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Tag: housing market
Hypocrisy On Housing Is A Bipartisan Scourge

Hypocrisy On Housing Is A Bipartisan Scourge

Right now, selling a home is akin to selling beer on a troopship: Buyers are so eager they'll pay almost any amount. The median home sales price in the United States was nearly 23 percent higher in June than a year earlier.

Surging demand is the immediate cause of the increase, and it will abate before long. But underlying it is a more durable factor: policies that choke off supply by making it harder and more expensive to build homes.

The claim that all politics is local has never been more true than in the realm of housing policy, which has a way of turning principles upside down. At the national level, Democrats favor affordable shelter for all and Republicans oppose burdensome regulation. But in their own neighborhoods, they give priority to high real estate values.

The 18th-century economist Adam Smith wrote: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The same can be said of homeowners, who in many communities have harnessed the power of municipal government to enrich themselves at the expense of everyone else.

In a lot of appealing locales, housing is increasingly unaffordable. The pandemic has boosted prices in suburbs and small towns by allowing urban office workers to relocate while keeping their city jobs. But that development only deepens a chronic malady: too many people and not enough homes.

A new study for the National Association of Realtors documents the fundamental cause. "While the total stock of U.S. housing grew at an average annual rate of 1.7 percent from 1968 through 2000, the U.S. housing stock grew by an annual average rate of 1 percent in the last two decades, and only 0.7 percent in the last decade," it noted. During this period, "every major region of the country heavily underbuilt housing."

It's true in Chicago. In Lincoln Park, one of the most desirable neighborhoods, loss of housing units has helped reduce the resident population by 40 percent. It's true in California. Since 2005, the state has added more than three times as many people as it has housing units.

In recent years, people have been leaving the Golden State for places like Austin, Texas, where rules have prevented the construction of multiunit buildings — helping to boost the median home sales price by 42 percent in the past year. In that respect, Austin resembles Los Angeles, where 75 percent of residential land is zoned for single-family homes and duplexes.

Democratic mayors can be faulted for making it difficult and expensive to enlarge the housing stock. Unfortunately, Republicans reject any attempt by the federal government to encourage more construction and density.

During the 2020 campaign, President Donald Trump alleged that Joe Biden would "eliminate single-family zoning, bringing who knows into your suburbs, so your communities will be unsafe and your housing values will go down." Biden's infrastructure package includes $5 billion in grants to local governments that ease zoning rules to allow more housing units.

You might think conservatives would want to scrap government regulations that abridge property rights and interfere with the free market. No such luck. Like Trump, many of them see exclusionary zoning as a way to shut out undesirables and keep home prices up. Self-interest triumphs over ideology.

Liberals are prone to their own hypocrisy. While cities like San Francisco, Denver, and Austin flaunt their progressive values, they have clung to housing rules that harm the people progressives are supposed to care about.

On the left, though, the consensus has cracked. Minneapolis and Seattle have "upzoned" to permit more multifamily units. In 2019, Oregon Democrats won passage of a measure largely forbidding single-family zoning. Last year, the Democratic California state Senate approved a bill to let local governments override such restrictions, and it's up for consideration again this year.

It's often said that the three most important factors in buying a home are location, location, and location. When it comes to housing affordability and access, the three most important factors are supply, supply, and supply. Anything that facilitates more housing units helps; anything that obstructs them does not.

Bipartisanship can be a way for people of differing views to find practical compromises that advance common goals. In the case of housing, though, it amounts to a cartel of the haves against the have-nots. And it's working exactly as designed.

Follow Steve Chapman on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

guide to buying a home

The Ultimate Guide to Purchasing Your Home 2023

Many people strive to own their own home. Homeownership is a pillar in the American dream, and owning a home is often considered a sign of success and accomplishment.

There are many things that come into play when buying a home, though. If you’re looking to make 2020 the year you own your own place, here’s a quick guide to get you on the right track.

Step 1: Find Out What You Qualify For

The first thing to do in the homebuying process is to get pre-approved for a home loan. Once you do this, you’ll know what price range to look within when looking at homes.

There are multiple factors that influence what kind of home loan you can get. Lenders look at factors like your debt-to-income ratio and credit score to determine what kind of loan you qualify for and the value of that loan.

It’s important to check your credit score before applying for a mortgage. According to NerdWallet.com, the lowest credit score needed to purchase a home is 620. If you have a credit score below 620, you greatly lower your chances of getting pre-approved for a home loan.

If you need to work on your credit score, strive to get it to the national average. On average, the typical American has a FICO credit score of 700. The closer your score is to the national average, the better your chances of getting pre-approved for a loan are.

This stage of the homebuying process is extremely important. It’s here that you’ll honestly assess your financial health and how a mortgage could impact it. As of January 2019, American households owed $9.12 trillion in mortgage debt. It’s crucial to honestly assess if you can handle this kind of financial responsibility.

Step 2: Decide What Kind Of Home You Want To Buy

Once you are pre-approved for a home loan, the next thing to do is decide what kind of home you want to buy. The type of home you buy is partially dependent on what kind of loan you get. For example, there are certain requirements that must be met if a home is to be bought with an FHA loan instead of a traditional home loan.

There are multiple kinds of homes you can choose to pursue. These include traditional houses, townhouses, and condominiums. Each kind of home has its pros and cons. For example, if you buy a home, you are responsible for all its maintenance. If you buy a place that’s part of an HOA, such as a townhouse or condo, that maintenance is done for you but you pay for it through HOA fees. Although Americans have a one in five chance of purchasing a home that’s a part of an HOA, it’s truly up to you to decide what kind of home works for you.

Step 3: Hire The Right Real Estate Agent

Once you know what kind of home you’re looking for and how much you can afford, it’s time to hire a real estate agent. Real estate agents are professionals who help you find your ideal home.

There are a couple of key characteristics you should look for in a real estate agent. First, you should look for someone who knows the market inside and out. They should be able to tell you if it’s really the best time to buy a home and what the pros and cons are of buying now.

Second, a real estate agent should be a master negotiator. They will act as the bridge between you and the seller. You’ll want your bridge to be as strong as possible, like the 3D-printed bridge with the record for holding about 250 pounds, the most weight any bridge created by LulzBot 3D Printers has been able to hold. You need your real estate agent to hold firm on deals when they need to. Negotiating with sellers is a part of almost every real estate transaction, so it’s important that your real estate agent knows how to create the best deal possible for you.

Third, it’s important that your real estate agent truly looks out for you and your housing needs. They should be looking for homes that will make you happy and are within your budget. If a real estate agent only sees you as a commission check, then it’s time to move on from them.

Step 4: Search For The Right Home

Now that you have a real estate agent in your corner, it’s time to house hunt.

House hunting involves a lot of time, organization, and patience. You will most likely have to move your schedule around to fit in showings. Once you go to these showings, it’s important to get as much information about the house as possible. If you’re looking at a home that needs to be fixed up, ask if there’s any lead paint in the house. The government banned lead as a paint ingredient because of its health risks back in 1978, but most homes built before then — about 57 million of them — still contain some traces of lead paint. This is crucial information to know, as it will impact whether or not you make an offer.

If you’re looking to buy a home associated with an HOA, do some research on how current residents feel about living there. The area may be nice, but does the association do what it says it will do? How are the neighbors? Do people get loud at night?

For what it’s worth, Americans living in homeowners associations and condominiums have told pollsters they are very satisfied in their communities for the seventh time in 13 years. While this is a promising statistic, it’s important to get a full understanding of the specific place you’re looking to buy.

Step 5: Close The Deal

You found the perfect home. Now, it’s time to close.

There are many moving parts in closing on a home. These include your down payment, closing costs, the date you’re looking to move, and who takes care of repairs between the buyer and seller. It’s important that you work with your real estate agent closely during the closing process, as they’ll help you negotiate deals with the sellers.

This may seem like a stressful part of the home buying process, but it’ll all be worth it once you sign the papers and officially own your own space.

Predictions For The 2016 Housing Market

Predictions For The 2016 Housing Market

By Mitch Lipka

(Reuters) – Is this going to be your year to buy a new home?

No housing expert has a crystal ball, but Svenja Gudell, recently appointed chief economist for the housing site Zillow.com, has looked at enough data to make a pretty good guess.

She examines vast amounts of housing market statistics – everything from about where people are going to want to live to what areas will be hot to what the future could hold for renters – on a daily basis.

Reuters asked Gudell to share her insights on what she thinks the 2016 housing market will be like.

Q: What markets do you think will be places to watch in 2016?
A: Next year, the combination of unemployment, population growth and the home value growth will make markets like Boise, Idaho, Salt Lake City, Utah, and Omaha, Nebraska, stand out.
Denver, Seattle, Dallas/Fort Worth and Portland, where inventory has been declining in the last year and demand continues to rise, will also be hot locations in 2016.

Q: Are there some areas we should just give up on, instead of waiting for them to recover from the recession?
A: No. Cities are pretty good at reinventing themselves. There’s a city out there for everyone.

Q: Location always matters in real estate, but are there any adjustments to that rule in 2016?
A: We have fairly low inventory in the cities. So next year, we’ll see first-time home buyers looking at suburbs – not just any suburbs, but those that are more dense, more walkable.
We’re also going to see an uptick in the number of condos being sold – especially for first-time home buyers. For a lot of folks, life happens not just inside their four walls but outside of them. Location, cost itself and nearby amenities will be most important.

Q: Now that the Federal reserve has officially started to raise interest rates, what will the ripple effect be to the mortgage market in 2016?
A: Markets really haven’t reacted much. A lot of the expectations of the rate increase have already been built in.
As rates continue to rise – there will probably be four increases of 25 basis points each – we will start to see more of an impact at the coasts, in areas like Seattle, San Francisco, New York, and Miami.
These are already markets where people are already stretching. But, overall the effects will be relatively muted.

Q: Is 2016 going to be the year millennials begin buying houses, now that they are older and the market is more recovered?
A: I feel like that was our prediction this year and it turns out we weren’t right.
Millennials are going to be bigger and bigger buyers in the market going forward. I don’t think next year we’re going to see a flood of millennials in one month or another. They’ll just trickle in.

They’re taking their time getting to the market and buying a home. They’re getting married later on in life. They’re having children later on in life. So they’re making home buying decisions later on in life.

One issue is that inventory is very low, especially on the bottom end of the price distribution. There are very few of those available, especially in these markets that have the most jobs. That’s particularly the case on the coasts. It’s a challenge for them. It’s a tough market. There is a lot competition.

Q: What kind of new house trends are on the horizon for 2016? Are there any upgrades that are must-haves?
A: It’s tough with how few new homes are available, but there is a trend among builders to build larger homes on smaller lots. Land is fairly expensive so they are trying to maximize their profits given the high land costs.

Q: Should we be optimistic or pessimistic or patient about housing in 2016?
A: I’m an optimist. I like to see the silver lining, but there’s going to be a lot of hurdles.

(The author is a Reuters contributor. The opinions expressed are his own.)

(Editing by Dan Grebler)

Photo: An advertisement for two-family homes is seen outside an oceanside community in the Rockaway area of the Queens borough of New York, September 16, 2015. REUTERS/Shannon Stapleton

Dear Millennials, You’re Ruining The Economy. Move Out

Dear Millennials, You’re Ruining The Economy. Move Out

By Gail MarksJarvis, Chicago Tribune (TNS)

The kids are back home and showing no inclination to move out on their own.

More than five years after the end of the Great Recession, 18- to 34-year-olds seem to be comfortable with a lifestyle that differs dramatically from the past. Even though the job market has improved, millions more are living with their parents now than during the depths of the recession.

A study of U.S. census data by the Pew Research Center shows 16.3 million millennials living at home, compared to 13.4 million before the housing bust set off one of the worst recessions since the Great Depression. About 26 percent of young adults are living with their parents, according to Pew. In 2007, it was 22 percent. When the job market was at its worst, 24 percent of millennials were living with family.

That’s put some economy watchers on edge, because they expected a change by now.

During the dreary days of the recession, it made sense for young adults who needed a roof over their heads to stay home while job opportunities were slim. But they were expected to move out when they got jobs or better-paying jobs.

Of course, the job market still has a way to go to give young adults better financial footing. Yet unemployment is less of an issue now, with 7.7 percent of those 18 to 34 unemployed, compared to 12.4 percent five years ago. Pay has also improved, although it hasn’t popped back to pre-recession levels. Pew notes that the median weekly pay is $574 compared to $547 in 2012.

If the trend continues, there could be serious implications for the economy. Adult children curled up on their parents’ couches don’t need to buy their own furniture.

Pew economist Richard Fry found no uptick in the number of young adults establishing their households despite a 3 million spurt in the 18- to 34-year-old population since 2007.

“This may have important consequences for the nation’s housing market recovery,” he said. “The growing young adult population has not fueled demand for housing units and the furnishings, telecom and cable installations and other ancillary purchases that accompany newly formed households.”

Analysts wonder if there’s been a cultural shift that will continue to restrain the economy.

Previous research by Pew shows that millennials, unlike previous generations, aren’t in a hurry to get away from parents. But other research also suggests that financial reasons continue to draw young adults into their parents’ homes.

Rents have climbed sharply, rising 4.3 percent in major cities in June, while the average hourly wage has climbed just 2 percent. Because they went to college in 2008 as the recession trampled job opportunity, many young adults are laden with student loan debt.

A study by the New York Federal Reserve in June found that areas of the country with high youth unemployment, expensive housing, and high incomes tend to be where more young adults were living with parents.

Still, the majority of people 18 to 34 are living independently, although the tendency to be on their own has been shrinking.

During the first four months of 2015, 42.2 million 18- to 34-year-olds (67 percent of the group) were living independently compared to 71 percent prior to the recession. Women have been more likely to live independently, 72 percent compared to 63 percent of men.

Besides living with family members, millennials have also been doubling up with roommates who are not spouses or unmarried partners. Early this year, 47 percent were living with another person, most often a parent or adult relative. But 16 percent were living with a nonrelative, apparently sharing expenses rather than stoking the economy on their own.

Photo: Bill Benzon via Flickr