patrick.net

Interest rates have gone up in the last year. People expect them to go up more. Maybe both buyers and sellers are trying to get deals done before then. For buyers, they want to hurry to get the lower interest rate. For sellers, they fear the higher rates will hurt the sale price and they want a high sale price. Seems to me higher rates could be bad for both buyers and sellers. Sort of split the difference: buyers pay a higher interest rate, but that is partially mitigated by a slightly lower house price; sellers see a slightly lower house price. So, banks would be winning at the expense of the buyer and the seller.

Another thought... maybe people are closing the deals just in time before the start of the new school season. I think, however, the timing is a little late — should have already been moved in because schools are starting up next week in some places.

Sometimes they all go at once, following the herd. Another way to look at it, lots of people moving in.

pwagner says

Interest rates have gone up in the last year

I hear all the time, there is tons of money like retirement, pension, insurance funds, money sitting on side lines etc. both inside US and EU ready to move in if the rate go up a little bit. When there is so much money out there, I wonder why would interest rate ever go up!
Note the FED money is still flowing around in different names/programs.

This is a completely different area, but around here in Portland, Oregon house prices are falling in various areas. Just recently read an article in the local news about it. Some areas down 5% from last year, some neighborhoods 10%. I'm wondering if it's a combination of factors? Fewer tax deductions on property ownership, higher interest rates.

APOCALYPSEFUCKisShostikovitch says

People know CANNIBAL! ANARCHY! is imminent and they're moving to higher ground, securing dry YAM! storage, drilling the kids and wife on care and feeding of M134.

Cannibal anarchy
Belt fed weaponry
Higher ground
Dry yam storage
Exactly as the founding fathers intended

LOL, you brighten my day with your banter ?

Global warming. Folks are cashing in home equity to get a ticket on Musk's space ship.

MisterLefty says

Global warming. Folks are cashing in home equity to get a ticket on Musk's space ship.

"Musk space ship" is so yesterday, buddy. "Moving into Arctica" is all the rage now.

I think it’s becoming clear to people that we’ve hit the peak and it makes sense for many to cash in, move, and live happily ever after with financial freedom.

BayArea says

I think it’s becoming clear to people that we’ve hit the peak and it makes sense for many to cash in, move, and live happily ever after with financial freedom.

I think so too. There are lots of for sale signs springing up in the last month in my neighborhood in Carlsbad as well. Prices are definitely softening.

Loma Preita quake redux, overdux.
People know this...

socal2 says

BayArea says

I think it’s becoming clear to people that we’ve hit the peak and it makes sense for many to cash in, move, and live happily ever after with financial freedom.

I think so too. There are lots of for sale signs springing up in the last month in my neighborhood in Carlsbad as well. Prices are definitely softening

I just feel bad for the poor bastards that are jumping in today, my gawd that would be scary.

It will be interesting when enxt year's tax returns are due and high tax states stare at the abysss as their millionares consider moving. if someone can save millions by just moving to NV, AZ, TX, FL and keeping their home as a second home in CA -how many will leave? Same for NY, IL, NJ etc.

pwagner says

Another thought... maybe people are closing the deals just in time before the start of the new school season. I think, however, the timing is a little late — should have already been moved in because schools are starting up next week in some places.

That's partially what I think. There are a few bummer homes in our area that went pending recently. Due to lack of supply, someone threw in the towel and bought them.

APOCALYPSEFUCKisShostikovitch says

People know CANNIBAL! ANARCHY! is imminent and they're moving to higher ground, securing dry YAM! storage, drilling the kids and wife on care and feeding of M134.

At last, the exciting times are coming.

Where's my free house? (that's an homage to one of the best pat.net posters from long ago)

If I had a dollar for every thread about how there are a bunch of for sale signs up in my neighborhood since 2012, I'd be a rich(er) man. Yet, somehow despite all these for sale signs, housing prices have gone up every year.

LeonDurham says

If I had a dollar for every thread about how there are a bunch of for sale signs up in my neighborhood since 2012, I'd be a rich(er) man. Yet, somehow despite all these for sale signs, housing prices have gone up every year.

You would be a lot richer if you had a dollar for every offer that was made on each of those homes.

LeonDurham says

Where's my free house?

Ask Nicolas Maduro.

When the Realtors start accepting down payments in dried yams, you know the winds are shifting.

LeonDurham says

If I had a dollar for every thread about how there are a bunch of for sale signs up in my neighborhood since 2012, I'd be a rich(er) man. Yet, somehow despite all these for sale signs, housing prices have gone up every year.

Then what are you waiting for? Call your realtor now and start house humping! It's a great time to buy!

The owners may work for Tesla.

San Jose is actually an even worse deal than San Francisco, just going by prices compared to local incomes. I think they are right to sell, especially since some other overpriced places like NYC have been falling for a year or more.

Patrick says

San Jose is actually an even worse deal than San Francisco, just going by prices compared to local incomes. I think they are right to sell, especially since some other overpriced places like NYC have been falling for a year or more.

SJ/SV has an 11x ratio of home prices to median household income. SF closer to 9x. Info courtesy of USAToday

Anyone who doesn’t think housing will go up forever is a grade-a moron.

I believe in Santa Cruz the median home is 18 X the median income. WOW.

BayArea says

Patrick says

San Jose is actually an even worse deal than San Francisco, just going by prices compared to local incomes. I think they are right to sell, especially since some other overpriced places like NYC have been falling for a year or more.

SJ/SV has an 11x ratio of home prices to median household income. SF closer to 9x. Info courtesy of USAToday

Check this out:

http://www.sandiegouniontribune.com/business/real-estate/sd-fi-hsh-study-20180820-story.html

Only two other metro areas were less affordable — San Jose and San Francisco — said the study, which crunched numbers for 50 regions across the United States.

HSH determined rankings by looking at quarterly home price data, local property taxes, homeowner insurance costs and income needed to qualify for a loan. It also assumed that prospective homebuyers made a 20 percent down payment.

The most affordable metropolitan area was Pittsburgh where the required annual salary to afford a median-priced home was $38,253. Other affordable cities for homebuyers were Cleveland ($39,253), Oklahoma City ($40,780).

Keith Gumbinger, HSH.com’s vice president, said rising mortgage rates are only a small part of the difficulty for potential buyers.

"Unfortunately, even if rates don't go up very much,” he said, “part of the issue we run into is that home prices are rising so quickly."

San Diego has been locked at the No.3 spot since HSH expanded the study to 50 metros three years ago. Los Angeles was No.4, which usually is seen as less affordable than America’s Finest City — but Gumbinger said the larger pool of homes in Los Angeles reduced the median cost in comparison to San Diego.

HSH said the salary needed to afford a single-family home in Los Angeles was $114,907, about $16,079 less than San Diego.

The mortgage website said that the salary needed to buy a San Diego home had increased 12.1 percent in a year. So, even a substantial raise last year would not necessarily make homeownership much easier.

Part of the issue, Gumbinger said, is a lack of homes for sale across the nation.

"In many markets, there is simply such little inventory to buy,” he said. “Even if you're well-positioned to buy a home, there might not be anything you can afford to buy or anything you can afford to buy that is desirable to buy."

There were 6,413 homes listed for sale in June, said the Greater San Diego Association of Realtors. There were more than 12,000 homes for sale in June 2011.

HSH also looked at the possibility of putting 10 percent down for a San Diego home instead of 20 percent, but that would increase the needed salary by roughly $24,000. The reason is that monthly payments would be higher with a smaller down payment. Also, putting less than 20 percent down means the buyer needs to purchase private mortgage insurance, adding to monthly payments.

Gumbinger said the study did not look at even more low-cost options — such as, 1 percent down — because those are aimed at low-income buyers, and there isn’t much for those buyers to purchase in expensive markets.

Nationwide, the salary needed for a median-priced home was $61,522 in the second quarter, HSH said. Across all 50 markets, the median increase in existing home prices was 6.55 percent in a year. Including available tax and insurance costs, a potential buyer would need to have seen a median increase in income of 10.58 percent just to keep pace.

Lawrence Yun, chief economist for the National Association of Realtors, wrote in the study that strong economic growth, a healthy labor market and a large millennial population should be driving sales much higher.

“With not enough homes for sale, multiple bids caused prices to rise briskly and further out of the reach of some prospective buyers,” he wrote.

In June there were 3,927 home sales in the county, CoreLogic said, which is the lowest in four years. But, the median home price hit its highest in history, $575,000.

The median single-family home price, determined by the National Association of Realtors in the study, was $645,000.

Housing experts generally attribute a lack of homebuilding during the recession as one of the reasons much of the nation today faces a housing shortage. In San Diego County, 18,031 residential building permits were issued in 2003 but those dropped to less than 3,000 in 2009 during the recession. There were 9,580 residential permits issued in 2017.

*

Most expensive metro (second quarter 2018)
1 San Jose — $274,623.19

2 San Francisco — $213,726.86

3 San Diego — $130,986.05

4 Los Angeles — $114,907.52

5 Boston — $109,411.27

6 Seattle — $109,274.91

7 New York City — $103,235.16

8 Washington, D.C. — $96,144.49

9 Denver — $93,263.28

10 Portland — $85,369.09

Survey: Anxieties rising about retiring in Palo Alto. Housing shortages, traffic congestion top residents' concerns.



As Palo Alto's population of seniors continues to grow, so are residents' anxieties about retiring in their hometown, according to a new survey released this week by the office of City Auditor Harriet Richardson.

The 2018 National Citizen Survey, which is administered by the National Research Center and the auditor's office, found that the percentage of residents who gave Palo Alto high ratings as a "place to retire" plummeted by 11 percentage points between 2017 and 2018, from 51 percent to 40 percent.

The decline is particularly significant given the city's historic rates. Between 2008 and 2012, about two-thirds of the respondents ranked the city "excellent" or "good" as a place to retire, with 68 percent giving Palo Alto one of the two highest scores in 2012.

The survey results are based on 889 responses that the National Citizen Survey received, a 21 percent response rate. The margin of error is 3 percentage points for responses aggregated citywide.

The survey, which the City Council is set to discuss at its Feb. 2 retreat, also indicated that a growing number of residents disapprove of the city's general direction. Only 42 percent of the residents gave the city a rating of "excellent" or "good" when asked about the "overall direction that the city is taking."

While this is only a slight drop from the 45 percent who gave the city high grades in 2017, it is significant drop from 2013, when 54 percent did so (in 2012, the percentage was 59 percent).

Despite these anxieties, most residents still see themselves sticking around Palo Alto for the next five years. In the survey, 78 percent said they are "very" or "somewhat likely" to stay in the city, up from 76 percent in 2017. Even that, however, is lower than the 87 percent who reported that they'd likely stay for five years in 2012 and in 2013.

More: https://www.paloaltoonline.com/news/2019/01/18/survey-anxieties-rising-about-retiring-in-palo-alto

Comments worth reading in the above article

Boomers are retiring en masse, and following their kids out of state.

Quigley says

Boomers are retiring en masse, and following their kids out of state.

Do these retiring Boomers leave job openings behind?

This needs AF commentary to brighten things up.

They are all moving to Caracas!

Does Caracas have the thirteenth amendment?

Ceffer says

Does Caracas have the thirteenth amendment?

What, beltfed is not enough?

Kakistocracy says

Anxieties rising about retiring in Palo Alto.

Who cares?

I lived in Palo Alto for a few years, and still live nearby. It's just an enclave of extremely self-satisfied internet millionaires. Not a friendly place.

Number 1. Houses grows when income grows.

There is mention about places in California (ie., Santa Cruz) where the median price to income ratio is 18x.

I wonder if the income tracked for these communities does not include the income of the relatively few wealthy home owners. That is, the vast majority of the data on local income is for the local workers (i.e., restaurant cooks, nurses at local hospital, retail clerks, etc.). And perhaps the income for the few wealthy home owners is not included in the analysis (i.e., census bureau economists, etc.). That is why it is skewed to show a median price to income ratio of 18x.

Another thought is I've seen this play out in Florida with beach towns like Destin, Miami Beach, Naples, Boca Raton, Clearwater, etc. Home prices are very high there, but fortunately there is very affordable housing within a 15 to 30 minute drive away (i.e., 15 to 20 miles) from these locations. I don't think that is the case in many places like California or perhaps even Colorado (i.e., where land is limited 70 miles radius from resort places like Vail, Aspen, and Breckinridge).