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  • 16 Jun 2021 1:00 PM | Francesca Reysel Jonker-Miranda (Administrator)

    Other Agents Are Not the Enemy


    People have a tendency to assume that anyone sitting on the other side of the table during a transaction is an enemy. However, that mindset is detrimental to everyone involved. In the world of real estate, relationships are crucial, and that includes cultivating relationships with other agents.

    It’s a Small World
    The expression may seem cliché, but you know, have met or at least have an impression of the other agents in your area, and they have an impression of you. Part of developing your brand identity is actively working to ensure that your interactions with others in the industry are creating positive impressions.

    While real estate is competitive in many regards, building trust with other agents can lead to better outcomes for everyone. Having a good rapport makes it easy to pick up the phone and have a conversation when hiccups occur during a sale. It’s easier to solve an issue when you trust the person on the other end of the line.

    It’s Not What You Know; It’s Who You Know
    Everyone loves a referral, but it might not come from where you would expect. Developing relationships with other agents can help on that front, as well. An agent from the other side of the country you met at a conference might have a client moving to your area. Perhaps another agent already in your area knows a different market sector that you don’t have as much experience in. Developing relationships allows you to tap into a network of benefits.

    Teamwork Makes the Dream Work
    It has been said that “a rising tide lifts all boats,” and creating the best possible team is a win for everyone, including your clients. When you recognize the talent and expertise that another agent could add to your team, you develop a synergy that goes beyond what any single agent might be able to offer on their own. Leadership through serving others means that you might be able to help someone else along, which, in turn, benefits everyone.

    Build. Build. Build.
    We cannot emphasize this point enough…build relationships with other agents. Treat each other with respect and professionalism. It benefits us all personally and professionally!


    Source: https://rismedia.com/

  • 5 May 2021 12:00 PM | Francesca Reysel Jonker-Miranda (Administrator)

    Read the April Newsletter below!

    Download link: WiscoREIA May 2021 Newsletter


  • 23 Apr 2021 12:00 PM | Francesca Reysel Jonker-Miranda (Administrator)

    Read the April Newsletter below!

    Download link: WiscoREIA April 2021 Newsletter



  • 7 Apr 2021 12:00 PM | Francesca Reysel Jonker-Miranda (Administrator)



    Real estate has some tremendous superpowers—not the least of which is its ability to help you find financial freedom and leave your terrible day job. Do you want to travel the world? Dedicate more time to volunteer efforts? Focus on raising your kids? A thriving real estate business providing you with passive income can be the key.

    But there’s a catch: To achieve true financial independence, you have to really love real estate. Just because you’re ditching the nine to five paycheck doesn’t mean real estate investors don’t work. In many ways, it’s still a full-time job. You’ll just have more freedom to arrange their lives in the way that best suits them.


    Start with the basic elements of financial freedom

    Before digging into how you should build your net worth, let’s start with the basics: Getting your finances in order. After all, financial freedom won’t feel that free if you’re still trapped by debt and bad financial habits. Here’s what to look at before you start pursuing real estate.

    Credit cards

    Credit cards aren’t inherently bad—in fact, utilizing credit card rewards and the purchase protections offered by said cards can be a smart financial strategy! However, many Americans can’t use a credit card without overspending. If you have credit card debt, pay it down as quickly as you can. If you’re prone to impulse buying, consider either getting rid of your cards or pursuing financial counseling. Over time, you can change your mindset toward credit, and eventually can use these cards as intended: As excellent sources of rewards.

    Emergency funds

    Do you have money set aside in case of an emergency? What would happen if you lost your job—before fully executing your wealth-building strategies, of course—or you have a significant unexpected expense, like a medical bill? Start with a small emergency fund (many experts say $1,000 is a good starting point), then build it over time. Ultimately, you should be able to cover six months of living expenses without your primary income. Consider creating a bank account explicitly for your emergency fund. Keep that money in your savings account until you need it.

    Other debt

    Do you have student loans or a car loan? A large mortgage? You don’t necessarily need to pay these off before beginning your real estate investment career, but it is important to understand exactly how much debt you have. This will be important for lenders, too: Before lending, they’ll calculate your debt-to-income ratio. Many consider 36% the highest allowable ratio, including a new mortgage, if you need to take one out. Wrangle your debt before investing to ensure your best chances of landing a loan.

    Should you quit your job to pursue real estate?

    Before we dive into the nitty-gritty of financial freedom through real estate, let’s discuss whether quitting your job is truly the best solution for you.

    Ideally, you should find what you love to do in life more than anything else and do that for a career. If that means teaching high school math, teach high school math. If that means traveling the world, then find a job that travels the world.

    And if that means investing in real estate for a career… then invest in real estate for a career. Because full-time real estate investors still work—in fact, the job often feels more like a lifestyle. While there are some truly passive investments, such as REITs (or real estate investment trusts), full-time investing usually involves work. You’ll need to:

    • Talk with troubled homeowners
    • Send out massive amounts of direct mail
    • Network with established real estate investors.

    Does that sound like something you’d hate? Everyone can, and should, create a real estate portfolio as part of their strategy for retirement and wealth building—and many current millionaires have followed that exact path. But full-time real estate is a full-time commitment.

    Ready to dive into real estate investing as a full-time career? Here’s your path to financial freedom.

    Educate yourself

    If you’re unfamiliar with real estate investing, brush up on your basics. Do this before you even consider dipping a toe in the full-time waters.

    Start by deciding which strategy will be your focus. There are a number of different types of real estate, and each type has unique pros and cons.

    Wholesaling

    This process is where you locate amazing deals, put them under contract, and sell that contract to an investor or house flipper—and make a sizable profit doing so. Wholesalers master the most valuable skill for a real estate investor to possess: how to buy right.

    Wholesaling works. However, while wholesaling might be fairly “simple”—it’s not easy or quick. It takes hard work, skill, motivation, and certain personality traits (like the ability to negotiate). Consistently finding deals that are worth pursuing can be a time-consuming job.

    House flipping

    This can be an exciting and profitable way to earn income. You’ve probably seen flipping TV shows where investors turn a dump into a mansion in three weeks and profit hundreds of thousands of dollars. While this is possible, don’t enter real estate expecting this to happen to you. Make sure you understand both construction and the market before starting a fix and flip business.

    Flipping houses is a lot of fun, and fantastic profits can be made. However, there are some important considerations to make before jumping in head-first to your career as a full-time investor:

    • How will you fund your flipping business if you don’t have a job?
    • How will you make your monthly payments if you don’t have a job?
    • Is your location conducive to flipping?

    Buy and hold cash flow investing

    Buy and hold cash flow investing produces a stable of cash-flowing properties. That can add up quickly to provide significant income. This can be a great option for long-term investing, but keep in mind that you’ll need significant monetary reserves when things go wrong.

    Educating yourself goes way beyond simply picking your favorite real estate strategy.

    • Sign up for BiggerPockets. If you are reading this blog post but haven’t signed up for a free account, stop what you are doing right now and sign up. Trust me.
    • Read the Ultimate Beginner’s Guide to Real Estate Investing. This is a quick, free online training manual that we put together to help you build a solid foundation for your future in real estate. Internalize it. Make it make sense. And if you don’t understand something, go ask about it on the BiggerPockets Forums.
    • Fully fill out your BiggerPockets profile. Include a nice picture of your face. Detail your history, your goals, and your wants/desires on your profile. People look at these things! Make it count.
    • Introduce yourself to the community in the New Member Introduction Forum.
    • Ask questions and offer ideas. If you aren’t an active member of the Forums, you are simply missing out on one of the most powerful tools on the planet for becoming a real estateinvestor. Ask questions, get answers. Answer questions, get smarter. Build your online brand. People will start to follow you and help you out. They will give you honest feedback on your ideas, your plans, your goals, your timelines, and more.

    Learn about your local market, too. Are jobs growing? Incomes? What does the population look like? Network with local investors and real estate agents—and make sure to visit homes for sale in your area before you start bidding. Knowing what your market offers in different price ranges is essential knowledge for all real estate investors, regardless of your strategy.


    Create a customized business plan

    A business plan works like a blueprint created by an architect.

    Keep in mind: This plan is doomed to be flawed, despite your best preparation and education. Expect to change your plan as your understanding of the local market—and your abilities and interests—change.

    Here’s what your business plan needs to address:

    1. What is the purpose and the model for my business?
    2. How will I raise capital for operations and for acquisitions?
    3. What is a good deal? What objective deal criteria will I stick to?
    4. Who is my target end-user? What do they really want? Where do they live?
    5. How will I find prospective deals? How will I convert them to purchases?

    Too many beginners look for answers before they even ask the right questions. Phrasing the major cornerstones of a business plan as questions means that naturally, you will try to answer them. And when you lack good answers, go back to your educational resources or local professionals.

    Think about your finances, too

    If you’re ditching your job for real estate, you’ll need a plan for that, too. Quitting your job is a big deal—with big financial consequences. Entering the world of self-employment is a risky venture. Most startup companies fail, largely because they run out of money.

    If you are looking to quit your job you are going to need to make some sacrifices—starting with your living expenses.

    • Do you really need cable TV?
    • How about that car payment?
    • Gym membership?
    • Starbucks?

    If you are serious about making real estate investing a full-time gig, it’s time to cut your expenses. Decide right now what is essential and what is luxury. You can always add the luxury stuff back in later.

    In addition to cutting your expenses, you’ll also need cash. Having a large financial cushion is imperative. The amount you’ll need is largely dependent on your personal situation, but try to have at least six months of savings before quitting your job.

    One additional point to make here: a great sacrifice to make is your home itself. Buying a small multifamily property, living in one unit, and renting the other unit out (a strategy called house hacking) is a great way to live cheap—or free—and learn the real estate investing business.


    Build your team and network

    Identifying and recruiting excellent team members is key to financial freedom through real estate. Here is a list of my most important members, why they’re important, and how I plan to recruit the right people for this role.

    Money sources

    Without money sources, the rest of your team members won’t matter. You can’t fix a fix and flip unless you can buy a fix and flip.

    Build banking relationships with lenders who offer a home equity line of credit (HELOC), and work with private lenders to fund the balance of your capital needs. Unfortunately, finding a private lender is not easy or fast. It can take “slow dances” with potential lenders before one or more will commit their money.

    You also want someone you trust, with long-term goals that align with yours. Long-term partnerships are essential to real estate investing.

    General contractor / project manager

    Unless you’re skilled in construction, you’ll need a contractor or project manager who can analyze repair costs, avoid large problems, and manage a rehab project from start to finish.

    Here are some qualities to look for in a partner:

    • Competency: Your contractor must be skilled in the world of construction. They should know costs and best practices for all of the trades you will be hiring—from plumbers to electricians. They also need to have all of the proper licenses and liability insurance.
    • Honesty: Can you trust them? Do you pick up on dishonesty, even in small things?
    • Organizational skills: Can this person handle many moving parts without dropping the ball? Maybe they’re old school with a planner and paper or totally digital. Whatever the case, look for a strong system.
    • Low overhead: You’re not paying for big trucks, extra office space, or fancy staff to feed your contractor’s ego. You want lean, cut-to-the-bone overhead.
    • Fun to be around: You’ll be talking to this person a lot. Will you have fun? Or will you dread having to talk with him?

    Broker and expert listing agent

    You won’t make money without buying and selling your inventory. So, you need to know everything possible about how to move houses as fast as possible and for top price.

    Some real estate investors choose to become licensed real estate agents—and there’s nothing wrong with that. But if that’s not an avenue you’re ready to pursue (yet), partnering with an investor-friendly agent is key. Here’s what your agent should do:

    • Consult with you while negotiating properties you’re buying
    • Providing estimates of after repair value (ARV), including lists of the best comps
    • Consulting on design, layout, paint colors, finishes, and other rehab choices
    • Staging the house for showing
    • Taking professional-quality pictures for marketing
    • Marketing the property through all the traditional channels, like signs, MLS, online websites such as Zillow, and networking
    • Being your eyes, ears, and advisor during negotiations with buyers
    • Handling details required to get a deal to closing

    That is a pretty powerful combination, don’t you think? Having an expert team member willing to provide these benefits will give you confidence.

    Attorney

    Team members fill expertise gaps—and the business of real estate transactions can be a minefield of legal problems. Trusted legal counsel is a necessity.

    In addition to looking for the basics, like being a straight talker, choose your attorney based upon expertise and experience in the following areas:

    • Real estate contract litigation: No one wants to litigate, but attorneys should be able to draw up contracts based upon knowledge of how litigation will proceed. This expertise allows you to preempt problems by including specific language in contracts.
    • Real estate transactions and title insurance: Look for someone intimately familiar with real estate closings. It’s even better if they have a team of paralegals on staff who can help manage minor issues.
    • Basic entity structuring, estate planning, and asset protection: An attorney can help create a basic legal entity to perform your buy-sell business.

    Accountant

    Before setting up your legal entity with your lawyer, talk to an accountant about the best option for your business. That may be an LLC, S Corporation, or C Corporation—but the right answer depends on your state and business strategy.

    You may also want to consider a bookkeeper, eventually. Smaller investors can often get by using a program like QuickBooks to further organize accounting activities.

    Decide what a good deal is (for you)

    To help guide your business, create a detailed profile of a good deal. First, you’ll want to understand the basics of deal analysis. Here’s what you should know for each deal:

    • Sales costs, such as commissions, closing costs, and home warranty
    • Desired profit
    • Holding costs, such as taxes, insurance, utilities, and maintenance
    • Rehab costs, including labor, materials, and permits
    • Acquisitions costs, such as attorney or title fees, closing costs, and inspections

    For example, a fix and flip or BRRRR investor would subtract these costs from the property’s ARV to find their max purchase price.

    Be careful with deal analysis: Numbers can be deceiving. In other words, everything that glitters is not gold—or everything that meets your formula is not always a good deal.

    You need criteria beyond numbers. You must check the assumptions behind said numbers.

    First of all, be careful with the rehab costs. This is why your contractor is so key, and it’s why pre-purchase inspections are always money well-spent.

    Second, be careful with the assumptions behind your ARV. Consider making a “desirability checklist” of qualitative criteria about the house and location. If the house checks three or more boxes, consider passing. Overcoming that many negative factors can be difficult.

    Problems to include on your list include:

    • Unsafe neighborhoods
    • Neighborhoods with mostly tenants and not owners
    • Properties too far from jobs, shopping, and amenities (10-plus miles)
    • Steep lots
    • Busy roads
    • Obnoxious outdoor smells or obnoxious next-door neighbors
    • Large power lines nearby
    • Extra-small house size
    • Two-bedroom houses, if they’re hard to sell in your market
    • Weird layout (e.g., walk through bedroom to another bedroom)
    • In-ground pool, if you’re buying in cooler areas

    Create a marketing plan to find good deals

    All of this hard work is for naught if you can’t find good deals. You want to create systems that bring you opportunities to buy deals—or leads—so you aren’t constantly chasing them down. Consider including the following elements in your marketing plan.

    MLS leads

    A real estate license provides access to the multiple listing service (MLS). If you’re unlicensed, your agent can help you set this up. Use daily filters to send listed properties straight to your email inbox.

    For instance, your MLS filter might look like this:

    • Within your target location
    • Status of new listing, change in price, or back on the market
    • List price below 70% of your top retail price
    • Square footage above 1,200 sq. ft.

    Referral campaigns

    Send letters to local professionals telling them that you’re buying properties in any condition for cash. But don’t expect an immediate rush of results: You’re building relationships. Over the long run, 25-50% of your deals will come from these sources. Potential sources could include:

    • Attorneys handling probates, divorces, foreclosures, and bankruptcies
    • Property managers
    • Commercial real estate brokers, who can send you their small stuff
    • Residential real estate agents, who can send their ugly properties
    • CPAs
    • Financial advisors

    Internet marketing

    Focused online activity can generate leads from potential sellers. Specific projects might include:

    • Create a website with video and content.
    • Create a good BiggerPockets profile, including target markets. Make 10-plus Forum posts per week.
    • Create a Trulia and Zillow profile and answer 10-plus questions per week on their Q&A forums.
    • Create a LinkedIn profile and share an interesting tip or news update per week.

    Build your ant farm

    Recruit your family, friends, and local contacts to be “ants” and bring morsels—or leads—back to you. Ask them to be on the lookout for vacant or rundown houses during their daily routines. If they see one, the instructions are simple: Text me the address, and I’ll do the rest.


    Source: www.biggerpockets.com

  • 24 Mar 2021 10:00 AM | Francesca Reysel Jonker-Miranda (Administrator)

    Garage Organization Ideas for the Fall and Winter

    A thoughtful approach to garage storage makes the most of this valuable space and keeps every necessity at your fingertips.

    If your house is bursting at the seams, or simply short on storage options, the solution may be as close as your garage. To make the best use of this space, however, you first need to corral its current chaos.

    This is, fortunately, a relatively simple task if you incorporate a few good storage ideas. With careful planning and a little effort, you can transform your garage from a messy catchall to an efficient, well-organized household annex.

    Divide and conquer

    First things first: Get rid of anything you no longer use. After you’ve winnowed down the contents of your garage, sort everything into groups. Keep garden tools with garden tools, and sports equipment with sports equipment. Items used together ought to be stored together.

    Where possible, place like items into clear plastic containers with lids. It’s fine to use opaque bins, just be sure to label each one. Stackable containers are especially handy. They keep your belongings clean, protect against insects and rodents, increase the amount of usable floor space, and cut down on visual clutter.


    Hiring a Garage Organization Company - The Dedicated House

    What goes where?

    The efficient use of space partly depends on positioning stored items in a thoughtful, strategic way. Are there certain items you’re likely to need on a regular basis, such as cleaning supplies? If so, store them near the door so you can access them quickly and easily. Stash rarely used or seasonal items, like sleds and skis, in harder-to-reach spots.

    Off the wall

    The key to garage storage and organization is getting things off the floor. Capitalizing on wall space enables you to fit the most into your garage, while keeping it all visible and easy to access. The type of wall storage you choose depends on your storage needs, project budget and personal preferences. Many homeowners opt for one or a combination of the following storage standbys:

    • Pegboard. A favorite for generations, pegboard is inexpensive and easy to install. Because it can be outfitted with an array of compatible hooks, clamps, bins and shelves, pegboard can be used to store and organize just about anything, as long as the item to be stored isn’t especially heavy.
    • Open shelving. Whether a wall-mounted track system or a set of stand-alone units, open shelves are affordable, versatile and user-friendly, and they keep everything in plain sight. Plus, depending on their construction, 12- or 16-inch-deep shelves are typically capable of holding heavier items.
    • Closed cabinetry. If you plan to park your car in the garage, cabinets with doors may be the most desirable option, because closed storage means not having to come face-to-face with paint cans and garbage bags every time you leave or arrive home. Cabinets are available in countless materials and styles, but generally speaking, they are more expensive than other solutions. And because they are unable to accommodate very large items, cabinets are most effective when used in conjunction with another storage system.
    • Panelized systems. Here, entire walls are covered with specially designed panels that hold any number of companion add-ons, such as hooks and shelves. Unlike pegboard, panelized systems can handle heavier items. But that strength and utility comes at a cost, especially since some proprietary products must be installed by licensed professionals.

    Look up

    For certain infrequently used belongings, the ceiling provides ideal, out-of-the-way storage space. Ladders and seasonal gear can be kept here, hung by clips or straps fastened to the ceiling joists. Or you can take advantage of hoist pulley systems, which cleverly operate like the cords on window blinds. Bear in mind, however, that ceiling storage must be oriented so that it doesn’t interfere with the operation of the garage door.

    Safety steps

    As you’re organizing your garage, it’s important to keep safety in mind. It’s unsafe to store gasoline and propane in the garage; a single spark could lead to tragedy.

    Likewise, if you have children or pets, you should store hazardous materials like fertilizer and pesticides far out of reach. Locked cabinets are a good solution for these toxic materials, and they’re also a smart place to store power tools and sharp implements.


    Source: www.zillow.com

  • 22 Mar 2021 2:38 PM | Francesca Reysel Jonker-Miranda (Administrator)

    Read the March Newsletter below!

    Download link: WiscoREIA March 2021 Newsletter


  • 22 Feb 2021 10:00 AM | Francesca Reysel Jonker-Miranda (Administrator)

    Read the February Newsletter below!

    Download link: WiscoREIA February Newsletter


    February Wisconsin Market Updates:

    GREEN BAY

    Median Sale Price:

    • Decreased from $165,972 in January of 2020 to $164,000 in January of 2021.

    Months Supply of Inventory:

    • Decreased from 2.64 in January of 2020 to 1.85 in January of 2021.

    New Listings:

    • Decreased from 90 in January of 2020 to 81 in January of 2021.

    Pending Listings:

    • Increased from 63 in January of 2020 to 65 in January of 2021.

    Closed Listings:

    • Is the same from 65 in January of 2020 to 65 in January of 2021.


    APPLETON

    Median Sale Price:

    • Increased from $158,250 in January of 2020 to $167,500 in January of 2021.

    Months Supply of Inventory:

    • Decreased from 2.86 in January of 2020 to 2.14 in January of 2021.

    New Listings:

    • Decreased from 77 in January of 2020 to 52 in January of 2021.

    Pending Listings:

    • Decreased from 46 in January of 2020 to 41 in January of 2021.

    Closed Listings:

    • Decreased from 45 in January of 2020 to 44 in January of 2021.


    KENOSHA

    Median Sale Price:

    • Increased from $185,000 in January of 2020 to $219,950 in January of 2021.

    New Listings

    • Decreased from 153 in January of 2020 to 121 in January of 2021.

    Active Listings:

    • Decreased from 346 in January of 2020 to 224 in January of 2021.

    Pending Listings:

    • Decreased from 125 in January of 2020 to 51 in January of 2021.

    Sold Listings:

    • Increased from 96 in January of 2020 to 112 in January of 2021.


    RACINE

    Median Sale Price:

    • Increased from $179,450 in January of 2020 to $205,000 in January of 2021.

    New Listings

    • Decreased from 160 in January of 2020 to 152 in January of 2021.

    Active Listings:

    • Decreased from 417 in January of 2020 to 288 in January of 2021.

    Pending Listings:

    • Decreased from 148 in January of 2020 to 73 in January of 2021.

    Sold Listings:

    • Increased from 126 in January of 2020 to 133 in January of 2021.


    EAU CLAIRE

    Median Sale Price:

    • Increased from $194,000 in January of 2020 to $213,000 in January of 2021.

    New Listings

    • Increased from 57 in January of 2020 to 58 in January of 2021.

    Active Listings:

    • Decreased from 169 in January of 2020 to 145 in January of 2021.

    Pending Listings:

    • Decreased from 65 in January of 2020 to 41 in January of 2021.

    Sold Listings:

    • Increased from 53 in January of 2020 to 58 in January of 2021.


    WAUSAU

    Median List Price:

    • $172,429

    Median Sale Price:

    • $168,116

    Sold Listings:

    • 68 units.


  • 17 Feb 2021 11:34 AM | Francesca Reysel Jonker-Miranda (Administrator)

    Housing Market Forecast 2021: Will This Boom Continue?

    Housing Market Forecast 2020 - 2021

    With 10 years having now passed since the Great Recession, the U.S. has been on the longest period of continued economic expansion on record. The housing market has been along for much of the ride and continues to benefit greatly from the overall health of the economy. However, hot economies eventually cool and with that, hot housing markets move more towards balance.

    The housing market 2020 was running at a record pace in the early stages of the coronavirus outbreak in February 2020, with sellers continuing to gain leverage, and buyers benefit from lower mortgage rates. We saw some of the best home sales and housing starts to pace in more than a decade until February 2020.

    Before the COVID-19 pandemic, Realtor.com's national housing forecast for 2020 was that home price growth will flatten, with an expected increase of 0.8 percent. Inventory was predicted to remain constrained, especially at the entry-level price segment. Mortgage rates were predicted to likely bump up to 3.88 percent by the end of the year.

    Buyers were expected to continue to move to affordability, benefiting smaller and mid-sized markets. The housing market predictions were pointing out that all the housing indices would trend upward for the nation as a whole as well as in every state, including the top 100 metro areas.

    After the coronavirus pandemic came into being, the housing market forecast runs the gamut from optimistic to pessimistic. The fall in GDP associated with the coronavirus pandemic, and the rise in unemployment, was unprecedented. As the number of coronavirus cases grew and lockdowns began taking effect across the United States, real estate activity slowed dramatically. Both buyers and sellers pulled back from the housing market.

    According to Zillow, after the third week of March, newly pending sales dropped each week through mid-April, hitting a low of 38.8% below 2019’s figures in a time period when sales usually heat up. Time on the market grew to three days longer than last year in early May, while list price appreciation fell to just 0.1% above 2019.

    Year-over-year rent growth in the U.S. saw the biggest one-month slowdown in at least five years. About 3 million adults moved in with their parents or grandparents in April, bringing the number of adults living at home to the highest number on record.

    Despite all of that, there were no signs that the housing market is about to subside. The housing market absorbed the shock relatively quickly and began to recover. Pent-up demand that was put on hold was unleashed starting in late April, then supercharged by even lower mortgage rates and changes in housing needs.

    Annual growth in median sale prices peaked at 7.4% the second week of April, before plummeting in the early days of the market freeze and falling to 0.8% by late May. But after the freeze began to thaw, year-over-year growth rose sharply and steadily, hitting new highs of 13.8% by late October, according to Zillow's data.

    Before the pandemic hit the nation the supply of new housing was failing to keep up with demand. Although buyers were eager to close on houses, sellers were not so anxious to list their houses. Inventory was low compared to 2019 to start the year, and that gap widened nearly every week through early December.

    Due to a very tight inventory, coupled with strong demand from first-time buyers, the housing market began to move incredibly fast. Sellers who did choose to list had little trouble finding motivated buyers who were looking to take advantage of low-interest rates. After peaking in early May, time on the market began to fall through early November as available homes for sale were scooped up faster.

    According to Zillow, in September 2020, one in five houses sold above list price – about 50% more than long-term norms. Houses’ typical time on the market reached down to 12 days in October — selling at blazing speeds regardless of price. By November, home values had risen 1.1% since October and 3% since the previous quarter — the largest monthly and quarterly gains in Zillow records going back to 1996.

    Inventory declined every week starting in early June – by the week ending Dec. 12, it was 34.3% below 2019 levels. As of the week of Dec. 12, houses were typically on the market a median of just 16 days before an offer was accepted — up a handful of days from lows set in earlier weeks, but still a full three weeks (21 days) less than the same time last year.

    Zillow expected that 5.7 million existing homes will be sold by the end of 2020, up 5.9% from 2019. This prediction turned out to be true. 2020 was a record-breaking year in residential real estate. But while 2020 will end up being a strong year for the housing market by most measures, it will pale in comparison to 2021.

    Zillow predicts that almost 6.9 million existing homes will be sold in the calendar year 2021, the most sales recorded in a single calendar year since 2005 and the largest one-year increase (21.9%) since the early 1980s. According to some experts, the economic cost we’ve paid to try to contain the virus will weigh down the economy into 2021. That is why home sales are expected to be around six million in 2021 instead of the previously projected 6.3 million.

    Economic sentiment affected the U.S. housing market, too. People were reluctant or unable to show their homes, while others are afraid it won’t sell and thus didn’t list their homes at all. Recovery is also expected to be uneven. Housing markets that are more heavily impacted should expect a slower recovery than markets that were hit less severely.

    If you're wondering what the state of the housing market will be like over the next six months, especially if you're an investor, then here is some good news for you. The mismatch between supply and demand is driving prices higher, but this isn't a housing bubble. Economic sentiment affected the U.S. housing market, too.

    Many experts were predicting that the pandemic could lead to a housing crash worse than the great depression. But that's not going to happen. The market is in much better shape than a decade ago. The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic period.

    Let’s first look at one of the most talked-about negative housing forecasts for 2021 — The rising mortgage delinquencies and their impact on the housing market in 2021? MBA forecasts that the refinance boom will surge in March and then drop by 54% by the second quarter of 2021. 

    Delinquencies at the end of 2019 were at their lowest level since 1979. That turned around quickly with the pandemic and spike in unemployment. It is important to note that foreclosure activity is increasing despite the various foreclosure moratoria that are in place. Mortgage delinquencies and foreclosures increased in August and October, respectively. 1.2% of loans are at least 150 days past due according to CoreLogic.

    ATTOM reported that foreclosures increased by 20% in October. The increased long-term delinquency is due to participation in forbearance programs, and foreclosures are down 80% year-over-year. South Carolina, Nebraska, and Alabama post the highest state foreclosure rates

    According to RealtyTrac's October 2020 U.S. Foreclosure Market Report, there were a total of 11,673 U.S. properties with foreclosure filings — default notices, scheduled auctions, or bank repossessions — in October 2020, up 20 percent from a month ago but down 79 percent from a year ago. South Carolina, Nebraska, and Alabama post the highest state foreclosure rates.

    Big metropolitan statistical areas are having the highest foreclosure rates. Almost all of the metro areas where foreclosure activity increased on a month-over-month basis are also places where unemployment rates are higher than the national average, and in many cases have been hotspots of COVID-19 infections.

    According to third-quarter 2020 research released by the Mortgage Bankers Association's Research Institute for Housing America, over 6 million households did not make their rent or mortgage payments and 26 million individuals missed their student loan payment in September 2020.

    During the third quarter, the percent of homeowners and renters behind on their payments decreased slightly from the second quarter, but the overall amount remains high. In September, 8.5% of renters (2.82 million households) missed, delayed, or made a reduced payment, while 7.1% (3.37 million homeowners) missed their mortgage payment.

    Student debt borrowers rose from 3% at the beginning of April to 8% by the end of September. The millions of student debt borrowers behind on their payments also have future ramifications for the housing markets. In aggregate, rental property owners lost as much as $9.2 billion in third-quarter revenue from missed rent payments.

    Why is there a negative housing market forecast for 2021 amidst the ongoing boom? At the moment, the foreclosure moratoriums have kept lenders from being able to even start their processing of defaults. One of the negative housing predictions is that the supply in the form of foreclosed homes may overwhelm the demand by many folds in 2021. The result would be that prices are going to plummet again and the real estate sector will likely cool off.

    The major effect will be seen in the summer of 2021 because foreclosure that starts today is probably not going to be processed until mid of 2021. It will be well into 2021 before you will see a spike in single-family and condo foreclosures. First of all the mortgage forbearance must end. Then the backlog of prior foreclosure and eviction cases must be cleared before a wave of new ones can be processed. This creates an incredible buying opportunity in the local housing markets if you can secure funding or have the cash to start buying once this inventory hits the market.

    The lack of homes for sale means rental demand should recover alongside the economy, and yields will ease back over 2021 and 2022. However, renters hurt financially by the pandemic will continue to struggle, and rental assistance by the government is needed. Now, we won’t speculate too much about the impending wave of foreclosures and would rather focus on the current housing indicators and their recovery from the lows caused by the pandemic.

    Real estate activity has been going on at an unusual pace. The housing sales recovery is strong, as buyers are eager to purchase homes and properties that they had been eyeing during the shutdown. In 2021, interest rates are expected to remain low but would increase gradually. The home prices will continue to appreciate double-digits.

    As the population of millennials is increasing, the demand side of housing remains strong. Many buyers need to get into a larger home because they have a growing family. Those interested in purchasing homes are looking at the enticing low mortgage rates.

    Housing inventory will remain low, despite plenty of new construction the number of homes for sale would still fall well short of demand in 2021. Buyers will stay focused on the suburbs. We can expect a wave of mortgage refinances to save money.

    According to N.A.R, an increasing gap between supply and demand will cause home prices to increase and we can expect further upward pressure on prices for the foreseeable future.

    NAR Chief Economist Lawrence Yun continues to project that 2021 will bring about strong economic growth, supported by low mortgage rates and fiscal stimulus, which in turn will bolster existing-home sales. According to Yun, with rates to remain low, existing-homes sales are likely to reach 6.49 million, which would be a 15% increase from 5.64 million in 2020. “There will also be slower home price appreciation, likely 6.6%, as increased confidence from homebuilders will ultimately lead to an increase in housing starts.”

    Realtor.com's latest housing market forecast for 2021 shows that the housing boom will continue but the seasonal trends will normalize. 

    • Spring and summer home-buying seasons in 2021 will be strong.
    • The existing home sales will increase by 7 percent in the year 2021.
    • The rise of millennials will push the housing demand up. 
    • Home prices will hit new highs, even though the pace of growth slows.
    • There would be no double-digit price gains.
    • The home prices will appreciate by 5.7%.
    • Single-family housing starts are now predicted to increase by 9 percent.
    • Low mortgage rates will keep purchasing power healthy, but monthly mortgage costs will rise as mortgage rates steady and home prices continue to rise.
    • Mortgage rates will remain low with an average of 3.2% throughout the year.
    • Buyers seeking affordability and space will drive interest in the suburbs.
    • The pandemic has merely accelerated this previous trend by giving homebuyers additional reasons to move farther from downtown.
    • Sellers will get top dollar for their homes.
    • Fast sales will remain the norm in many parts of the country which will be a challenge felt particularly for first-time buyers
    Housing Indicator Realtor.com 2021 Forecast
    Mortgage Rates Average 3.2% throughout the year, 3.4% by end of year
    Existing-Home Median Sales Price Appreciation Up 5.7%
    Existing-Home Sales Up 7.0%
    Single-Family Home Housing Starts Up 9%
    Homeownership Rate 65.9%

    According to Zillow, the housing market forecast for 2021 has improved but lingering economic uncertainty may temper some of the predictions.

    The forecasts for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.

    The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of economic uncertainty, including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market, and virus-specific factors, were incorporated into this outlook.

    • Home sales will remain near their current, elevated levels well into 2021.
    • Sales volumes overall are forecasted to remain higher than pre-pandemic levels throughout this year and next.
    • Their forecast suggests that closed home sales reached a recent high in September, and will temporarily slow down in the coming months, falling to pre-pandemic levels by January 2021.
    • Growth is then expected to resume next spring and to remain firmly above pre-pandemic volume through most of next year.
    • This short-term deceleration in sales volume can be attributed in large part to an expected slowdown in GDP growth, the fading impact of historically low mortgage rates, fewer sales occurring that were deferred from earlier this year, and historically low levels of for-sale inventory.
    • An expected reacceleration of GDP growth in 2021 should help push sales volumes higher.
    • The home price forecast has been adjusted to higher for 2021.
    • Seasonally adjusted home prices are expected to increase by 1.2% from August to November and rise 4.8% between August 2020 and August 2021.
    • The previous forecast predicted a 3.8% increase in home prices over this time frame.
    housing market forecast 2021Courtesy of Zillow.com

    WHICH WERE THE HOTTEST REAL ESTATE MARKETS in 2020?

    According to Realtor.com's Market Hotness Index, measuring time-on-the-market data and listing views per property, the east coast accounts for seven of the top 10 zip codes, with a focus in the northeast region. Although these markets were hit by the COVID-19 pandemic first, they were also some of the first to recover, with caseloads easing over time.

    The resulting pent-up demand has driven homebuyers back to these markets, but now with an increasing preference for neighborhoods outside of the dense city centers and more toward suburban areas. Affordability continues to be a key factor in attracting buyers to these neighborhoods.

    The median listing price in the hottest zip codes was $335,000, up 1.8 percent year-over-year. However, these prices were 15 percent cheaper than their surrounding metros, on average, and essentially right in line with the national median price of $331,000 during the same period.

    The top 10 zip codes follow the overall trend of homebuyers shifting their buying behavior in response to the pandemic by increasing their search toward less dense suburbs beyond urban city centers.

    The 2020 Hottest ZIP Codes in America by Realtor.com
    Rank Zip Code Zip Name Views Per Property Y/Y Median Days on Market Median Listing Price
    1 80911 Colorado Springs, CO 38% 13 $287,000
    2 43068 Reynoldsburg, OH 69% 17 $204,000
    3 14617 Rochester, NY 44% 18 $162,000
    4 2176 Melrose, MA 14% 19 $644,000
    5 4106 South Portland, ME 5% 21 $377,000
    6 66614 Topeka, KS 99% 19 $184,000
    7 3051 Hudson, NH 45% 22 $350,000
    8 1602 Worcester, MA 45% 21 $318,000
    9 22152 Springfield, VA 41% 7 $553,000
    10 27604 Raleigh, NC 81% 25

    Economic Recession & its Affect on Housing Market

    The pandemic cost 22 million payroll jobs in March and April, and about 9 million have been recovered through July. But more recently, job openings appear to have stalled, and other statistics indicated that the labor market remains in the grips of recession. On August 27, the Labor Department said that the number of Americans applying for jobless benefits topped 1 million last week, just as it has most weeks since late March.

    That’s about four times the number of average weekly applicants before the pandemic. And the near-term job prospects are dim for people in service industries such as restaurants, hotels, travel, and entertainment. According to the U.S. Bureau of Labor Statistics, as of July, the U.S. unemployment rate stood at 10.2 percent.

    The rate is encouraging when compared to previous months but is still above the highest rate during the Great Recession—10 percent in October 2009. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic.

    At the same time, the stimulus package that Congress passed in March was more than double the financial aid offered during the last downturn.

    Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, as efforts continued to reopen businesses and resume activities that were postponed or restricted due to COVID-19, according to the “advance estimate” released by the Bureau of Economic Analysis. This is a massive economic recovery as in the second quarter of 2020, real GDP had decreased by 31.4 percent.

    The decline in second-quarter GDP reflected the response to COVID-19, as “stay-at-home” orders issued in March and April were partially lifted in some areas of the country in May and June, and government pandemic assistance payments were distributed to households and businesses. This led to rapid shifts in inactivity, as businesses and schools continued remote work, and consumers and businesses canceled, restricted, or redirected their spending.

    The third-quarter increase in real GDP reflected increases in consumer spending, inventory investment, exports, business investment, and housing investment that were partially offset by a decrease in government spending. Imports, a subtraction in the calculation of GDP, increased.

    The increase in consumer spending reflected increases in services (led by health care) and goods (led by motor vehicles and parts). The increase in inventory investment reflected an increase in retail trade inventories (led by motor vehicle dealers). The decrease in government spending was in federal as well as state and local governments.

    Current‑dollar GDP increased 38.0 percent, or $1.64 trillion, in the third quarter to a level of $21.16 trillion. In the second quarter, GDP decreased 32.8 percent, or $2.04 trillion (tables 1 and 3).

    The price index for gross domestic purchases increased by 3.4 percent in the third quarter, in contrast to a decrease of 1.4 percent in the second quarter (table 4).

    The PCE price index increased 3.7 percent, in contrast to a decrease of 1.6 percent. Excluding food and energy prices, the PCE price index increased by 3.5 percent, in contrast to a decrease of 0.8 percent.

    Current-dollar personal income decreased $540.6 billion in the third quarter, in contrast to an increase of $1.45 trillion in the second quarter.

    Disposable personal income decreased $636.7 billion, or 13.2 percent, in the third quarter, in contrast to an increase of $1.60 trillion, or 44.3 percent, in the second quarter.

    Real disposable personal income decreased by 16.3 percent, in contrast to an increase of 46.6 percent.

    Personal saving was $2.78 trillion in the third quarter, compared with $4.71 trillion in the second quarter.

    The personal saving rate — Personal saving as a percentage of disposable personal income — was 15.8 percent in the third quarter, compared with 25.7 percent in the second quarter.

    US economic recovery and GDPCourtesy of Bea.gov

    The Federal Reserve says it will keep buying bonds to maintain low borrowing rates and support the U.S. economy during a recession. It intends to keep the interest rates at rock bottom for even longer than previously expected after a major policy shift that has profound implications for Wall Street, workers, and savers.

    The economy is expected to shrink by 6.5% this year, in line with other forecasts, before expanding 5% in 2021. The Federal Reserve foresees the unemployment rate at 9.3%, near the peak of the last recession, by the end of this year. The rate is now 13.3%. The whole new policy aims to address the immediate economic problems caused by the pandemic-induced downturn.

    But knowing that the Fed’s benchmark rate is likely to stay at its current level of near zero for a long time — analysts say that could be several years — might give companies more confidence to invest and hire.

    Employers and households also could benefit from cheaper borrowing rates for houses, cars, and other loans. And over the long run, if an extended period of low-interest rates supports economic growth, that could lead to further drops in unemployment, which in turn could help disadvantaged workers who are typically the last to benefit from a long economic expansion.

    Over the long term, the U.S. will probably face slower growth, a weaker dollar, and a huge debt related to paying for the crisis response.

    What will 2021 be like for buyers? Economic activities are ramping up in all the sectors, mortgage rates trend at historic lows, and jobs are also recovering. Record low mortgage rates are providing opportunities for buyers to lock-in low monthly mortgage payments for future years. The latest housing market trends show that prices are rising in most parts of the country and most price segments because of the lack of supply.

    Although growth in supply remains below the normal seasonal pace it continues to improve as buyers anxiously await more sellers to put fresh new homes for sale on the market. Tight housing inventory was the issue for buyers before Covid-19 as well. Due to this persistent shortage of housing, some experts predict that the median home price for the country as a whole could easily rise by 10% cumulatively over the next two years.

    If you qualify for a mortgage, you have a more limited selection and prices close to what they were before the coronavirus hit, but you have relatively little competition. In response to the COVID-19 national emergency, borrowers with financial hardship due to the pandemic have been able to receive forbearance, which is a pause or reduction in their monthly mortgage payment. Borrowers can request an additional six months if needed. FHA does not require lump sum repayment at the end of the forbearance.

    An important step in this direction was the announcement of the payment deferral option for borrowers. The Federal Housing Finance Agency (FHFA) announced on May 13 that Fannie Mae and Freddie Mac (the Enterprises) are making available a new payment deferral option. The payment deferral option allows borrowers, who can return to making their normal monthly mortgage payment, the ability to repay their missed payments at the time the home is sold, refinanced, or at maturity.

    What will 2021 be like for investors? Many investors who primarily acquired at the courthouse foreclosure auction are migrating to buy bank-owned (REO) homes via online auction, which also provides the added benefit of safety from viral exposure. The added competition for these homes due to the moratorium on foreclosures could drive up the prices in the distressed housing market.

    According to a survey from Auction.com, 64% of investors who primarily buy investment properties as rentals said they planned to increase or keep their acquisitions, despite the pandemic. Even though the housing market likely won’t be the cause of the next recession, an economic downturn would still have an impact on the US real estate sector.

    The spillover to the housing market will rely upon the profundity, length, and severity of the 2020 recession and, if some parts of the country feel the effect worse than others, some local housing markets could see greater effects.

    “The current economic expansion is getting long in the tooth by historical standards, and more late-cycle signs are emerging,” said Scott Anderson, chief economist at Bank of the West, who was among those predicting a 2020 recession.

    According to a survey published by WSJ, some 59% of private-sector economists surveyed in recent days said the economic expansion that began in mid-2009 was most likely to end in 2020. An additional 22% selected 2021, and smaller camps predicted the next recession would arrive the following year, in 2022 or at some unspecified later date.

    To put it simply, the US housing market is ripe for investment in 2021, making it a great time to buy a rental property for sale to increase your cash flow. A multi-generational housing market is creating limited supply and increased competition, driving up prices at the affordable end of the market for the foreseeable future. In hot job markets and communities that fit the youngest generation’s ideals, price increases of 8-15 percent are possible year-over-year.

    For everyone else, real estate is appreciating at or just above the rate of inflation. The home price appreciation rate has slowed so far but prices are still rising. While many economists predict that home prices will continue to rise, much will depend on the economy’s ability to bounce back from the pandemic.


  • 17 Feb 2021 11:33 AM | Francesca Reysel Jonker-Miranda (Administrator)

    US Housing Market Summary For January 2021


    The housing market before the pandemic was remarkably strong. The coronavirus crisis response was unprecedented. The federal government ordered a de facto shutdown of the entire private economy, closing an estimated eighty percent of businesses. It has caused unemployment to soar to at least ten percent, while tens of millions are idled.

    According to the National Association of Realtors®, overall sales decreased year-over-year, down 17.2% (4.33 million units in April 2020) from a year ago (5.23 million in April 2019). The national median existing single-family home price in the first quarter of 2020 was $274,600, up 7.7% from the first quarter of 2019 ($254,900). Housing market data of the last month showed that it is beginning to heat up again as more sellers and buyers enter the market.

    Realtor.com's latest national housing report shows that listing price growth continued to increase at double-digit rates compared to last year. Homes continued to sell almost two weeks more quickly than last year. Inventory continues to decrease, still posing a challenge for buyers. Buyers will face a competitive spring season as sellers slowly crawl back into the market and inventory remains low. Homebuyers may need to prepare for a competitive season with lower inventory (especially in more affordable price categories), continuing growth in asking prices in response to strong buyer demand, and slowly rising interest rates.

    Housing Market Trends For Supply

    Nationally, the inventory of homes for sale in January decreased by 42.6% over the past year, a higher rate of decline compared to the 39.6% drop in December. This amounted to 443,000 fewer homes for sale compared to January of last year. Despite a slightly more active December, sellers once again entered the market more hesitantly in January, which saw 23.2% fewer new listings enter the market compared to last year.

    A declining inventory suggests that buyers are more active than sellers, perhaps looking to lock-in record-low mortgage rates. The total housing supply is not enough to mark it as a buyer’s real estate market and it going to continue to be difficult for buyers to find their perfect home, while sellers who face little competition amongst each other may find selling their home easier this fall season than is typical.

    Housing inventory in the 50 largest U.S. metros overall declined by 41.8% over last year in January, greater than last month’s 38.6% decline. While in December, all regions except for the South saw a year-over-year increase in new listings, in January, all regions saw renewed declines as sellers became skittish entering into 2021. New listings were down 24.0% in the South, 22.6% in the Midwest,  14.4% in the Northeast, and 6.6% in the West.

    Housing markets that saw the largest year-over-year decline in newly listed homes included Cleveland (-37.1%), Jacksonville (-36.9%), and Memphis (-32.6%). Only San Jose, San Francisco, and Denver saw newly listed homes increase, by 24.8% and 14.4%, and 1.8%, respectively. Overall, newly listed homes in the largest 50 metros decreased by 17.3% compared to last year.

    According to the National Association of Realtors®, total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million). Unsold inventory sits at an all-time low 1.9-month supply at the current sales pace, down from 2.3 months in November and down from the 3.0-month figure recorded in December 2019. For existing single-family homes, the unsold inventory sits are 2.2 months. 

    Total housing inventory at the end of December totaled 1.07 million units, down 16.4% from November and down 23% from one year ago (1.39 million).
    Total housing inventory at the end of November totaled 1.28 million units, down 9.9% from October and down 22% from one year ago (1.64 million). 
    Total housing inventory at the end of October totaled 1.42 million units, down 2.7% from September and down 19.8% from one year ago (1.77 million).
    Total housing inventory at the end of September totaled 1.47 million units, down 1.3% from August and down 19.2% from one year ago (1.82 million). 
    Total housing inventory at the end of August totaled 1.49 million units, down 0.7% from July and down 18.6% from one year ago (1.83 million). 
    Total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million).
    Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million).
    Total housing inventory at the end of May totaled 1.55 million units, up 6.2% from April, and down 18.8% from one year ago (1.91 million).
    Total housing inventory at the end of April totaled 1.47 million units, down 1.3% from March, and down 19.7% from one year ago (1.83 million).


    Housing Market Trends For Listing Prices

    Realtor.com's data shows that the median national home listing price grew by 15.4% over last year, to $346,000 in January, higher than last month’s growth rate of 13.4%. Listing prices in the nation’s largest metros grew by an average of 10.9% compared to last year, higher than last month’s rate of 8.8%.

    In October, the median listing price held steady at the summer 2020 high of $350,000, resisting the usual seasonal decline for the first time in Realtor.com's recorded data history. Had there been no pandemic this year, prices would have normally dropped 1-4% from summer’s price peak by October.

    The nation’s median listing price per square foot also grew by 17.5% compared to last year, an acceleration from the 15.9% growth seen last month. In May, the nation’s median listing price growth had deaccelerated, driven by diminished seller expectations and a shift in the mix of homes for sale.

    According to the National Association of Realtors®, the median sales price for all existing housing types in December was $309,800, up 12.9% from December 2019 ($274,500). Home prices increased in every region and December's national price increase marks 106 straight months of year-over-year gains.


    The following is a tabulated summary of the National Listing Price Trends from March 2020 to January 2021 on Realtor.com.

    National Housing Price Trends 2020 – 2021

    In the first two weeks of March, the median listing prices were increasing 4.4 percent year-over-year on average.
    The median list price on pending contracts in the four weeks through April 26 was up 2.6% from one year ago.
    The April national median listing price was $320,000, up 0.6 percent year-over-year.
    This was a further deceleration from the 3.8 percent year-over-year growth seen in March.
    In the three weeks of May ending May 9, May 16, and May 23, the median national listing price posted an increase of 1.4 percent, 1.5 percent, and 3.1 percent year-over-year, respectively.
    Locally, 77 of 100 large metros saw asking prices increase over last year.
    In May 2020, the median national home listing price grew by 1.6 percent year-over-year, to a new high of $330,000.
    This is a re-acceleration from the 0.6 percent year-over-year growth seen in April.
    In June, the median national home listing price grew by 5.1 percent year-over-year, to a new high of $342,000.
    This is an acceleration from the 1.6 percent year-over-year growth seen in May.
    The nation’s median listing price per square foot also grew by 7.7 percent year-over-year, an acceleration from the 5.4 percent growth seen last month.
    The July national median listing price was $349,000, up 8.5 percent year-over-year. Prices rose 7.8 percent in larger markets.
    This is an acceleration from the 5.1 percent year-over-year growth seen in June.
    The nation’s median listing price per square foot also grew by 9.5 percent year-over-year, an acceleration from the 7.7 percent growth seen in June.
    The median national home listing price grew by 10.1 percent year-over-year, to a new high of $350,000 in August.
    This is an acceleration from the 8.5 percent year-over-year growth seen in July.
    The median national home listing price grew by 11.1% over last year, to $350,000 in September.
    This is an acceleration from the 10.1% growth seen in August.
    The nation’s median listing price per square foot also grew by 13.9% compared to last year.
    In October, the median national home listing price grew by 12.2% over last year, to $350,000.
    This is an acceleration from the 11.1% growth seen in September.
    The nation’s median listing price per square foot also grew by 14.7% compared to last year.
    In November, the median national home listing price grew by 12.7 percent year-over-year, to $348,000.
    The nation’s median listing price per square foot also grew by 15.4% compared to last year.
    In December, the median national home listing price grew by 13.4 percent year-over-year, to $340,000.
    The nation’s median listing price per square foot also grew by 15.9% compared to last year.
    In January 2021, the median national home listing price grew by 15.4 percent year-over-year, to $346,000.
    The nation’s median listing price per square foot also grew by 17.5% compared to last year.

    Among the largest 50 metros, listing prices are increasing most in northeastern markets, where they are now growing at an average rate of 16.8% over last year, compared to a growth rate of 12.3% for western metros, 10.4% for midwestern metros, and 8.0% for southern metros. This month, price growth accelerated in all regions compared to last month.

    Austin (+30.2%), Rochester (25.9%), and Los Angeles (+22.4%) posted the highest year-over-year median list price growth in January. Miami (-3.2% year-over-year) and Minneapolis (-0.4%) were the only top 50 metros to see listing prices decline year-over-year in January.

    Highest Year-Over-Year Price Gains Highest Year-Over-Year Price Declines
    May Los Angeles-Long Beach-Anaheim, CA (+14.9%) Detroit-Warren-Dearborn, MI (-3.4%)
    Pittsburgh, PA (+14.0%); and Cincinnati, OH-KY-IN (+12.1%) San Antonio-New Braunfels, TX (-3.2%)
    Seattle-Tacoma-Bellevue, WA (-3.1%)
    June Pittsburgh, PA (+23.8%) Miami-Fort Lauderdale-West Palm Beach, FL (-2.3%)
    Los Angeles-Long Beach-Anaheim, CA (+21.4%) Jacksonville, FL (-0.8%)
    Cincinnati, OH-KY-IN (+16.6%) Dallas-Fort Worth-Arlington, TX (-0.7%)
    July Pittsburgh, PA (+25.0%) Miami-Fort Lauderdale-West Palm Beach, FL (-1.5%)
    Los Angeles-Long Beach-Anaheim, CA (+24.3%) Orlando-Kissimmee-Sanford, FL (-0.9%)
    Cincinnati, OH-KY-IN (+18.5%)
    August  Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (+18.6 percent) Miami-Fort Lauderdale-West Palm Beach, FL (-0.2 percent)
    Cincinnati, OH-KY-IN (+17.8 percent)
    Cleveland-Elyria, OH (+15.6 percent)
    September  Cincinnati, OH-KY-IN (+16.9%)
    Boston-Cambridge-Newton, MA-NH (+16.4%)
    Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (+15.6%)
    October  Los Angeles (+16.9%)
    Philadelphia (+16.7%)
    Cincinnati (16.3%)
    November  Austin (+20.0%)
    Los Angeles (+16.1%)
    Riverside-San Bernardino (15.9%)
    December  Austin (+16.9%) Minneapolis (-1.6%)
    Riverside-San Bernardino (17.2%)
    New Orleans (+16.8%)
    January 2021 Austin (+30.2%) Miami (-3.2%)
    Rochester (25.9%) Minneapolis (-0.4%)
    Los Angeles (+22.4%)

    Housing Market Trends For Sales

    Homes for sale in January 2021 were being scooped up more quickly than last year as buyer demand remained solid through the new year. The typical home spent 76 days on the market this January, which is 10 days less than last year. However, this yearly decline has slowed compared to December 2020, when homes sold 13 days more quickly than the previous year.

    In the 50 largest U.S. metros, the typical home spent 60 days on the market, and homes spent 12 days less on the market, on average, compared to last January. Among these 50 largest metros, the time a typical property spends on the market has decreased most in the South and West, where the typical property spent 2 weeks less on the market compared to last year, followed by the Midwest (-12 days) and the Northeast (-11 days).

    Among larger metropolitan areas, homes saw the greatest decline in time spent on the market compared to last year in Virginia Beach (-27 days); Sacramento (-24 days); and Birmingham (-22 days). Only two markets saw time on the market increase compared to the previous year: New York (+11 days), and Miami (+5 days).

    Existing-home sales rose in December, with home sales in 2020 reaching their highest level since 2006, according to the National Association of Realtors®. Activity in the major regions was mixed on a month-over-month basis, but each of the four areas recorded double-digit year-over-year growth in December.

    Total existing-home sales completed transactions that include single-family homes, townhomes, condominiums, and co-ops, increased 0.7% from November to a seasonally-adjusted annual rate of 6.76 million in December. Sales in total rose year-over-year, up 22.2% from a year ago (5.53 million in December 2019).

    Housing Sales By Region – December 2020 (By N.A.R.)
    Northeast Existing home sales climbed 4.5%, recording an annual rate of 930,000, a 27.4% increase from a year ago.
    The median price in the Northeast was $362,100, up 19.0% from December 2019.
    Midwest Existing-home sales were unchanged, recording an annual rate of 1,590,000 in December, but up 26.2% from a year ago
    The median price in the Midwest was $235,700, a 13.7% increase from December 2019.
    South Existing-home sales increased 1.1% to an annual rate of 2,860,000 in December, up 20.7% from the same time one year ago.
    The median price in the South was $268,100, an 11.3% increase from a year ago.
    West Existing-home sales fell 1.4% from the month prior, recording an annual rate of 1,380,000 in December, a 17.9% increase from a year ago.
    The median price in the West was $467,900, up 14.2% from December 2019.


    First-time buyers were responsible for 31% of sales in December, unchanged from the same time in 2019, but down from 32% in November 2020. Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in December, identical to the share recorded in November 2020 and a small decline from 17% in December 2019.

    All-cash sales accounted for 19% of transactions in December, down from 20% in both November and December 2019. Distressed sales – foreclosures and short sales – represented less than 1% of sales in December, equal to November's percentage but down from 2% in December 2019.

    Despite dropping slightly in the last month of 2020, the latest pending home sales registered as the highest ever recorded in December, according to the National Association of Realtors®. The decrease marks the fourth consecutive month of month-over-month declines. While contract transitions fell in one of the four major U.S. regions, activity climbed or remained flat in the three other areas. Compared to a year ago, all four regions witnessed double-digit gains in pending home sales transactions.

    Pending home sales fell slightly in October, according to the National Association of Realtors. Contract activity was mixed among the four major U.S. regions, with the only positive month-over-month growth happening in the South, although each region achieved year-over-year gains in pending home sales transactions. All regions experienced double-digit year-over-year increases.

    NAR's Pending Home Sales Index (PHSI), fell 0.3% to 125.5 in December. Year-over-year, contract signings jumped 21.4%. An index of 100 is equal to the level of contract activity in 2001. The Northeast PHSI rose 3.1% to 112.0 in December, a 22.1% increase from a year ago. In the Midwest, the index fell 3.6% to 111.7 last month, up 13.9% from December 2019.

    Pending home sales in the South increased 0.1% to an index of 150.6 in December, up 26.6% from December 2019. The index in the West was unchanged in December, remaining at 111.3, which is up 18.9% from a year ago.


  • 17 Feb 2021 11:32 AM | Francesca Reysel Jonker-Miranda (Administrator)

    Real Estate Markets

    We have collected some data from credible sources that show how the US housing market is recovering week after week from the blows of the pandemic. 

    Housing Market Crash or Boom in 2021?

    The US housing market is far from crashing in 2021 or 2022. In fact, it continues to play an important supportive role in the country’s economic recovery. Current economic conditions resemble a “swoosh” pattern, with the initial impact from the lockdown followed by a gradual recovery as the economy reopens.

    Mortgage rates and slow but steady improvements to the job landscape continue to propel confidence for first-time buyers. The pace of existing-home sales has jumped to a level not seen since 2006 and, importantly, was followed by strong pending sales, purchase mortgage applications, and construction data.

    The U.S. economy is expected to grow 5.3 percent in 2021, a substantial improvement from the currently projected 2.7 percent contraction in 2020, with a strong pick-up in growth projected to commence over the spring months, according to the latest commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group.

    Housing activity is expected to remain strong in 2021, but the growth will likely decelerate from the torrid pace set in the second half of 2020. While the ESR Group expects home sales to rise 3.8 percent in 2021, the monthly pace is likely to slow through much of the year. Home price appreciation is also expected to slow along a similar timeline.

    Historically, low-interest rates are also an inducement to buy homes, but slow supply growth continues to result in high levels of home price appreciation, which is offsetting some of the affordability benefits of the lower rate environment. Housing starts have surpassed expectations at the end of 2020 and remain poised to show continued strength in 2021.

    The latest forecast of full-year 2021 real GDP growth is an upgrade of 0.8 percentage points from the previous month’s forecast, reflecting the ESR Group’s view that the expansion of COVID-19 vaccination efforts and the approach of warmer weather will likely reverse the economic weakness experienced at the end of 2020.

    As Federal Reserve has made clear that it has no intention of raising interest rates soon, many households are seizing the opportunity to refinance their existing mortgages. Let's first see how various consumer surveys are responding in wake of this crisis.

    The Fannie Mae Home Purchase Sentiment Index® (HPSI) is a good indicator of the houisng recovery and buyer and seller behavior. The index measures housing attitudes, intentions, and perceptions, using six questions from the National Housing Survey® (NHS). The HPSI fell for the second straight month in December to 74.0, a 6.0 point decline from November.

    Five of the six HPSI components decreased month over month, and consumers reported a substantially more pessimistic view of homebuying and home-selling conditions, which drove the relatively large monthly change. Year over year, the HPSI is down 17.7 points. It fell 1.7 points in November to 80.0, the first decline after three consecutive months of increases since late spring.

    The sell-side component fell for the first time since April and by 18 points which shows a more pessimistic view of home-selling conditions and home prices, including mortgage rate expectations. If sellers choose to wait to list their homes, this could have the effect of perpetuating already-tight inventory levels and supporting additional home price growth, which could contribute to a further moderating of home sales and decreasing housing affordability.

    The latest survey finds out the percentage of respondents who think it’s a ‘good/bad time to sell a home’ vs those who think it's a ‘good/bad time to buy a home’. 

    • Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 57% to 52%, while the percentage who say it is a bad time to buy increased from 35% to 39%. As a result, the net share of Americans who say it is a good time to buy decreased 9 percentage points month over month.
    • Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home decreased from 59% to 50%, while the percentage who say it’s a bad time to sell increased from 33% to 42%. As a result, the net share of those who say it is a good time to sell decreased 18 percentage points month over month.
    • Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months remained the same at 41%, while the percentage who say home prices will go down increased from 13% to 16%. The share who think home prices will stay the same decreased from 35% to 34%. As a result, the net share of Americans who say home prices will go up decreased 3 percentage points month over month.
    • Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 24% to 20%, while the percentage who say their household income is significantly lower remained unchanged at 18%. The percentage who say their household income is about the same increased from 57% to 61%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 4 percentage points month over month.

    The Federal Reserve Bank of New York's Center for Microeconomic Data released the December 2020 Survey of Consumer Expectations, which shows that median inflation expectations increased at the medium-term horizon, and remained unchanged at the short-term horizon. Uncertainty about future inflation increased slightly, remaining at an elevated level.

    Median home price change expectations, which have been trending upward after reaching a series' low of 0% in April 2020, increased sharply from 3.0% in November to 3.6% in December, the highest reading since July 2018.

    It also shows that mean unemployment expectation — or the mean probability that the U.S. unemployment rate will be higher one year from now — decreased from 40.1% in November to 38.9% in December, equal to its trailing 12-month average.

    The mean perceived probability of losing one's job in the next 12 months increased slightly from 14.6% in November to 15.0% in December, remaining slightly below its December 2019 level of 15.4%. Median expected household income growth increased by 0.1 percentage point to 2.2% in December.

    According to Zillow's market pulse report dated February 12, 2021, housing market sentiment improved in January, while overall economic optimism remained depressed. While demand for housing remains red hot, supply-side constraints that have hindered homebuilders for years have recently become even more acute. Mortgage rates are holding firm even as Treasury yields continue to rise and access to most mortgages became easier in January.

    • More existing homes were sold in 2020 than in any year since 2006
    • December existing-home sales rose 0.7% from November and 22.2% from December 2019 to 6.76 million (SAAR).
    • In total, 5.64 million homes were sold in 2020, up 5.6% from 2019.
    • Home value growth breaks new records.
    • The typical U.S. home was worth $266,104 in December, up 8.4% (or $20,587) from a year ago.
    • Home values grew 3.2% in the fourth quarter of 2020 – the fastest three-month pace of appreciation since at least 1996.
    • December housing starts cap an extraordinary year
    • December housing starts rose 5.8% from November and 5.2% from a year ago to 1.669 million (SAAR).
    • The 1.709 million (SAAR) permits filed in December were up 4.5% and 17.3%, respectively, from November and December 2019.
    • Home values in Austin grew 5.3% in the past quarter, while home values grew 5.1% over the same period in Phoenix, San Diego, and Salt Lake City.
    • For now, there are no indications that price growth is going to slow.
    • Zillow's latest forecast predicts annual home value growth will rise as high as 13.5% by mid-2021, and for home values to end 2021 up 10.5% from their current levels.

    Realtor's Recovery Index: No Housing Market Crash Coming

    According to Realtor.com's latest recovery report, the Housing Market Recovery Index reached 103.7 nationwide, up 0.3 points over the prior week.

    • The overall index remains above the pre-COVID baseline, with all measures growing faster than this time last year, except for new listings.
    • The ‘housing demand’ component increased 2.1 points to 116.9, growing but at a slower pace than in December.
    • The overall recovery index is showing the greatest recovery in Portland, Los Angeles, Denver,  Boston, and Las Vegas.
    Week ending 1/23 Current Index w/w Change
    Overall Housing Recovery Index 103.7 +0.3
    Housing Demand Growth Index 116.9 +2.1
    Listing Price Growth Index 110.8 -0.6
    New Supply Growth Index 87.3 +0.8
    The pace of Sales Index 108.6 +0.0

    The graph below charts the index by showing how the real estate market started strong in early 2020, and then dropped dramatically at the beginning of March when the pandemic paused the economy. It also shows the strength of the recovery since the beginning of May. A W-shaped recovery can be seen.

    Housing Market CrashCredits: Realtor.com (Housing Market Recovery Index)

    The housing index is pegged to a starting point of 100 at a particular year. And then they can just track whether things are improving or declining from that reference point. It’s similar to any other index where you have a starting point or a starting year and you peg it at a hundred and it just goes up and down from there.

    It went up for most of March, and then it hit this peak and came down rapidly and fast over the course of essentially the end of March, April, and right through to the beginning of May where it bottomed out. So after May 1st, that index started to go up, it passed 85 in mid-May and then continue to work its way up rather quickly.

    The recovery index had reached 106.6 nationwide for the week ending July 18, bringing the index above the pre-COVID recovery benchmark for the first time since March, and then it kept going up from there till Dec 26.

    After that, it fell sharply by 14.1 points and reached below the pre-COVID benchmark on Jan 2, 2021. It was the first major decline that we have seen since April 2020. The index has formed a V-shaped curve back again reached 103.7 points as of Jan 23. 

    Are Housing Prices Increasing?

    Last year, the inflow of buyers and sellers remained abnormally high. The ‘home price’ component fell slightly to 110.8 points this past week but remains well above the January 2020 baseline and remains higher than the 109.7 point average over the course of December. With inventory failing to see any visible improvement, asking prices continue to rise near-record levels even as short-term economic and COVID concerns fail to disappear. Sellers have newfound leverage, enabling the fastest listing price growth recorded in more than two years.

    Although the fastest price growth has been recorded since January 2018 it is yet to be seen whether higher asking prices will translate into higher selling prices. A seller would always prefer sales to a list price ratio of 100% or more. If inventory continues to decline at the current sales pace, we’ll get a clear indication of this ratio.

    Locally, 33 of the 50 largest houisng market markets seeing growth in asking prices surpass the January baseline, the same as the previous week. The most recovered markets for home prices include Austin, Pittsburgh, Riverside, Richmond, and Houston, with a home price growth index between 113 and 128.

    Is The Housing Demand Growing?

    The Housing Demand component – which tracks growth in online home searches nationwide – increased to 116.9 this past week, up 2.1 points over last week but still down compared to the 122.9 point average over the course of December. It shows that the pool of active buyers has continued to grow but at a visibly slower rate than observed in the fall. Buyers remain motivated but watchful of interest rates and frustrated by a shrinking inventory.

    Locally, 45 of the 50 largest real estate markets are still positioned above the recovery trend, up by 3 from the previous week. The most recovered markets for home-buying interest include Austin, Miami, Houston, San Antonio, and Seattle; with a housing demand growth index between 137 and 153.

    Is Housing Supply Increasing?

    In the first week of August, the index had managed to reach the January baseline for the first time as more sellers re-entered the market but it was a temporary boost in new listings which weakened later in August. The housing supply index, which measures the growth of new listings, has been slow to recover in the first two weeks of the new year but continues to move slowly in the right direction.

    Last week, the supply component rose slightly to 87.3, 0.8 points above the previous week but still down compared to the 107.6 point average over the course of December. Selling activity has remained volatile in the post-pandemic period, and this relatively slow start to the year by sellers confirms that they might wait to list more homes.

    A sustained rebound in newly listed homes for sale remains elusive and highly localized but this week’s improvement is encouraging. The housing supply will need to carry consistent momentum forward to balance the relentless growth in demand.

    Will sellers choose to go against the usual seasonal decline in new listings? What do you think? Locally, only 11 of the 50 largest housing markets saw the new listings index remain above the January baseline, two fewer than the previous week.

    Interestingly, markets, where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets. A failure of new listings to improve beyond the current pace could prove to be an obstacle for further sales improvements, given their strong correlation with sales.

    The most recovered markets for new listings included San Jose, Denver, San Francisco, Los Angeles, and Las Vegas, with a new listings growth index between 115 and 137. While San Jose and San Francisco's new listings still outpace January 2020, it’s worth noting that the pace of new listings growth is down considerably compared to December in these metros, which has had a large impact on their recovery scores this week.

    Houisng markets where new supply is improving the fastest, tend to be higher priced than those that have yet to see improvement, suggesting sellers are more active in the more expensive markets. More homes being listed for sale in areas with wealthier demographics goes some way to explain the strength of the housing market at a time of recession and rising unemployment.

    Are Housing Sales Recovering?

    Home sales are recovering from the setback of the coronavirus-led crisis with fall becoming the peak homebuying season. The pace of sales component – which tracks differences in time-on-market – held well above the pre-COVID baseline at 108.6, the same as the previous week but lower than the 114.9 point average over the course of December.

    Despite the moderate deceleration, homes continue to move at a record pace for this time of the year and faster than in pre-pandemic times. In other words, homes are selling faster than the same time last year.

    Locally, 43 of the 50 largest housing markets in the US are now seeing the time on market index surpass the January baseline, the same as the previous week. The most recovered markets for time-on-market include Los Angeles, Portland, Riverside, Louisville, and Phoenix; with a pace of sales growth index between 135 and 151.

    This past week, San Jose and San Francisco saw their ‘pace of sales’ scores fall well below the recovery point. While the time spent on the market in these metros has not significantly risen, it has failed to keep up with the blistering drop-in time on the market seen in late January and early February 2020, right before the onset of the pandemic.

    Are Housing Rents Declining?

    The rental market appears poised to turn the corner and demand for rental units is expected to surge in 2021. While rising rents is a good sign for rental property owners, it will certainly put millions of renters hit hard by pandemic-related income loss in an even more difficult position, and further government intervention will likely be needed to avoid a painful wave of evictions. In general, there are some significant early signs of trend reversals from what the rental market saw throughout the majority of 2020. These shifts, however, don’t come as a total surprise, as the rental market tends to pick up in the New Year after the holiday season.

    Below you'll find various rent reports that highlight year-over-year rent trends and price fluctuations that renters may be experiencing in various parts of the United States.

    December's data by Realtor.com shows rents across the nation’s largest 100 counties are continuing their slowdown, with year-over-year trends easing since March across the studio, one-bedroom, and two-bedroom units.

    • In several major and most expensive cities in the country, rents are down substantially compared to last year.
    • The urban tech centers such as the Bay Area, Manhattan, Boston, Seattle, and Washington, D.C all saw the largest declines in rents compared to last year.
    • One-bedroom rents were declining year-over-year in 37 of the 100 largest counties, up from just 6 in March.
    • Two-bedroom rents were declining year-over-year in 28 of the 100 largest counties, up from just 12 in March.
    • San Francisco again topped the list of rent declines in all three unit types with studio rents declining by 33.8 percent, one-bedrooms by 25.5 percent, and two-bedrooms by 22.8 percent.

    Apartment List National Rent Report shows that COVID’s impact on the market is continuing to stabilize.

    • The most expensive markets saw rents fall rapidly while several more affordable mid-sized cities experienced accelerating rent growth.
    • Their national index ticked up by 0.1% from December to January, the first monthly increase since last August.
    • Year-over-year, rents are now down by 1.2 percent nationally, a slight increase from the 1.5 percent year-over-year decline that we reported last month.
    • Boise ranks #1 for fastest year-over-year growth, with rents up by 12.4 percent.
    • The vast majority of that growth in Boise occurred from April through October, and over the past three months, rents in Boise have increased by a total of just 0.4 percent.
    • In Chesapeake, VA, rents are up by 8.4 percent year-over-year, but fell by 0.5% this month, the first decline since the start of the pandemic.

    Zumper's National Rent Report (February 2021), shows some early signs of reversing the unprecedented rental market trends we saw throughout 2020.

    • Nationally, rents remain slightly up across the country, while expensive coastal cities are still down dramatically compared to a year ago. Nationally, median 1-bedroom rent was up 0.6% from a year ago, and median 2-bedroom rent was up 1.7%.
    • The national 1-bedroom median and 2-bedroom median grew 0.3% and -0.1% at a monthly rate, respectively.
    • Rents continue to be down considerably in historically expensive, coastal cities from a year ago.
    • At the same time, rents in historically cheaper cities throughout the Midwest and Southwest are up considerably from a year ago.
    • Bay Area Shows Early Signs of Rent Growth.
    • For the first time since April 2020, rental prices are increasing at a monthly rate in San Francisco after months of decline in the city and throughout the entire Bay Area
    • The top 8 cities are the 8 most expensive as ranked in the January 2020 report: San Francisco, CA; New York, NY; Boston, MA; Oakland, CA; San Jose, CA; Washington DC; Los Angeles, CA; and Seattle, WA.
    • Second-Tier Cities and New Tech Hubs appear to be declining in price somewhat in recent months.
    • This group that comprises Miami, FL and Austin, TX, is eager to welcome tech companies and workers that are fleeing traditional tech hubs like San Francisco and New York City.
    • These cities have seen a spike in renter searches on Zumper in recent months, which could be a result of price decreases.

    Here's a snapshot of January 2021 rental prices in the top 20 largest cities in the country. 

     

    national rent price trends 2021Source: Zumper National Rent Report

    Apartment Guide’s January 2021 Rent Report shows that rents are rising modestly on one-bedroom apartments and more noticeably on two-bedroom and three-bedroom apartments. This may be due to household consolidation as consumers grapple with the economic pressure introduced by COVID-19.

    • On a national level, prices on studio apartments are down and one-bedroom units are up modestly. In comparison, both two-bedroom and three-bedroom units are up.
    • Studios are down 6 percent from six months ago and down 2.4 percent from one year ago.
    • One-bedroom units are down 3 percent from six months ago, but up 1.8 percent year-over-year.
    • Two-bedrooms are up 3.8 percent from where they were one year ago.
    • Three-bedroom units are up 4.2 percent from where they were one year ago.
    • The West and Northeast regions haven’t been on the same trend line for rent prices in recent comparisons — until now.
    • In both the West and the Northeast, studio and one-bedroom apartments are less expensive than they were a year ago, while two-bedroom and three-bedroom units are more expensive.
    • Of the top 20 cities for rising rent prices across unit types, 31 percent have populations of 500,000 or less.
    • That indicates strong momentum in the rental markets of smaller cities, leaving them well-positioned for further growth.
    BEDROOMS 2020 2019 2018
    Studio $1,608 $1,648 $1,598
    1 $1,598 $1,570 $1,582
    2 $1,865 $1,797 $1,798
    3 $2,036 $1,955 $1,947

    RESIDENTIAL VACANCIES AND HOMEOWNERSHIP RATES  Q3 2020

    Vacancy rates affect the price of housing. In a market in which there are a lot of vacant homes or apartments, prospective tenants or buyers are at an advantage. On the other hand, in a market in which vacant homes or apartments are scarce, the power dynamic is reversed. The landlords (or sellers) are in a position to tend to bid up the rents.

    Therefore, when there is an unusually low vacancy, the price of housing will tend to be bid up over time. When there is an unusually high vacancy, the price of housing will tend to be bid down over time.

    Let us see how this pandemic-led economic slowdown has impacted the vacancy rates nationally as well as regionally. The vacancy rate is somewhat analogous to the unemployment rate. If the unemployment rate increases, it has a direct impact on vacancy rates, just as what happened this year since March.

    COVID-19 continues to limit economic activity, yielding higher apartment vacancies, and lower overall rent growth. The Census Bureau reports rental vacancy and homeownership vacancy rates each year through its American Community Survey; you can get these at the city level or in some cases for even more fine-grained areas.

    According to the U.S. Census Bureau, the homeowner vacancy rate in 2019 was 1.3%, and the rental vacancy rate at approximately 6.8%. In the third quarter of 2020, the national vacancy rates were 6.4 percent for rental housing and 0.9 percent for homeowner housing.

    Approximately 89.9 percent of the housing units in the United States in the third quarter of 2020 were occupied and 10.1 percent were vacant. Owner-occupied housing units made up 60.6 percent of total housing units, while renter-occupied units made up 29.3 percent of the inventory in the third quarter of 2020.

    It is interesting to see that the rental vacancy rate of 6.4 percent was 0.4 percentage points lower than the rate in the third quarter of 2019 (6.8 percent) and 0.7 percentage points higher than the rate in the second quarter of 2020 (5.7 percent).

    And the homeowner vacancy rate of 0.9 percent was 0.5 percentage points lower than the rate in the third quarter of 2019 (1.4 percent) and virtually unchanged from the rate in the second quarter of 2020 (0.9 percent).

    On the other hand, the homeownership rate of 67.4 percent was 2.6 percentage points higher than the rate in the third quarter of 2019 (64.8 percent) and not statistically different from the rate in the second quarter of 2020 (67.9 percent).

    Usually larger metro areas have an advantage when it comes to rental properties. They have an abundant supply of renters in the high-income bracket with more disposable income who are willing to compete for the best apartments and rentals. However, industry experts are seeing more positive conditions in many suburban markets.

    Buyers of apartment properties are returning to the market, spurred by historically low-interest rates and increased equity financing availability. In the third quarter of 2020, the rental vacancy rate was the highest in Metropolitan Statistical Areas (7.5) percent. Also, it was not statistically different principal cities (7.0 percent).

    But suburbs had the lowest rental vacancy rate of 5.5 percent, 1.5 percentage points lower than principal cities. According to The New York Times, an estimated 5% of New York City residents and 18% of Manhattanites alone left the city between March and May. Suburbs like Westchester, Long Island, and North Fork have become other popular sanctuaries inside New York State.

    This combination of high demand and low supply has driven prices higher in the suburbs. As affluent New Yorkers are buying houses in suburbs, the real estate market in those areas has prospered. In Manhattan, however, the median rental price decreased by 3.9% between August 2019 to August 2020, and the vacancy rate has increased by 3.15%.

    The third quarter 2020 rental vacancy rate in the Northeast (5.6 percent) was lower than the rates in the Midwest (6.9 percent) and South (7.6 percent), but it was not statistically different from the rate in the West (5.1 percent).

    The rental vacancy rates in the Midwest and South were higher than the rate in the West, and there was not a significant difference between the rates in the Midwest and South.

    The rental vacancy rate in the South was lower than the third quarter 2019 rate, while the rental vacancy rates for the Northeast, Midwest, and West were not statistically different from the third quarter 2019 rates.

    rental vacancy rates by regionCourtesy of Census.gov

    The third quarter 2020 homeownership rates in the Midwest (71.2 percent) and South (70.8 percent) were higher than the rates in the Northeast (62.0 percent) and West (62.1 percent). The rates in the Midwest and South were not statistically different from each other, nor were the rates in the Northeast and West. The homeownership rates in the Midwest, South, and West were higher than the rates in the third quarter of 2019, while the rate in the Northeast was not statistically different.

    homeownership rate


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