Friday, January 30, 2015

Housing, Are You Confused Too?

If there is one thing that is not lacking these days are stats on housing. Yesterday it was reported that pending home sales dropped in December – which of course in the middle of winter says that the market is softening. GO HERE 

Words like moribund, decline, and hope are thrown about. And even though there was an slight uptick in new single-family homes, the overall growth for the year was just 1.2%. Hardly a turn around in an industry that is faced with monumental problems. Many of which are started in Washington D.C.

Housing sales, new and existing, face a number of serious obstacles. The largest may be the student debt load carried by many of those under thirty. Tens of thousands of dollars of debt will make qualifying almost impossible. And then there is the issue of the down payment, and even with parents helping, banks are hesitant to loan out money to single people (an increasing demographic stat), young couples with little or no money in the bank, and debt. Even though the average interest rate on a 30-year fixed is 3.66% it means nothing if the bank tells you, “You are not qualified.” Any surges in home loans at the moment seems to be a result of refinancing – not outright home purchasing.

Maybe it is because the young homebuyer is getting smarter. The markets on the coasts (New York Metro to Washington D.C. and Northern California) are just crazy with affordability the least important issue – these are sellers markets at the moment and the Millennials can afford to sit on the sidelines. Once they are locked into a decent apartment the need for a house lessens – for now. And in many markets the only housing under construction is apartments

There is the usual push by Washington to mess with Fannie Mae and Freddie Mac and take their profits and push them into funds that can be used to dole out favors to states and other bodies to build low-income housing and rehab existing. GO HERE  

All this completes in the overall housing market making it unprofitable for your average merchant builder to compete in the affordable home market – so they don’t. It is not worth the effort. If there is one area where there is little competition to keep pricing down or competitive it is the affordable home market and the non-profits that drive the market. Next time you see Jimmy Carter swinging a hammer tell him thanks.

Keep in mind that the mortgage market is controlled by the federal government and through their various agencies almost all housing development is controlled by Washington through grants, Freddie and Fannie, affordable housing trust funds, and housing finance laws and banking regulations. Makes you all warm and fuzzie about markets, capitalism, and the plight of the homebuilder.

And lastly housing affordability has hit a six year low. GO HERE 

This past June the average mortgage payment represented 16.3% of a household’s income (except on the Coasts where it has to be at least twice that). The dream of a your own home for many under 35 is becoming just that – a dream.

Stay Tuned . . . . . . .

Saturday, January 17, 2015


I came across these on Facebook posts and thought you might get a kick out Fibonacci, algorithms, and graphics. Seems that nature also has inherent algorithms in its genetic codes that also express themselves in flowers and who knows what else....

And again how Aaron Renn finds these I just don't know.......

Paris and New York
Paris and London

The new trend in urban videos is split screens - very cool. And for a reminder of the most exciting event last year in San Francisco . . . . .

Stay Tuned for a Great New Year . . . . . . .