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By Susanne Dwyer

The housing market is on the up-and-up, but at a lesser pace than in prior years. According to new research, buzzier markets are now stabilizing.

Appreciation is projected to slow in 41 of the top 100 metropolitan statistical areas (MSAs) this year, according to HouseCanary, which recently released its “5 Housing Trends That Are Changing the Market Today.” HouseCanary assessed the country’s 381 MSAs for affordability and appreciation. The areas with marked softening:

1. Palm Bay-Melbourne-Titusville, Fla.
2. North Port-Sarasota-Bradenton, Fla.
3. Lakeland-Winter Haven, Fla.
4. Cape Coral-Ft. Myers, Fla.
5. Deltona-Daytona Beach-Ormond Beach, Fla.
6. Phoenix-Mesa-Scottsdale, Ariz.
7. Orlando-Kissimmee-Sanford, Fla.
8. Miami-Ft. Lauderdale-West Palm Beach, Fla.
9. Urban Honolulu, Hawaii
10. Tampa-St. Petersburg-Clearwater, Fla.

“Although the housing market is still strong, with home prices still increasing in many markets, there is clear evidence of a considerable deceleration in the pace of those price increases,” says Alex Villacorta, executive vice president of Analytics for HouseCanary. “The rapid price growth in high-end and luxury markets seems to have stagnated as affordability continues to put downward pressure on home price appreciation.”

What factors are fueling the trend? The demand/supply dynamic, for one, Villacorta says. Buyers are out in droves, but inventory is lacking. The imbalance is pressuring prices—and affordability is suffering, in turn. Households in 30 of the top 100 MSAs are allocating more than 30 percent of their income to their mortgage, HouseCanary’s research shows. (Thirty percent is considered, generally, the ideal share.) Five of the top 100 MSAs are allocating more than 50 percent of their income.

Affordability is also impacted by mortgage rates, which Villacorta anticipates will land in the neighborhood of 4.75 percent by this time next year—a change that could deter homeowners with lower rates from selling, exacerbating inventory issues. The average 30-year, fixed mortgage rate has been on an uptick since the start of 2018.

The Tax Cuts and Jobs Act could have an effect on housing, as well, though how it could help or hurt the market is unclear. With change comes indecision, and Villacorta believes homebuyers and sellers could hold off on their plans until they know how the bill will impact them personally.

MORE: Housing and Tax Reform: Where Could the Impact Land?

“Clearly there are many challenges to stabilizing the housing market,” Villacorta says. “There is still a supply-and-demand problem, mortgage rates are still on the rise, affordability remains an issue in many major markets, and the wider-ranging effects of the new tax plan are still unknown—so it’s unclear whether this slowed growth will lead to housing market price plateaus or declines, but the conditions are certainly in place for that potential outcome.”

For more information, please visit www.housecanary.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.

The post A Let-Up for Prices? Housing Trends to Watch appeared first on RISMedia.

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From:: Finance and Economy

By Susanne Dwyer

The housing market is on the up-and-up, but at a lesser pace than in prior years. According to new research, buzzier markets are now stabilizing.

Appreciation is projected to slow in 41 of the top 100 metropolitan statistical areas (MSAs) this year, according to HouseCanary, which recently released its “5 Housing Trends That Are Changing the Market Today.” HouseCanary assessed the country’s 381 MSAs for affordability and appreciation. The areas with marked softening:

1. Palm Bay-Melbourne-Titusville, Fla.
2. North Port-Sarasota-Bradenton, Fla.
3. Lakeland-Winter Haven, Fla.
4. Cape Coral-Ft. Myers, Fla.
5. Deltona-Daytona Beach-Ormond Beach, Fla.
6. Phoenix-Mesa-Scottsdale, Ariz.
7. Orlando-Kissimmee-Sanford, Fla.
8. Miami-Ft. Lauderdale-West Palm Beach, Fla.
9. Urban Honolulu, Hawaii
10. Tampa-St. Petersburg-Clearwater, Fla.

“Although the housing market is still strong, with home prices still increasing in many markets, there is clear evidence of a considerable deceleration in the pace of those price increases,” says Alex Villacorta, executive vice president of Analytics for HouseCanary. “The rapid price growth in high-end and luxury markets seems to have stagnated as affordability continues to put downward pressure on home price appreciation.”

What factors are fueling the trend? The demand/supply dynamic, for one, Villacorta says. Buyers are out in droves, but inventory is lacking. The imbalance is pressuring prices—and affordability is suffering, in turn. Households in 30 of the top 100 MSAs are allocating more than 30 percent of their income to their mortgage, HouseCanary’s research shows. (Thirty percent is considered, generally, the ideal share.) Five of the top 100 MSAs are allocating more than 50 percent of their income.

Affordability is also impacted by mortgage rates, which Villacorta anticipates will land in the neighborhood of 4.75 percent by this time next year—a change that could deter homeowners with lower rates from selling, exacerbating inventory issues. The average 30-year, fixed mortgage rate has been on an uptick since the start of 2018.

The Tax Cuts and Jobs Act could have an effect on housing, as well, though how it could help or hurt the market is unclear. With change comes indecision, and Villacorta believes homebuyers and sellers could hold off on their plans until they know how the bill will impact them personally.

MORE: Housing and Tax Reform: Where Could the Impact Land?

“Clearly there are many challenges to stabilizing the housing market,” Villacorta says. “There is still a supply-and-demand problem, mortgage rates are still on the rise, affordability remains an issue in many major markets, and the wider-ranging effects of the new tax plan are still unknown—so it’s unclear whether this slowed growth will lead to housing market price plateaus or declines, but the conditions are certainly in place for that potential outcome.”

For more information, please visit www.housecanary.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.

The post A Let-Up for Prices? Housing Trends to Watch appeared first on RISMedia.

…read more

From:: Real Estate News

By Susanne Dwyer

Ahead of the buying season, inventory issues are showing no signs of subsiding. According to the National Association of REALTORS® (NAR), existing inventory is at a 3.4-months supply, dismally down 9.5 percent from last year. New inventory is at 5.7 months, the Census reports. Although builders are confident and ground-breaking looks promising, the deficiencies persist. The biggest challenge for the majority of Power Brokers in RISMedia’s 2017 Power Broker Survey? Lacking supply.

Against climbing costs, labor limitations and regulation, builders are building—and according to an analysis recently released by Trulia, comparatively, construction is kicking up the most in one headline-making market: San Francisco.

In 2017, The City by the Bay began to build further than any other market. Comparing the annual average number of permits from 1980 to 2016 with 2017’s number of permits, San Francisco approved 94.6 percent more permits last year—6,270 total. Approvals amped up in the latter part of the year—they were just 41.9 percent above the average halfway through 2017.

Does its No. 1 finish indicate inventory relief is on the way? Likely not. Over 90 percent of permits were primarily for rentals (multifamily), which contributes to the rental stock. For homeowner housing, affordability constraints are continuing.

Additionally, the analysis found a link between comparatively high permits and the construction of multifamily units—illustrated in markets like San Francisco. In essence, building “up” versus “out” correlates to a higher likelihood of more permits. Cities with growing incomes and jobs—factors that ignite interest from out-of-towners—and prices are also likely to have more permits.

Although historically San Fran is tops, relatively, it lags markets that also had a high number of permits, like Austin, which approved 79.5 percent more permits last year for roughly 25,800 total units, and Nashville, which approved 63 percent more permits for roughly 19,300 units.

Austin, however, is not No. 1 in terms of volume—that distinction goes to Dallas, which came out far in front with more than 47,000 permits. Houston is No. 2, with nearly 43,000.

Adding homes has an impact on new and pre-owned supply. Buyers generally have to offload their current home in order to buy a new one, and, when they do, their current house becomes part of the pre-owned pool. The buyer of that home, in turn, may have a house of their own to sell.

For more information, please visit www.trulia.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.

The post Home-Building in 2017: The Winners appeared first on RISMedia.

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From:: Finance and Economy