navy has nuclear experts.
The current storage system puts the public at risk. Nuclear waste stored in thin-wall steel canisters (only 5/8? thick) cannot be inspected, repaired or safely transported. Thin-wall canisters crack, but technology does not exist to inspect for cracks or repair cracks once canisters are filled with highly radioactive nuclear fuel waste.
The President of Holtec has stated a through-wall crack will release millions of curies of radionuclides and it’s not practical to repair them, even if you could find the cracks.
Yet, they have no plan in place to stop or contain a cracking, radiation-leaking, and potentially exploding canister.
Each canister contains roughly a Chernobyl nuclear disaster. Once canisters explode, the radionuclides will travel with the wind, similar to how smoke traveled with the California Camp Fire.
San Onofre will have 73 canisters stored on-site by mid 2019.Link to Article
We are, once again, experiencing one of the greatest housing booms in United States history.
How long this will last and where it is heading next are impossible to know now.
But it is time to take notice: My data shows that this is the United States’ third biggest housing boom in the modern era.
Since February 2012, when the price declines associated with the last financial crisis ended, prices for existing homes in the United States have been rising steadily and enormously. According to the S&P/CoreLogic/Case-Shiller National Home Price Index (which I helped to create) as of September, the prices were 53 percent higher than they were at the bottom of the market in 2012.
That means, on average, a house that sold for, say, $200,000 in 2012 would bring over $300,000 in September.
Even after factoring in Consumer Price Index inflation, real existing home prices were up almost 40 percent during that period. That is a substantial increase in less than seven years.
This had been on the market for two years before it finally sold for $15,000,000 cash in September. Another Marengo deal; it sold for $7,800,000 in 2014:
Realtor.com is optimistic about the 2019 real estate market (Sales to be -2%):
“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” says Danielle Hale, realtor.com®’s chief economist. “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they’ll adapt to higher rates and prices.”
2019 Predictions for Home Buyers
Buyers who are able to stay in the market will find less competition as more would-be buyers get priced out, realtor.com® notes. But home shoppers likely will still feel a sense of urgency as buying a home gets more expensive.
“Their largest struggle next year will be reconciling wants, needs and budget versus the heavy competition of 2018,” realtor.com® notes in its report. “Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid- to higher-end price tier, not entry-level.”
2019 Predictions for Home Sellers
The market is largely expected to remain a “seller’s market” in 2019, but homeowners will start to see greater competition from others looking to sell. They “shouldn’t necessarily expect to name their price and get it in full—a change from the past few years,” realtor.com® notes. “Above-median priced sellers may find it will take longer to sell and require offering incentives, such as price cuts or other offerings.” But for those sellers who price their homes competitively, they’ll “still walk away with a handsome amount of profit,” just not with the price jumps seen in previous years, realtor.com® notes.Link to Article
From the California Association of Realtors:
C.A.R.’s “2019 California Housing Market Forecast” sees a modest decline in existing single-family home sales of 3.3 percent next year to reach 396,800 units, down from the projected 2018 sales figure of 410,460. The 2018 figure is 3.2 percent lower compared with the 424,100 pace of homes sold in 2017.
“While home prices are predicted to temper next year, interest rates will likely rise and compound housing affordability issues,” said C.A.R. President Steve White. “Would-be buyers who are concerned that home prices may have peaked will wait on the sidelines until they have more clarity on where the housing market is headed. This could hold back housing demand and hamper home sales in 2019.”
The average for 30-year, fixed mortgage interest rates will rise to 5.2 percent in 2019, up from 4.7 percent in 2018 and 4.0 percent in 2017, but will still remain low by historical standards.
The California median home price is forecast to increase 3.1 percent to $593,450 in 2019, following a projected 7.0 percent increase in 2018 to $575,800.
“The surge in home prices over the past few years due to the housing supply shortage has finally taken a toll on the market,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Despite an improvement in supply conditions, there is a high level of uncertainty about the direction of the market that is affecting homebuying decisions. This psychological effect is creating a mismatch in price expectations between buyers and sellers and will limit price growth in the upcoming year.”Link to C.A.R. forecast
The pundits are chiming in on their housing expectations for next year, and the opinions revolve around one topic: Higher mortgage rates are changing things.
Here are two experts who don’t think the number of sales will change much:
“As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.” — Ruben Gonzalez, chief economist at Keller Williams
“We’re going to have the same number of transactions, but…rates are going to nudge up to 5 percent; market times are going to expand out to 30 days. You’ll have to have a different set of skills.” – Brian Buffini
For sales to stay the same, then buyers will have to agree that the sellers’ prices are about right. Will sellers list their homes attractively enough, especially early in the selling season?
Or is it more likely that they will add a little mustard to their price in spring, just because they’re not going to give it away?
I want to compare a full 12-month history to prior years, so let’s examine the December 1st to November 30th period – let’s have history guide us:
NSDCC Detached-Home Sales
The 2018 sales are similar to those in 2014, which happens to be the last time rates had popped up 1%.
But then the rates started declining right away, and by the end of 2014 they were back in the 3s, which powered the strong sales between 2015-2017:
(click to enlarge)
But today, rates are much higher – and so are prices:
Something has to give, doesn’t it?
Sellers aren’t going to bend much on price, especially early in 2018 – they won’t believe their prices are wrong until they try them out for months, and maybe longer.
So if most buyers wait-and-see, then sales have to give.
I’m sticking with my prediction that 2019 NSDCC sales will drop 20%, YoY.