Will housing market cool off ? Experts disagree with each other
The housing market is not likely to implode like it did in 2008, when it ushered in what’s now known as the Great Recession. But could a price correction be coming?
“The cure for high prices is high prices,” noted economist Austan Goolsbee at the recent Urban Land Institute conference in Chicago — meaning that at some point, people will stop buying houses until prices become more reasonable.
To hear Laura Cole of Lakewood Ranch Communities in Sarasota tell it, prices have been slipping for the last three months as “consumer fatigue” sets in.
Todd Mansfield of Crescent Communities in Charlotte, North Carolina, agrees. “At some point,” he said at the ULI meeting, “enough is enough.” He added that the market is
“on the verge” of self-correction: “I can’t imagine it will keep going as it has.”
While Cole wonders how much demand has been “pulled forward” by people rushing to buy during the pandemic — and paying record prices to do so — she is convinced the current slowdown is “only temporary.”
In that regard, consider the recent research note from Goldman Sachs, which says the housing supply/ rocks. He teamed up with Kohler, of kitchen and bathroom fixtures fame, to create a limited-edition sink (X/06). The Rock.01 sink resembles a rock formation and is made using 3D printing. It is available in an edition of 99.
The Collectors Lounge, immediately adjacent to Maison Perrier-Jouët, features one of the most evocative interiors. Sponsored by AIG, the 2021 Collectors Lounge Designers Commission by BADG (Black Artists +Designers Guild) is a study in subtlety.
Brooklyn-based designers Leyden Lewis and Danielle Fennoy took a lowkey approach to a powerful subject. They want us to reflect more on what we demand imbalance could last longer than any other shortage issue affecting the economy. Consequently, the firm says the price boom, which has already exceeded “even our lofty expectations,” will grow by an additional 16% by the end of next year.
MORTGAGE EFFECT ON CREDIT SCORE
Your credit score is likely to take a hit when you sign up for a mortgage, but not for long.
A study by LendingTree found that new borrowers’ all-important scores will slide by roughly 20 points for four to six months before starting to climb back up. In about a year, your score should return to where it was when you first applied for financing.
More precisely, the company found that scores took an average of 165 days after closing to reach their lowest points. Then they took an average of 174 more days to rebound to pre-loan levels.
The key to recovery is to hold off on applying for additional credit right after buying a house. That means waiting to make big-ticket purchases like furniture for your new digs, or a new car for that longer commute. If you continue to apply for new forms of credit after getting a mortgage, your credit score may fall further and take longer to rebound.
Also, make your monthly house payments on time. Paying late will affect your score negatively. And don’t neglect your other debts, either: Being tardy on your credit card payments will see, especially when it comes to race.
From the message at the entrance: Your Eyes Are Open Do You See? to the camouflage design on the interior walls, the designers are playing on that old chestnut that “all Black people look alike.” Fennoy, founder of Revamp Interior Design, titled the exhibit Blackouflage.
Even the seating carries a coded message. Several couches dot the room. They are enclosed in acrylic capsules that provide privacy and a bit more. Lewis, who heads Leyden Lewis Design Studio, said the stylish seating capsules were deliberately designed to resemble one-way mirrors. At once elegant and also have a negative impact.
In another study, LendingTree found that the majority of people who take on a new credit card see their scores slip right away. The average is small, but some lose as many as 25 points.
Here, both your outstanding balance and your utilization rates matter. The scores of those who upped their balances right away fell an average of 14 more points. If your balance is more than 30% of your available credit, figure on knocking 19 more points off your score.
$2M OVER ASKING PRICE
More signs of the apocalypse: A 6,000-square-foot property in San Francisco has sold for — wait for it — $2.1 million over its asking price. Listed at $3.5 million, it went for $5.6 million in just 11 days on the market. But then, it has a great view of the skyline.
Meanwhile, in Surfside, just north of Miami Beach, a 6,800-square-foot waterfront house built on spec recently sold off-market for $8.5 million. But here’s the real kicker: Just six months earlier, it had sold for $6.9 million, reports agent Sharon Beck of Luxuri International Realty.
RECOVERY COMPLETE
It took more than 13 years, but every one of the 100 largest metro areas in the country has finally recovered from the 2008 housing debacle.
The last place to get housing prices back to their pre-2008 levels was Bakersfield, California, according to HSH, a New Jersey-based treacherous, those mirrors are reminiscent of an interrogation room or perhaps dressing rooms where store owners once spied on people they suspected might shoplift.
“The history Black people have of being looked at as ‘What are they up to?’ — now to use the same materials and bring light and beauty, turns it on its head,” Lewis said of the material he and Fennoy chose to provide an oasis of calm to Design Miami/ collectors.
DESIGN MIAMI/
When: Through Dec. 5 Where: Convention Center Drive and 19th St., Miami Beach
Info: https://shop. designmiami.com/ real estate information service. Prices there are now 1.5% above where they were in 2008.
While prices have risen everywhere, some markets have done much better than others, HSH’s Keith Gumbinger reports. Austin has fared the best, followed by Denver, Boise, Dallas and Fort Worth.
By HSH’s count, housing costs in Austin are now 162% above their previous peak. In Denver, they are 139% higher.
RENT CONTROL
Could this happen here? Dunno, but in Berlin, citizens have voted to take some 240,000 privately held apartment units into the public domain to gain control over super-high rents.
Average salaries in Berlin are among the lowest in Germany, yet the city has some of the highest rental prices. Of 19 neighborhoods, 17 are considered to be unaffordable to the average earner. In one section, a typical tenant needs to spend 62% of their net income to cover rent.
In Berlin, a rental burden of more than 40% of a household’s income is defined as financial overload. In the United States, anything over 30% is considered unaffordable.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com.