Sunday Snippets – Did You Know?
* In 2020 we had a run on toilet paper and paper towels in the USA….. empty shelves and rationing followed as demand far outstripped supply. Now in northern Italy, the supermarkets have been cleared of pasta and pharmacies in Norway are sold out of iodine tablets! In 2020, toilet paper, paper towels, tissues, hand soaps, etc had price increases around 20% or more in one year! (FT)
* The world added 153 billionaires last year, or 3 billionaires each week, to a total of 3,381, according to the Hurun Global Rich List released Thursday. China led with 1,133 billionaires, followed by the U.S.’s 716, and India’s 215. The TOP 10 are all worth more than $100 billion…5 years ago none were. The average age of the billionaires was 64; 120 of them are under 40, and 269 are self-made women billionaires, nearly 66% from China. (PENTA)
* A home in Laguna Beach, CA features a rather interesting “amenity”…. on the property is a fire suppression system with six cannons connected to city water lines. The system senses the temperature of the land and if there is a fire, water will automatically spray from the cannons and alert the fire department. (WSJ)
* Just 10 seconds of idling uses as much gas as restarting your car, in case you wish to cut your gas costs…. Edmunds.com did a comparison of various gas-saving measures. To test the cost of idling, testers drove two cars for 10 miles—they stopped 10 times and idled for two minutes each time. Then testers drove the same route but turned off the engine and restarted at each of the 10 stops. They estimated nearly 20% fuel savings on the restarted cars.
U.S. Takes Step to Regulate Cryptocurrency Market
Cryptocurrency home sales barely have a toehold, and a new exec order from Pres. Biden may change the rules. The order suggests regulation and a U.S.-owned version.
Over 100 countries are exploring or piloting Central Bank Digital Currencies (CBDCs) – a digital form of a country’s sovereign currency.
“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security and climate risk,” according to the Executive Order.
The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
Executive Order key points
Sunday Snippets – Did You Know?
* Tech meets TREES? 🤔 Trees help with stormwater attenuation, store carbon, improve air quality, provide shade for humans and offer habitats for wildlife…..but as the climate changes, some trees are not surviving/thriving in their current habitat and arborists are identifying the trees that will survive and thrive going forward. i-Tree is a state-of-the-art, peer-reviewed software suite from the USDA Forest Service that provides urban and rural forestry analysis and benefits assessment tools. (FT)
* The median age of a US homebuyer has risen from 31 in 1981 to around 45! If we average leaving home around the age of 20 and rent for 25 years before buying, that equates to $300k lost to rent if your rent is $1,000/month….. $600k if it’s $2,000/month…..and $ 1million if you average $3,333/month! (FT)
* Gen Z — those born between 1997 and 2012 — has become the most active faction in the housing market, flocking to major cities that some claimed were doomed in the pandemic. Manhattan’s social scene and job climate led to a 63% jump in Gen Z rental applications year-over-year. Zoomers made up 27% of Manhattan renters last year, up from 17% the year before as they contend with an increasingly tight market. Other major cities to see a spike in its share of Gen Z renters include San Jose (52%), Los Angeles (45%) and Irving, Texas (37%). Gen Z is the only generation to have its activity surge in the past year. There were 220,000 more rental applications from Zoomers in 2021 than the year before, making up 27% of the rental application market, trailing only millennials (45%). So yes, I was not hallucinating when I noticed everyone around me getting younger and prettier in Manhattan! (RENT CAFE)
* The number of unincorporated self-employed people in the U.S. reached 10 million in February, or 400,000 more than when the pandemic began. It soared as high as 10.3 million last summer. Being a self-employed, independent contractor has pro’s and con’s! (WSJ) (more…)
Naples YTD: sales plummet, prices soar
The combination of undiminished demand and greatly diminished inventory have had the inevitable consequence in the first two months of 2022: prices have soared 25-50% from a year ago, while sales have dropped by similar percentages ( read Naples Beach prices drop 47%? Not so fast.
Here are the numbers broken down by property type and location within Naples: (more…)
The Great Resignation’s Effect on Florida Real Estate
The Great Resignation’s impact on home construction means that the value of Florida residents’ homes could see another double-digit price rate increase in 2022, according to a recent report from the CE shop: The Great Resignation’s Effect on Florida Real Estate.
This impact comes on top of a 70% decrease in inventory since the start of the pandemic:
Disappearing inventory
The Great Resignation — the name given to the enormous wave of workers quitting their jobs over the past year — is making headlines nationwide around 33 million Americans have quit their jobs since the spring of 2021.
Why Are Americans Leaving Their Jobs? (more…)
Survey: Sellers Waiting Out Pandemic Are Ready to List
Homeowners have had all the usual reasons to sell over the past two years – marriages, deaths, children, etc. – but many hunkered down during the pandemic, and some feared the housing market because selling might be easy but finding a new home? Not so much.
A survey conducted by HarrisX for realtor.com, however, suggests that many of those people might be planning to list their home in 2022, with 65% of them planning to do so this winter and spring. The survey of 2,583 consumers was conducted online in September-October 2021.
Many sellers, however, want to set an asking price higher than they think their home is worth, and they expect buyer bidding wars.
When will sellers list? (more…)
Are Mortgage rates really under 3%?
When Freddie Mac released its weekly mortgage survey on Thursday it did so with the heading: “Mortgage Rates Drop Below Three Percent Again.”
Which they are not now.
The problem lies with the methodology. Freddie Mac surveys lenders from Monday to Wednesday with the major weighting given to Monday’s rates. As I have explained in many postings over the years (see Mortgage Rates back to 3% – again as an example), the 30-year Fixed Rate Mortgage (FRM) is priced based upon a premium that investors, when they buy pools of mortgages, demand over the yield on the nearest-equivalent US Treasury – which is the 10-year Note (10T). Thus, if the yield on 10T increases from Monday to Thursday – as it did this week – by the time of Thursday’s announcement the FRM may have changed – as it did this week.
Mortgage News Daily had a great article this week and I am going to use their charts. I recommend signing up for their newsletter, a source of great information and opinion. (more…)
How accurate are Zillow’s Zestimates?
During the pandemic-spurred housing boom, Zillow Offers emerged as a particularly aggressive iBuyer, or instant buyer, of homes in Sun Belt markets, offering homeowners more than the market value of their properties, with no catch. Zillow has now conceded that it has been paying too much for properties, even in a market characterized by soaring home values. Saying it had lost $1 billion on iBuying, Zillow has shut down its Zillow Offers unit.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,” Chief Executive Rich Barton said.
Zillow used an algorithm to make home price estimates, called the “Zestimate,” and determine what it would pay home sellers.
Are Zestimates accurate?
Zestimates are somewhat like the National Hurricane Center’s projection for a hurricane’s path: both provide a single price or point, but those prices and points are actually the median of a range.
Here’s an example for a house: (more…)
Naples September Market Overview
The median price in the overall Naples market through the first 9 months of 2021 increased 33% to $625,000 for Single Families (SF) and 18% to $329,595 for Condos.
The tables below show the breakdown of sales and median prices by area of Naples (see map below). Price increases for SF ranged from 30% in Central Naples to 40% in Naples Beach; and for Condos from 14% in South Naples to 21% in East Naples.
Sales also increased dramatically: up 30% for SFs and 68% for Condos.
Please contact me to discuss the current market and see how I can help you in your search. (more…)
Naples August Housing Market Review
The median price in the overall Naples market through the first 8 months of 2021 increased 35% to $625,000 for Single Families (SF) and 18% to $325,000 for Condos.
The tables below show the breakdown of sales and median prices by area of Naples (see map below). Price increases for SF ranged from 27% in South Naples to 44% in Naples Beach; and for Condos from 13% in South Naples to 33% in East Naples.
Sales also increased dramatically: up 39% for SFs and 79% for Condos. (more…)
Which country has the fastest growth in home prices?
According to data gathered by money.co.uk, the country with the highest property price increase from 2010 to 2020 was Israel, where there was a staggering 346% rise in costs per square meter.
Switzerland and Germany come next, with increases of 166% and 162%, followed by the United States at 153%. Hungary, Slovakia, France, Portugal, Japan and the United Kingdom round out the rest of the top 10, all with average home price increases of at least 75%.
Real Estate: It’s Still a Lack of Supply, Not a Lack of Demand
One of the major questions real estate experts are asking today is whether prospective homebuyers still believe purchasing a home makes sense. Some claim rapidly rising home prices are impacting demand and, by extension, leading to the recent slowdown in sales activity.
However, demand isn’t the real issue. Instead, it’s the lack of supply (homes available for sale). An article from the Wall Street Journal shows this is true for new home construction: “Home builders have sold more homes than they can build. Now they are limiting their sales in an effort to catch up.”
The article quotes David Auld, CEO of D.R. Horton Inc. (the largest homebuilder by volume in the United States since 2002), explaining how they don’t have enough homes for the number of buyers coming into their models: “Through our history, to have somebody walk into our models and to tell them, ‘We don’t have a house for you to buy today’, is something that is foreign to us.”
Danielle Hale, Chief Economist for realtor.com, also explains that, in the existing home sale market, the slowdown in sales was a supply challenge, not a lack of demand. Responding to a recent uptick in listings coming to market, she notes:“. . . if these changing inventory dynamics continue, we could see a wave of real estate activity heading into the latter part of the year.”
Again, the buyers are there. We just need houses to sell to them. (more…)
Prediction: Lots of International Buyers Over the Next Year
NEW YORK – In June, when real estate agent Nitin Gupta took two clients to see a new housing development in the Dallas-Fort Worth area, a sales representative for the builder told him all the units were gone.
The builder had planned to sell 100 homes to investors out of roughly 1,500 he was planning to build. Investors had come to the site the day before, the rep told Gupta, and another agent had pitched the homes to a group of buyers in China over Zoom.
“He said, ‘The people were saying, I want one, I want two, I want three. Boom, boom, boom,” Gupta recalls. “The agent sold about 50 to 60 homes and the builder had sold 130 homes the first day.”
While the global COVID-19 pandemic has squashed sales of U.S. homes to foreign buyers over the last year, local buyers should be prepared for a rebound in competition from other countries in the next 12 months, economists say.
Texas, Gupta’s state, ranked as the third-most-popular destination for foreign real estate buyers between April 2020 and March 2021, according to a recent report by the National Association of Realtors. Florida and California claim the top two spots, while Arizona, New Jersey and New York follow Texas. (more…)
7 Winning Tips for Buyers
The only one of these I don’t recommend is number 4 – waiving contingencies other than in certain circumstances.
18 Reasons to Work With a Realtor
Whether buying or selling you need a Realtor on your team, working for you, putting your interests first. Here are 18 reasons why:
