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The Riskiest Housing Markets, Where Home Prices Could Fall the Most

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The Riskiest Housing Markets, Where Home Prices Could Fall the Most By Clare Trapasso
Sep 15, 2022

With the housing market correction well underway, the big question on the minds of just about everyone is if home prices are poised to fall. Mortgage rates are rising, fears are mounting that the nation will slip into a recession, and inflation continues to soar.

Something has to give, right?

However, when it comes to real estate, it’s all about location. New Jersey, Illinois, and inland California had the most at-risk real estate markets if the nation slips into an economic downturn, according to real estate data firm ATTOM. New York City and Chicago were particularly susceptible.

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Meanwhile, the South and Midwest were the least vulnerable.

“Most of the markets that are most at risk tend to have higher unemployment and tend to be the least affordable markets,” says Rick Sharga, executive vice president of market intelligence at ATTOM. “We’re not suggesting any of these metros is in imminent danger of a housing crash. In the event of a recession, these metro areas would be the most likely to have some fallout.”

To come up with the list, ATTOM assessed the vulnerability of 575 U.S. counties by looking at the percentage of homes facing a potential foreclosure; the share of homes with mortgage balances that were higher than property values; local unemployment; and the percentage of average local wages needed to afford homeownership expenses. Counties had to have enough data to analyze.

The analysis assumes that the Federal Reserve’s determination to continue raising rates to combat inflation, along with other worrying economic factors, will push the nation into a recession. If that happens, some parts of the country are likely to fare better and worse than others, similar to what was experienced during the Great Recession.

Nearly two-thirds of the 50 most at-risk counties were in the Chicago, New York City, and Philadelphia metropolitan areas and in inland California. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

“When you look at the top 10 to 15 most vulnerable markets, they tend to be in places like the New York metro and the Chicago metro, where you have limited affordability and relatively high unemployment,” says Sharga.

On the other hand, at least half of the 50 least vulnerable markets were in the South and 14 were located in the Midwest. Tennessee, Wisconsin, and Arkansas had the most markets that were deemed safer.

“In the South, homes are less expensive,” says Sharga. “And many of the people moving into the South have been moving out of high-priced, high-taxed states and looking for more affordable properties [to help buffer these markets]. They have very, very strong employment as well.”

#Silver Lake Realtor #Los Feliz Realtor

Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak

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Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak—Here’s Proof By Judy Dutton
Sep 15, 2022

It’s hard to not feel bad today for homebuyers, who are being simultaneously squeezed by rising mortgage rates and ever-higher home prices. But at long last, some relief seems to be on the horizon.

“How’s the Housing Market This Week?” is our regular column in which we look at real estate statistics. For the week ending Sept. 10, they indicate that the runaway real estate inflation that homebuyers have been struggling to keep up with is slowing down—if just by a bit.

“Although home prices continue to register double-digit growth relative to one year ago, the rate took a notable step back this week to the lowest pace since January,” notes® Chief Economist Danielle Hale in her analysis.

Here are the latest figures and what they mean for both homebuyers and sellers so that all can stay on top of today’s fast-changing market.

Weekly Housing Trends – latest
Home prices are still growing, but they’re definitely slowing
In August, home prices hovered at a national median of $435,000. And prices are still rising—by 11.7% for the week ending Sept. 10 compared with this same week last year.

While that’s the 39th straight week of double-digit growth, the glimmer of good news for buyers is that this week’s rate does mark the lowest level seen since January. The home price growth in previous weeks clocked in even higher—in the 15%–16% range throughout July, followed by the 13%–15% range in August. In this context, this latest week’s 11.7% price growth doesn’t seem so bad.

Plus, now that summer’s homebuying frenzy is over, real estate prices are already sloping downward along with dwindling temperatures.

“Home prices typically decline as we move into the second half of the year, one of the key seasonal trends that help make fall the best time to buy a home,” says Hale.

In fact, statistics suggest that the very best time to buy a house in the entire year is the last week of September, when prices are slated to be $20,000 lower than June’s all-time high of $450,000.

In other words, home shoppers who want to double down on their efforts right when the cards are heavily stacked in their favor had best hit those open houses hard right now before this prime window of opportunity closes.

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New real estate listings dropped a lot
For the week ending Sept. 10, the number of new home sellers putting their properties on the market dropped by 13% compared with this same week last year. That’s the 10th straight week of year-over-year declines, and a double-digit drop at that.

Clearly, “sellers are less optimistic about conditions compared to a year ago, which is a likely factor behind the scarcer new listings trend,” says Hale.

Nonetheless, overall housing inventory—a combination of these fresh listings and stale ones still on the market that have yet to find a buyer—is strong, up by 27% over last year.

“While the number of newly listed options was smaller, today’s shoppers have more than five homes to consider for every four they had at this time a year ago,” Hale explains.

Home sales are slowing
Since the COVID-19 pandemic, the pace of home sales has sped up, with median days on the market in August clocking in at a mere 34—22 days faster than this same month from 2017 to 2019.

Yet finally, this frenetic rush is mellowing. For the week ending Sept. 10, properties spent six extra days on the market compared with a year earlier. That’s the seventh straight week of homes sticking around for sale longer than last year.

Still, Hale reminds us, “relative to pre-pandemic, shoppers need to make faster decisions.” And the pace of sales will range widely based on where the house hunt is taking place.

Homes in the country’s hottest markets—currently in the Northeast and Midwest, which offer affordability—will still disappear quickly. (For example, listings in the hottest market of all, Manchester, NH, linger a mere 23 days before being snapped up.)

“And with more shoppers than ever before willing to look across state lines for a home, affordable areas are likely to see ongoing demand,” adds Hale.

Mortgage rates broke the 6% mark
According to Freddie Mac, for the week ending Sept. 15, the average 30-year fixed mortgage rate increased to 6.02%, up from the previous week’s 5.89%.

And since many are bracing for the Federal Reserve to hike its short-term interest rates at its meeting next week to combat stubborn inflation, mortgage rates may continue rising, making this fall’s housing market more of a mixed bag of good and bad news for buyers.

“Higher mortgage rates combined with still-high home prices are making it challenging for homebuyers as we head into what historically has been the best time of the year to find a better deal,” Senior Economist George Ratiu notes. “Something has to give.”

days on markethome inventoryhome priceshousing marketWeekly Housing Market Update

Affordable Housing in California Now Routinely Tops $1 Million

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Affordable Housing in California Now Routinely Tops $1 Million per Apartment to BuildwordPublished 2 months ago on June 21, 2022By NewsArtist rendering shows a proposed affordable housing complex at Shaw and Glenn Ave. in Fresno. (Image: UPholding)
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More than half a dozen affordable housing projects in California are costing more than $1 million per apartment to build, a record-breaking sum that makes it harder to house the growing numbers of low-income Californians who need help paying rent, a review of state data has found.

The exorbitant price tags mean that taxpayers are subsidizing fewer apartments than they otherwise could while waiting lists of renters needing affordable housing continue to grow.

A key driver of the increases is labor and material prices, which have soared because of inflation, supply-chain problems and worker shortages during the COVID-19 pandemic. But numerous factors within the control of state and local governments also to blame for the high cost of building affordable housing in California.

Read more from the Los Angeles Times

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SoCal Housing Market Cools with Slow Sales and Declining Prices

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SoCal Housing Market Cools with Slow Sales and Declining Prices
The number of homes sold since last June has dropped 21 percent as mortgage rates rise—but the effects aren’t felt in all counties
By Laurenz Busch -July 20, 2022
The California housing market has further cooled in June, dropping a remarkable 21 percent in units sold since the same time last year.

The market also saw an eight percent drop in units sold since May, when California’s median home price was pushed to a record-high of $900,170 according to the California Association of Realtors. June’s statewide median dropped four percent, to $863,790.

“Excluding the three-month pandemic lockdown period in 2020, June’s sales level was the lowest since April 2008,” the association’s Vice President and Chief Economist Jordan Levine said in its report. “With inflation remaining high and interest rates expected to climb further in the coming months, the market will normalize further in the second half of the year with softer sales and more moderate price growth.”

Levine added that sales can be expected to continue to slow in the coming months.

The fact that the housing market has been lethargic is not surprising, considering that mortgage rates increased. However, as the Los Angeles Times reports, the fact that the market saw a four percent decrease during peak season from May to June, is surprising—since 2010 was the last time that median home prices fell from May to June.

The C.A.R study uses a “seasonally adjusted annualized rate,” or the amount of homes expected to be sold in 2022 based on June’s numbers to assess the market. That number is currently 344,970, down roughly 30,000 units from May.

Across the state, fewer homes are being sold and home values are decreasing, but it’s not as drastic in all parts of the state. Although the market in SoCal slowed, it hasn’t affected all counties. Los Angeles and Ventura both saw increases in home prices since May, whereas Orange, Riverside, and San Diego saw drops—San Bernardino remained unchanged. Still, over the past year, the average home price is up 5.4 percent.

“At the regional level, home prices in all major California regions increased in price from last year, with the Central Coast leading the way at a 10.1 percent increase, followed by Central Valley (10.0 percent) and Southern California at 8.4 percent,” the report states.

Santa Barbara even saw home prices increase 38.9 percent since May, an anomaly only Del Norte County has even come close to at 25 percent.

Despite rising mortgage rates, the news could potentially benefit homebuyers who may have missed out on the highly competitive markets. As the Times reports, 29.6 percent of all homes on the market in the L.A. metro area had price cuts in June, which is more than double the 12.6 percent rate of June 2021 and higher than in dozens of other cities, including San Francisco, Boston, Detroit and St. Louis.

“California’s housing market continues to moderate from the frenzied levels seen in the past two years, which is creating favorable conditions for buyers who lost offers or sat out during the fiercely competitive market,” said C.A.R President Otto Catrina. “With interest rates moving sideways in recent weeks and fewer homes now selling above listing price, prospective buyers have the rare opportunity to see more listings coming onto the market and face less competition that could force them to engage in a bidding war.”

This is the salary you need to afford a home in California

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This is the salary you need to afford a home in California
By Alexa Mae AsperinPublished August 8, 2022Updated 8:47AMCaliforniaFOX 11

California’s real estate market continues to be extremely competitive
FOX 11’s Hailey Winslow was in Mission Viejo as the demand for homes remain extremely high across Orange County.

LOS ANGELES – It is cheap to live in California – said no one ever.

The Golden State is notorious for its exorbitant housing prices up and down the coast – from San Francisco down to San Diego – it isn’t a surprise to see houses for sale triple the amount than in other parts of the country.

Just how expensive is it?

Visual Capitalist used data from Home Sweet Home to analyze the salary one needs to earn in order to buy a home in America’s 50 biggest metros.

RELATED COVERAGE: This is how much money you need to make to be happy living in California, survey finds

According to the data, the median home price in the U.S. is around $370,000. That means the average person would need to earn around $76,000 to consider comfortably purchasing a home in the U.S.

But that does not apply to some states like California, where cities like Los Angeles, San Diego, San Jose, and San Francisco are the most expensive cities in the country.

The highest median home prices in the U.S. can be found in San Jose, where you’d need to earn around $337,000. The data revealed the monthly mortgage payment in San Jose for the median home is $7,718.

RELATED COVERAGE: Despite high rent, it’s still cheaper than buying a home – except in these cities

Here are the salaries needed to comfortably afford a home in California’s largest metros:

San Jose
Median Home Price: $1.88M
Salary Needed: $330.76K

San Francisco
Median Home Price: $1.38M
Salary Needed: $249.69K

San Diego
Median Home Price: $905K
Salary Needed: $166.83K

Los Angeles
Median Home Price: $792.5K
Salary Needed: $149.13K

Riverside/San Bernardino
Median Home Price: $560K
Salary Needed: $106.19K

Median Home Price: $545K
Salary Needed: $105.93K

You can see how other major cities like New York, Boston, and Seattle ranked by tapping or clicking here.

If you’re thinking that renting may be a cheaper option versus owning in California, think again.

The Out of Reach report from the National Low Income Housing Coalition revealed Californians are among those who have it the worst.

RELATED COVERAGE: This is how much money you need to make per hour to afford rent in California

According to the report, the average Californian needs to earn an hourly wage of $39.01 and work full-time to afford a two-bedroom apartment.

For more on that report, tap or click here.