INVENTORY'S LOW AND THE COMPETITION'S HIGH, BUT FOR THE FIRST TIME IN MORE THAN TWO YEARS, HOME SEARCHES AND LISTINGS AVAILABLE BEGAN TO CONVERGE

Source: Trulia

For the first time in more than two years, when it comes to price, homebuyers and sellers are finally moving closer together. Market mismatch – Trulia’s measure of the price gap between search interest and available listings – is flat from a year ago, but has dropped 15 percent, falling to 11.1 from 13.1 the previous quarter; the first such drop since prior to the start of 2016. In other words, more homebuyers are searching at price points where listings are more common.

• What looks like good news among very tough market conditions for starter home buyers comes with some hefty caveats. Rather than being a story of increasing inventory meeting high demand for starter homes, instead, searches are just shifting increasingly toward pricier options.
• Nationally, the mismatch gap shrunk to 11.1 from 13.1 last quarter as the share of searches for starter homes fell to 28.7 percent from 31.1 percent. While part of this shift could be attributed seasonality, it is the first quarter to quarter drop we have seen and compares with a mismatch increase from 9.7 to 11.1 during the same period last year.
• It’s not all good news though as the starter listing’s share continued to slide and is now down to22.4 percent of all listings from 22.8 percent last quarter and the first quarter of 2017.
• Premium buyers got pinched this quarter for the first time in more than two years. Premium home searches made up 41.4 percent of all searches and comprised 52.5 percent of listings. Still comfortable, but down from a larger gap of 38.4 percent of searches going to 51.5 percent of listings last quarter and on par with the mismatch a year ago.
• What looks like starter home buyer relief on a national level may just be signs of shoppers giving up. Recent changes are driven by search activity growing more slowly for starter homes than for trade-up and premium homes.
• San Francisco saw the biggest improvement for starter home shoppers from last quarter as starter inventory increased to 40.2 percent from 36.1 percent of all listings and searches to those homes dropped to 42.7 percent from 45.5 percent of all searches.

Read the full story:
https://www.trulia.com/blog/trends/mismatch-q12018/

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SOUTHERN CALIFORNIA HOUSE PRICES UP 7.3% IN APRIL, REALTORS® REPORT

Source: The Orange County Register

Home prices and sales increased last month in Southern California and across the state, with median house prices hitting their highest levels since the summer of 2007, the California Association of REALTORS® reported Thursday, May 17.

The median price of an existing Southern California house — or price at the midpoint of all sales — was $515,000 for a second straight month in April. That’s the highest median for the region in more than a decade.

The Southern California house price rose $35,000, or 7.3 percent, since April a year ago.

Statewide, the median sale price was $584,000, also a post-recession high and up 8.6 percent year over year.

House sales were up slightly from year-ago levels, rising 1.6 percent in Southern California and 2.2 percent in the state as a whole.

Full story: 

https://www.ocregister.com/2018/05/17/southern-california-house-prices-up-7-3-percent-in- april-realtors-report/

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ZILLOW: RENT VS. BUY BREAK-EVEN POINT FALLS BY A MONTH IN Q1

Source: Housing Wire

According to a report by Zillow, the average time it takes for owning a typical U.S. home to make more financial sense than renting that same home is down by about one month over last quarter. The new average is 1.96 years. That means it would take roughly one year and 11 months for it to make more sense to own a home in the U.S. than to rent that same home.

Not surprisingly, break-even horizons are longest in expensive coastal markets like Los Angeles, Portland and Washington D.C. This translates to a roughly two to three-year break-even horizon. Los Angeles has the longest breakeven horizon at 3.7 years.

The shortest break-even horizons are in the Southeast, with Memphis taking first place at 1.32 years. Birmingham, Tampa and Orlando are other markets with notably short break-even horizons.

Full story: 

https://www.housingwire.com/articles/43426-zillow-rent-vs-buy-breakeven-point- falls-by-a-month-in-q1

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MAJOR CALIFORNIA HOUSING BILL NARROWED BEFORE ITS FIRST LEGISLATIVE DEBATE

Source: The Los Angeles Times

Ahead of its first legislative committee hearing scheduled for next week, a Bay Area lawmaker has narrowed his bill aimed at building more housing near transit across California.

Making sense of the story:Under the newly amended Senate Bill 827 from Sen. Scott Wiener (D-San Francisco), cities would be allowed to restrict building heights to four or five stories, down from a maximum of eight stories, within a half-mile of rail and ferry stops. Wiener also limited changes surrounding bus stops.

The new version of the bill wouldn’t mandate height increases around bus stops, insteadallowing for increased density and lower parking requirements. It also would apply only at bus stops with frequent service throughout the day, rather than just during rush hour.

SB 827 tries to address the state’s longstanding shortage of homes and a push by climateregulators to build near mass transit through dramatically changing development rules,particularly in the state’s largest metropolitan areas. Earlier versions of the bill would haveaffected nearly all of San Francisco and, according to a Times analysis, about 190,000 parcels currently zoned for single-family homes in Los Angeles — roughly half such parcels in the city.

Additional changes to the bill made this week try to address concerns relating to the promotion of gentrification. All projects greater than 10 units will have to set aside a portion for low- income residents. It further restricts the demolition of rent-controlled or formerly rent- controlled properties. And the developers will have to provide monthly recurring transit passes to all residents at no cost.

Read the full story:

www.latimes.com/politics/essential/la-pol-ca-essential-politics-updates-major-california-housing-bill-narrowed-1523379748-htmlstory.html

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DEBT-TO-INCOME RATIOS RISING AMONG BUYERS

Source: Realtor Mag

About one in five conventional mortgage loans issued this winter went to borrowers who spent more than 45 percent of their monthly incomes on their mortgage payment and other debts. This is the highest proportion since the housing crisis, according to CoreLogic, a real estate data firm. Further, that is nearly triple the proportion of such loans issued in 2016 and the first half of 2017.

Real estate professionals told WSJ that they are concerned a growing number of buyers are becoming priced out of the housing market. Besides rising home prices, the average 30-year fixed-rate mortgage has increased to 4.40 percent, compared to 3.95 percent at the beginning of the year, according to Freddie Mac.

Rising mortgage rates “are working against affordability and that’s why you get the pressure to ease credit standards,” says Doug Duncan, Fannie Mae’s chief economist. That's leading mortgage financing giants Fannie Mae and Freddie Mac to test programs aimed at making homeownership more affordable. For example, they’re experimenting with backing loans made by lenders who agree to help pay down a buyer’s student loan debt or programs that ease standards so that self-employed borrowers can get a mortgage more easily. Also, last summer, Fannie Mae and Freddie Mac started to back a greater number of loans from borrowers with debt-to-income ratios of up to 50 percent (45 percent was usually the typicallimit prior). Fannie’s new policy has added 100,000 new mortgages that wouldn’t have otherwise beenmade last year and early this year, according to the Urban Institute.

Full story:

http://realtormag.realtor.org/daily-news/2018/04/11/debt-income-ratios-rising-among- buyers

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WHY BUYING A HOUSE TODAY IS SO MUCH HARDER THAN IN 1950

Source: Curbed

In 2016, millennials made up 32 percent of the homebuying market, the lowest percentage of young adults to achieve that milestone since 1987. Nearly two-thirds of renters say they can’t afford a home.

Even worse, the market is only getting more challenging: The S&P CoreLogic Case-Shiller National Home Price Index rose 6.3 percent last year, according to an article in the Wall Street Journal. This is almost twice the rate of income growth and three times the rate of inflation. Realtor.com found that the supply of starter homes shrinks 17 percent every year

It’s not news that the homebuying market, and the economy, were very different 60 years ago. But it’simportant to emphasize how the factors that created the homeownership boom in the ’50s—widespread government intervention that tipped the scales for single-family homes, more open land for development and starter-home construction, and racist housing laws and discriminatory practices that damaged neighborhoods and perpetuated poverty—have led to many of our current housing issues.

Full story:

https://www.curbed.com/2018/4/10/17219786/buying-a-house-mortgage-government-gi-bill

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CALIFORNIA HOUSING MARKET BOUNCES BACK IN FEBRUARY

Source: World Property Journal 

According to the California Association of Realtors, led by the San Francisco Bay region, California home sales registered healthy gains in February 2018 on both a monthly and annual basis after January's weak start.

Making sense of the story: 
• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 422,910 units in February, according to information collected by C.A.R.

• The statewide annualized sales figure represents what would be the total number of homes sold during 2018 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

• February's sales figure was up 3.3 percent from the revised 409,520 level in January and up 5.4 percent compared with home sales in February 2017 of a revised 401,060. The year-to-year increase was the largest since March 2017, and the month-to-month increase was the largest since June 2017.

• "February's solid market performance was likely fueled by rising interest rates, which motivated buyers to rush in and close escrow before rates move even higher as they're anticipated to do in the coming months," said C.A.R. President Steve White. "Despite losing ground in January, February's strong sales gain more than covered the loss, resulting in a 1.1 percent increase so far this year."

• While the statewide median price slipped from January, it continued to grow at a strong year- over-year pace and has remained above the $500,000 mark for a full year. The $522,440 February median price was down 1.0 percent from January's $527,780 and was 8.8 percent higher than the revised $480,270 recorded in February 2017. The year-over-year price gain has been growing at or above 7 percent for eight of the past nine months.

Read the full story:
http://www.worldpropertyjournal.com/real-estate-news/united-states/laguna-beach/california- home-sales-report-2018-median-home-prices-in-california-los-angeles-home-sales-san- francisco-home-prices-california-association-of-realtors-10801.php

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