The “van life” movement has been gaining momentum for years, but it seemed like 2017 really saw a variety of intriguing new vans (and van build-outs) to inspire would-be road-dwellers to get out there and live the life. The year also saw a few very compelling motorhome introductions for those looking to go bigger and farther – without losing much homestyle comfort. The best of the best include everything from big, angry all-landers to compact, versatile everyday commuters that weekend as rolling vacation homes.
With the new Fed transparency, these rate hikes are telegraphed well in advance now and priced in by the market. Free enterprise is working – the competition between Chase, Wells Fargo, and Bank of America is keeping rates in check. BofA is quoting 3.875% and no points for 30-year jumbos today – and we’ve had three Fed hikes this year (doubling from 0.75% to 1.5% today)!
Mortgage ratesfell fairly quickly this afternoon following the Federal Reserves updated economic projections. While it is indeed true that the Fed “raised rates” this afternoon, there are two reasons that doesn’t matter.
First of all, the rate the Fed adjusts (aptly named, the Fed Funds Rate), governs only the shortest-time frames (overnight loans among big banks). Although its effects radiate to longer-term debt like mortgages, the two are far from joined at the hip. Short term rates often move one direction while long term rates move another.
More importantly, EVERYONE responsible for trading the bonds that govern interest rates (and I do mean every last person without a single exception) was well aware that the Fed would be hiking rates today. No Fed rate hike has been better telegraphed during this cycle.
When bond traders know what’s going to happen in the future, they’ll trade accordingly as soon as possible. That means rates had long since adjusted to today’s rate hike–so much so that the hike itself was a non-event. Again, it was the update economic projections that helped rates move lower this afternoon. Fed Chair Yellen’s press conference played a major role as well.
Even before the Fed news came out, a weaker reading on an important inflation report helped bond markets get into positive territory on the day. The net effect of the Fed and the economic data was a moderately quick move back to last week’s low rates.
Loan Originator Perspective:
Bonds are rallying following the Fed announcement today and weaker inflation data. As of 4pm eastern, only a few lenders have passed along any of the gains. So, I favor floating overnight and evaluate pricing tomorrow. Hopefully this rally can continue.
Methane and volatile chemicals such as benzene have been discovered underground at a yet-to-be completed Otay Ranch project that is marketed as one of the largest planned housing developments in the U.S.
Homebuyers in the Chula Vista community known as Village of Escaya can’t move into their homes because government officials have stopped installation of water meters.
inewsource is the first to report on the discovery, though contractors first noticed the potential problem in April. Water sampling began the following month and the San Diego County Department of Environmental Health was alerted in June.
“The district is doing its due diligence to make sure that they’re evaluating the situation,” Otay Water District spokeswoman Tenille Otero said Friday.
The Otay Water District provides water and wastewater service to nearly a quarter-million customers in San Diego County. It typically takes responsibility for a developer’s work, including pipes and facilities, once a project is completed. In this case, the district is refusing to install water meters within the 450-acre development until the problems with the methane and other chemicals are resolved.
Other agencies involved include the Chula Vista Development Services Department and Chula Vista Elementary School District, as well as several private companies.
The land’s developer, Carlsbad-based HomeFed Corp., is marketing nearly 1,000 homes in an area adjacent to the Otay Landfill, auto-salvage yards and the country’s largest producer of construction aggregates. According to HomeFed’s most recent quarterly report, 165 homes were under contract to close within Escaya as of Oct. 24.
HomeFed’s president and chief executive officer, Paul Borden, told inewsource on Friday the discovery of methane and other volatile compounds is not unusual in California.
“It’s going to be dealt with absolutely the way it should be dealt with,” Borden said, adding that HomeFed is working out mitigation measures with the water district. The matter will be resolved “very soon,” he said.
Borden said homebuyers also have been alerted to the issue.
“Among the many many things that are disclosed, this is definitely one of them,” he said.
Much like in the last presidential election cycle of 2012, the November, 2016 sales were high, and led to a frenzied selling season the following spring (we had 4% more NSDCC sales in 1H17 than in 1H16). But sales were solid last month too, which hopefully means Spring 2018 will be lively.
NSDCC November Sales
Year
# of Sales
Avg. $$/sf
Median Sales Price
Median DOM
2012
241
$415/sf
$855,000
52
2013
187
$474/sf
$1,030,000
38
2014
173
$489/sf
$985,000
34
2015
193
$520/sf
$1,187,000
37
2016
238
$535/sf
$1,247,500
28
2017
209
$527/sf
$1,200,000
27
This is only one-month’s worth of data, but these stats suggest that pricing may have topped off, and we’re finding an equilibrium. The average $$/sf and median sales price from last month are closer to those from 2015 than 2016.
It’s interesting that the median days-on-market is almost half of what it was five years ago! There’s not much hesitation in buyers these days.
As home prices continue to escalate, the less-affluent folks are considering other options. Will the imbalance catch up with us eventually? If so, when?
Jonas Peterson enjoyed the California lifestyle and trips to the beach while living in Valencia with his wife, a nurse, and their two young kids. But in 2013, he answered a call to head the Las Vegas Global Economic Alliance, and the family moved to Henderson, Nev.
“We doubled the size of our house and lowered our mortgage payment,” said Peterson, whose wife is focusing on the kids now instead of her career.
Part of Peterson’s job is to lure companies to Nevada, a state that runs on gaming money rather than tax dollars.
“There’s no corporate income tax, no personal income tax…and the regulatory environment is much easier to work with,” said Peterson.
Some companies have made the move from California, and others have set up satellites in Nevada. California, a world economic power, will survive the raids, and it will continue to draw people from other states and around the world. Its assets include cutting-edge tech and entertainment industries, major ports, great weather and dozens of first-rate universities.
But the Golden State is tarnished and ever-more divided by a crisis with no end in sight, and this year’s legislative efforts to spawn more housing for working people lacked urgency and scale. Slowly, steadily, and somewhat indifferently, we are burdening, breaking and even exporting our middle class.
In an area of 300,000+ people, we only have TEN houses for sale priced under $800,000 – and there are only 118 priced between $800,000 and $1,400,000!
Is it greed, or just supply and demand? It would take something to disrupt the market to find out. Buyers are already wondering about tax reform, and this could be a hurdle too – the Trump/Mueller saga. Protests are already being planned:
Appraisers in Southern California get together and evaluate the same 300 homes every six months – here’s how their values compare to those of CoreLogic (San Diego has the closest gap):
Elsewhere in the region, here’s how the battle-of-the-index gaps shaped up since 2012 …
Los Angeles County: Appraisers say up 58 percent; CoreLogic says 72 percent.
Orange County: Appraisers say up 44 percent; CoreLogic says 55 percent.
San Diego County: Appraisers say up 50 percent; CoreLogic says 56 percent.
Ventura County: Appraisers say up 45 percent; CoreLogic says 53 percent.
Now, these gaps may partially be a reflection of the often-bemoaned shortage of “affordable” homes to buy.
Southern California’s painfully thin supply of homes at the lower-end of the price spectrum has distorted indexes like CoreLogic’s median. These metrics end up reflecting a buyer’s willingness to pay up for the higher-priced housing that’s on the market. This statistical pattern doesn’t mean all home values are up at the median’s skyward pace.
Yes, it’s not totally shocking these appreciation gaps — man-vs.-machine — exist in the first place. Remember, appraisers get paid to be real estate’s party poopers — protecting overzealous lenders from overlending on overvalued properties.
So by nature, appraisers are … let’s say … skimpy! Still, their cautious viewpoint can’t be easily ignored, since they often have the power to kill a prospective home purchase with a low valuation.
Plus, the collective wisdom of appraisers is especially noteworthy as Southern California’s eye-catching home-price gains continue.
Above are the three new-home tracts (in order) discussed in this video. The new homes by Shea are replicating the homes they built down by the freeway:
While Congress deliberates the winners of their tax reform, the number of havenots seems to be growing. An article in the U-T today showed nearly 10,000 homeless people in SD County, and 55,000+ in L.A. County.
Here’s an up-close view of the growing tent cities – you can see these off the freeway, and in the shadow of the BigA (hat tip daytrip):
