With the Fed raising rates fast, homeowners are watching as demand for their homes begins to dry up. Pending home sales fell by 8.6% in June. That was much further than forecast, reports Aarthi Swaminathan at MarketWatch: U.S. pending-home sales fell in June by 8.6%, according to the monthly index released Wednesday by the National Association of Realtors. Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 1%. The drop in pending home sales is the biggest since the depths of the pandemic in April and March 2020. It also follows gloomy data on … [Read more...]
RURAL RENAISSANCE: America Finds the Country Again
You know that Americans are escaping the city. You've read here about their efforts to find a better life in America, away from the taxes, crime, and pollution of America's big blue cities. Americans have been happy to find new homes in long-neglected country towns where they can work from home and raise their children in safe, healthy communities. At The Wall Street Journal, Sarah Chaney Cambon and Andrew Mollica report on America's rural renaissance, writing: Even in the face of inflation and the risk of recession, the broad economic prospects for rural America may be looking up for the … [Read more...]
Massive Home Equity Becoming More Expensive to Tap as Rates Rise
Americans have watched with happiness as the market values of their homes have skyrocketed, leaving them more equity in their homes than ever before. But as the Federal Reserve raises rates, borrowing against that equity is becoming more expensive, lessening its value to homeowners. Orla McCaffrey reports in The Wall Street Journal: Americans have more equity in their homes than ever before. Total U.S. home equity increased almost 20% in the first quarter to $27.8 trillion, a record high, according to the Federal Reserve. The increase is another consequence of a red-hot housing … [Read more...]
MARKET TURNING: Canada’s Housing Market Turmoil
Real estate buyers and sellers are finding themselves in new positions at the bargaining table after rate hikes by Canada's central bank have put the market in a spin. Ari Altstedter reports at Bloomberg: One of the world’s bubbliest housing markets is tilting from sellers to buyers with dizzying speed. A string of central bank interest rate hikes has flipped the switch on Canada’s white-hot real estate market, spurring the first national home price decline in two years. That has both buyers and sellers in some of the frothiest pocketsscrambling as they try to navigate an … [Read more...]
NO GO ZONES: The Cities of Yesterday Are Dead
The cities of yesterday are dead. Don’t just take my word for it. Look around. Take NYC, where foot traffic is a fraction of what it was. That doesn’t mean there isn’t a way forward. It comes with making sections of cities small towns where residents control what it’s like to live there. Imagine farmer’s markets, outdoor seating, safety, and an involved citizenry. There will be a fine line between places in the cities you’ll want to stay and visit and the NO GO ZONES, much like Paris, France. It will happen. Stick with me. The Wall Street Journal reports (abridged): People want to live in … [Read more...]
UP: Record High Inflation Sends Home Prices Sky-High
Americans are being forced to live with inflation that is higher than most of them can ever remember. Among the bigger ticket items seeing rapid price increases is housing. Prices for houses are rising at a record pace. Nicole Friedman reports in The Wall Street Journal: Home-price growth surged to a record in 2021, as low mortgage-interest rates prompted buyers to compete fiercely for a limited number of homes for sale. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 18.8% in the 12 months … [Read more...]
Homeowners Facing Increasing Headwinds in Biden Economy
As both interest rates and housing prices rise, prospective homeowners are facing an increasingly difficult situation. Nicole Friedman reports in The Wall Street Journal: U.S. housing affordability worsened in the fourth quarter as home prices rose alongside mortgage-interest rates. The Covid-19 pandemic helped spark a nationwide housing boom, with prices rising rapidly in every corner of the U.S. But intense competition has pushed more buyers out of the market, especially at lower price points. Price growth for previously owned homes, which make up most of the housing market, slowed in … [Read more...]
Great Escape Cities: New York City to Where?
You’re seeing the great escape from cities unfold in real time. Where are New York city slickers going? Palm Beach, Miami, and Naples to name a few. The Wall Street Journal editors lament the recent assassination of two NYPD officers, writing: A second New York police officer died of his wounds Tuesday after being ambushed on Friday night while responding to a call about a domestic dispute. Wilbert Mora, who was 27 years old, died after being shot in the head by an assailant who kicked open the door of a bedroom and opened fire on officers. Another officer, 22-year-old Jason Rivera, died … [Read more...]
ALGORITHM APOCALYPSE: Zillow’s Robo-Real Estate Meltdown
You have heard that Zillow is desperately trying to offload the inventory of homes it built up throughout the pandemic buying spree. It turns out, Zillow's plan to dominate the real estate market with data-driven algorithmic buying and selling was "too risky, too volatile," and "too narrow." Those aren't adjectives investors want describing the operations of the businesses they own. With more detail on what happened at Zillow, Will Parker and Konrad Putzier report at The Wall Street Journal: When executives at Zillow Group Inc. Z -4.01% pored over the company’s earnings in the spring, they … [Read more...]
ZILLOW EXPOSED: You Invest, They Win But Not Always…
"Too risky, too volatile, too narrow..." Is that how you want your investment prospect described? That's what Zillow has called its own home-buying scheme, driven by algorithms. You know that Zillow is looking to flip nearly 7,000 homes it has purchased to exit a business that it probably never should have been in. Laura Forman reports for The Wall Street Journal: Sometimes a ruler gets too ambitious and has to fall on his own sword. So it goes for online real-estate king Zillow ZG -18.12% which, in conjunction with its earnings announcement Tuesday, said it was quitting the automated … [Read more...]
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