Price-to-Rent ratio (source: Calculated Risk)
Calculated Risk has pegged this March as the bottom of the market for U.S. home prices.
The blog isolated home prices from another data set that’s commonly used to determine market strength, new home sales and housing starts, and predicted that both the Case-Shiller Index and the CoreLogic index would valley in March. [more]
Goldman Sachs, the Blackstone Group and several other notable investors have turned bullish on the U.S. housing market, the Wall Street Journal reported, buying up shares of home building companies, like Pulte Group, Beazer Homes and Hovnanian Enterprises. Those stocks are up 30 percent since the end of the third quarter, according to Dow Jones, far outpacing the 10.5 percent increase recorded by the Standard & Poor’s 500.
In a recent report, Goldman said it expects home prices to decline 3 percent next year, before gaining 30 percent — not taking inflation into account — through 2022 [more]
Sen. Chuck Schumer is one of two senators introducing a bipartisan bill aimed at improving the housing market by offering an incentive to foreign buyers, the Wall Street Journal reported. He and Sen. Mike Lee of Utah want to offer residence visas to any foreigner that spends at least $500,000 on residential real estate in the United States. The measure compliments existing rules that offer visas to foreign investors that create jobs in America.
“This is a way to create more demand without costing the federal government a nickel,” Schumer said. [more]
Prudential Douglas Elliman CEO Dottie Herman appeared on Fox Business this week (see video above) to talk about the consistently fluctuating housing market. Reports such as the S&P/Case-Shiller Home Price Index give a view of the national as a whole, she said, but don’t reflect activity in unique markets such as New York. “You have to really look at your local market to determine what’s going on… Interest rates are the lowest they’ve been… the banks just really have to start lending,” she said. While national home prices are continuing to exhibit seasonal strength, according to the S&P/Case-Shiller Home Price Indices’ data through July, Herman said she expects the housing slump to continue for another year at least.
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Paul Ballew, chief economist of Nationwide Mutual Insurance, accompanied attorney Adam Leitman Bailey on CNBC yesterday to diagnose the state of the housing recovery. Each of their statements proved grimmer than the last. Bailey started by noting the three markets, the well-performing luxury market, the muddling lower market that could be damaged by the conforming loan limit and the foreclosure market, which he said may not be sorted through for another five years.
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Department of Housing and Urban Development Secretary Shaun Donovan responded to a recent report by Harvard Joint Center for Housing Studies today on CNBC. The report shows that one in every four U.S. households is paying more than half their income on rent and middle-income Americans are struggling just as badly and those in a low-income bracket. Rents are rising, vacancies are falling and buyers simply can’t get credit, the report revealed.
Asked about helping the rental housing market and pushing homeownership, Donovan says, in the video above, that HUD didn’t have the luxury of prioritizing one over the other. “We’ve had the biggest increase in worst-case rental housing needs over a two-year period, 2007 to 2009,” he said, “in the history of looking at those numbers.”
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Residential brokers are bullish on the second-quarter housing market in New York City, according to a survey by the Real Estate Board of New York released today. Of the 394 residential brokers REBNY said it polled through April 8, 72 percent said they expect the market to improve in the second quarter. And brokers reported having the sales numbers to back that up. Five percent more brokers said they have closings scheduled in the next three months compared with last year. Among the survey’s other findings, 7 percent of brokers reported sales that closed above the sellers’ asking price, up from 4 percent in the fourth quarter of 2010. TRD [more]
A 1 percent climb in new jobs nationwide last year won’t be enough to boost the lethargic housing market, according to a report from Local Market Monitor, a home price forecasting firm. The negligible boost in new jobs won’t be enough to make up from 2009′s 3 percent job loss, the report says, spelling bad news for the housing market, which many experts agree is largely dependent on employment. This news comes on the heels of a negative U.S. housing market report from Case-Shiller late last month, which showed that January housing prices are down 3 percent from the same month a year earlier. [Housing Wire]
New York City-area home prices remained relatively flat in January, according to the S&P/Case-Shiller Home Price Index, released today. The report, which does not take condominium or co-op units into account, shows a 0.9 percent drop in home prices month-over-month (see full report below). Prices are down 3 percent from the same time period a year ago. This performance is in line with the overall momentum in the housing market nationwide. The index’s 20-city composite dropped 1 percent month-over-month and declined 3.1 percent from January 2010. David Blitzer, chairman of S&P’s Index Committee, said that the data show a protracted real estate slump. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery,” Blitzer said. “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.” TRD
The younger set may be benefitting more from mortgage-related tax deductions, according to a report from the National Association of Home Builders. Because younger households tend to have more housing-related debt and lower incomes, the NAHB says they take advantage of mortgage interest tax deductions more often than their older counterparts. The report also shows that among the taxpayers who claimed a mortgage insurance-related deduction, 59 percent were under 45 years old. “Opponents [of mortgage-related tax deductions] falsely argue that the deduction is only for the wealthy but it is clear that the mortgage interest deduction is also of great value to younger homeowners,” said Robert Dietz, an assistant vice president with NAHB. TRD
