A Wealth Building Tool Reliant On Large Doses Of Unearned Equity Is Fatally Flawed
A weekend topic starting with CNBC. “With the U.S housing bubble far in the rearview mirror, home prices in most places have passed their pre-recession peak. In other spots, though, it’s a different story. ‘Some markets that experienced a huge run-up and then a big downturn are still waiting for a recovery,’ said Lawrence Yun, chief economist for the National Association of Realtors. ‘For some people, the decline from the time they purchased was so severe that it’s taking a long time to recover.'”
“Nationally, the median home price is $226,700, according to Zillow. That’s about 13% more than its 2007 peak of $200,500. Prices have pushed far higher than their previous peaks in some metro areas.”
The Indianapolis Star. “For Central Indiana builders to meet employment-driven housing demands, construction would have to increase by 21 percent over the course of the next two decades, according to the housing study. While such studies might accurately point out a lack of ‘new’ affordable homes, a Ball State economics professor notes that, in truth, Indiana has a housing glut, largely due to older, often vacant homes that are affordable but not necessarily desirable.'”
“Professor Michael Hicks, along with research professor Dagney Faulk,published a study in February disputing the housing inventory shortage in Indiana, and said that new construction would only contribute to Indiana’s existing excess housing supply.”
“Hicks found 316,000 vacant single-family homes in Indiana. ‘Statewide we have too many homes. Far too many homes that have to be bulldozed and removed,’ he said. ‘The problem is that they’re not in the places people want to live.'”
“But perhaps more significantly, the homes that are being built are beyond what many people can afford to buy. New households can support homes that cost $260,000 or less, but many new homes are priced above that, the study found.”
“Pent-up demand from the housing crisis has contributed to a trend in increasing land prices, said John Eaton, a custom home builder with about 25 years of experience in the industry. Eaton recently sold a home for $750,000 in an area he would never have expected to command such a high value near 38th Street.”
“‘If you had told me that five years ago, I would’ve told you you were insane,’ he said. ‘Before, the rule of thumb, you wanted the lot value to be 20 percent of the house. That’s changed lot. Now we’re in bigger city prices, some of these lots are 50 percent the value of the house.'”
“If you ask Steve Hatchel, chief business development officer for Indianapolis-based Arbor Homes/Silverthorne Homes, it’s harder to build affordable housing in some communities now. ‘Four or five years ago, our average price point was right at about $160,000 and now it’s running $215-220,000,’ Hatchel said. ‘Big difference.'”
From Knowledge@Wharton. “Wharton real estate professor Benjamin Keys discusses a new analysis tool he an colleagues have created that could be an early-warning signal when lenders relax mortgage requirements beyond a safe level.”
“‘This is a really nice indicator for when markets are looking a little bit frothy, a little bit bubbly.’ Keys noted that late last year when some lenders began making loans that have echoes of the past. ‘We saw this at the tail end of 2018. As interest rates started to go up, we started to see some lenders — even very traditional lenders — starting to make these loans that have some shadows of the types of loans that were so popular during the boom. And now these are not being called subprime or non-prime or ‘alt-A.’ The new name for them is non-qualified mortgage or non-QM. I think people are going to start to hear more about these types of loans.'”
“‘You’re starting to see some things that look like teaser rates. You’re starting to see some contracts that look like maybe interest-only contracts, where you’re only paying interest on the loan for two, three, five years, and then you start to repay the principal at that point.'”
“‘There’s certainly a lot of evidence that seems to point to the need for some form of risk retention, that that is going to align the incentives better than not. But right now, there are a lot of ways to avoid these kinds of rules. Anything that’s sold to Fannie Mae or Freddie Mac, for instance, doesn’t require risk retention. So, Fannie and Freddie are bearing a lot of that risk. Now, they haven’t moved their standards into this direction either, but we saw this at the tail end of the boom, as well — that Fannie and Freddie started to relax their standards to try to keep up with the private market.'”
“‘If you look at the difference between the number of AAA-rated corporations versus the number of AAA-rated mortgage bonds, it’s just not even close. There are so many of these mortgage bonds out there with a AAA rating. You can get different types of investors willing to bear different types of risks, but the model really matters. The underlying model matters a ton. And this is something the rating agencies got wrong. They just simply didn’t realize how correlated these different markets were.'”
“‘If you look back at the mistakes that the credit rating agencies made, we haven’t really replaced that. One thing I think is keeping this type of lending to a relative minimum — now it’s growing quickly.'”
From AEI Housing Center. “The 30-year mortgage amortizes extremely slowly, making it nearly twice as risky as a similar loan with a 20-year term. And the 30-year loan compounds risk-layering by promoting the use of higher combined loan-to-value and debt-to-income ratios (DTI).”
“The Housing Lobby unabashedly supports the broad availability of the 30-year mortgage, and even wants it extended to manufactured housing. This is because Housing Lobby sees the slow amortization as a feature that reduces monthly payments, making home ‘more affordable.’ They choose to ignore the bug–the 30-year loan, when combined with other risk factors, drives up home prices when the supply of homes is tight, especially for buyers of entry-level homes.”
“Since 2012, lower priced entry-level homes have risen by about 55%, while move-up homes have risen by about 31%. This means lower priced entry-level homes that cost an average of $103,315 in 2012, cost a whopping $160,138 in late-2018. Thus, rather than making housing more affordable as its supporters claim, 30-year loans make housing less affordable.”
“Fact 1: In December 2018, 30-year loans constituted 99% of all government guaranteed loans to finance a home purchase. Government agencies guaranteed 85% of home purchase loans. Fact 2: This was not always the case. In 1953, the year before Congress authorized the FHA to insure 30-year loans on existing homes, FHA’s average loan term was 21 years and conventional loans had a term of 15 years. Even as recently as 1992, 27% of home purchase loans had a term of 15- or 20-years.”
“Fact 3: 30-year loans are much riskier than the 15- and 20-year loans they replaced. In general, a 30-year loan is about twice as risky as a 20-year loan with similar risk characteristics. A 15-year loan has about 60% less risk than a 30-year loan with similar characteristics. With the loans terms prevalent in the 1950s, it comes as no surprise that foreclosure levels in the 1950s literally rounded to zero. With the broad adoption of the 30-year loan by FHA in the late 1950s and early 1960s, foreclosure rates started to rise to concerning levels in the early 1960s.'”
“Fact 5: But it is the 30-year loan’s lower monthly payment that is its flaw. The pace of principal pay-down on a 30-year mortgage is agonizingly slow. At the end of 6 years, the balance on the 30-year loan is $89,138, compared to $78,749 for the 20-year loan. This helps explain why the 30-year loan is so much riskier. The paying down of principal through scheduled amortization is called earned equity. House price appreciation through rising prices, particularly when rising faster than inflation, is call unearned equity. Since the long term success of the 30-year loan as a wealth building tool is reliant on large doses of unearned equity on entry level-homes, it is fatally flawed.”
“Back in the 1950s, before the large-scale adoption of the 30-year loan, the median home price was about 2 times median income. Today, this ratio is over 3.5. This result is predictable, as Ernest Fisher, FHA’s first chief economist in the 1930s and a university professor in the 1950s, observed that in a seller’s market, ‘more liberal credit is likely to be capitalized in price.”
“Fact 7: As the easy terms of the thirty-year loan gets capitalized into higher home prices, the dollars needed for a down payment of say 10% doubles as the price of a home doubles. Yet as already noted, incomes (and savings) do not rise as quickly. At the start of the current home price boom in 2012, first-time FHA buyers had a median down payment of $3800. In January 2019 the median down payment was still $3800, yet the median home price purchased had increased by 31%. This translates into more risk.”
“Fact 8: A similar trend has occurred with respect to borrower DTIs. Since 2012, the DTIs of first-time FHA buyers have increased by 13%, an unsurprising result since wages have increased by only about 16% over the same period, but the price of homes purchased went up by 31%.”
“The solution is simple. Stop putting FTBs in harm’s way and end the pricing penalty. This can be done by switching to a 20-year loan term that builds wealth more reliably and at much lower risk of default. Second, adopt policies to increase the supply of newly constructed entry-level homes.”
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‘If you look at the difference between the number of AAA-rated corporations versus the number of AAA-rated mortgage bonds, it’s just not even close. There are so many of these mortgage bonds out there with a AAA rating. You can get different types of investors willing to bear different types of risks, but the model really matters. The underlying model matters a ton. And this is something the rating agencies got wrong. They just simply didn’t realize how correlated these different markets were.’
AKA eee-bola!
‘If you look back at the mistakes that the credit rating agencies made, we haven’t really replaced that. One thing I think is keeping this type of lending to a relative minimum — now it’s growing quickly’
BTW Wharton was shouting no bubble right up until it collapsed.
no bubble right up until it collapsed
With the U.S housing bubble far in the rearview mirror
Real Estate double talk and they all seem to do it. The “Bubble” to them isn’t the inflated prices, it’s the collapse.
The bubble is always the high prices, not the catastrophic aftermath – that’s the collapse. The Fed likes to talk a bunch of BS saying “you can’t spot a bubble” or whatever, but it’s actually simple to spot a housing bubble. When prices become detached from incomes and fundamentals, it’s a speculative bubble. It’s a no-brainer.
Why in the world would “investors” be buying houses and multi-family properties that are not cash-flow positive? There’s only one answer – they are speculating on price gains. The Fed, of course, understands all this, they are just lying to keep the con going.
Yes, but also if one assumes there is a rent rate bubble, then those low cap rates will really make the prices go down when rents drop. This is the 600lb (not 300lb) gorilla in the room that no one is addressing in detail as it affects property value. At a low cap rate, a small change in income creates a large change in the property’s market value.
I believe the popping of the rent bubble will be the torpedo that triggers the next big real estate crisis and possibly dominoe into the next economy wide recession. Waits to be seen.
I think your point is spot on Jdog. I totally agree.
believe the popping of the rent bubble will be the torpedo that triggers the next big real estate crisis and possibly dominoe into the next economy wide recession
But what’s the catalyst for this?
The catalyst is falling prices in the purchase market. Rental and owner-occupied housing are substitute goods, with positively correlated, or at least cointegrated, prices. A drop in the price of owner-occupied homes will eventually draw demand away from rental housing, unless the Fed decides to play the hair-of-the-dog housing market hangover cure card again. Can’t rule it out, given strong political support for QE. There’s a whole generation of unhoused Millennials who probably wouldn’t be very happy if housing went bubbly a third time.
A drop in the price of owner-occupied homes will eventually draw demand away from rental housing
The Fed cannot prevent a fall, they may be able to keep some banks from failing down the line though.
Home sale prices do not even have to fall to break the rent escalator, they merely needed to stop going up. The business model has been gains on flipping the property, rental or owner occupied. Low to negative margins have been just OK. Now they’re not and a lot of these guys are going into foreclosure. Not to worry, the buildings will change hands at lower prices and the rents will be lower.
The catalyst is falling prices in the purchase market.
I just don’t see it. I mean, I want to see it and I am seeing it at certain segments. But as long as the administration is pushing lower rates and we have funny money from the Fed, I just don’t see it happening.
I think we’re in for a Hunger Games restructuring of where people live. The wealthier you are, the closer you will be to thriving city centers, of course in nice homes. The poorer you are, the further in the sticks you go and the longer your commute. Drive ’till you qualify, rent burdened households, doubling up, side gigs, and all that.
The bubble means we’re building the wrong type of housing (e.g. luxury) and in the wrong places (e.g. not where the jobs are). Also, there is the NIMBY-ism and the current owner cartel that discourages building because more supply will hurt their most precious asset. It’s a mess. It’s a bubble, and it’s a complete mess. As Ben pointed out, getting rid of 30 year mortgage would be huge. But I’m not sure that is within the Overton window.
OneAgainstMany,
I think we’re in for a Hunger Games restructuring of where people live. The wealthier you are, the closer you will be to thriving city centers, of course in nice homes. The poorer you are, the further in the sticks you go and the longer your commute. Drive ’till you qualify, rent burdened households, doubling up, side gigs, and all that.
We’re already seeing this in coastal hotspots, especially on the west coast with SD, LA, SF/SV, Portland, Seattle, Vancouver, etc, etc…
I probably over consider population and it’s growth along with immigration (I blame this pondering on all the simulations I’ve programmed) . When the population grows against fixed land areas and other constraints, a transformation takes place in response.
Parallel to this I’m watching increasing inequality and the rising concentration of hard assets including RE being concentrated into the hands of corporations and fewer people – thanks in part to a decade+ of printing QE money and near zero borrowing costs to those well off enough to have access to it scrambling to turn cheap money into hard(er) assets and seeing returns.
All those things would help push the general situation people face though as you put it – ‘through a Hunger Games restructuring’ and I think it has already begun. How it continues… well, stick around to see how it turns out.
Japan’s experience since 1990 might be a useful comparison, as they are still facing lowflation 30 years hence.
Jul 31, 2018, 8:25 am
Japan’s Lowflation Problem
Frances Coppola, Senior Contributor
Markets
I write about banking, finance and economics.
If ever there were evidence that very low interest rates and QE don’t work, it is in Japan. Japan’s inflation rate has been on the floor for most of the last quarter-century. So have its interest rates. And the Bank of Japan has been doing QE longer than any other central bank: its first experiment with large-scale asset purchases was between 2002-6.
The current Governor of the Bank of Japan, Haruhiko Kuroda, is throwing everything he has at Japan’s lowflation problem. The Bank of Japan is buying up Japanese government bonds as fast as the government can issue them, and is also buying corporate debt, ETFs and REITs. The interest rate on excess reserves held by banks is negative. But Japan’s lowflation remains as intractable as ever.
…
“…we’re building the wrong type of housing (e.g. luxury)…”
How’s that working out?
Real Estate
Unsold Luxury Homes Are Piling Up in the Hamptons
By Misyrlena Egkolfopoulou
April 24, 2019, 9:01 PM PDT
– Sales in all price ranges fall for a fifth straight quarter
– Buyers bypass mansions in favor of homes below $1 million
Lavish vacation homes are losing their luster in New York’s Hamptons, the beachfront retreat favored by financiers and celebrities.
There were 869 luxury properties available at the end of the first quarter — almost triple the supply from a year earlier and the most in seven years of data-keeping by appraiser Miller Samuel Inc. and Douglas Elliman Real Estate. While higher-end homes piled up, buyers flocked to deals below $1 million. Those made up 59 percent of Hamptons sales in the quarter, the firms said in a report Thursday.
…
La La Land’s Housing Market Comes Back Down to Earth
Sales in Los Angeles drop over 25% in the first quarter of 2019 as tight inventory and runaway price growth puts off buyers
By Beckie Strum
| Originally Published On April 25, 2019 | Mansion Global
A view of downtown Los Angeles from Hollywood Hills
The broad slowdown in U.S. luxury home sales has finally caught up with Los Angeles, a megamansion epicenter where prices have doubled in the past six years, according to market data released on Thursday.
The median price across the city’s downtown and westside—a swath of high-end neighborhoods from the Sunset Strip to Malibu—fell 4.5% year-over-year to $1.455 million, according to the report from brokerage Douglas Elliman. It’s only the second time annual price growth turned negative in the city since 2011, said Jonathan Miller, chief executive of appraisal firm Miller Samuel and author of the Douglas Elliman reports.
…
the further in the sticks you go and the longer your commute
Only if you insist on being stuck in the “Game”. I stopped playing 15 years ago. Life is much better.
Only if you insist on being stuck in the “Game”. I stopped playing 15 years ago. Life is much better.
BlueSky,
I’d be the first to agree with you. Having (Financial) Independence and control over life circumstances gives a serious boost to almost any person’s health.
Though not everyone has the option of ‘opting out’. In fact I’d say you are in the minority.
Sometimes it’s due to choices made, other times it’s due to circumstances beyond one’s control. See: Exhibit A: Average dude’s Divorce Decree (after cheating ex destroys him…)
To TPTB, it’s not their interest to have a population that isn’t indebted to ‘the system’…
‘With the loans terms prevalent in the 1950s, it comes as no surprise that foreclosure levels in the 1950s literally rounded to zero. With the broad adoption of the 30-year loan by FHA in the late 1950s and early 1960s, foreclosure rates started to rise to concerning levels in the early 1960s’
This is one of the biggest lies the REIC repeats, that a 4% foreclosure rate is normal. Of course, they’ll tell you an 18% increase in prices is normal too. How do the GSE’s keep the rate down? Modifications. Over and over again, and they just keep defaulting and getting re-modified.
With the loans terms prevalent in the 1950s
They also don’t mention that down payments were 50%.
They don’t mention a lot of things. If they did, the picture it painted would show that the differences between now and then were a lot greater and more significant. Enough to make some people stop and think and ask questions. But that doesn’t help the narrative the interested parties want to promote.
‘New York’s statewide crackdown on “zombie homes”, a campaign launched in Western New York, seems to be paying off. New laws were passed in Albany that have enabled towns and cities in this area to fight back against banks and mortgage servicers that threatened homeowners with foreclosure, then failed to follow through, after the properties were vacated.’
‘A “Shame the Bank” campaign was launched in 2015, in response to the alarming number of vacant homes, across Western New York, put in limbo by those “incomplete foreclosures”–even though the homeowners moved out, they still held title to the property.’
‘State lawmakers got the message and passed a number of new laws, including the Foreclosure Relief Act of 2016 that armed local city, town, and county governments with new tools to take hold banks responsible for zombies they created with their actions.’
‘Kate Lockhart, the Vacant and Abandoned Property Program Director for the WNY Law Center said the mortgage servicer gave up its claim to the property in question after it became apparent the property was a lost cause due to its neglect. “Walking away from a property, leaving this house for the taxpayers and the neighbors and the municipality to have to deal with is not a sufficient solution.”
‘Once the mortgage was discharged on the property in question the former homeowner sold it and a new responsible owner has taken control. Now that house that was dilapidated and disrepair in 2017, is much improved. The new owner has invested in shoring up the damaged foundation, replaced broken and damaged windows, and made other substantial improvements.’
‘Lockhart said the new laws and the lawsuit are providing new homeowning opportunities, and sending a powerful message to banks and mortgage servicing companies. “We think it is very important that the servicer in this case be held responsible for the neglect that led to this property sitting for years and deteriorating. It’s a cute little house.”
https://www.wivb.com/news/local-news/-zombie-properties-getting-new-life-from-new-laws/1957771988
Notice how once they don’t have some Harryhowmuchamonth on the hook for some suicide loan, they don’t even want to deal with the shack anymore? They can’t even be bothered to try to rent it. That’s because houses are money pits, and there’s very little money to be had even renting them out.
“With the U.S housing bubble far in the rearview mirror, home prices in most places have passed their pre-recession peak.
You keep telling yourselves that, CNBC REIC shills. Meanwhile, the evidence abounds all around that Housing Bubble 2.0 is cratering like a mo-fo.
‘Some markets that experienced a huge run-up and then a big downturn are still waiting for a recovery,’ said Lawrence Yun, chief economist for the National Association of Realtors.
The real cratering hasn’t even begun yet, Lawrence.
ok I saw the following posting and I just had to share it with you guys. Swampland in Florida has reached a new low. A direct quote from the listing: “PRIME submerged land”
https://www.zillow.com/homedetails/0-Tropical-Shores-Way-Fort-Myers-Beach-FL-33931/2084763745_zpid/
Good one!
“This otherwise vacant portion of our privately owned submerged land has a dock built on it. Said dock is located to the rear of 106/108 Tropical Shores Way. As many local residents are aware, the property where the Topps Grocery store was located may soon be rezoned, or essentially repurposed for a hotel. As this process moves along, we anticipate increased interest in our privately owned man-made canal. This portion of the canal may be the most desirable as it is right next to the future hotel property. We anticipate that the highest and best use of this property will soon be a dock for use by hotel guests. Also uses of great potential are hotel access by boat, as well as jetski and boat rental for hotel guests. Floating ‘bungalow’ type hotel rooms may also be a great idea. The area which is promoted in this listing measures approximately 957 square feet of PRIME submerged land, which has already been nicely improved by the construction of a boat dock with the following approximate dimensions; 5ft by 99ft.”
If it’s so great, why are they trying to offload this useless bit of underwater, I mean “prime submerged” land for a paltry $12,500? It could be worth MILLIONS!!!
Hey Ben, did you see this?
https://www.latimes.com/business/realestate/hot-property/la-fi-hp-zillow-makowsky-lawsuit-20190426-story.html
Very Interesting – hackers changing the price data on Zillow..
Taking aim at Zillow’s security process, the lawsuit alleges that Zillow has no safeguards in place to stop trolls or criminals from claiming a property and posting false information.
Oh boy, I’m sure that those security holes aren’t being abused…
Guy tries to sue zildo for not getting his 250mil dream price… time to go back to selling his Knick knacks on QVC it perhaps venture over to Lyft / Uber, they really need drivers!
What more harm can be done by posting fake price data, given that Zilldo already does the same thing? The buyer and seller ultimately have to agree on a price regardless of what disinformation is posted.
Zilldo is shooting themselves in the foot as they post fake data. With their Kool-Aid tinged “Zestimates,” any prospective sellers who Zilldo wants to try to purchase homes from will just say “look at your Zestimate, I’m NOT GIVING IT AWAY!”
It also doesn’t have any safeguards to prevent Zillow from pumping and dumping real estate.
For how long can you paint lipstick on a pig before everyone and his dog notices there’s a pig beneath all the lipstick?
Opinion: Behind that great GDP number, the real economy slumped
By Rex Nutting
Published: Apr 26, 2019 4:31 p.m. ET
The economy didn’t do nearly as well as that 3.2% GDP number reported Friday — consumption and investment both slowed
…
Lyin’ Larry Yun, right up there next to Delusional Danielle Hale. They both aspire to be David Lereah.
They better get busy on their bubble book, as the gathering storm clouds of bust look evermote dark.
evermore
https://www.amazon.com/All-Real-Estate-Local-Sellers/dp/0385519222
In Lereah’s defence, the book price is up alot from 2007 levels. Of course we have no information on whether anyone is buying them.
What a refreshing comment!
“The battle against a devastating November wildfire in Los Angeles County was hampered by politicians asking firefighters to check on certain homes…’A significant number of requests by political figures to check on specific addresses of homes to ensure their protection distracted from Department leadership to accomplish priority objectives,’ the review said.”
https://www.yahoo.com/news/report-politicians-hampered-fight-against-california-fire-033457554.html
Bellevue WA Housing Prices Crater 14% YOY As Double Digit Price Declines Emerge In All Washington Counties
https://www.movoto.com/bellevue-wa/market-trends/
“But perhaps more significantly, the homes that are being built are beyond what many people can afford to buy. New households can support homes that cost $260,000 or less, but many new homes are priced above that, the study found.”
Welcome to southeast Michigan…
Indeed. I still track prices in the area I grew up in (think beyond 26 mile rd) and I can’t figure out where the wages are, unless everyone has an hour+ commute. The last 3-4 years the charts have hyperbolic…
The communities that can support “new urbanism” and walkable downtowns (Birmingham, Royal Oak, Plymouth, Northville, inner core of Detroit etc.) have been thriving, the inner ring “need a car” cities (Dearborn Heights, Livonia, Farmington Hills etc.) are declining, while the exurbs beyond appear to be holding steady.
The entire area is segregating according to wealth — I guess it’s always been that way, but the contrast here now is much more stark, with the decline of labor, which had always supported a more even distribution of prosperity in the area.
But I think that they’ve run the prices up about as much as they’re ever going to now. I’m starting to wonder if the automotive industry restructuring is causing a lot of people to chicken out of taking on a higher mortgage. It has been a *very* slow spring thus far, particularly for homes above $400K. Which will untimately bankrupt the flippers, which is the best outcome we could all possibly hope for.
“Seattle Is Dying” Drug addicts on the streets are the problem, no solutions presented by those in charge.
I watched the documentary twice. Pretty friggen sad.
This is one of my favorite posts in several months. Very insightful and loaded full of good stuff.
Here is what stood out to me:
“The paying down of principal through scheduled amortization is called earned equity. House price appreciation through rising prices, particularly when rising faster than inflation, is call unearned equity.”
It seems like we know that one lever for reducing house prices is to move from 30 year loans to 20 year loans. I wonder though if we’ll see 35 year loans or 40 year loans once prices can’t be inflated further with the current regime?
Another lever for lower home prices (e.g. making housing more affordable) would be to eliminate single-family only zoning. Multiple good articles and studies have been written on how this type of land use impedes entry level construction.
we know that one lever for reducing house prices
Probably, but government lever pulling is what got us here. If the government were to get out of the house lending business lever pulling, prices would right themselves right quick.
Once nearly all mortgages were packaged into tranches, sliced and diced and sold to remote investors instead of being held by local banks, it didn’t matter much how long their duration was – very few were expected to make it all the way to maturity anyway.
Y’all wonderin’ what that beacon of cry$tal ball truth$ “$ir.Thornberg” has to pipe in about NON.HB.B ll? … ok, here from thee horse’$ mouth:
“It’s a mix issue — that’s all it is,” said Christopher Thornberg, founding partner of Beacon Economics. “The stock market’s back. Interest rates are down. The economy’s still growing … prices always fall in the face of severe economic circumstances. Right now we don’t have that.”
Southern California home price$ fall for 1$t time in 7 years
Jeff Collins |PUBLISHED: April 26, 2019 |Categories: Business, Housing
Ha, (-$500) they spend that much on gourmet dog bicuit$ every month.I
“CoreLogic reported Southern California’s median home price fell $500, or 0.1%, in March, the first year-over-year price drop since an 83-month streak of rising values began in April 2012.
Southern California home prices dropped $500 in March from the year before, the first annual price drop in the region in seven years, real estate data firm CoreLogic reported Friday, April 26.
But that doesn’t mean the $ky is falling for the hou$ing market, economist$ and market watched$
warned.
The main reason for last month’s price dip was fewer sales at the high end of the market, skewing the statistics downward, CoreLogic reported. For example, high-cost Orange County and pricier new homes both made up a smaller proportion of total sales.”
Mr. Ben, don’t ye qualify as a “Market$ Watcher”?