HousingWire provides the latest real estate news, from policy that shapes the behavior of lenders to best practices adopted by industry professionals. The news is not limited to real estate, but it covers many other topics related to the real estate industry, including housing trends and the economy. In this article, we’ll review some of the most important housing news.
And if you’re interested in local market trends, we suggest you subscribe to the MLS.
Home prices rose 0.76% in October
In the latest case-Shiller report, home prices rose 0.76% in October compared to October last year. That was a larger increase than the 0.4 percent rise expected by Wall Street. Still, the report isn’t an encouraging sign for the housing market, and it comes on a bad day for the US economy. Durable goods orders fell sharply in December and economic bellwether Caterpillar sounded a negative note about global growth in 2017.
Although the number of homes for sale was down slightly in October from the year-ago period, it was still up 2% from September, despite the lack of inventory. Sales of homes priced between $500k and $750,000 rose 18%, while sales of homes priced over $1m were up 31%. The shortage of inventory in the market has made it difficult for buyers with lower incomes to find affordable homes. However, the increasing prices are putting pressure on the housing market and making it harder for those with less disposable incomes to purchase homes.
Inventory remains tight but supply of homes on the market has almost doubled
The shortage in housing stock has increased, but the pace has been slow. According to Jeff Tucker, senior economist at Zillow, inventory is still near record lows. The supply of homes on the market is now 3.1 percent larger than a year ago. But that is still a far cry from a balanced market. If the supply of homes for sale keeps rising at this slow pace, it could last until April 2020.
As the biggest living generation, the millennials, continue to enter their prime homebuying years, the shortage of new homes is worsening. New home construction has not kept up with this growing demand, causing a housing bubble to form. The supply of homes on the market has been so tight that multiple offers were common in many segments of the market. While inventory levels are still low, buyers are battling for homes and facing a lack of options.
California is an indicator of what is to come for the rest of the nation
Some progressive pundits and politicians have property news to California as a model for national policy. If California is an example of progressive leadership, the Biden administration should follow its lead. Sadly, California’s “boom” has not brought prosperity to working and middle-class residents. The state is losing population for the first time in modern history due to a combination of out-migration, fewer immigrants, and the reduction of young families. Furthermore, the population of California is aging 50 percent faster than the rest of the country.
Climate change is already affecting California’s water supply. In fact, climate change is increasing the frequency of severe flooding. Similarly, climate change will lead to more frequent and more intense droughts. The State is facing a water management crisis because its water infrastructure is outdated and not designed for climate change. The state’s two largest reservoirs are losing water due to drought and climate change.