Industry expert says it will take five years to absorb existing home inventory

By , on June 17th, 2011

Simple economics tells us that when supply exceeds demand prices suffer, just as we have seen in the housing market over the past three-plus years. A report by Brendan Lowney, a macroeconomist with Forest Economic Advisors (FEA) estimates that an excess home inventory of 2.5 million homes exist at this time. He says that this oversupply has put downward pressure on home prices, which in turn has caused a variety of undesirable effects, such as pushing more home owners “under water” which, in turn, causes even more defaults, thereby further increasing the oversupply. Continue reading “Industry expert says it will take five years to absorb existing home inventory“

Harvard University Report Paints Bleak Picture of Housing Market; Present and Future

By , on June 8th, 2011

The “State of the Nation’s Housing“ Report for 2011 by the Joint Center for Housing Studies of Harvard University does not paint a very pretty picture of the housing market, nor does it give us a whole lot to look forward to with regard to the near-term future of the U.S. housing market. Continue reading “Harvard University Report Paints Bleak Picture of Housing Market; Present and Future“

2010 Census data disappointing for St. Louis; what is effect on the St. Louis Real Estate market?

By , on February 25th, 2011

It’s hard to miss the fact that the US Census Bureau just released some of the results of the 2010 census for our area.  It’s been all over the media about St. Charles County’s population surpassing the City of St. Louis and moving it into the spot of the third largest county in the State.

Being the data junkie I’ve become I decided to tear into the numbers and see how the 2010 data compared with the 2000 data to see what changes have taken place in the last decade and see what I could glean from the data to perhaps get a little insight on the impact of these changes on the St. Louis real estate market.  Also, since I have been somewhat of a contrarian in saying the that reports of low housing starts is a good thing as I don’t think we need to add housing units in this market, I thought it would make sense to see if my theory holds water. Continue reading “2010 Census data disappointing for St. Louis; what is effect on the St. Louis Real Estate market?“

Has The Rate of Home Ownership Dropped to an All-Time Low?

By , on December 31st, 2010

Dennis Norman St LouisAs 2010 quickly comes to an end I sat here early this morning pondering the real estate market and reading reports on the housing industry. One thing that caught my attention was an article titled “The Mortgage Interest Deduction and Negative Equity” by Ted Gayer, the co-director of economic studies at the Brookings Institute (and occasional contributor to this blog). Ted’s article made some interesting points related to the mortgage interest deduction, negative equity and home-ownership rates in the U.S.

In his article Ted states “It seems semantically incorrect to call someone who owes more on an asset than it’s worth an “owner.”” This is a point that others have made as well and I think makes a good point. With this in mind, and in the mood to do some research and create some charts, I decided to dig into the topic deeper. Continue reading “Has The Rate of Home Ownership Dropped to an All-Time Low?“

Report shows home prices up modestly over last year

By , on August 31st, 2010
Dennis Norman

Dennis Norman

This morning S&P/Case-Shiller Index report for the 2nd quarter of 2010 was released showing that the home prices improved slightly over a year ago in 17 of the 20 Metro Area’s their reports cover.

The Case-Shiller Home Prices Indices showed an increase of 4.4 percent in home prices in 2nd quarter after a decline of 2.8 percent in the first quarter. As of the end of the 2nd quarter U.S. home prices are, on average, up 3.6 percent from the year before. Continue reading “Report shows home prices up modestly over last year“

Housing Market Outlook and Forecast

By , on July 29th, 2010

Dennis Norman

This week I attended an event at the St. Louis Association of REALTORS® in which Lawrence Yun, Chief Economist for the National Association of REALTORS® was the featured speaker and gave his take on the housing market as well as his housing market outlook. Continue reading “Housing Market Outlook and Forecast“

Homeownership Rate in U.S. Hits 10 Year Low

By , on April 29th, 2010

Dennis Norman

According to a report issued by the U.S. Census Bureau earlier this week, the percentage of Americans that own a home in the U.S. in the first quarter of 2010 dropped to 67.1 percent, the lowest rate of homeownership since the same quarter of 2000. The homeownership rate for 4th quarter 2009 was 67.2 percent, the low for 2009.

REGIONAL HOMEOWNERSHIP:

The Midwest Region has the highest rate of homeownership, as of the 1st quarter of 2010, at 70.9 percent with the South region not far behind at 69.2 percent.  The Northeast homeownership rate was 64.4 percent and the West had the lowest at 61.9 percent.

HOMEOWNERSHIP DEMOGRAPHICS:

  • Traditionalists Generation, 65 years and above, 80.6 percent.
    • Highest rate for this group since first quarter 2007
  • Older Boomers, 55 to 64 years, 79.1 percent.
    • Highest rate for this group since third quarter 2009
  • Younger Boomers, 45 to 54 years, 74.8 percent.
    • Highest rate for this group since third quarter 2008
  • Generation X’ers, 35 to44 years, 65.3 percent
    • Lowest rate for this group in over 5 years
  • Generation Y’ers, under 35 years, 38.9 percent.
    • Lowest rate for this group in over 5 years

What is interesting about the age of homeowners is that, while first-time home sales have been propping up the market, partially as a result of the first-time homebuyer tax credit, the younger population’s percentage of homeownership has dropped dramatically.  It seems that the X’ers and Y’ers either don’t value home ownership as much as their parents did, don’t trust a home as an investment, or perhaps cannot afford to buy a house.  If this trend continues I would think it will definitely drag down the homeownership numbers in the future as well.

Homeownership by Race and Ethnicity:

  • Non-Hispanic White – 74.5 percent
  • Black – 45.6 percent
  • Hispanic (of any race) – 48.5 percent
  • All Other Races – 57.2 percent


 

 

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