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Sizzling Hot Summer Home Market

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This is not the first time that the US has had a strong market. The difference this time around is that the market is exceptionally strong in all parts of the country. The coastal intense markets are typically found, but this time it’s almost everywhere, with the national average list price hitting a new high of $ 380,000 in May 2021 (Realtor.com). That is 15.2% more than in the previous year.

How the summer market got so hot

Let’s look at the main drivers of this unprecedented summer 2021 housing market (it’s a long list):

  • Millennials are in their prime when buying a home.
  • Mortgage rates have long been exceptionally low as the Federal Reserve continues to support low rates.
  • COVID turned our homes into offices, classrooms and havens for the outside world.
  • Construction workers were laid off during the pandemic – few new homes were built.
  • Timber prices are exceptionally high and are getting higher. It is estimated that the cost of building an average home has increased by $ 80,000.
  • Many large construction companies have slowed production while waiting for business costs to stabilize. (Some give deposits back because they can’t build, prices are previously quoted).
  • At the current rate of sale, the stock is estimated at a very low level of 2.4 months.
  • Compared to the traditionally much slower winter season, there are currently around half of the houses for sale.
  • The high cost of buying a replacement home has led many potential sellers not to sell their current home.
  • All consumer costs are rising rapidly (inflation).
  • Inflation increases the pressure to raise interest rates. A rate hike from 2.75% to 3.25% decreases a home buyer’s purchasing power by an average of $ 23,250.
  • Because of the pent-up travel needs, consumers spend more on flights, vacations, family visits and entertainment – and save less on their own home.
  • The pandemic stimulus is mostly in the rearview mirror (less savings for down payments).

The hot domestic market in 2021 has reached a peak of affordability.

Like it or not, we may be on the verge of a slowdown. That doesn’t mean it will immediately become a buyer’s market in two months. However, more buyers are being pushed out of the market every day. You give up. After all, the home buying frenzy has driven millions of Americans out of the market. The National Association of Home Builders says about 60% of households can no longer afford the house at the average price. Since the cost increases occurred at the lower end of the market, the number of first-time buyers has no choice but to decrease.

Sellers recognize the top of the market. Two week old data from realtor.com suggests that more and more sellers are bringing homes to market. Most recently, new listings rose 7% after rising in March and April after falling briefly in the first half of June. If the rise in listings continues, it is to be expected that the feverish price increase of the past year will weaken slightly.

Also this week the Federal Reserve announced that it would examine the interest rates closely. No rate hike is planned for the moment, but a closer look adds to concerns that the economy is recovering faster than expected. A rate hike could come earlier than previously forecast to keep inflation under control.

Completions of new buildings rose slightly in May, while building permits declined in the summer months. Timber prices and the shortage of labor keep new residential construction significantly below demand.

A March poll by Fannie Mae showed more Americans have lost confidence that this is a good time to buy, with shoppers’ confidence falling 4%. If this sentiment persists, it means fewer new buyers are entering the market while existing buyers are giving up. The expected outcome can be a slowdown in the market.

Key indicators to keep watching are interest rates, inventory levels and consumer confidence. The affordability problem may finally have peaked. The average US home price is projected to rise above $ 395,000 in June. The high end of the market for well-qualified Millennials can be a 3-bedroom, 2.5-bath home for $ 360,000 or less.

Please leave your comment.

Additionally, our weekly Ask Brian column welcomes questions from readers of all levels of real estate experience. Please email your questions, inquiries or article ideas to askbrian@realtybiznews.com.

Photo by Tuce on Unsplash

Author Biography: Brian Kline has been investing in real estate for more than 35 years and has been writing about real estate investing for 12 years. He also has over 30 years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives in Lake Cushman, Washington. A vacation destination near a national and Pacific ocean.

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Real Estate News

Real estate in one Downriver city stands out for netting top dollar, selling the fastest – The News Herald

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When an engaged couple with law enforcement jobs is looking for a home, you can bet that crime is one of their top considerations.

Allen Park passed the test for Alexus Martinez and James Guardola. They bought a two-bedroom bungalow near Allen Park High School.

“It’s a safe city,” said Martinez, who works for the Department of Homeland Security at Detroit Metropolitan Airport.

“It’s perfect,” said Guardola, an Allen Park native and Detroit police officer.

It’s popular too.

Among the downstream communities, Allen Park is one of the hottest homebuyer destinations. For the first 10 months of this year, Allen Park residential properties ranked top in percent median price increases, the fewest days in the market that resulted in a sale, and the percentage of asking price received.

Local and national real estate markets have overheated since the COVID-19 pandemic disrupted lifestyles and economies. Health concerns, lockdowns, inventory shortages, and a trend towards home work have resulted in higher home prices and fierce bidding among potential buyers.

Sales above the asking price were common.

Now with just a few days left in this calendar year, real estate experts say conditions are calming – some.

Rosanne Couvreur

“It’s still a wild ride,” said Rosanne Couvreur, Real Living Kee Realty realtor in Rockwood with a quarter of a century of experience.

“It’s still a sellers’ market. For buyers, it’s still a matter of competing against multiple offers on most properties. “

Sellers continue to catch up with top dollars, Couvreur said, adding that “patience is key” for home buyers.

“The fall market has a little more seasonality this year compared to last year, but active buyers continue to give the market a boost,” said Jeanette Schneider, president of Re / Max in southeast Michigan.

Karen Kage, Managing Director of Realcomp II added: “October was particularly interesting when put in historical context. Aside from the atypical year 2020, sales were well above those previously recorded in 2017-19. It’s still a very robust marketplace. “

For Martinez, buying a house in today’s environment was accompanied by a range of emotions, from enthusiasm to fear. She credits Couvreur for bringing the trial to a happy conclusion.

The couple made a handful of unsuccessful offers on other homes before joining the Allen Park home for $ 189,000.

“We looked for a couple of months,” said Martinez. “We looked at everything. We got discouraged. It was stressful. Now it’s exciting. “

James Guardola and Alexus Martinez present their new home in Allen Park. (Courtesy photo of Alexus Martinez)

Tracking 18 downstream communities for the first 10 months of the year, Realcomp reported that closed sales increased 5.8% to 3,709 homes from the same period last year.

According to Realcomp, six downriver communities saw double digit percentage increases in closed sales for the 10 month period this year: Wyandotte (25.7%, 352 sales); Romulus (17.6%, 234 sales); Lincoln Park (16.3%, 471 sales); Southgate (14.2%, 354 sales); Big Ile (11.1%, 150 sales) and Trenton (10.1%, 208 sales).

Allen Park led all municipalities for the percentage of the bid price received (103.4%), Realcomp said. Allen Park, Southgate and Woodhaven reported the fewest days in the market from listing to sale (12).

According to Realcomp, Grosse Ile had the highest average median closing price (USD 363,750), followed by Huron Township (USD 298,450), Brownstown Township (USD 285,250), Woodhaven (USD 232,000), Gibraltar (USD 220,000), Flat Rock (USD 206,500) and Trenton ($ 196,750). .

River Rouge led in the percent increase in median price (41.4%, $ 63,500), followed by Ecorse (33.3%, $ 60,000), Lincoln Park (22.2%, $ 125,000), Riverview (18.5%, $ 189,500), Allen Park (17.8%, $ 179,000), Southgate (16.8%, $ 160,000), and Rockwood (15.8%, $ 183,500).

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Real Estate News

Forget about asking price for CNY real estate. Plus, National Guard deployed to help nursing homes (Good Morning CNY for Dec. 3)

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weather

High: 36; Low: 28. Partly sunny, cool. Check out the 5 day forecast.

picture of the Day

“We had a thousand balls here,” says Mark Koester of the past 14 years at his home at 2119 Conley Road near Chittenango. Climb down the steps, jump off the diving board, or slide down the slide into the heated swimming pool.Courtesy of Simply Heidi Photography

HOUSE OF THE WEEK: This Chittenango house, built in 2003, was designed for families. It sits on 6.45 acres and checks in on 6,406 square feet and has plenty of room to play. And if you think the pool is beautiful, just take a look inside.

What’s hot

Are you looking for a house in CNY? Forget the asking price: the real estate market in central New York has been on fire for much of the year, and a great indicator of the heat is how close sellers are getting to their asking prices. For months they have not only grown closer. You got more.

New York State is using the National Guard to support low-staffed nursing homes: Nursing homes, such as hospitals and other health facilities, are grappling with a severe shortage of nurses and other health workers. To cope with this, the New York National Guard is sending 120 of its medical staff to low-demand nursing homes across the state, including Loretto in Syracuse.

  • The nursing home in Syracuse will reopen the Covid unit to ease the hospital shutdown

While New York licensing lags, Indian nations are increasing marijuana sales: It’s been eight months since New York state legalized the possession and use of adult marijuana. Yet the state has still not enacted regulations or issued licenses to sell, which is delaying the opening of retail stores. Several Native American nations in New York have filled the void, citing sovereign nation status.

Future uncertain for planned Microsoft tech hub in Syracuse: In 2019, the software giant Microsoft announced plans to build a “Smart Cities technology hub” in Syracuse and signed a three-year agreement with the city, Onondaga County and Syracuse University . Two years after signing the contract, City Councilor Michael Greene says that Microsoft “did not have the decency to give us a clear answer where they stand” with the project.

looking ahead

Are you ready for a challenge? Don’t you go after waterfalls? We say chase away in upstate New York with a new challenge that brings people to some of the 150 breathtaking cascades that Ithaca has to offer. The Waterfalls Challenge, launched by Visit Ithaca, lists 22 known and hidden gems in the area.

Sports

Runners run on a track during a meeting

The Jack Morse Kickoff Meet will take place on Thursday in the SRC Arena of the Onondaga Community College.Marilu Lopez-Fretts | Contributing photographer

WESTHILL, BALDWINSVILLE TEAMS WIN AT JACK MORSE RELAYS: Athletes from Section III schools participated in the second day of the Jack Morse Relays at the SRC Arena on the Onondaga Community College Campus on Thursday. The Westhill girls ‘and Baldwinsville boys’ teams were victorious. See the results and more than 70 photos from the event. (See results and photos from Wednesday here) (Marilu Lopez-Frett’s photo)

Old Rival Back on the Syracuse Lacrosse Scheme: One of Syracuse men’s lacrosse’s fiercest rivals is back on its way, and a new Orange coach is set to make some serious flashbacks.

How did the SU women beat a top 20 team after 3 losses in the Bahamas? The Syracuse women’s basketball team had a rough time in the Bahamas last week, trailing in all three games in Battle 4 Atlantis. The team took some of their frustration with a win over Colgate on Sunday, but the Orange needed more. The opportunity came with Ohio State No. 18 in town for the Big Ten / ACC Challenge, and SU took the opportunity.

FURTHER SPORT NEWS:

In the letter

A Syracuse man requests a plea for the murder of a 15-year-old boy in Creekwalk. DA drops large numbers

Byrne Dairy & Deli are closing down a shop that has been in operation for nearly 50 years

Watch an exclusive courtroom video in which Anthony Broadwater was acquitted of Alice Sebold’s rape 40 years later

CNY Wishlist: Would you like to help? Here’s a wishlist from local nonprofits

Rome woman killed in head-on collision, 2 more hospitalized, soldiers say

A rainy summer in Syracuse revealed a growing problem: black mold

Man dies after striking a power pole during a medical emergency in Syracuse, police say

Today’s obituaries

To view today’s obituaries, please click here.

Amazon Flash Briefings

To hear the latest news with Alexa every morning, please click here.

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Real Estate News

My holiday wish list for commercial real estate – Daily News

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With Thanksgiving lately, Hanukkah in full swing, and Christmas in less than 30 days … it’s time for some Christmas cheer!

Countless children around the world – including our five grandchildren – are putting together their lists. So I thought it would be fun to draw my five hopes for the 2022 commercial real estate market – aka my gift list for the coming year.

So without further ado, here it goes.

A more balanced market. Industrial real estate – buildings where people make, store, and ship things – have fallen by the wayside for the past six years. Currently, fewer than 1 in 100 buildings have no residents!

We find an acute imbalance when there is a demand that exceeds supply, the lack of new buildings, changes in consumer shopping habits and an excessive appetite for things. As a result, the prices of listings have skyrocketed and many people are wondering if rents are sustainable.

So I would like a little more common sense.

Vanishing office insecurity. II have said many times that transactions take place when activity increases or decreases. But uncertainty is a killer for a company that relies on movement.

There have been some big Amazon office deals in the market – like the purchase of the former Orange County Register Printing Office in Santa Ana and the Bank of America campus in Brea. For both, however, a change of use is pending. The former suites of executives, middle management and office workers will be eliminated and replaced by countless blue delivery vans.

The pandemic changed the office paradigm. Companies countered with “hybrid” approaches that required smaller floor space, virtual workstations and less collaborative layouts.

I would like some long-term leases for large office buildings here.

Solution to the port problem. Talk about a perfect storm that’s like an anaconda eating a Thanksgiving meal or six: the accumulation of ecommerce containers slowly moving through the supply chain.

Many people are much better informed than me about the causes. All points in the supply chain are simply squashed – which leads to massive delays, bottlenecks and escalating price tags. Certainly some reduction in regulation would help. A little more storage space could help too. Are you asking America to stop shopping for a while?

I would like a stable flow of goods until July 4th.

Interest rates still low. Rising interest rates could be the best thing for us – like tearing off a bandage. But wow! How incredibly painful for an economy that depends on cheap money.

Our 10-year Treasuries rate – the benchmark for commercial real estate lending – has been hovering in the low 1% range for a number of years. Great for borrowers but terrible for savers. As our population ages and more of us have steady incomes, an increase in returns would be welcome. Don’t forget, however, that $ 1.2 trillion in stimulus goodies is to be paid back. Rising interest rates would make amortization more expensive.

All in all, I would like more of it.

A more diverse industry. Commercial real estate brokerage has been dominated by men in the past. However, two fall conferences that we attended showed a change.

I was thrilled to see over 40% women and minorities at the Commercial Real Estate Influencers Summit and the Society of Industrial and Office Realtors Global Event.

It is my wish that the face of commercial real estate reflects our world.

Allen C. Buchanan, SIOR, is a Principal at Lee & Associates Commercial Real Estate Services, Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

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