Friday, July 29, 2016

The State of the Nation's Housing - 2016

The State of the Nation’s Housing - 2016               

With this last report from the Joint Center for HousingStudies of Harvard University, we have a comprehensive look at the state of the US Housing.
In it, one can find important stats which can be found here and there in various real estate articles and publications, - and in some of my blogs, like:

Inventory (fig. 10, page 10): 
-       There are 1.9% fewer existing homes for sale in the US than one year ago,
-       7.8% fewer entry-level homes for sale,
-       New home sales still at their lowest, for the past 25 years (although the inventory of new homes for sale went up by 8.2% in 2015, which is a step in the right direction) - see page 9 and 10.
Homeownership:  fewer people own their home in the US:
-       Homeownership rate is much lower than before the 2008 crisis, over all at 63.7% (see page 19),
-       This is the case in pretty much all of the age groups (page 2).
-        The number of renters has increased by 9 million in the past 10 years, with vacancy rates falling and rents climbing, as we all know (especially in the Bay Area). Not so well known: people in their 50s and 60s make up the largest part of the increase in renters.
-       The number of renters paying more than 50% of income for housing jumped by 2.1 million, to a total of 11.4 million. (page 4).
-       A growing supply of new housing being built may help ease these conditions.  Something to follow up on …

-        The percentage of all households that can afford to purchase a median-priced, single-family home is called the Housing Affordability Index.  It is 60% for the US.  Compare this to California: 30%, and the County of Santa Clara: 20%
-       The share of adults aged 20-39 with student loan debt went from 22% in 2001 to 39% in 2013, while the average amount owed went respectively from $17k to $30k;  - this has an impact on the housing market as a whole: fewer homes sell as a consequence.  Since housing makes a good part of the economy, one could deduce that it is not good for the US.
-       Homebuying activity is much lower than before 2007, but is now on the uptick (pg.21).
Property value appreciation:
-       Very uneven, depending on the area.  Some areas still lag in appreciation (pg 11). Some areas are higher than at the peak before the 2007 crisis, and some are still way below.
-       Of course, overall, fewer homeowners are “under water”.   

The report, for those interested, is a treasure trove of fascinating information about our society and the US housing situation.   In trying to keep some perspective on the real estate market locally in the Bay Area, I find it enlightening, and offer the following graph that I keep over the years:

click on the graph for better viewing.

Thanks for reading,

Silicon Valley Real Estate
Smart local Stats and Graphs 
non-profit organization worth noting: Partners for New Generations.

Thursday, July 14, 2016

Foreign buyers - California - US

The number of sales to foreign buyers rose once again over the past year, although international buyers are shifting their preferences from luxury homes to less-pricey properties.

NAR (National Association or Realtors) economists think the change in the price of homes international buyers are after may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign buyers more these days.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence” all had an impact on foreign buyers over the past year, said Lawrence Yun, NAR’s chief economist.  “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s report. The number of properties purchased rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

Experts say a slight drop in dollar volume is due to the types of properties purchased, and the locations of those properties. There are signs that foreign buyers have begun looking beyond higher-priced markets like San Francisco and New York to purchase properties in smaller, less-expensive cities in the Southeast and Midwest.

Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was three times as much as Canadian buyers, who were ranked second. Chinese buyers also bought the most expensive homes at a median price of $542,084.

Five states accounted for half of foreign buyer purchases, according to the NAR report: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent).

 It is interesting to note that California is home to about 25% of all of the foreign-born population of the US.  Florida has only 9% of the foreign-born population of the US, as shown on the graph below:

Thank you for reading,
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Friday, July 1, 2016

California: Millennials - Baby Boomers

The definition of a Millennial is not straightforward as evidenced by the many resources found online. However, if we follow the general guidelines of the Pew Research Center we can agree that these would be the people between the age of 19 and 35 as of 2016  (i.e. born between 1981 and 1997).
For the 3rd straight year nationwide, millennial homebuyers made up the largest part of all homebuyers: 35%, edging out Gen X (26%), boomers (31%) and the silent generation (9%).

Lots has been said and written about the level of indebtedness found associated with this slice of the American population (see for instance the article by Maya Pope-Chappell that I show on my previous post on my FB page:  "buried-in-debt millennials...").  Because they are the largest part of all homebuyers, we can only assume that more people nationwide would be engaged into the process of owning a home if the Millennials were not so saddled with student loans.  This could have in turn very positive repercussions on the US economy as a whole.

In California, these are some of the stats for Millennials and Baby Boomers (born between 1946 and 1964):

Francis Rolland - Millennials comparison with Baby Boomers

Click on the picture to see it larger.

Thank you for reading,

Silicon Valley Real Estate
Smart local Stats and Graphs 
non-profit organization worth noting: Partners for New Generations.