The Real Estate News Brief: Single-Family Investor Hot Spots, Insurance Price Hikes, Top Searches on Zillow
Manage episode 317040481 series 1248803
In this Real Estate News Brief for the week ending January 1st, 2022... investor hot spots for single-family homes, insurance premium price hikes, and Zillow’s list of most popular search areas.
Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.
We begin with economic news from the last week of 2021. The year closed with fewer people asking for unemployment benefits. Initial jobless claims were down to 198,000, which is close to a 50-year low. Continuing claims also dropped. Government figures show they were down by about 140,000 to 1.72 million people. The numbers reflect a labor shortage and companies that are not eager to lay anyone off because it might be difficult to replace them. According to MarketWatch, economists are predicting the labor shortage will continue in 2022, but will not be so pronounced. (1)
Pending home sales for November were down for a third month in a row. The National Association of Realtors says they were down 2.2% from October. That’s more than the .8% drop in pending home sales that MarketWatch had forecast. On a year-over-year basis, they were down 2.7%. NAR’S chief economist, Lawrence Yun, blames the dip on a tight supply of homes which continues to push home prices higher. He also expects to see higher inventory levels in 2022 which will help slow the price growth. (2)
The latest report from the S&P CoreLogic Case-Shiller 20-city price index shows an 18.4% year-over-year gain in home prices for October. The national index shows a 19.1% annual gain. Both are slightly “lower” than they were in September. But some cities are showing extremely strong price growth, such as Phoenix. Year-over-year home price growth there is 32.3%. Tampa and Miami are also very high due to the strong housing market in Florida. (3)
Mortgage rates moved slightly higher, but the average 30-year fixed-rate mortgage is still hovering slightly above the 3% level. Freddie Mac says it rose 6 basis points last week to 3.11%. The 15-year was up 3 points to 2.33%. (4) Freddie Mac’s chief economist, Sam Khater, says: “Mortgage rates have been effectively moving sideways despite the increase in new Covid cases.” (5)
In other news making headlines…
Investors Want Single-Family Homes
The buying spree continues among investors who are snapping up single-family homes, and it’s not just the more affordable areas they are interested in. According to CoreLogic, California is experiencing a rebound in single-family homes that are purchased by investors. (6)
CoreLogic economist, Thomas Malone, says: “After a decade of moving away, investors are coming back to California.” He says: “The California rise is likely due to large investors, who seem less deterred by the high prices found in the area.”
Those California metros include the Silicon Valley region and San Francisco in the North, and the Los Angeles area and the counties of Riverside and San Bernardino in the South. Other metros attracting investors are Atlanta, Phoenix, and the McAllen-Edinburg-Mission region of Texas down near the Southern tip of the state. Las Vegas, El Paso, Memphis and Salt Lake City are also attracting a large share of investors.
Insurance Premiums Are Climbing
The cost of homebuilding materials and climate change risks are turning into higher insurance premiums, and that’s giving some property owners sticker shock. The Insurance Information Institute says that premiums are up about 4%, with an average annual premium of $1,400. Realtor.com reports a warning from insurance companies, that premiums will be going even higher. (7)
Realtor.com says the cost of rebuilding a home is going up because of higher prices for building materials in general. But, it says, homeowners with the biggest increases are those in disaster-prone areas. Chief economist of the National Association of Home Builders, Robert Dietz, says that building material prices are pushed higher after a natural disaster for six to nine months, while people are, of course, scrambling to rebuild their homes.
Most Searched for Real Estate in 2021
The rise of remote work has put a popular vacation area in the spotlight. According to page views on Zillow, South Lake Tahoe was the most popular city last year. Zillow says it catapulted into the number one position because of a high number of page views for each listing – about 5,500! (8)
Calabasas in the Los Angeles area ranked as the most popular small town. But it isn’t your typical small town. Calabasas is known for having many celebrity residents with homes that are valued at an average of $1.5 million. California’s Big Bear Lake also attracted a lot of page views, which Zillow ranked as the most popular vacation town.
Other hot spots include Newport, Oregon as the most popular beach town; Tempe, Arizona as the most popular college town; and Lavallette, New Jersey, as the most popular retirement community.
You can also join RealWealth for free at newsforinvestors.com. As a member, you have access to the Investor Portal where you can view sample property pro formas and connect with our network of resources, including experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more.
Thanks for listening. I'm Kathy Fettke.