Tag Archives: real-estate
Majority of US metro areas experiencing falling home ownership rates, new research shows
Rising home prices in many metro areas in the United States have helped home owners build housing wealth in recent years, according to new research from the National Association of Realtors. But the continued decline in home ownership means the gains are going to fewer people and likely leading to worsening inequality in the nation. The NAR reviewed data on home ownership rates, changes in single family median home prices and a measure of inequality between 2010 and 2013 to estimate wealth and income inequality in 100 of the largest metropolitan statistical areas across the US. The findings reveal that over 90% of metro areas have experienced declining home ownership rates at a time when home values have risen and incomes have remained flat. According to the study, wealth distribution is seen as most unequal in metro areas with the lowest homeownership rates, including high cost areas such as Los Angeles, New York and San Diego. According to Lawrence Yun, NAR chief economist, home prices have steadily recovered in most metro areas in the past five years, providing a boost of $5 trillion in housing wealth from the downturn’s cyclical low for home owners during this time. ‘Home ownership plays a pivotal role in the US economy and has historically been one of the primary sources of wealth accumulation for middle class families,’ he said. ‘Unfortunately, due to an underperforming labour market, insufficient housing supply and overly-stringent underwriting standards since the recession, home ownership has plunged to a rate not seen in over two decades. As a result, the country has become more unequal as the number of homeowners has fallen while the number of renters has significantly risen,’ he added. Yun explained that the inability for renter households to become home owners is leaving them behind financially. A typical homeowner’s net worth climbs because of upticks in home values and declining mortgage balances. On the other hand, renters have likely seen increased rental housing costs and are less likely to have been active investors in the stock market’s strong growth in recent years. NAR’s study examined intensifying or lessoning inequality by measuring the change in the number of owners and renters during the recent period of rising home values. The findings show that an overwhelming 93 out of 100 analysed markets experienced a declining home ownership rate from 2010 to 2013. Because renters typically have much lower net worth than home owners, a metro area’s low homeownership rate is associated with greater wealth inequality. As a result, Los Angeles, New York, Las Vegas, Fresno in California and San Diego were found to have the most unequal wealth distribution. ‘Changes in wealth during this period are especially profound in high cost metro areas that have seen robust price growth. For instance, a typical home owner in San Jose, California, enjoyed an increase of $210,671 in housing wealth while renters were left behind and likely exposed to annual rent increases,’ said… Continue reading
UK buy to let landlords increasingly looking for semi-detached properties
There has been a big jump in UK landlords looking to buy semi-detached property with demand for terraced houses almost half previous levels, new research shows. Landlords are also planning for steady growth in the buy to let property sector as optimism rises, according to the latest landlord research by Paragon Mortgages. The data shows that landlords on the lookout for a semi-detached property amongst those expecting to purchase buy to let property soon, have increased from 23% in the fourth quarter of 2014 to 35% in the first quarter of 2015. The specialist lender’s Private Rented Sector Trends survey, which has been tracking landlord confidence and views on the buy to let market for 13 years, also shows that the proportion of landlords looking to buy terraced property had fallen from 67% to 35%. The lenders says that this sharp turnaround in demand for these two different property types results in a more even distribution of interest across the broad spectrum of property types from landlords than previously. Overall, among those looking to buy, 30% of landlords expressed interest in adding a flat to their portfolio, 35% were on the look-out for a semi-detached house, 35% for a terraced house and 22% said they were considering more specialist units such as multi-unit blocks and HMOs. The report also finds a higher proportion of landlords are optimistic about the prospects for their property portfolios, with 27% feeling positive about the future and an increase in those expecting to buy sometime soon, up from 15% to 18%. ‘The growing proportion of landlords looking to purchase buy to let property sometime soon points to continued, steady growth in the private rented sector,’ said John Heron, the firm’s director of mortgages. ‘Meanwhile, a closer look at interest levels for different property types suggests landlords are taking a broader perspective in order to cater for the wider range of households looking for a suitable home in the rental sector,’ he added. Continue reading
UK property market set for further growth due to stable election result
House prices in the UK, especially the prime property market in London, are set to rise on the back of the Conservative win at the general election, according to property experts. London is likely to see sales surge as people who put off buying, particularly overseas buyers, now go ahead and make a decision with the possibility of a mansion tax evaporated. Indeed, according to Edward Heaton, of Heaton and Partners property search agency prime country house prices could rise by as much as 10% within weeks. ‘There will be bun fights in the next few weeks for the best houses which come to the market as confidence in the top-end of the regional market returns,’ he said. ‘For many operating in the prime property market, there is a palpable sense of relief at the election outcome as there were some genuine concerns about the possible impact of mansion tax tied in with the attack on non-doms proposed by Labour,’ he added. The result will bring stability to the markets, according to Michelle van Vuuren, managing director of residential development at Sotheby’s International Realty UK. The firm is already getting calls from would be international buyers. ‘The removal of the uncertainty that has clouded the last year of the coalition will allow developers to plan confidently for the medium term with a consistent economic policy. Having said that, we do hope to see the Tories come good on their annual pledge of 200,000 new homes and freeing up brownfield sites for development,’ she said. ‘Increasing the supply of homes is the only way to truly overcome the hurdles that the housing market places for the majority of buyers. At the top end, for the next five years at least, a cessation of the clamour for a mansion tax will see a number of transactions that have stalled to come back on line as certitude creeps back into the market. It is going to be an exciting time to be in the London market,’ she added. ‘Andrew Ellinas, director of central and north west London agency Sandfords, believes that confidence will return quickly and it is likely that there will be a significant late spring bounce in activity as those who have held back start to act. ‘London has established itself around the world as a safe and thriving place to invest and increased confidence will once again be restored and with that see the return of overseas investors. It has felt like the market was becalmed and now will steam ahead once again, with London prices that have been subdued steadily rising throughout the second half of the year,’ he pointed out. ‘My advice to those who have been thinking about selling, but awaiting political certainty, is to make a move now and beat the rush. The market has been challenged most recently by a lack of stock, but this is likely to change quite swiftly now, creating more competition for vendors. Take… Continue reading
