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Housing in 2018: Where Are Home Values Headed?

Dec 5, 2017 by

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Additionally, experts foresee increasing mortgage rates, with the 30-year, fixed rate ranging anywhere from 4.28 to 4.70 percent. Currently, the 30-year averages 3.90 percent, according to Freddie Mac.

“Higher mortgage rates will eat into buyers’ budgets, putting even more price pressure on the most affordable homes for sale,” Terrazas says. “Unless there is a fundamental shift in the number and type of homes for sale, this is the new normal of the American housing market.”

One factor in the health of the housing market is the homeownership rate; experts predict it, too, will rise, though slightly, to 64 percent. The homeownership rate has improved twice thus far this year, up to 63.9 percent in third quarter, according to the Census.

Beyond 2018, analysts are divided.

“Our most optimistic group of experts projects average annual home value appreciation of almost 5 percent annually through the five-year period ending in 2022, while the most pessimistic group expects an average annual rate of just 1.4 percent,” says Terry Loebs, founder of Pulsenomics, which conducted the survey in conjunction with Zillow. “I don’t foresee a stronger consensus emerging until we have greater clarity concerning tax reform and the pace of entry-level home building.”

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Values going down and so it begins….

Aug 28, 2017 by

Home values are going down in Texas and the rest of the Nation will soon follow, watch todays show to find out why.

The post Values going down and so it begins…. appeared first on National Real Estate Post.

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In Like a Lion: Spring Gets Roaring Start With High Values, Low Supply

Mar 26, 2017 by

The spring home-buying season is off to a roaring start, with home values up 7 percent and supply down 3 percent year-over-year, according to Zillow’s Real Estate Market Reports for February. Competition is expected to be fierce as homebuyers chase down few listings, says Zillow Chief Economist Dr. Svenja Gudell.

“Low inventory, strong demand and tough competition will be the defining characteristics of this year’s home shopping season,” Gudell says. “Even though interest rates are rising, buyers are eager to start their home search.”

High values and low supply are especially pronounced in Minneapolis-St. Paul, Minn., where values are up 7.1 percent year-over-year and supply is down 18 percent; Cincinnati, Ohio, where values are up 6.4 percent and supply is down 14.9 percent; and Detroit, Mich., where values are up 10 percent and supply is down 14.4 percent. The median home value in Minneapolis-St. Paul ($ 239,700) is above the national median, $ 195,700, while the median home values in Cincinnati ($ 150,500) and Detroit ($ 137,500) are below it.

The highest home value appreciation occurred in Tampa, Fla., Seattle, Wash., and Dallas-Fort Worth Texas, where values rose more than 11 percent year-over-year—above the national appreciation, 6.9 percent.

“If you’re a prospective buyer about to enter the market, keep in mind that it’s rare to get the first home you make an offer on, and homes in particularly hot markets frequently sell for over asking price,” says Gudell. “Buyers should give themselves enough time to get their finances in order and find a real estate agent they know and trust before jumping into the market.”

For more information, please visit www.zillow.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Healthy Food and Real Estate Values: An Odd (but Real) Connection

Dec 10, 2016 by

We all know great school systems and access to public parks can amp up real estate values. Did you know access to healthy, innovative eats can have the same impact? A new Urban Land Institute (ULI) report shows that access to healthy eats, a focus on “local” choices, and innovative cuisine options can all support a richer real estate value. The report, Cultivating Development: Trends and Opportunities at the Intersection of Food and Real Estate, examines the meeting of food and real estate from three perspectives: the impact on people, the environment and real estate values.

We already know that proximity to quality grocery stores impacts property values. According to the report, the relationship between food and real estate is stronger than how far you live from Whole Foods.

“The synergy between food and real estate is becoming increasingly evident. Just as food plays a key role in social interaction and creating a sense of community, real estate plays a significant role in shaping how people access and experience food,” said ULI Senior Vice President Rachel MacCleery. “An emphasis on access to healthy food is spurring innovative developments that are enhancing the overall prosperity, sustainability and livability of our communities.”

It makes sense; food brings people together, and has a great impact on how we identify home.

The report notes that a growing interest in fresh, accessible food nurtures the communities that surround it and spurs innovation in development projects. Think neighborhood farmer’s markets, unique farm-to-table restaurants, community gardens and more.

The study’s research also focused on a few innovative food projects and the communities that support them, including the Aria Denver in Denver, Colo. and the Chelsea Market in New York City.

Below are a handful of important highlights from the report:

  • Investments in food-related enterprises within the context of larger development projects can support a developer’s bottom line, while also addressing health and environmental goals. Such developments require innovation, creativity, new business models, and inventive partnerships to be successful.
  • Restaurants, food halls, markets, community gardens, and farms can serve to create a sense of attachment to development projects, adding value and fostering stronger community social ties.
  • Truly successful food-centric development relies on partnerships with established local institutions. By working with existing neighborhood groups, nonprofit organizations, anchor businesses, and small food purveyors, developers have the opportunity to create authentic, culturally relevant projects that support local priorities.
  • Community food-growing areas can be differentiating amenities that add value to residential and mixed-use developments at little cost.
  • The development community has an essential role in ensuring that places where food is grown, produced, and distributed can adapt to the mounting challenges posed by climate change, high levels of food waste, and fossil fuel dependency.

Healthy foods, healthy real estate markets—a true win-win.

View the full report here.

Zoe Eisenberg is RISMedia’s senior content editor. Email her your real estate news ideas at zoe@rismedia.com.

This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends. Like Housecall on Facebook and follow @HousecallBlog on Twitter.

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Study Shows Low-Income Housing Does Not Impact Property Values

Nov 20, 2016 by

As markets across the country stretch tight with low inventory and high selling prices, many homeowners fear, and even boycott, low-income housing. Specifically, homeowners are wary of the integration of HUD-supported Low Income Housing Tax Credit (LIHTC) housing projects. Why? Some believe that these government-supported homes may lower the values of properties nearby.

A recent study powered by Trulia wipes these fears clean by setting the table with surprising news: in the nation’s 20 least affordable housing markets, low-income housing built during a 10-year span shows no negative effect on nearby home values. We repeat: No. Negative. Effect. The only markets with any negative implication are in Boston and Cambridge, Mass., where low-income homes had a negative impact on price per square foot.

In the other 19 markets, which include Honolulu, Hawaii; Orange County, Calif.; and Miami, Fla., no downfalls of integrated low-income housing surfaced. In an interesting plot twist, homes located near low-income housing projects in Denver, Colo. actually registered a positive impact in terms of price per square foot.

Check out more of the study’s findings below, and read the full results here.

Zoe Eisenberg is RISMedia’s senior content editor. Email her your real estate news ideas at zoe@rismedia.com.

This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends, Like Housecall on Facebook and follow @HousecallBlog on Twitter.

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