More than 20 years ago, agents at ERA Shields Real Estate in Colorado Springs, CO, participated in a sales training led by Larry Kendall called Ninja Selling. This approach is based on a philosophy of building relationships, listening to your customer, and helping them achieve their goals. At its core is a belief that it is far better to create value for people by solving their problems.
It was out of this training that the “Stat Pack” was born. Simply put, the Stat Pack is a “boots on the ground” monthly market report that our agents can share with their clients and sphere as an example of the value they bring. A collection of easy-to-read bullets and simple charts, the report draws on data from a variety of sources that can help homeowners, buyers, and sellers better understand current market conditions. I regularly consult our local MLS, the National Association of REALTORS®, the Colorado Association of REALTORS®, our local assessor’s website, a regional new construction report, Fannie Mae, Fannie Mac, and reports on the primary mortgage market.
I also include one key trend I am seeing and provide insight and context to help consumers better understand how that trend is affecting the local real estate landscape. For instance, many buyers wonder why there is so little inventory right now. But when we explain that many current homeowners have mortgage rates around 3 percent, and there is little incentive to sell and buy a home with a rate in the 7% range. We have also helped homeowners appeal their assessed values using data from the Stat Pack. That was a great touch with 75% of our clients winning their appeals.
I’ve served as the “editor” of the report since 2003, so I have an incredible 20-year vantage point of the area’s trend lines. I’m able to distill this long view into actionable items for our agents to share with their clients and prospects.
The Stat Pack is a great way for agents to keep in regular communication with their sphere. We have a professionally designed template that uses the company’s branding. Agents can add their own branding to the report as well. Agents tell us they appreciate the credibility the report imparts to them.
We host the Stat Pack using a few different platforms including Issuu.com. Agents can share a hard copy of the report, email the pdf or post a link to the Issuu file. They can also incorporate key statistics from the report into their listing presentations.
We discuss the report each month at a sales meeting and provide suggested sound bites that agents can use in casual conversations and encounters. For example, “Homes in the $400k range are very popular now. Can I send you a more detailed report?”
We have also created a video outlining how agents can use the Stat Pack in their marketing efforts.
In addition to the monthly reports, we also produce quarterly reports as well as a Year In Review report that comes out in January.
For a company with two offices and about 90 agents, we have found this formalized approach to producing market reports to be a valuable tool for our agents in building their business. The Stat Pack creates a regular opportunity for agents to showcase their value in an excellent example of Ninja Selling. I certainly appreciate that something we learned 20 years ago is still a key part of our marketing efforts today.
By Eddie Hurt: ERA Shields Real Estate
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Just when you thought things were cooling off, home prices surprised us with yet another killer year.
Tomorrow, Zillow will release the November edition of their Real Estate Market Reports, which will show that home prices increased 6.5% in November from a year earlier, the best year-over-year gain since 2006.
Yes, you heard that right. It might be a seasonal blip, but still, best 12 months since 2006…that’s impressive.
I Was Wrong
I’ll be the first one to admit I was wrong about sustained, stellar home price appreciation. I actually thought things were overheating a couple years ago, yet home prices continued to defy expectations.
I suppose we can thank low mortgage rates and scant inventory for that. The good news is I’ve learned something from all of this.
Whenever you think things are about to top out, they’ve probably got a lot more time to keep going higher. This is probably even more true when you watch things really closely.
The same thing happened in the stock market. It looked frothy a couple years ago, but now we’re on the cusp of Dow 20,000. And probably Dow 21,000 if history is any indication.
Not long after, it might be time to worry, or least get slightly less bullish.
The takeaway is that market tops take a long time to reach, just like market bottoms, and you’ll doubt yourself along the way.
I’ve been hearing chatter lately about how we probably have another good year or so, maybe less, depending on who you ask, in both real estate and the stock market.
The sentiment seems to be that we can squeeze a little more out of this rally, but it’s clearly coming to an end. Everyone seems to agree on that, at least in private.
Does that mean the bottom is going to fall out once we all realize we’ve gotten ahead of ourselves? That part I’m not sure of, though history does tend to surprise us over and over again with the same exact outcome (think about it).
We’ll Never See Another Crisis Like We Did
The chart above (I annotated it) shows the Case-Shiller Home Price Index (red) versus the S&P 500 (blue) since 1987.
I discuss this stuff with my wife sometimes, who always tells me I overthink everything. She’s probably 100% right. But what struck me recently was her telling me something like, “Things will never be as bad as they were a few years ago.”
When I heard her say that I thought to myself, “famous last words.” The second you hear that kind of stuff, it conjures up memories of the dot-com bust or simply the most recent housing crisis, and fears of impending doom.
Back in early 1999, the Dow hit 10,000 for the first time…and it wasn’t long before it hit 11,000. In fact, it was less than two months later that it climbed above that next key threshold.
Interestingly, it wasn’t until 2006 that the Dow surpassed 12,000 for the first time. Does that mean the Dow is going to hit 20,000 soon, then 21,000 shortly after, then tank? Or at least stall for five years? Maybe, who knows?
There’s certainly a lot of uncertainty in the world at the moment. If you want to talk about geopolitical tension, you’ll have plenty of material to fuel days, if not weeks of conversation.
Should You Buy a House in 2017?
Now let’s talk about real estate. Home prices are no longer on sale. Whether they’re still cheap is perhaps a more complicated question.
Most pundits will tell you that Americans are spending less on housing historically, but that’s mainly because of near-record low mortgage rates.
Still, home prices have increased as mortgage rates have risen, so there’s no clear correlation there, as many might expect.
But there will come a time when wages won’t be able to keep up with home prices, at which point they’ll need to fall, or at a minimum, gains will need to moderate as incomes catch up.
The question is when will that actually happen? When the dot-com bubble burst around the turn of the century, home prices pulled back around 10% in the Bay Area.
Before that somewhat modest decline, home prices had risen about 60% from 1997 to 2000.
In San Francisco, the median home value increased from $670,000 in 2012 (most recent bottom) to $1.12 million as of early 2016, a gain exceeding 67%.
History is starting to sound pretty familiar, isn’t it?
Of course, home prices in the Bay Area bounced back between 2003 and 2006, before tanking again. Regardless, the trajectory is always up.
The question then is clearly a matter of timing. As I’ve said before, time heals all real estate wounds, but there are better and worse times to buy. There are also those who tell you not to time the stock market, and probably the housing market too.
For me, 2017 doesn’t seem like a particularly good year to buy real estate. There’s just too much uncertainty in the world at the moment, and with home prices at new, fairly pricey all-time highs, I’d rather watch how things play out.
Pull Back More Likely Than Another Crisis?
Fortunately, the mortgages originated over the past few years (and still today) are of the utmost quality. CoreLogic launched a new quarterly report this week featuring its Housing Credit Index (HCI), which claims mortgage credit risk continues to be low.
In fact, it fell in the third quarter of 2016 from a quarter earlier and a year before that. You can thank rising credit scores, falling DTI ratios, and lower LTVs for that.
But it might be set to change direction as mortgage rates begin to rise, finally. Chances are borrowers will begin to assume more risk to deal with the higher rates and home prices in place, perhaps in the form of ARMs and smaller down payments.
Before long, we could be back in a familiar situation, though as my wife said, not as bad as it was before.
If you wait, maybe you’ll see a pullback of 10% or so, it’s just unclear when that’s going to happen, and also where mortgage rates will be at that time. And with rents expensive too, it’s not an ideal situation for anyone to just sit around and wait. But at some point, something’s got to give.
Welcome news for mortgage brokers, and somewhat surprising While welcome news given her role as a mortgage broke,. Rebecca Richardson, of UMortgage, wasn’t completely taken off guard by the development. Still, she added, the lowered rates only added to the contradictory market reports amid today’s uncertain market. “It was somewhat expected after the resolution of … [Read more…]
Top Producer Software, a leading real estate software provider, announced on Monday the release of its first-ever social media lead product, Social Connect. This new product combines social media marketing with automated lead nurture to enable real estate agents to grow their database and convert more leads into clients.
“Social Connect is a game changer for our customers with the number of quality interactions being generated,” Kerm Foltz, senior vice president of operations at Top Producer, said.
Social media has become an indispensable tool for real estate agents to expand their networks and attract potential clients. According to industry data, more than 95% of home buyers utilize online tools during their home search.
To capitalize on this trend, Social Connect leverages social media advertising to reach a broader audience, targeting leads that the advertising algorithm identifies as more likely to make a home purchase.
Incoming leads from Social Connect are automatically sent to the customer relationship management (CRM) system, where they receive relevant content tailored to their needs. This includes branded market reports, infographics, and other educational materials aimed at engaging leads and converting them into clients.
Top Producer also has access to one of the largest multiple listing service (MLS) networks and utilizes live MLS data to create active and sold listing ads, which are then optimized by a team of advertising experts. Agents only need to select their target city and budget, leaving the rest to Top Producer Social Connect.
In addition to its other features, the system generates a high volume of affordable leads with accurate contact information while also utilizing Top Producer’s smart follow-up technology.
Top Producer tracks all the essential activities of leads in a centralized location within the CRM. This allows agents to provide exceptional service by accessing the communication history and saved property inquiries associated with each lead’s contact record.
“The lead nurture content is one of the big advantages of Top Producer Social Connect. Messages don’t sound canned, have a better personality than other lead generation follow-up systems and include nice infographics,” said real estate agent Marty Soller.
Top Producer Software has been a trusted provider of innovative real estate software solutions for over 40 years, assisting tens of thousands of real estate professionals in streamlining their businesses and maximizing their networks. The company is part of the Constellation Real Estate Group.
This content was generated using AI, and was edited and fact-checked by HousingWire’s editors.
Starting from the premise that the words used in home listings can have a significant impact on how much the home sells for — and how fast it sells — Zillow took a closer look at exact keywords used in listing descriptions across the country, and correlated the findings with actual sales.
They took 4.6 million listing descriptions of homes sold throughout the country in both 2017 and 2018 to identify useful patterns and insight we can use to better market our homes.
What they found was quite surprising: while having professional appliances is still in the top 3 most sought-after features, people nowadays seem to really have a thing for steam ovens, pizza ovens, and wine cellars.
If you want to learn more about the findings but this article is too damn long and boring, check out Zillow’s fun quiz here.
Keywords that sell a home for more $$$
Surprisingly, listings mentioning ‘steam ovens’ saw the highest sale premium of all the keywords Zillow looked at, selling for 34% more than expected, with ‘professional appliances’ coming in on second place, selling for 32% more, and ‘wine cellars’ landing the third spot, selling for 31% more.
“Having a steam oven, a heated floor or other luxury features in the home is a signal that there are more than the home’s basic features at play. These homes are special. They likely come with an elevated design sense and the extra touches valued by home shoppers who are willing to pay,” says Skylar Olsen, director of economic research at Zillow. “If you have these features, flaunt them.”
Now, if you find it extra surprising that ‘steam ovens’ are the listing feature that sell homes for more, there’s a decent explanation for that. Zillow also took into account the metro area where that feature was most often mentioned in listing descriptions; and the metro area where prices were higher for ‘steam oven’ homes was Los Angeles, California, where it’s not at all surprising that people would much rather use steam to cook rather than turn on their ovens.
For starter homes (bought primarily by first-time homebuyers), listings mentioning ‘free-standing tub,’ ‘pizza oven’ or ‘wine cellar’ stood out, having sold for more than expected.
A fun finding of the study was that homes featuring ‘steam ovens’ were also the slowest to sell, staying on the market 22 days longer than other similar homes in the same metro and price tier. So then which listing features speed up the sale of a home?
Keywords that sell a home faster
In Zillow’s analysis, fast sales were often associated with trendy design features made popular by home improvement TV shows, such as ‘open shelving’ (homes with this feature sold 11 days faster than expected) and ‘subway tile’ (10 days faster).
Are there any home features that seem to be selling homes both faster and for more money? Apparently, there might be a few:
homes with a mention of a ‘shed/garage studio’ (26% more than expected, 8 days faster than expected)
homes with mentions of ‘exposed brick’ (22% more, 9 days faster)
homes featuring a ‘mid-century’ design style (17% more, 11 days faster.)
But that doesn’t mean you should start revamping your home to fit a more billable profile. In fact, here’s what Zillow Design Expert and founder of Kerrie Kelly Design Lab, Kerrie Kelly, pointed out when the study was released:
“While it’s important to understand what’s popular with buyers, ultimately your home is a reflection of your personal style and how you want to live,” Kerrie Kelly said, adding that “You should design a home that makes you happy every day with features you love, knowing that future buyers may want to adapt it to create their own dream home.”
Now, if you’re wondering what to do if you house doesn’t come with a wine cellar, here’s a handy article by one of our contributors on how to increase the value of your home. Maybe we should also add buying a steam oven to that one.
Buying or renting a home is a challenge that can take up a lot of your time and energy. Much of that time and energy go into your due diligence process, of doing the proper research and learning more about the area you’re looking to buy a house in.
This is why people tend to turn to realtors or other professionals, to tap into their past experience and vast knowledge of the local real estate market.
However, if you are determined to handle the purchase or rental of your new Texas home by yourself, here’s a detailed Texas housing market overview, meant to help you save time and make the entire process easier when buying a house in the area.
What are the latest stats when it comes to housing in Texas in 2019?
To offer you a complete image of the housing situation in the Lonesome Star State, we will be tackling the three essential criteria: Supply, Demand, and Prices:
According to the construction activity reported by the Texas Residential Construction Cycle (Coincident) Index, the overall home construction and development activity slowed down its pace after a strong 2018.
Construction wages and employment in this sector have dropped. However, the Texas Residential Construction Leading Index remains optimistic when it comes to future projections. The main reason behind this are the lower interest rates and extended economic expansion in Texas.
December brought a surprising downslide in terms of single-family housing construction permits. When looking at the major metropolises, the Texas housing insight identified San Antonio as the leading example when it comes to growth in monthly permits (796). Other cities in Texas were managed to stay in the race, in comparison to the stats from early 2018:
Houston led the state with 2,846 issued permits (despite a 14.6 percent decline)
Dallas-Fort Worth was the close runner-up, with 2,698 issued permits
Austin doesn’t offer nearly as much, but still did good, with 1,400 issued construction permits
Texas’ months of inventory (MOI) showed potential but never passed four months, just two short from a balanced housing market. Everything home lower than $300,000 maintained an MOI between 2.9 and 3.4 months.
A drop in new listings and boost in sales could limit any further MOI expansions.
The state of demand for Texas housing
With lower mortgage rates reducing the price pressure, the total housing sales in Texas marked a 5.2 percent increase since July 2018. Resale transactions were the reason behind the progress, with a record level of homes sold in the price range of $200,000-$300,000.
On the other hand, homes that went for under $200,000 also experienced an increase in quantity. Put these two ranges together and you have a piece of the Texas housing pie that covers more than 70 percent.
However, it should also be noted that even luxury homes achieved an 11.9 percent increase, making up for the losses experienced back in the 4th quarter of 2018.
According to current Texas housing insights, all major metropolitan areas in the state are experiencing growth. So, it should be no surprise that people are moving to Texas from another state.
The trend began in Central Texas, with Austin and San Antonio, and continued to spread throughout the state. Fort Worth marked the biggest growth, raking in at 12.4 percent, with Dallas and Houston trailing behind at 6.0 and 6.5 percent.
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The numbers this week are unfortunate: inventory should be growing like it does at this time every year. But, the weekly inventory data can occasionally have big moves up or down that can deviate from the longer seasonal trend so I need to see a few more weeks of inventory declining before I make too much out of one week.
However, one thing is for sure, housing is not going to crash due to large-scale panic-selling — a scare tactic of late 2021 that didn’t work then or now. New listing data was trending at all-time lows in 2021 abd 2022 and now it’s creating a new all-time low trend in 2023.
Weekly inventory change (April 28-May 5): Inventory fell from 422,270 to 419,725
Same week last year (April 29-May 6): Inventory rose from 287,821 to 300,481
The bottom for 2022 was 240,194
The peak for 2023 so far is 472,680
For context, active listings for this week in 2015 were 1,081,085
Weekly housing inventory
According to Altos Research, new listing data declined weekly and is still trending at all-time lows in 2023. This data line can have some wild swings up and down, but for the most part, we do see the traditional seasonal increase in new listings data. We are roughly two months away from the seasonal decline in new listings.
Since the second half of 2022, after the big spike in mortgage rates, this data line hasn’t gotten much traction. Last year at this time, we saw some growth year over year, but this year it’s been different.
New listing weekly data over the past three years:
New listing data from previous years to give you some historical perspective.
As you can see in the chart below, new listing data is very seasonal; we don’t have much time to get some more growth here.
The NAR data going back decades shows how difficult it has been to get back to anything normal on the active listing side since 2020. In 2007, when sales were down big, total active listings peaked at over 4million. We had high inventory levels while the unemployment rate was still excellent in 2007.
This proves that the mass supply growth we saw from 2005-2007 was due to credit stress, not because the economy was in a recession; the U.S. didn’t go into recession until 2008. Even though the labor market is currently showing signs of getting softer, there is no job-loss recession yet.
The total NAR inventory is still 980,000. As you can see in the chart below, there is a big difference between the current housing market and those looking for a repeat of 2008.
NAR total active listing data going back to 1982
People often ask me why there is such a difference between the NAR data versus the Altos Research inventory data. This link explains the difference and is worth a read.
While this was a disappointing week on the inventory growth side, I hope this is just a one-week blip. We can see what a difference a year makes in inventory data. For example, last year, from April 22-29, weekly active listings grew by 16,311. So far this year, after the seasonal bottom in inventory happened the week of April 14, the total growth in active listings since that week has been only 14,257.
Traditionally, we would see active listings starting to grow at the end of January. However, that growth has taken longer in 2023 than any other year in U.S. history and so far the active listing growth from April to May has been mild.
The 10-year yield and mortgage rates
Last week we had multiple land mines for the 10-year yield and mortgage rates to rise or fall with the Fed meeting and four labor market reports. Although the Fed raised the Federal funds rate, the bond market is sensing a slower labor market and mortgage rates fell.
Tracking the 10-year yield and mortgage rates are essential for housing inventory because when rates fall, buyer demand gets better, allowing more homes to be bought and getting a lid on inventory growth, which we have seen since 2012. The only two years we have seen the active inventory grow were 2014 and 2022 when softness in demand allowed inventory to grow.
The big difference between 2022 and 2014, as you can see in the chart below, is that the bottom in 2022 was an all-time record low; we can see year-over-year growth in total active listings. However, the increase in inventory this year from last still puts active listings near all-time lows.
NAR Total Active Listings
We have seen from 2022 that the monthly supply of NAR data has grown more visually in the data lines; this means homes are taking longer to sell than before. I wrote about this last week and talked about it in the HousingWire Daily podcast.
NAR Monthly Supply Data
Mortgage rates started last week at 6.73% and fell as the labor data and banking stress drove money to the bond market. We briefly broke under my key Gandalf line in the sand (between 3.37%-3.42%) intraday, only to close right at the line and rise by the end of the week. This line has been truly epic.
Mortgage rates fell to a low of 6.43% then ended the week at 6.5%. The spreads between the 10-year yield and 30-year mortgage rates have been terrible for a long time and have gotten worse during the banking stress. While credit is stlll flowing for conventional loans, mortgage pricing has been bad. Mortgage rates in a regular market should be 5.25% today but are at 6.5%. Can you imagine the housing market at 5.25% today when we found stabilization with rates ranging between 5.99%-7.10% this year?
In my 2023 forecast, I said that if the economy stays firm, the 10-year yield range should be between 3.21% and 4.25%, equating to 5.75% to 7.25% mortgage rates.If the economy gets weaker and we see a noticeable rise in jobless claims, the 10-year yield should go as low as 2.73%, translating to 5.25% mortgage rates.
Of course, the banking crisis has added a new variable to economics this year. However, even with that, the labor market, while getting softer, hasn’t broken yet. We have been in the forecasted range all year, even with all the drama from the banking crisis, which isn’t good news for the economy.
My line in the sand for the Fed pivot has always been 323,000 jobless claims on the four-week moving average. This has been my big economic data line for the cycle since I raised my sixth and final recession red flag on Aug. 5, 2022. While the labor market is getting less tight, it’s not broken yet.
From the Department of Labor: Initial claims for unemployment insurance benefits increased by 13,000 in the week ended April 29, to 242,000. The four-week moving average also rose by 3,500 to 239,250.
Purchase application data
Purchase application data has been the main stabilizing data line for the housing since Nov. 9, 2022, with 16 positive prints versus seven negative prints, after making some holiday adjustments. For 2023, we have had nine positive prints versus seven negative prints.
The MBA purchase application data line has been very rate-sensitive: when the 10-year yield and mortgage rates rise, it typically produces a negative weekly print, and when they both fall, we get a positive print. This past week we saw a 2% week-to-week decline in the data line.
The year-over-year decline in purchase application data was 32%; as I have noted, we are working from the mother of the all-time lowest bars in 2023. As we can see in the chart above, just having 16 positive prints since Nov. 9 has stabilized the data — it’s been hard to break lower than the levels we saw back in 1996.
The year-over-year comps will get noticeably easier as the year progresses, especially in the second half. This data line looks out 30-90 days for sales, and we are almost done with the seasonality. I always weigh this report from the second week of January to the first week of May. Next week for the tracker, I will report on how 2023 demand looks based on this index.
Traditionally, purchase application volumes always fall after May. Now, post-COVID-19, this index has had some abnormal late-in-year growth data. So, after May, I will address this issue with seasonality and whether we will see some growth later in the year, as we have seen in previous years.
The week ahead: It’s Inflation week!
All eyes are on the CPI report this week, coming on Wednesday, and we have the PPI inflation report on Thursday. The entire market knows the headline inflation growth rate peaked last year, so watch out for the core inflation data, excluding shelter inflation. Of course, core CPI is primarily driven by shelter inflation, and we all know by now that it will cool off, especially as the year progresses. However, the Fed and the markets focus on service inflation, excluding shelter.
I am keeping an eye on the car inflation data as that might be stubborn this week, keeping core inflation higher than it should be.
The bond market never bought into the 1970s inflation premise, so the 10-year yield is closer to 3% than 5%. Since the entire marketplace is keeping an eye out on credit getting tighter, I will be watching the Senior Loan Officer Opinion Survey on Bank Lending Practices on Monday. This will provide more clues into how fast credit is getting tighter in the U.S. economy, which is key at this expansion stage.
So, we will have some economic data to see if the 10-year yield can break lower and send mortgage rates lower as well. So far, the Gandalf line in the sand has held up against some brutal attacks this year, but we shall see if we can break under that line of 3.37% and head lower in yields. Why is that important? Because the 10-year yield and mortgage rates have always danced together, and if the 10-year yield heads lower, mortgage rates will follow it.
The Silicon Valley boom paved the way for unprecedented returns for scores of high-tech companies, resulting in a mass influx of highly-skilled professionals to the San Francisco Bay Area.
A surge in job creation invariably boosted housing demand across the region. With a limited supply at hand, the prices quickly spiraled out of control, appreciating at an extraordinary clip.
The effect of rising demand and limited supply quickly resulted in an over-inflated property market which out-priced nearly everyone in the Bay Area counties. Year-on-year growth rates show that the median house price in San Francisco has increased by 1.3%, – to $1.6 million. While substantial, this is the smallest gain since 2012. More significantly, housing prices across Santa Clara County dropped by 6%, averaging out at $1.26 million.
Analysts agree that the explosive growth in the property market are due in large part to the runaway success of technology companies in the region. 2019 ranked among the most active years for IPO listings, leading to an influx of billions of dollars in venture capital, and various rounds of financing activity. This has led to a cooling of expectations as various tech companies such as Slack, Uber, and Lyft, failed to hit their price targets.
Interestingly enough, the steep prices in San Francisco and its surroundings have many homebuyers shift interest to other areas, like Oakland and Berkeley. Home prices in these areas have risen by approximately 4%, reflecting a median house price of $860,000.
Where to next for the Bay Area housing market?
Dozens of economists were recently surveyed regarding pricing in the Bay Area market. The consensus among them was that San Francisco will lose traction as other housing markets like Austin, Texas gain momentum. Apparently, the worst performing real estate market in 2020 is expected to be the Bay Area.
Of the 100 economists that were polled in the survey, 64 of them believe that San Francisco’s housing market will underperform this year, followed by 61 experts who believe that San Jose will underperform. If these predictions hold true, home values across the Bay Area will start to decline. Obviously, residents of the Bay Area have mixed feelings about their home value decline, but those looking to rent and buy properties will be heartened by this news.
The uninterrupted growth in property prices has everyone overly concerned. The majority of real estate developers have been focusing on the high-end market when developing new housing facilities. This has neglected the low and middle-income earners who were simply priced out of the market.
One of the most expensive cities of America
Of course, notable exceptions exist such as Danny Haber of oWOW, a California-based real estate development company which focuses on low-cost, luxury accommodations for the market, in and around the Oakland region. Owing to general trends in the Bay Area, most people do not consider home ownership, let alone rentals. While high home prices affect buyers and sellers, they also have an impact on renters by raising the costs. Unfortunately, the rise in rental prices has outstripped the growth in real earnings by a wide margin.
According to SF Gate, the one third rule is not applicable to the Bay Area property market. Typically, renters spend approximately 33% of their gross income on housing, but in the Bay Area, this is a pipe dream.
Rental prices for a single bedroom apartment in San Francisco can average $2,900 per month, which requires earnings of $105,000 a year. Most wage earners come nowhere near close to that figure. In fact, experts found that San Francisco rentals, including San Mateo and Marin counties, eat up to 50% of gross income. This being said, the costs of living here become more affordable in households with multiple wage earners.
Housing alternative for the Bay Area
Construction costs in the Bay Area rose by 6.7% during 2018, making San Francisco the most expensive real estate market to build in. Typically, increases in demand are met with increases in supply to reduce pricing, but in San Francisco’s housing market this is not the case.
Of course, the tech sector is likely to rebound and this will add further pressure onto housing prices. In the absence of accelerated construction, other viable solutions need to be found.
One possible solution to the housing crisis in the Bay Area is MacroUnits, the system provided by oWOW. These modular-style housing units are built offsite and shipped to their destination.
This alternative reduces the costs of remodeling existing apartments, shortening the time to market and reducing overall costs for customers. A flexible walls system known as Magic Walls is used to maximize the living space and create luxurious accommodations by transforming single bedroom units into multi-bedroom units with additional facilities, all within the same square footage.
By entering the market with lower prices, Danny Haber’s company is rapidly expanding its tenant base, by offering upgraded housing at an affordable price. If this system is implemented at scale, it could become part of a comprehensive solution to the housing dilemma.
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With their sheer size and economic gravity, cities like New York or Los Angeles will always appeal to wealthy buyers. But newcomers to the scene like Austin, TX, Boise, IN, or Minneapolis, MN leverage economic vitality and fast growth across all sectors (employment, population, income levels, lifestyle) to make significant gains on the luxury home […]
The post Report: Luxury Buyers Gravitate Towards New Markets appeared first on Fancy Pants Homes.
Mid-March brought about a lot of uncertainty and change, with the real estate sector seemingly coming to a halt as buyers became increasingly weary of the times ahead. Among the first signs we saw was a significant drop in people’s interest in looking up properties online, with listings websites seeing a sharp decline in traffic […]
The post Online For Sale Listings See Uptick in Traffic, Which May Signal that Buyers are Returning appeared first on Fancy Pants Homes.