All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- Homebuilder Confidence Hits 9-Year High
- Housing Starts Nosedive 14.4% in August
- What Ails Housing Starts
- Analyst Predicts 15% Home Price Decline
We hope these real estate news items help you stay up-to-date with your real estate investing strategies and inspire some profitable real estate deals for you.
Homebuilder Confidence Hits 9-Year High
By Trey Garrison, Housing Wire
“Builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a nine-year high.
The National Association of Home Builders/Wells Fargo Housing Market Index, released Wednesday, hit 59 — the highest level since November 2005.
Ironically, despite this week’s gains, mortgage applications are at a 14-year low.”
Housing Starts Nosedive 14.4% in August
By Trey Garrison, Housing Wire
“Privately-owned housing starts plunged 14.4% in August, according to the U.S. Census Bureau.
Starts were expected to drop after a strong July but not by this much….
Single-family units remained largely flat as they have for the past 20 months, multifamily starts fell from 396,000 to 343,000, or 13.4% for permits, and an incredible 31.5% for starts.”
What Ails Housing Starts
By David Blitzer, Chairman of the Index Committee, S&P Dow Jones Indices
“August housing starts, were disappointing at 956,000 units, a drop of 14.4% from July and 8% from August last year. Only twice this year have monthly reports of housing starts topped a million units at annual rates – from 1991 to the financial crisis in 2008, starts were never below one million.
To a large extent building houses hasn’t recovered from the financial crisis….
The details suggest there is much more to the story. Single family homes started in August were 50% of the normal rate while multi-family homes (apartments) were at 94% of the normal pace.
The chart shows that there was a change in the shares of single family homes and apartments. The single family share (in blue) dropped beginning in 2007, rebounded briefly in 2009 when the government provided tax benefits to first time home buyers and then fell from 2010 on.”
“What happened to keep people in apartments?”
Read more of Dr. Blitzer’s analysis here >>>
Analyst Predicts Home Price Decline In Report to White House
By Scott Morgan, DSNews
“Former Goldman Sachs executive Joshua Pollard sent a sobering 18-page report to the White House on September 17 warning of a potential downturn in home prices that could put the country back into a recession before the ripples of the previous one settle.
According to Pollard, the former head of the Goldman’s housing research team, home price appreciation is outpacing income, and the United States is on the brink of a 15 percent decline in home prices over the next three years….
Pollard says values are 12 percent higher than they should be….
If Pollard is correct, the impact on the U.S. economy would be seismic. Overvalued homes, according to his report to President Obama, make up $23 trillion of consumer asset value and “serve as the psychological linchpin” for $17 trillion of invested capital.
Put together, that 15 percent decline translates to a $3.4 trillion cut to consumers’ net worth.”
What does the inventory look like?
That’s also a factor.