Ben Foldy tells readers of the Financial Times that in the Hamptons, an area of Long Island that serves as a vacation community for New York City's ultra-wealthy, property sales have slowed down. He writes: Second-quarter sales fell 12.8 per cent from 2017 levels, according to data prepared for Douglas Elliman by Miller Samuel Real Estate. The median price dropped 5.3 per cent to a $975,000, compared with $1.03m a year earlier. The spring selling season is usually the high point of the year in the Hamptons, so the drop is stoking concerns that the resort areas of Long Island’s south shore … [Read more...]
Housing Starts Rise 5% in May
In a surprise to many economists, housing starts rose 5% in the month of May. Despite rising housing starts, the housing market is still sluggish when starts are viewed as a percent of U.S. households. By that measure, current start rates are barely above the lows of the 1991 housing collapse. Sharon Nunn reports in The Wall Street Journal: Housing starts rose 5% in May from the prior month to a seasonally adjusted annual rate of 1.35 million, the Commerce Department said Tuesday. Compared with a year earlier, starts were up 20.3%. The strong improvement was spread fairly evenly … [Read more...]
For an Edge in the European Logistical Race, Companies Look East
When arriving in France and immediately driving away from Charles de Gaulle airport, it’s hard to miss all the warehouses/distribution facilities on your way to Paris. I found this article interesting as companies battle for logistics superiority by building in more affordable Eastern and Central Europe. The WSJ’s Isobel Lee explains: The industrial real-estate market is booming in Central and Eastern Europe, thanks to the region’s geography and cheap labor along with the benefits of Europe’s unified currency and lack of trade restrictions. Developers are adding new warehouses and … [Read more...]
America Records Fastest Home Price Inflation Since 2006
Despite the Federal Reserve's intimation that a bit of inflation is just fine, Americans are being hammered with home price inflation at the fastest rates since the housing bubble in 2006. In April, home prices increased by 8.7%, the fastest rate since June 2006 which saw a 9% rise. Alexandre Tanzi reports at Bloomberg: San Jose home values appreciated 26 percent year-over-year. Las Vegas, Seattle, Dallas-Fort Worth, San Francisco, Tampa, Atlanta, Charlotte and Orlando all saw double digit growth. “The spring home shopping season has been a perfect storm of strong demand and tight supply,” … [Read more...]
Are REITS a buy?
REITs have had a tough go of it over the last five years. The Vanguard Real Estate ETF is up only 21% over the last five years compared to an 81% gain in the S&P 500. On a price-only basis REITs have fallen in price over the last five years. Rising interest rates, shifting secular trends within select REIT sectors, and premium valuations have all contributed to the Vanguard Real Estate ETF’s middling performance, but as the WSJ writes here, some investors are now giving REITs a closer look. “The tide is turning very slowly. It’s not going to be a sea change,” said Jonathan Woloshin, head … [Read more...]
Home Price Inflation Heats Up
Home prices in 91% of American metropolitan areas increased during the first quarter, and at faster rates. Prashant Gopal reports at Bloomberg: The median price of an existing single-family home rose from a year earlier in 162 of the 178 areas measured, the group said in a report Monday. The national median was $245,500, which is up 5.7 percent from the first quarter of 2017. The number of regions with double-digit gains jumped to 30 percent from 15 percent in the fourth quarter. Home values have increased steadily as job growth boosts demand for a record-low supply of properties on the … [Read more...]
New York Real Estate Sales Plunge
Buyers faced with the twin realities of high prices and high real estate taxes are stepping back from the New York City real estate market. After being fully exposed to the state's high tax rates after the federal tax reform bill passed last year, buyers are taking recoiling from what has been one of the world's hottest real estate markets for at least a decade. Lindsay Fortado writes in the Financial Times: The number of co-op and condominium sales in Manhattan fell nearly 25 per cent during the first quarter compared to the same period last year, according to new research by Miller … [Read more...]
Mortgage Rates Still Low Historically
If you’re old enough to collect Social Security you might laugh out loud reading this from today’s WSJ: "U.S. mortgage rates have hit their highest level since 2014, a new challenge for a housing market that has been central to the economic recovery but remains vulnerable to even modest headwinds. The rate for a 30-year fixed-rate mortgage rose to 4.46%, the highest in more than four years and the ninth consecutive week of increases, according to data Thursday from mortgage-finance giant Freddie Mac." While everyone is talking about the “sharing” economy, I have yet to speak with an … [Read more...]
Is Housing in Another Bubble?
House prices may not be as high as they were at their 2006 peak, but they are close. And as Bloomberg reports, we are starting to see the type of activity that should worry regulators and central bankers. 35% of home-buyers in the U.S. are now buying houses sight unseen. Even with a planned 3 interest rate hikes in 2018, the Fed may be behind the curve. Thirty-five percent of homebuyers in the U.S. aren’t even visiting the property before they put in a bid, amid torrid competition in a tight market, according to the latest survey by Redfin Corp. The survey, conducted in November and … [Read more...]
After Tax Overhaul, Manhattan Real-Estate Sales Seize Up
Manhattan real estate prices are in a standoff. With the tax reform package making owning property in high tax areas less desirable, buyers are looking for lower prices on New York real estate. Sellers don't believe the tax changes should have a large effect, and aren't moving their prices lower. Stagnation has ensued. Josh Barbanel writes: The number of contracts signed from October through January was down 6% from the same four-month period beginning in October 2016, according to figures from brokerage Brown Harris Steven. That was the slowest pace of activity during those months since a … [Read more...]
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