Tag Archives: real estate news

Highlands Real Estate Benefits from Events…and Non-Events!

A couple of recent developments made the news recently that promised to impact Highlands’s real estate scene either now or in the future. The one that got most of the attention last Wednesday came from a familiar source: Federal Reserve Chair Janet Yellen. Her news conference’s less-than-stirring pronouncement (“Caution is appropriate”) made headlines nonetheless because of the accompanying action (actually, inaction): no increase in interest rates.

Highlands real estate watchers will remember that when the Fed increased their Fed Funds target rate by a quarter of a point last December, they nudged it upward from zero to .25%. It was the first move in nine years, and was accompanied by a statement that they anticipated making three or four similar small increases throughout 2016. Thus it was expected that another quarter of a percentage point would be announced by now, so the news marked a mildly surprising turn—one that will be welcome to anyone contemplating buying or selling real estate in Highlands. The continuation of a miniscule Fed Funds rate translates into significant savings for everyone, particularly when measured against the historical norm of 2%-5%.

Soooo: as for the first development, ring the bell: good news!

The other development had come earlier. It was one that might turn out to benefit real estate activity—but it could conceivably have the opposite effect. It, too, dealt with government and finance, this time in the realm of real estate taxation: a bill introduced in Congress. H.R. 4494, the Renters Fairness and Equality Act, would amend the IRS Code to give renters a federal tax break. It would put renters on a footing similar to that which allows Highlands homeowners to deduct mortgage interest and property taxes.

As in all things Washingtonian, the proposed details are complicated. The total amount of rent paid would become federally deductible, but only for some (tenants in very expensive areas wouldn’t qualify). The way such proposals become law, the final rules could differ—and in any case, there is faint likelihood of swift enactment. The legislation had been introduced by a lone Democrat, and was now sitting in the Republican-led House Committee on Ways and Means, where it was predicted to evoke continuous and profound inactivity.

But even if that turns out to be its fate, H.R. 4494’s introduction was an interesting development—an idea that might someday catch on. Around here, it raised the question about whether this would be good news for Highlands home values. The federal tax break is a major inducement prompting renters to buy, so a number of prospective buyers might go missing. On the other hand, many renters who have been priced out of the market because they’ve been unable to save for a down payment would get meaningful relief. Additionally, the prospects for Highlands investment real estate could benefit greatly if consumer demand for rental accommodations were to expand—as groups promoting affordable housing projected.

The promise that mortgage rates will continue to provide a welcoming backdrop for this spring’s selling season comes as unambiguously exhilarating news for Town’s real estate market. To investigate further, do give me a call!

Real Estate Predictions for 2016 All Fall into Line

12-30-15-predictionsGiven that the experts have often been as wrong as they were right about predicting at least one real estate trend for 2015 (mortgage interest rates), it’s fair to ask why it’s worthwhile to consult them regarding the coming year. Fair enough. The answer is twofold.

First off, for anyone who will be buying or selling a Highlands home in the coming year, much could ride on the wider market factors that influence buyer and seller attitudes.

The other part of the answer is because it’s fun. Trying to take a peek into the future gathers a crowd every time: just tune into any cable TV news or feature show and start counting the experts prognosticating. Besides, it’s even more fun, later, to ridicule the experts who were way off.

But putting together a roundup of real estate predictions for 2016 involves some hard virtual pick-and-shovel work. To begin with, you have to eliminate all the real estate predictions for 2016 that emerged more than a month ago. A month may not seem like such a long time, but in the real estate prediction business, it can turn into too long (especially if what you predicted for 2016 is already heading in the wrong direction). At this juncture, that hasn’t befallen any of these prominent national real estate prediction sources Highlands readers can note:

  • Realtor Magazine – ‘Normal’ is coming. Healthy growth in home sales and prices at a more normal pace
  • CoreLogic — Interest rates will gradually move higher but dollar volume of single-family mortgage originations will fall approximately 10% [reason given: refis will fall]
  • Housingwire — Moderate growth in housing prices and sales (3.5%-4.5%); easier credit; more first-time home buyers
  • BofA Merrill Lynch Global Research—Further expansion in U.S. housing. The “good news for anyone planning to sell a home in 2016” is that existing home sales could increase by as much as 5%; good news for buyers: a slowdown in home-price appreciation
  • Trulia — “general consensus at the national level…another good year” with hot markets in the West and Northeast cooling down; markets in the South and Midwest “could experience an uptick” in home sales

The researchers and prognosticators behind these projections seem to be in lock-step, at least as we launch into the new year. Whether or not you will be entering the Highlands real estate any time soon, it’s certainly good news that the serious folks who forecast future trends agree that conditions look to be settled, stable and hospitable in the coming year.

There is one thing I know you can count on: I’ll be standing by throughout 2016, ready to assist with all your Highlands real estate needs!

Highlands Real Estate Observers Greeted with Multiple Surges

If you are a Highlands real estate observer, last week was the time of month when you typically look for the major data releases which detail how residential sales and prices performed in the previous month. Highlands observers weren’t disappointed: last Tuesday, the key National Association of Realtors® report came in right on schedule, with national media interpretations appearing close on its heels.

The NAR decreed that September’s existing-home sales numbers, which showed a 4.7% increase from the month before, indicated a resumption of the momentum that had momentarily faltered. The seasonally adjusted annual rate of 5,550,000 completed transactions was hailed as a strong rebound, marking the twelfth consecutive month of year-over-year increases.

Realty Today agreed that the “more than expected” sales pace “suggests that the housing market continues to show strength compared to the rest of the economy.” In fact, the increase did contradict expectations from some observers. Their school of thought had been based on the common sense conclusion that if residential real estate price rises continue to outpace wage growth—as it has—the pace of sales would certainly slow. That prediction ran head-on into these latest figures. So much for common sense.

The financial press, which views real estate news from their own perspective, had a slightly different take—one that was equally positive. “Good news abounds,” wrote CNN Money. “After years of flunking, the American housing market finally merits a B+ grade.” The financial publication’s ebullience was based on data which indicated that building activity was picking up “at the fastest pace since the recession.” That meant that the real estate sector had turned an important corner, with “the housing market…finally starting to be a real boost to the U.S. economy—and stock market—instead of a drag.”

The Wall Street Journal gave Highlands real estate watchers an even more upbeat takeaway—going so far as to apply the rarely-invoked ‘surge’ word…twice! “U.S. Existing Home Sales Surge in September,” greeted WSJ readers on Wednesday. It was “a big increase” that put the real estate “market back on track for its strongest year since 2007.” Elsewhere, over the picture of a North Dakota roofer hard at work, another headline blared, “Home Construction Rebounds Amid Surge in Multifamily Units.” With all that ‘surging’ going on everywhere, Highlands readers might have begun to worry about keeping their balance…

But they needn’t have worried—economic writers wouldn’t be performing as expected if they didn’t include at least some hand-wringing. The Journal didn’t disappoint on that score, either. They found one economist, Richard Moody, who complied. “I have this list of things that worry me about how we can sustain this,” he fretted.

If you are a current or prospective Highlands homeowner, national real estate performance is of more than passing interest. I’m here to help you transform your own personal Highlands real estate projections into real performance!

New Reports Help Guide Sapphire Real Estate Market Decisions

10-16-15-marketnewsAt the beginning of any month, Sapphire onlookers can find batches of fresh reports about national real estate market activity. Take October, for instance. We’ve just learned a bunch about what happened across the country. September’s numbers won’t be collected and analyzed for a while, but the fresh real estate market data for August is out, as well as July revisions. Since earlier findings are always being tinkered with as estimates are replaced with hard results, we also get improved readings from the earlier month.

This latest batch of real estate market news was upbeat, downbeat, and, uh…sideways. Thursday was the first day in October, which was when CNN Money came out with some good old-fashioned cheerleading. “Americans went shopping for homes in August,” they headlined. The reason cited was for new home sales: they notched the highest volume since early in 2008: 552,000. It was a nice way to get the month’s data reports started.

Home prices, on the other hand, were not yet available for the August timeframe—but July’s Case-Shiller Home Price Index had pointed upward. It showed a 4.7% rise in prices paid for homes from a year earlier. This made for “moderate, but still above average, price appreciation,” according to Realtor.com’s chief economist. The prices were seen to have edged up just 0.7% from June, which was “barely higher” yet “much higher than last year.” If that summary had been illustrated, it would have merited both a frowny face and a smiley face.

There were other preliminary soundings about what the August price information was likely to be, and they were just as equivocal.

The National Association of Realtors® tracks pending home sales data (homes under contract but not yet closed), and by that measure, there was a slight retreat from July’s level. Yet although the preliminary number showed a 1.4% drop, that was still more than 6% higher than August 2014’s had been. Which was more compelling? Altogether, the news for sellers was deemed to be stronger. “Demand continues to outpace supply,” according to the NAR. “Shed no tears for sellers.”

If that sentiment is shared by Sapphire homeowners, it might nudge some into listing their home now rather than waiting for the next truly robust real estate market—traditionally not expected until next spring. Although fall and winter usually find fewer buyers on the prowl for new digs, those who do surface are generally regarded as serious shoppers. And since the number of Sapphire listings usually declines as the holidays approach, there’s a good argument to be made that less competition tilts in favor of sellers.

We have to wait until next month to get a read on how September activity fared; but for anyone who sees the advantages this fall’s Sapphire real estate market offers, I share your opinion! It’s definitely worth giving me a call.

Stock Market in Turbulent Contrast to Serene Real Estate

8-27-real estate newsLast week was a head-swiveling version of a follow-the-dots puzzle for those who keep tabs national news related to on Highlands real estate. Children like following the numbered dots to reveal a picture. You can’t be sure what it will turn out to look like until the end. The week was a lot like that:

Monday led off with the release of housing-builder sentiment: its best reading in 10 years! It was given credit for reversing an early-day 100+ point stock market drop. When the Dow closed up 68 points for the day, real estate performance got the kudos.

Monday’s dot connected to the next one, which appeared as USA Today’s early Tuesday dispatch pointing out that the previous day’s market rescue was hardly a flash in the pan. The Money section’s lead story, “Housing Provides Much-Needed Lift to Wall Street” drew a broader picture. In a ho-hum year for the broader stock market, housing-related stocks were uniformly “among the best-performing shares.” The S&P 500 may have been up less than 2% for the year, but homebuilders’ shares were up 13%; home-improvement retailers, 11.1%; home furnishings stocks, a blistering 26.1%! The reason was “the power of the resurgent real estate market to generate positive action in the stock market.”

Then, on Wednesday, CoreLogic provided the next dot with its release of the August MarketPulse roundup, pointing to a 6.5% increase in its national home price index. This was the logical next dot—one that was hardly unexpected. The predicted continuation of price increases was again explained by lean inventories, continuing low mortgage rates, and consumer confidence rated “the most optimistic in eight years.”

Thursday’s dots had been anticipated, too: the morning announcement of July existing-home sales marked the 41st consecutive month of year-over-year price gains. Volume was up, too, as sales topped an annual level of 5.5 million for the first time since early 2007. TheStreet took that as “just the latest confirmation that the housing nightmare is mostly over.”

By Friday, the last dots appeared in calm contrast to the frenetic news from Wall Street, which completed its worst week in five years. Even the real estate industry stocks which had rescued the day on Monday couldn’t buck the outrushing tide of equity losses. But the last dot for Highlands real estate watchers was found in the analysts’ post mortems after the market’s close, as speculation increased that the carnage on Wall Street might well be sufficient to nudge Federal Reserve decision makers away from raising interest rates in September. Real estate trackers were able to put their pencils down and relax for the weekend.

So, what was the picture the follow-the-dots puzzle revealed? The real estate industry dots seemed to trace a simple circle…with a curved line near the bottom that looked a lot like a smile.

Whether or not this fall’s Highlands real estate offerings continue to benefit from historically low mortgage interest rates (they dropped again last week!), there are definitely great opportunities for buyers and sellers. Give me a call whenever you feel the time is right to take advantage of today’s market!

Highlands Readers find Sweet Real Estate Reports

8-21-readerHighlands’s real estate picture usually differs little from that of the nation as a whole. The latest rumblings from the mass media and web continue to bolster the picture of rising values and quickening activity—a sweet story with nary a sour note. In fact the unanimity of voices from almost every corner of the country is a story in itself. There was just one exception.

Some samplings Highlands readers would have found in the past week’s real estate news and opinion—

  • From the Associated Press, we learned that “prices are soaring” in some cities, and that they rose in all 20 cities polled. The pace of existing home sales rose to the “fastest pace since February 2007.”—roughly what might be expected in a healthy housing market. The AP attributed at least some of the reason for the real estate price rises to widespread predictions that the Federal Reserve may start raising short-term interests rates sooner rather than later.
  • From Dan Green’s Mortgage Reports, the home value increase was illustrated in a multi-colored chart, which showed sample cities’ rises at anywhere from 1%-11%—with most clumped between the 4%-6% lines. Freddie Mac was quoted as pegging the average 30-year mortgage rate at below 4%, with VA and FHA mortgage rates even lower. Their opinion was straightforward: “It’s an inexpensive time to finance a home.” Since historically “mortgage rates average nearer to 8:25%,” that opinion is hardly a stretch!
  • Headlines from CoreLogic’s latest Home Price Index Report were “Home Prices Rose by 6.5% Year Over in June 2015” and “HPI Forecast Projects 4.5%” rise for the coming 12 months. CoreLogic’s nationwide real estate numbers are among the most reliable—whereas some of the government numbers sometimes have to admit regular later revisions, it’s not usually the case for them.
  • Surprisingly, town observers would have had to go to the National Association of Realtors® site to find what at first sounded like the only sour note to be heard—yet it, too, had a sweet finish. “Pending Home Sales Dip in June” headed the last week’s news release. You had to read the fine print to learn that the pending sales were 8.2% higher than a year before, and that although they dipped slightly from May’s number, they were still the third highest reading in 2015…and marked the tenth consecutive monthly year-over-year increase!

Strengthening real estate prices have continued to bolster a solid summer selling season. If you are interested in exploring the Highlands market as a prospective buyer (or as a seller), the climate continues to be inviting. Good reason to give me a call!

Novel Solution in the U.S.’s Most Expensive Housing Market

8-11-shippingcontainerSapphire residents been hearing about unbelievably tight housing situations in some U.S. cities for many years, but last week there was one report that would have challenged any imagination. This was about a Wharton School graduate who is spawning a new way to afford rents in the San Francisco Bay area. His solution: live in a shipping container.

The article appeared (with pictures) in BloombergBusiness. The photos weren’t exactly flattering of Luke Iseman’s 160-square-foot “box”—in fact, the bright blue painted walls seemed definitely in need of a decorator’s input (not to mention the cords and ducts strapped from ceiling to floor). With a shower constructed from discarded boat hulls and a camp stove set atop what appears to be a deconstructed wooden crate, the overall look might be described as post post post modern urban chic.

But Mr. Iseman is making progress turning his container housing option into a business. In fact, he is already presiding over 11 of the “miniature residences,” where his tenants live inside a warehouse he leases across the Bay from San Francisco.

In case Sapphire real estate watchers suspect this is a less-than-serious attempt to forge a new kind of rentable living arrangement, a quick review of housing costs in the City by the Bay will have them thinking twice. According to Bloomberg, the median rents in June jumped 16% from a year earlier (15% in the wider metro area). Median sales price is over $1.1 million in the City.

The chief market analyst for one S.F. real estate outfit put the housing situation in perspective. “People have to get creative,” he said. Bloomberg put its perspective another way: “The market…is crazy…”

Iseman’s “new model for urban development” does have some serious hurdles to clear before the “more sustainable, affordable and enjoyable” urban development model gets much further. One of the hurdles is that it’s illegal—he’s already been rousted from two other sites. But with Bay Area building inspectors busy dealing with converted garages, offices, living room conversions and other unlicensed structures (like rental tents), his startup concept may last a while longer.

What seems somewhat comical to Sapphire observers is actually a creative answer to a very real problem. Iseman had been paying $4,200 a month for a badly maintained two-bedroom apartment before he thought up the container idea. He bought his first container, which had been classified as industrial waste, for $2,300 (delivered), spent $12,000 converting it, and voila!—suddenly he had himself some affordable East Bay housing. In and around and area where 10 jobs are added for every new residence, who’s to say this stop-gap solution might not prove to have some staying power?

One thing is for certain—our Sapphire real estate scene is going to continue to offer a choice variety of affordable housing offerings, even without the benefit of shipping containers. Give me a call whenever you’d like to go over the wide range of opportunities today’s market is providing.

Housing News that Highlands Homeowners Have Been Waiting For

7-30-housingmarketFor Highlands homeowners, the news was a long time coming. The bounce back from last decade’s dizzying plummet in the nation’s residential housing values has been underway for quite a while now—but those values hadn’t quite returned to their former heights.

Until last month!

The Wall Street Journal was early to break the long-awaited headline, “Existing-Home Prices Hit Record: $236,400.” Using just-released June sales numbers, the Journal reported that the nation’s average housing prices now topped the previous high water mark set in 2006. It meant that a lot of paper losses have been obliterated—and the return of full nights’ sleep for many U.S. homeowners who have long been underwater.

Another aspect of June’s housing report card could also ease nerves on a wider scale. USA Today led with it: “Existing homes were sold at the fastest pace in eight years…” It quoted the NAR’s Lawrence Yun as pronouncing this year’s spring buying season “the strongest since the economic turndown.”

That’s where the current housing market profile seems to differ in kind from the previous peak of $230,400, registered in July 2006. That mark was reached after sales volume had started to fall. Prices then followed, starting with a slow decline that continued until the spring of 2008, when the slump became a nosedive—unleashing the subprime mortgage crisis. The “bubble” of unsupported high prices had burst.

There was more glad tidings in last week’s news, as well. U.S. home builder confidence levels hit its highest mark in “nearly a decade” (WSJ). A rise in demand for apartment housing caused a jump of 9.8% in housing starts.

But the biggest news was the existing-home price rise, reported as having “rocketed” 35% since 2011, “benefiting current homeowners by giving them an opportunity to trade up to better homes or sell and cash out.” That’s the kind of spur that can stimulate the entire housing market.

With one economist (Andrew Hunter of Capital Economics) quoted as saying “the housing recovery has shifted into a higher gear,” it wasn’t surprising that other analysts were in agreement. “Don’t Laugh” read one headline from international observer Quartz.com; “the U.S. housing market is the best story in the global economy right now.” Reuters agreed about the implications. Their headline: “Strong U.S. housing data boosts dollar.”

Highlands residents don’t have to be global investors to take advantage of this summer’s values. A simple call to my office is all it takes to get things started!

Real Estate News (in Case You Thought You’d Heard it All)

5-13-real estate newsHighlands real estate news is fairly predictable—at least compared with some of the stories that filter in from the rest of the world. Here in Highlands, for instance, wherever a new home is being built, you’re likely to see familiar evidence like stacks of lumber and drywall, cartons of nail gun ammo, sacks of cement, and workmen hustling around as they put everything together.

Nary a printer in sight.

Not so in China. According to The Washington Post, the real estate news includes an item about an innovation from Asia. “Innovation” is perhaps a bit of an understatement, because the gist of the story was that in April a year ago, a Chinese concern built 10 houses in one day using a 3-D printer.

Despite what you may be thinking, this item did not have an April 1 dateline.

The 3-D printers we’ve been reading about over the past few years are the ones that take pellets or powders made of plastic, wax, ceramic, or even metal, and print three-dimensional objects, layer by layer, as directed by a computer.

Only a few years back, for most of us, stories about 3-D printers seemed more like science fiction than reality. But apparently the things actually work! As evidence, there have been lots of stories about the legal and other ramifications that accompany the printing of firearms. A few months ago, astronauts printed up a 3D wrench aboard the International Space Station: they’ll just print up spare parts when things break down. And there was that car (the “Strati”) that a company printed in Chicago: it took 44 hours to print, with a top speed of 40 MPH…

Doesn’t this all sound a little bit nuts?

But back to the real estate news from China. It seems that the outfit that printed the 10 houses last year, built a really, really big 3D printer, and used it to print a mansion: an 11,840 square-foot villa. Next to it, they printed up a 5-story building (just showing off, you have to think). According to reports, the process is more than just fast: it’s becoming cheaper and more energy-efficient. The Chinese company says that it can save 30%-60% of building materials, 50% of labor costs, etc. They want to print bridges, too…

But don’t think American ingenuity is being left in the polymer dust! USC Engineering Professor B. Khoshnevis is plugging away at the forefront of the technology, except he calls it “contour crafting” instead of “3D printing” (or “Xeroxing”). On his web site, in answer to the FAQ “Can you print an entire house?” the answer is Theoretically, yes. He hopes to see “entry-level construction models on the market within one to two years.”

Soooo, how long before our local Highlands real estate news will be trumpeting our own 3D printed houses for sale? No time soon. It turns out that the villa, 10 small houses, and 5-story apartment building in China “aren’t much to look at.” In fact, some say they are for demonstration only.

So when you give me a call to help you find the Highlands home of your dreams, I suspect a printed model won’t be on our tour list. We won’t be making the rounds in a Strati, any time soon, either.