ReportWire

Tag: house prices

  • Denver’s housing market feels topsy turvy to buyers and sellers

    Denver’s housing market feels topsy turvy to buyers and sellers

    Housing in La Alma/Lincoln Park. June 27, 2024.

    Kevin J. Beaty/Denverite

    Let’s say you want to put your home up for sale in the Metro Denver housing market. You know that in recent years, buyers were scooping up houses sight unseen. They were outbidding each other into the stratosphere, driving prices increasingly higher. 

    You want the same perks sellers had just a couple of years back and don’t want to waste time negotiating with greedy buyers. You’re ready to cash in and move on. 

    But nobody’s biting at the price you’re willing to sell. So your home is just sitting there. 

    Or maybe you want to buy a new Denver home. But how can you?

    You’re looking at this new era of stratospheric prices established during the market frenzy. 

    The median price of a stand-alone house is $665,000, up just over 1 percent from this time last year, according to the Denver Metro Association of Realtors Market Trends Report.

    The median price for an attached property like a condo or a duplex is $410,000, down more than 2 percent from this time last year. 

    Add to those costs much higher interest rates, higher than 7 percent as of July 5, according to Realtor.com. Home ownership feels further out of reach than ever.

    Considering all that, you are afraid you’ll drop a big down payment and commit to high interest rates. Then home values could plummet, and your mortgage will be underwater.

    You don’t want to see a housing bubble burst like it did back in 2008 and find yourself broke. So you’re demanding good deals. You want an ideal home and a seller willing to drop the price or add concessions. 

    And unlike buyers over the past few years, you’re willing to wait as long as it takes until you get what you want. 

    Choosy buyers and sellers unwilling to compromise are having an outsized impact on the number of homes available in the Denver housing market. 

    “A once reliable market with a peak selling season in June has taken a detour,” commented realtor Libby Levinson-Katz, chair of the Denver Metro Association of Realtors Market Trends Committee. 

    The June housing market was sluggish. 

    In fact, last month, the number of available homes leaped more than 68 percent, to 10,214, from this time last year — and more than 11.5 percent month over month. That’s largely because homes aren’t selling as fast as they were.

    This trend gives buyers a much wider selection of properties to choose from.

    Sellers can still sell fast if they are willing to negotiate. Those who aren’t could be waiting with their properties on the market for months. 

    They’ll be in good company. Sellers have more homes sitting on the market now than at any time over the past few years, according to DMAR, and that number just keeps climbing.

    “The main culprit of higher interest rates is easy to identify,” explained Levinson-Katz. “Buyers fear a repeat of 2008, sellers hope for a return to 2021 conditions and renters expect interest rates to drop back to three percent.”

    None of these views, she maintains, are true. But they’re helping balance the market.

    All of these changes have some sellers holding off on entering the market. 

    Though properties are staying on the market longer, fewer are being listed. 

    The number of new listings dropped more than 16 percent to 5,825 in June, a month when the market is typically red hot.

    The number of closed sales plummeted more than 17 percent, while the number of pending sales increased by just over 1 percent. 

    “The number of contract terminations is rising,” according to DMAR’s Market Trends Report. “Sellers may need to be more cooperative and solutions-oriented during inspection negotiations to keep their closing on track.” 

    Typically, as summer roles on, fewer properties are listed.

    Sellers hope interest rates will drop in the fall. If that happens, they may be more likely to list. After all, lower interest rates make the prospect of taking on a mortgage easier for buyers to swallow. 

    “It is possible that we are simply experiencing a calm before the storm,” Levinson-Katz said. “Many consumers are holding off until the fall to align with the projection of lower mortgage rates. While the market typically slows down ahead of a presidential election, we may find ourselves in the throes of a bustling market this election cycle.” 

    Source link

  • Maryland family closes on dream home with a 3.4% mortgage rate — paying $1K a month less than the market rate

    Maryland family closes on dream home with a 3.4% mortgage rate — paying $1K a month less than the market rate

    Maryland family closes on dream home with a 3.4% mortgage rate — paying $1K a month less than the market rate

    With house prices and mortgage rates hovering at painful highs, many Americans have tossed aside their dreams of homeownership — but are they missing a trick?

    The Sutton family in Northeast Maryland recently secured their dream home with a mortgage rate of around 3.4% — which was roughly half the average 30-year fixed mortgage rate at the time of purchase.

    Don’t miss

    • The 5 most expensive mistakes in options trading and how to avoid them

    • Car insurance premiums in America are through the roof — and only getting worse. But 5 minutes could have you paying as little as $29/month

    • These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how

    How did they beat the home buying odds? They used something called an assumable mortgage — a special type of home loan where the buyer essentially takes over the seller’s mortgage.

    The young family shared their story with NBC News. By going down the assumable mortgage route, the Suttons not only managed to avoid the stress and fees associated with qualifying for a conventional mortgage, but they also saved themselves about $1,000 to $1,500 a month by taking on the low interest rate.

    Here’s how assumable mortgages work and how to determine if one might be right for you.

    What is an assumable mortgage?

    An assumable mortgage is a type of home loan where a qualified buyer can take over (or assume) a seller’s mortgage terms, including the existing balance, repayment period and interest rate.

    These loans can be appealing for both buyers and sellers, particularly those, like the Suttons, looking to capitalize on lower mortgage rates of the past. But they do also have their limitations and are bound by strict regulations.

    Christopher Sutton admitting he’d “never heard of” assumable mortgages before his realtor suggested one is unsurprising.

    Assumable mortgages are a relatively niche product today, but they were immensely popular back in the 1980s, when mortgage rates lingered in double-digit territory for years and many lenders (including conventional banks) accepted the practice.

    Since then, the majority of lenders have restructured their loan terms (in line with regulatory and market developments) to prohibit the practice. Today, conventional loans are no longer eligible for assumption. They must be paid in full — and a new one issued — whenever a property is sold or transferred to a new owner.

    There are three exceptions, where home loans are assumable:

    • FHA loans: These loans are backed by the Federal Housing Administration and are popular with first-time buyers and those with lower incomes who may not qualify for a conventional loan. Like conventional loans, borrowers still have to qualify under all FHA terms, including credit and employment standards.

    • USDA loans: These loans are intended for low-income borrowers in rural areas. They’re backed by the U.S. Department of Agriculture and don’t require any down payment.

    • VA loans: These loans are offered to active or retired members of the U.S. military.

    The Suttons assumed an FHA loan in order to secure their dream home in Maryland.

    Read more: ‘You didn’t want to risk it’: 80-year-old woman from South Carolina is looking for the safest place for her family’s $250,000 savings. Dave Ramsey responds

    Things to be wary of

    To successfully assume someone else’s mortgage, you need to cover all of the equity already built up in the house. So, if the seller bought the home for $200,000 and paid off $50,000 in principal, the buyer would have to bring $50,000 to the table (a bit like a down payment) and qualify to assume the remaining mortgage.

    This worked out for the Suttons because the previous owner of the house had only made about 18 months of mortgage payments before relocating to Florida for work, meaning they had not built up a ton of equity that the Suttons would have to match.

    “It was just one more of those stars that had to align for this to work,” the family’s realtor, John Gatsoulas from REMAX, told NBC News.

    It’s also important to consider the property value before assuming a mortgage. If the home has appreciated significantly since the seller first bought it, the original home loan that you assume may not cover your costs.

    So, if you assume a mortgage for $350,000, but the house is now worth $500,000, you’ll need to pay the $150,000 difference out of pocket. You may be able to secure financing to cover that cost, but second mortgages are typically expensive, hard to qualify for and not really suitable for families, like the Suttons, seeking assumable mortgages for their affordability.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

    Source link

  • Inside abandoned Chinese-made £1bn ghost city where skyscrapers left to rot

    Inside abandoned Chinese-made £1bn ghost city where skyscrapers left to rot

    LUXURY skyscrapers in southern Malaysia developed by the Chinese were on the way to become “a dream paradise for all mankind”.

    But that promise was never delivered and the multi-billion estate sits empty on the coast of the sea, surrounded by only nature.

    12

    Forest City in southern Malaysia is just across the water from bustling SingaporeCredit: Reuters
    The city built for 1million people only inhabits around 9,000 people

    12

    The city built for 1million people only inhabits around 9,000 peopleCredit: AFP
    Investors blew $100billion on the ambitious project but left it half-finished

    12

    Investors blew $100billion on the ambitious project but left it half-finishedCredit: AFP

    12

    The Forest City looks like a lavish resort and is only a stone’s throw away from bustling and noisy Singapore.

    At a first glance, it appears to be a regular metropolis with hundreds of high-rise buildings, villas and paved roads.

    But upon closer inspection, visitors might notice how eerily silent the “ghost city” is with the only sound coming from birds‘ chirping.

    You can’t hear drivers frustratingly honking at traffic jams – in fact, you can’t see cars at all.

    There are no neighbour noise complaints as only a few hundred people live in the numerous skyscrapers.

    The only signs of life can be found on a handful of flats that lit up at night and have their laundry hung on the balconies.

    Most of the opulent apartments and villas are left to rot in the estate built by Country Garden – China’s largest property developer – under Xi Jinping’s Belt and Road Initiative.

    The ambitious project was being built in 2016 during China’s real-estate boom.

    The developers blew a staggering $100billion on the property in a bid to attract middle-class buyers who live abroad.

    The idea was to construct an eco-friendly city including a water park, golf course, offices, bars, and restaurants.

    Massive abandoned airport 3 times the size of Monaco left with rusting jumbo jets to be bulldozed and turned into new city

    The Chinese company planned for 1million people to live in Forest City, which would spread across thousands of acres of land.

    The developers believed that investors would flock to the area next to Asia’s financial hub, Singapore, for great opportunities.

    While a house in Singapore costs an eye-watering $4million on average, the typical condo in Forest City retails for a fraction of that and is just across the water.

    Although 80 per cent of units have been sold, most of them stayed unoccupied after Malaysia’s then-prime minister Mahathir Mohamad restricted visas for Chinese buyers.

    The city was supposed to boast waterpark, golf course, restaurants

    12

    The city was supposed to boast waterpark, golf course, restaurantsCredit: Reuters
    The model shows what the city would look like if completed

    12

    The model shows what the city would look like if completed
    The Forest City Mall has a restaurant and a duty free but most shops are closed

    12

    The Forest City Mall has a restaurant and a duty free but most shops are closedCredit: AFP
    Only bottled are scattered around the beach without a soul in sight

    12

    Only bottled are scattered around the beach without a soul in sight
    A handful of units have their lights on at night when the city is immersed into darkness

    12

    A handful of units have their lights on at night when the city is immersed into darkness

    After eight years, Forest City is now merely a deserted ghost town beside a river rife with crocodiles.

    Only a few hundred people reside in the high-rise structures, and just 15% of the project has been completed.

    On top of that, Chinese government introduced strict laws which barred its citizens from spending more than $50,000 abroad.

    The selling prices of the residential units were also much beyond the means of the average Malaysian, despite the Chinese developers’ claims that it was designed with the middle class in mind.

    In the complex, the typical condo currently retails for about $1.14 million.

    The largest city next to the development, Johor Bahru, has an average sale price of $141,000 for a similar property.

    This means that a large portion of the grand project is empty, with just 9,000 people dispersed around the metropolis built to inhabit 1million.

    Residents are a rare sight in Forest City where the majority of people you encounter are staff from the premises.

    The city’s mall has a working restaurant, a shop and a duty-free store with the rest of the shops closed due to slow business.

    Inside the interiors of the unoccupied shops lay bare and construction materials are scattered around.

    When the night falls, the city immerses into pitch darkness with no more than a dozen apartments having their lights on.

    But cheap rent, around $800 a month for a brand-new unit, has duped some people into moving to the abandoned city.

    The 30-year-old IT engineer, Nazmi Hanafiah, rented a one-bedroom flat overlooking the sea but soon regretted his decision.

    He told BBC: “To be honest, it’s creepy. I had high expectations for this place, but it was such a bad experience.

    “There is nothing to do here.

    “It’s lonely around here – it’s just you and your thoughts.”

    Joanne Kaur and her husband live on the 28th storey of one of the tower blocks – and are the only ones on the whole floor.

    She told BBC: “This place is eerie. Even during the day, when you step out of your front door, the corridor is dark.

    “I feel sorry for people who actually invested and bought a place here.

    “We are looking to move out as soon as possible.”

    According to the BBC, some analysts criticise the decision of building such a huge project in a country where the economy and politics are unstable.

    Travel lockdowns during the Covid-19 pandemic also hampered many overseas projects, including the Forest City.

    But the Country Garden remains “optimistic” about the future of their brainchild despite struggling to repay its $190billion debt.

    The Chinese developer is 'optimistic' that the project will be completed in 35 years

    12

    The Chinese developer is ‘optimistic’ that the project will be completed in 35 yearsCredit: AFP
    Rare signs of life can be seen on balconies where residents hang their laundry

    12

    Rare signs of life can be seen on balconies where residents hang their laundry
    Most shops have never been finished with their interior still bare

    12

    Most shops have never been finished with their interior still bare

    Aiya Zhussupova

    Source link

  • Mum fears she may be homeless by new year as rent DOUBLED days before Christmas

    Mum fears she may be homeless by new year as rent DOUBLED days before Christmas

    AN AUSTRALIAN single mum says she could lose her home by New Year’s day after was rent was more than doubled just days before Christmas.

    Jakki Brooking, 28, now fears homelessness as her landlords increased her weekly rent from £230 to £500 from January 1, 2024.

    2

    Single mum Jakki is in the verge of homlessness after her rent got increased by more than doubleCredit: TikTok / @jakkibrooking
    She began her emotional video by revealing the harsh reality she’s facing

    2

    She began her emotional video by revealing the harsh reality she’s facingCredit: TikTok / @jakkibrooking

    In an emotional TikTok video, the nurse spoke about her dire situation after living in the rental home for more than six years.

    Jakki explained she was able to pay a lower rent as her property was, until recently, a part of the National Rental Affordability Scheme (NRAS), aimed at reducing rental costs for low-income earners.

    She was paying some 20 per cent less rent than the average market rental prices.

    However, her property was bought by new owners who decided to delist the property from the government scheme and put it up on open rental market to attract hire prices.

    Her new lease, which is set to start at the beginning of next year, will have an increased rent amount which is more than double than what she is currently paying.

    A teary Jakki expressed in the TikTok video: “I obviously can’t afford to pay that …I feel so stupid doing this [making video].

    “My lease is up on the 1st of January, I’ve applied to houses and been rejected for all of them.

    “I just don’t know what I’m meant to do now. This is literally so embarrassing.

    “I am facing homelessness from the end of the lease.”

    The limited availability of NRAS properties complicated her search, leaving her stuck between being a low-income existing tenant and not meeting the criteria as a new tenant.

    Jakki also said she reached out to her real-estate agent explaining her precarious situation and the looming threat of homelessness.

    But the agent, in return, threatened her with legal action if she did not vacate the property by the end of her tenancy.

    Jakki turned to her audience, asking for suggestions.

    She added: “I just don’t know what I’m meant to do now.

    “This is literally so embarrassing.”

    One of her viewers commented: “Working was an registered nurse means you should be able to afford rent easily! What is this world coming to? I’m so sorry.”

    Another added: “The housing in Australia is ridiculous, no one should be paying $600 a week to live in a house.”

    Jakki revealed she has since found a place for her son, Levi, and her cat and dog to stay while she examines her options.

    Sayan Bose

    Source link

  • Interactive map: The home price correction (or lack of correction) in America’s 400 largest housing markets

    Interactive map: The home price correction (or lack of correction) in America’s 400 largest housing markets

    Across the country, mortgage brokers and builders are scrambling as millions of potential buyers sit on the sidelines after last year’s historic mortgage rate shock. The numbers aren’t pretty: On a year-over-year basis, mortgage purchase applications are down 36.4% and existing home sales have fallen 35.4%.

    While home transactions went into free fall in the second half of 2022, home prices have felt less of an impact. Through October, seasonally adjusted U.S. home prices were down just 2.4%, as measured by the Case-Shiller National Home Price Index. On one hand, that marks the second biggest home price correction of the post-WWII era. On the other hand, it’s mild compared to the 26% peak-to-trough U.S. home price crash from 2007 to 2012.

    In the future, Moody’s Analytics chief economist Mark Zandi expects the story to begin to change: The free-fall in home sales will soon bottom out, while the home price correction will carry on.

    “Housing demand (home sales) is close to a trough, housing supply (housing starts and completions) has yet to hit bottom, and house prices have a way to go before reaching their nadir,” Zandi tells Fortune.

    By the time U.S. home prices bottom out, Zandi expects them to be 10% below the 2022 peak. He isn’t the only economist who thinks home prices will continue to fall: Among the 24 major housing forecasters tracked by Fortune, 17 predict that U.S. home prices will decline further in 2023. (Another seven firms think U.S. home prices will remain flat or rise by a low single-digit amount in 2023).

    “The housing market downturn, triggered by rapid increases in mortgage borrowing costs, continues to cause us significant concern. Prices have risen hugely over the past couple of years as demand vastly outstripped limited supply of homes, but this process is going into sharp reverse,” writes James Knightley, chief international economist at ING. His firm expects around a 10% peak-to-trough decline in U.S. home prices.

    Keep in mind, when a group like ING or Moody’s says U.S. home prices, they’re talking about a national aggregate. Whatever comes next will likely vary significantly by market. After all, there’s a reason industry types like to say real estate is local.

    To better understand the regional home price story, Fortune reviewed the Zillow Home Value Index (ZHVI) for November 2022.*

    Through November, home values in 254 of the country’s 400 biggest housing markets were below their 2022 peak. In those markets, the average decline was 2.1%.

    “Home values slipped 0.2% in November, resuming a slow decline that began this summer. Once again, the proximate cause could be traced to high mortgage rates,” writes Zillow researchers. “While national prices only inched down, they slumped more dramatically in many formerly-hot housing markets.”

    The markets hit the hardest by the correction fall into one of two groups.

    The first group are boomtowns, often second-home markets or up-and-coming cities, where remote workers moved during the pandemic and pushed local home prices beyond what local incomes could support. That “froth” might explain why home prices are falling more swiftly in boomtown markets like Coeur d’Alene, Idaho (where home values are down 10.8% from the peak); Austin (down 10.4%); Phoenix (down 8.1%); Las Vegas (down 8%); Salt Lake City (down 7.9%); and Reno (down 7.6%).

    The second group comprises high-cost markets along the West Coast, including places like San Jose (where home values are down 10.6% from the peak); San Francisco (down 9.5%); Santa Cruz, Calif. (down 8.4%); and Seattle (down 5.8%). Historically speaking, those high-end markets are vulnerable whenever the stock market slips into bear territory or mortgage rates spike. Of course, both red flags occurred in 2022.

    While home prices in 254 major markets are below their 2022 peaks, another 146 major markets remain at their 2022 peaks. The ongoing mortgage rate shock has yet to cause home values, as measured by Zillow, to fall in markets like Indianapolis, Miami, and Philadelphia.

    So therefore the coast is clear in markets like Miami and Philadelphia, right? Not so fast, says Moody’s.

    While the home price correction has yet to impact tight inventory markets like Miami and Philadelphia, it still could this year. Moody’s expects home prices to fall further this year in every major regional housing market. In cities like Miami and Philadelphia, Moody’s expects that peak-to-trough decline to hit 16.9% and 5.3%, respectively. (Here is Moody’s outlook for the nation’s 322 largest markets.)

    While the ongoing housing downturn has translated into the U.S. housing market flipping from inflation-mode to deflation-mode, it has only barely touched the gains accrued during the Pandemic Housing Boom. As of October 2022, U.S. home prices were still 38.1% above March 2020 levels.

    Even in the housing markets hit the hardest by the correction, including San Francisco (down 9.5% from its 2022 peak) and Austin (down 10.4% from its 2022 peak), prices remain well above pre-pandemic levels. Indeed, as of October, home values in San Francisco were 16.9% above pre-pandemic levels while those in Austin were up 57.1%.

    *Note: The Zillow Home Value Index (ZHVI) is a measurement of the typical home value in a given region. According to Zillow, the index “reflects the typical value for homes in the 35th to 65th percentile range.” Fortune pulled ZHVI’s “raw version” which is not seasonally adjusted.

    Want to stay updated on the housing correction? Follow me on Twitter at @NewsLambert.

    Our new weekly Impact Report newsletter examines how ESG news and trends are shaping the roles and responsibilities of today’s executives. Subscribe here.

    Lance Lambert

    Source link