Tag Archives: homes

Real Estate

Buildable land in the most desirable areas is in short supply

The sky may be infinite, and the oceans are vast. But land is finite, and there is a shortage of it to build homes on, accord to a recent NAHB/Wells Fargo Housing Market Index report.

The survey asked a panel of single-family builders to categorize the supply of lots in their market areas as “very high,” “high,” “normal,” “low,” or “very low,” as well as giving them an option to say they didn’t know or were not sure. NAHB’s Paul Emrath says, “In response, 58 percent of builders said the supply of lots was low (40 percent) or very low (18 percent). This is down somewhat from the all-time peak of 65 percent in September of 2018, but higher than it had been at any time before 2013 (NAHB has been asking the same lot supply questions on its HMI survey periodically since 1997).”

Housing starts, after averaging 1.5 million from 1960-2007 and hitting a peak of 2 million in 2005, has recovered only to about 1.2 million a year. If you compare the boom period in August of 2005, the share of builders characterizing lot supply as low or very low was 53 percent — 5 percentage points below the latest number.

According to Emrath’s article, in September of 2019, the lot shortages tended to be especially acute in the most desirable locations — not a surprise. That shortage tends to increase lot prices and reduce lot sizes. Visit any new subdivision in a desirable area, and the most affordable homes are increasingly on smaller lots. Census data show that the median size of new home lots remains near a record low, while the median price of new home lots is at a record high. All of this is a huge reason for the lack of affordable housing. And no one we know is creating more buildable land.

Source TWS Group

Real Estate

Aging in Place’ helps to fuel housing shortage


Source Galaxy Clipart copyright free

As the baby boomer generation has aged, it has also stayed put. And for all the innovations builders and product manufacturers have come up with to help seniors “age in place.” they may have also made it difficult for would-be homebuyers, causing a lack of housing inventory.

According to a new report from Freddie Mac, 2019 will see a significant shortage of available homes here in the U.S., failing to meet needs by 2.5 million units. It doesn’t help that at the same time millennials are buying fewer homes at this point in their lives compared with previous generations at similar periods.

As seniors continue to prefer to stay where they are as the optimal way to live out their remaining years, housing inventory has tightened nationally. According to the report, for people between the ages of 67 and 87, homeownership rates dropped by 11.6 percent for previous generations but only 3.6 percent for the current (leading edge) generation of seniors, identified as having been born between 1931 and 1941.

New advances in information technology may be the culprit, as well as accessibility to better healthcare and education, with the report crediting those advancements as “boosting and extending” housing demand among seniors. The result? The current senior generation has become much slower in transitioning out of homeownership than prior generations.

The U.S. Census Bureau says lost units will need to be replenished at a rate of 350,000 homes per year in order to bring the market to a “well-functioning” status. “Vacant homes increase liquidity in the market, enable prospective buyers to find a match, and give prospective sellers confidence to list their home for sale,” the Freddie Mac report states. “Vacancy rates are an important indicator of housing market vitality. Too high a vacancy rate reflects a moribund market, while too low of a rate reduces the efficiency of the marketplace.”

While this does not bode well for home shoppers, it will boost spending on renovations, according to Chief Economist Sam Kater. “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting, making renting more attractive to younger generations.” If that is true, however, those in a position to purchase the limited number of homes available may well see their property values increase more quickly than anticipated.

Source: thetbwsgroup

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    Real Estate

    Wildfire Risks Are Not Deterring Buyers

    Image result for images of forest fires

     

    The risk of wildfires isn’t deterring some home buyers from purchasing in an area, even if the area has been struck by blazes in recent years. Real estate prices in wildfire-prone areas are in line with homes in low-risk areas, even immediately after fires, according to a new study.

    Americans may watch media coverage of out-of-control blazes, mass evacuations, and even deaths from recent wildfires out west, but that isn’t deterring them from making these areas their home, notes Shawn McCoy, a research economist from the University of Nevada, Las Vegas.

    Residential growth in forested areas across the U.S. has significantly risen in recent years, increasing from an estimate 30.8 million housing units in 1990 to 43.4 million by 2010. More people living in such areas puts a greater risk for large-scale natural disasters, researchers note.

    Any impact to an area’s housing sales following a wildfire tends to rebound in one to two years after the blazes, researchers note. McCoy expects the same will occur in the recent California wildfires.

    “Despite an initial drop in real estate prices in risk-prone areas, the results of our study suggest that homebuyers’ initial fears about fire risk will fade, and development in risk areas may continue to increase,” McCoy says. “This is a problem: A lot of recent work shows that wildfires are not just a result of changes in global climates, but also rapid housing development into forested lands.”

    For the study, McCoy and co-author Randy P. Walsh of the University of Pittsburgh examined real estate transaction data from nearly 360,000 properties across eight Colorado counties, which had been affected by 18 severe wildfires between 2000 and 2012. The study has been accepted for publication in the Journal of Environmental Economics and Management.

    Source: “Wildfire Risk Doesn’t Douse Housing Demand,” University of Nevada, Las Vegas (Aug. 27, 2018)

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      Environment

      2.5M Homes to Be Threatened by Tidal Flooding by the Year 2100

      Photo by Maureen Drennan 

      Rising sea levels and climate change are putting a significant number of homes at risk of tidal flooding, according to a report released Monday by the Union of Concerned Scientists. The report warns that up to 311,000 coastal homes and about 14,000 commercial properties will be at risk of chronic flooding within the next 30 years. By the end of the century, the UCS says that number will increase to 2.4 million homes—valued at about $912 billion—and 107,000 commercial properties—valued at $152 billion.

      The UCS’s study used three sea level rise scenarios to determine how many residential and commercial properties along the entire coastline of the lower 48 are at risk of becoming chronically inundated by high tides (which they defined as flooding an average of 26 times per year or more). The scenarios were in the absence of any major storm.

      The state with the most homes at risk by the end of the century was Florida, with about 1 million homes—or more than 10 percent of the state’s current residential properties. New Jersey follows with 250,000 homes at risk, followed by New York with 143,000 homes at risk. These three states were also identified as thse that stand to lose the most in home property values by year 2100: Florida risks $351 billion, New Jersey may lose $108 billion, and New York nearly $100 billion, according to the analysis.

      “Not all affected communities will share the same experience,” says Erika Spanger-Siegfried, senior analyst in the Climate and Energy Program at the UCS and a report coauthor. “Some may see sharp adjustments to their housing market in the not-too-distant future; some could see a slow, steady decline in home values; and others could potentially invest in protective measures to keep impacts at bay for a few more decades. In any case, by knowing how much time they have before a significant number of properties will be regularly flooded, communities can start planning and implementing responses now, while they still have a range of options from which to choose.”

      Source: 

      “U.S. Coastal Property at Risk From rising Seas,” Union of Concerned Scientists (June 18, 2018)

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