Real Estate News 3/11/19

REAL ESTATE NEWS
 Home price growth is slowing down and that could spell good news for buyers who were previously priced out of the market. According to CoreLogic's Home Price Index (HPI) and HPI Forecast for December 2018, though home prices increased by 4.7 percent year-over-year, they're projected to grow at a slightly lower rate of 4.6 percent year-over-year through December 2019. Comparing the annual average HPI and HPI forecast for 2018 and 2019, price growth is forecasted to slow from 5.8 percent to 3.4 percent, the report indicated. Prices are expected to decrease by 1.0 percent on a month-over-month basis between December 2018 and January 2019. These trends are likely to represent good news for potential homeowners. In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted a survey measuring consumer-housing sentiment, assessing attitudes toward homeownership and the driving force behind the decision to buy or rent a home. According to this survey, when renters were asked how interested they were in owning a home or residence, 36 percent felt homeownership would allow them to fulfill a dream and provide a place to raise a family. On the other hand, 45 percent of those surveyed claimed they could not afford to buy or take on the responsibility of ownership at this time. However, the latest HPI report indicated that as home-price growth cooled and incomes rose, buyer affordability was likely to improve and help "home sales to pick up." Source: MReport

Seniors who were born after 1931 are less likely to sell their homes than were previous generations —and it’s a significant cause of the housing shortage, according to the “February Insight” report from Freddie Mac. The result is around 1.6 million houses were not for sale through 2018, representing about one year’s supply of new construction, or more than 50 percent of the shortfall of 2.5 million housing units—that the market faces. The scarcity factor serves to increase housing prices and make renting more attractive to younger generations. However, a shortfall of new construction increases house prices and rental rates. “We believe the additional demand for homeownership from seniors aging in place will increase the relative price of owning versus renting,” said Sam Khater, chief economist at Freddie Mac. “This further highlights the importance of addressing barriers to the production of new housing supply to help accommodate long-term housing demand.” Improved health and higher levels of education are causes of the trend. And it’s likely to increase over time as improvements in health care and technology make aging in place easier. For example, the capability to Skype with a doctor. Source: DS News

Are home prices affected by proximity to hospitals and colleges? That’s what a team of computer scientists from University of California – Riverside wanted to discover as they began an analysis of median home price data from 13,105 ZIP codes over 21 years and rent data from 15,918 ZIP codes over seven years to compare a ZIP code's appreciation, volatility, and vacancies to the size of a university or hospital within that ZIP code. Their results confirmed that colleges and hospitals are ‘opportunity hubs’ with factors including jobs and high wages, but they also found that homes near these institutions see faster rises and falls of prices, creating a risk for investors. Led by Hristidis and UCR computer science doctoral student Ryan Rivas, the group also determined that homes close to a university did have higher average prices and rents and were highest in ZIP codes with a university of 10,000-20,000 students. Larger hospitals nearby meant higher average prices and rents – especially for one-bedroom homes in smaller ZIP codes – while those with smaller hospitals actually saw prices below the average for ZIP codes with no hospital. Source: Mortgage Professional America 

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