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ECON Home prices are set to soar in 2018
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  1. #1
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    Home prices are set to soar in 2018

    -Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic.

    -Low supply and high demand are fueling the gains and neither of those is expected to ease up anytime soon.




    The temperature may be frigid across much of the nation, yet home prices are sizzling and sellers are in the hot seat.

    Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic.

    That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon.

    Supply is actually falling even more now, and a strengthening economy is pushing demand. This will have potential buyers out early this year, trying to get a jump on the spring market.

    "Rising home prices are good news for home sellers, but add to the challenges that home buyers face," said Frank Nothaft, chief economist at CoreLogic, in the report. Nothaft said the limited supply is the worst at the lower end, and will hit the growing number of first-time buyers hardest.

    Half the homes are overvalued

    The largest metropolitan areas are seeing the biggest gains.

    In the nation's top 50 markets, half of the housing stock is now considered overvalued, based on market fundamentals, like income and employment. CoreLogic defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level.

    Las Vegas led the November report as not only being overvalued, but showing a double-digit annual price gain of 11 percent.



    San Francisco was not far behind at 9 percent, and Denver came in third at 8 percent.

    Las Vegas and Denver are both considered overvalued, but San Francisco is not, as incomes in the tech capital far exceed the national level.

    Of the nation's 10 major markets with the biggest price gains, seven are overvalued. These include Washington, D.C., Houston and Miami. Boston and Chicago are still seeing price gains but are considered at value.

    Without a significant jump in home construction, prices will remain high and likely move higher. Mortgage rates could also move slightly higher, and new tax policy limiting mortgage and property tax deductions, is hitting homeowners in some states hard.

    All will combine to make housing less and less affordable in the new year.
    https://www.cnbc.com/2018/01/02/home...r-in-2018.html

  2. #2
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    7 of the 10 major markets are OVERvalued, and yet prices are expected to RISE? I know the rest of the country is different from California, but to my mind, that's a sure sign of a real estate crash coming at some point. Here in California, we have 20 year high/low cycles, but it's only been 10 years since the last low. In most places, prices are back up to about 2007 prices. If CoreLogic thinks prices will continue to rise, how much more will they go up here in CA before they crash? I'm so glad right now to be renting, at least until we more to Idaho in 1.5 years. BTW- CoreLogic is a trusted real estate source. I use them all the time in my work as an appraiser, but this article is too general, too vague. Broken down into those 10 markets, the information would be much more reliable. Just my 2 cents....
    The history of civilization could actually be written by the level of its women ~Archbishop Fulton J Sheen

  3. #3
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    Sales prices jumped 7 percent annually in November, according to a new report from CoreLogic.

    That is the third straight month at that pace, far higher than the price gains in the first half of 2017. Low supply and high demand are fueling the spurt and neither of those is expected to ease up anytime soon.
    That is quite significant. In my market, prices were up about 7% in '17 and there really is too little in the way of inventory.

    Looks like rents will climb even faster

  4. #4
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    Yikes! The average rent here is more than I get in a month already, this will be tough on folks who are low income. I noticed the price of double wide trailers doubled in the last 3 months of 2017, I saw a 40 year old single wide going for $47,000!!! No property, set on a park rental that charges $470 a month.
    Now the Lord is that Spirit: and where the Spirit of the Lord is, there is Liberty. II Cor. 3:17

  5. #5
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    Quote Originally Posted by imaginative View Post
    That is quite significant. In my market, prices were up about 7% in '17 and there really is too little in the way of inventory.

    Looks like rents will climb even faster
    Rents here in Hampton Roads are crazy. It's about $1 per square foot, and there are a lot more tenants than properties.

    The housing inventory in this area (houses for sale) is also very low. I purchased my house within 24 hours of its listing, and had to beat out two other buyers who also tried to purchase it.

  6. #6
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    Quote Originally Posted by imaginative View Post
    That is quite significant. In my market, prices were up about 7% in '17 and there really is too little in the way of inventory.

    Looks like rents will climb even faster
    I meant to say that In my market, prices were up about 10% (not 7)in '17.

    With interest rate going up, insurance going up, prop taxes rising and market values rising- rents will certainly rise

  7. #7
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    It's nice to see them rise again, but still nowhere near the peak in 06. We would love to be able to sell and move closer to family but another mortgage is not in the cards at our age. The more it rises the more a new home would cost, so I think we are here to stay. We paid $69,900 for a brand new home in 88. It is currently valued at $150,000. At the peak in 05 it was closer to $200,000. I paid the mortgage off in 06 just before the crash. In 06 both our kids lived within 30 miles from us. Now one is in VA., military, so who knows where the next move will be. The other is 6 hrs away. The rest of our families are between 8 and 12 hrs. away. All in central and south FL. We are in the NW FL panhandle.
    In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people. Source The Declaration of Independence

  8. #8
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    Build more bridges so the homeless can live under them
    Trump has to hurry and rebuild the middle class before we lose this country

    We are living in the times of the Biggest income range or wage gap in American history
    It's soon to be strife between the haves and have nots

  9. #9
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    My hair dresser just sold her house for $760,000. She had 2 offers in December and one she accepted. It's a nice house but certainly no mansion and a small lot. The trouble with raising prices for us is that the tax bill goes up. We're over 10K a year now and now being retired it worries me.
    Happy is the Nation whose God is the Lord. -Psalm 33:12

  10. #10
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    Flipping homes should be illegal. This also drives up housing prices.
    BITCOIN MINING BOOM HITS SMALL TOWN IN WASHINGTON STATE https://bitcoinist.com/bitcoin-minin...hington-state/

  11. #11
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    Considering how much homebuilding is probably going on in Texas and Florida post-hurricane, scarcity of materials should be throwing in there too.

  12. #12
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    Quote Originally Posted by Sleeping Cobra View Post
    Flipping homes should be illegal. This also drives up housing prices.
    Many of the flipped houses here benefit the market, as they are bringing the home in bad condition (or at least deferred maintenance) up to the neighborhood standard. Any flipper who puts granite counter tops in a neighborhood of formica is an idiot and deserves to lose money. But most flippers know their neighborhoods well enough to determine what standards the homeowners are looking for. A real flip should be bought low, rehabbed using average materials for that neighborhood, and sold quickly for a reasonable profit, in line with standard resales.
    The history of civilization could actually be written by the level of its women ~Archbishop Fulton J Sheen

  13. #13
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    Quote Originally Posted by Hermantribe View Post
    Many of the flipped houses here benefit the market, as they are bringing the home in bad condition (or at least deferred maintenance) up to the neighborhood standard. Any flipper who puts granite counter tops in a neighborhood of formica is an idiot and deserves to lose money. But most flippers know their neighborhoods well enough to determine what standards the homeowners are looking for. A real flip should be bought low, rehabbed using average materials for that neighborhood, and sold quickly for a reasonable profit, in line with standard resales.
    Yes of course.

    (Excxept for the granite/Formica thing; unless you are talking about the innercity- granite will always pay for itself)

  14. #14
    Moral of the story, some will turn some dollars in the form of profit. Everyone's property taxes increase.......

  15. #15
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    Prediction on home prices...

    Interest rates have long been suppressed by the FedGov effectively keeping Prime near zero, so they can put off the day they go bankrupt. Eventually, interest rates WILL rise to a more realistic level. Inflation + 5% is my guess where that would be, at a minimum. Shadowstats shows that actual inflation is easily 10% now. If mortgages were all at 15%+ for the highest credit scores (and starting with a "2" for anyone with a remotely checkered credit history), does ANYONE here think housing prices would average even 2/3 of what they are now? Me neither.

    Oh, and watch for the Feds to drop the mortgage interest deduction; they're already moving towards that, and that will also hullshoot housing prices.

    Proud member Alt-Right group "Scientists For Trump". (Smart Americans know he's right.)
    A man should only take a wife whose Bible includes Genesis, Leviticus, Deuteronomy, Colossians, Malachi, Isaiah, Ephesians, Corinthians, Hebrews, Timothy, Titus, Proverbs, Mark, Peter & Revelation. Ecclesiastes 7:28 (NIV) tells him the odds.

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