The start of the slow season for home search in most of the country began last month. But autumn is prime time for shopping in certain regions, mostly vacation areas in the mountains and forests.
House hunting is largely considered a seasonal sport, with springtime ranking as the best time to play. March typically kicks off the busy season, which extends through Labor Day, and is when the largest number of buyers circle, and the most homes go up for sale.
But depending on where you are house hunting, you may not realize that autumn can be an excellent time to buy and sell. Instead of slowing down in the fall, many regions of the country buck the national trend and experience high levels of activity, according to a new report on the seasonality of house hunting. The research reveals the cities where home buying and selling peaks, as well as significantly slows, during this time of year.
Fall Slow Down
Home shopping majorly slows in many warm climates and beach areas during the fall months. For example, in September and October Hawaii and Florida see a 10% dip below their annual averages. When looking at major metro areas, search activity drops the most in the South and Southwest. In the Cape Coral/Fort Myers, Florida, area, for example, it declines 18% in September and October compared to the annual average. Searches plummet 12% in Austin, Texas, and Phoenix, Arizona. In Charleston, South Carolina, hunting goes down 11%.
Big vacation destinations that see search activity slow include Punta Gorda, Naples/Marco Island and Key West.
The study also found that college towns have some of the lowest rates in the country for home searching during the autumn season – making it all the more important to lock in your housing before classes begin. College Station/Bryan, Texas, Columbia, Mo., and Iowa City, Iowa, are three university towns that see a big reduction in activity during this time of year.
Bucking the Trend
There are several areas of the country where activity actually picks up in the fall, and autumn is the busy season. These regions are typically near ski resorts in mountain and forest areas.
The county of Lincoln, NM, which is close to winter resort Ski Apache, sees a 16% jump in search activity during the fall when compared with the annual average. The area around Ellsworth, ME, known for a fun winter carnival, boasts 13% more searches.
Big Bear/Lake Arrowhead, a ski region located east of Los Angeles, also has a high number of house hunters in the fall, presumably preparing themselves for fun weekend days on the slopes and dinners by bustling fireplaces.
Other parts of the country don’t necessarily see a large increase in the fall, but instead chug along at their same springtime pace. This pattern emerges in some New England metro areas, including Peabody, Mass., and Worcester, Mass. Search activity in San Francisco also doesn’t change much in the fall, possibly because it includes some of the warmest months for the City by the Bay.
Millennials already have to deal with hefty debt from college, an iffy job market, and growing up in an era where MTV no longer plays music videos, but now they’re being blamed for holding back the real estate boom. Homebuilder adviser John Burns Consulting published details from a study earlier this month concluding that student loan payments will cost the housing industry 414,000 transactions this year that would have totaled $83 billion in sales.
Ouch. The ivory tower is crumbling at the foundation.
It’s been widely assumed that mounting student debt is eating away at this otherwise buoyant housing market recovery. John Burns Consulting’s study — boiled down to a free one-pager for those that aren’t paying customers that got the more thorough report — attempts to quantify the impact.
How did the adviser arrive at $83 billion? Well, we start with the 5.9 million households under the age of 40 that are paying at least $250 in student loan debt, nearly triple the 2.2 million leveraged college grads in the same predicament back in 2005. We then get to the assumption that $250 earmarked for student loan debt every month reduces the buying power of a potential homebuyer by $44,000. That’s bad, and it’s naturally worse depending on how much more than $250 a month some of these indebted students have taken on to pay back. That’s less money they can commit to a mortgage. John Burns Consulting offers up that most households paying at least $750 a month in student loan have priced themselves out of the housing market entirely.
It gets worse
The study only looked at folks between the ages of 20-40. That’s a pretty sizable lot, especially since 35% of all households in that age bracket have at least $250 a month in student debt. However, even John Burns Consulting concedes that there’s “a big chunk of households over age 40 who have student debt” as well. It’s not likely to be as bad, naturally, but it’s all incremental at this point.
This report also happens to come at a time when the housing industry is starting to flinch after a couple of years of boom and bounce. Right now everything seems great. New home sales data released this past week showed the industry’s highest monthly growth rate in more than six years. However, the near-term outlook is starting to get hazy.
Shares of KB Home KB HOME KBH 0.2807% shed more than 5% of their value on Wednesday after reporting uninspiring quarterly results. Revenue and earnings fell short of expectations, and the same can be said about its number of closings and order growth. Earlier this month it was luxury bellwether Toll Brothers TOLL BROTHERS TOL -0.9731% setting an uneasy tone after posting a year-over-year decline in the number of contracts it signed during the period and an uptick in the cancellation rate for existing home orders.
It gets better
The student debt crisis is real, and the skyrocketing costs of obtaining a postsecondary education naturally open up the debate of its necessity. However, it’s also important to remember that university grads are earning far more than those that don’t attend college.
The median of annual earnings for young adults in 2012 was $46,900 for those with a bachelor’s degree, $30,000 for those with just a high school degree or credential and $22,900 for those who did not complete high school. Those going on to grad school for advanced degrees — and that’s where student loans can really start to pile up — are at $59,600 a year.
In other words, most college grads, and especially grad school graduates, are typically better off than those that didn’t pursue higher education, even with the student loan albatross around their white-collared necks. The housing industry would be better off if colleges were cheaper or if student debt levels were lower, but the same can be said about purchasing power in general. At the end of the day, debt-saddled or not, the housing industry needs its college graduates.
Even former central bankers can't get a loan
If you’ve failed to get a loan in this market, don’t feel too bad. Not even central bankers can catch a break–as Ben Bernanke, who chaired the Federal Reserve from 2006 through February of 2014, recently revealed that he has been unable to refinance his home.
“Just between the two of us, ” Bernanke told the moderator at a recent conference of the National Investment Center for Seniors Housing and Care, “I recently tried to refinance my mortgage and I was unsuccessful in doing so,” Bloomberg reports.
The audience laughed.
“I’m not making this up,” Bernanke insisted.
Bernanke also complained that stringent credit standards have made the process for first-time homebuyers excessively difficult, especially as economic conditions have improved. “The housing area is one area where regulation has not yet got it right,” Bernanke said. “I think the tightness of mortgage credit, lending is still probably excessive.”
As of press time, there is no word on whether current Federal Reserve Chair Janet Yellen has been denied for an auto loan.
Fewer than 12% of Americans changed homes in the past year, near the all-time low. But the reasons why people go or stay are changing.
Yesterday the Census released the Current Population Survey (CPS) data, giving an up-to-date picture on how many Americans are moving, how far they’re going, and why they’re making that move. The mobility rate remains at a low level: 11.7% of Americans moved in the year ending March 2014, unchanged from the previous period.
At this rate, the typical American stays put eight and a half years between moves. Remember the old rule of thumb that people move every seven years? Well, that was true until around 2003. In fact, the mobility rate has been falling for decades, as we pointed out in this post last year. Back in the 1950s and 1960s, Americans moved every five years on average. That rate rose to every seven years by the turn of the century and has since increased to the current eight-and-a- half year rate.
Here are the most recent mobility trends, based on this latest 2014 data.
The Long-Term Mobility Decline Continues
With the percentage of Americans moving stuck at 11.7% in 2014, mobility remains near the all-time low of 11.6% in 2011. That’s considerably below the 14% rate from the early 2000s. The housing bust and recession offer possible explanations why people are stuck in place – things like negative home equity and few job opportunities to move for. Still, mobility also declined both before and during the housing bubble. Furthermore, mobility has barely budged since 2011 despite a significant drop in the percentage of borrowers with negative equity and a modest recovery in the job market.
What explains this long-term decline in mobility? Some academic researchers have found that the economic benefit of switching jobs has fallen over time. Since a job is often the reason people move, that means the economic benefits of moving have fallen. In fact, the decline in mobility has mostly been a drop in longer-distance moves, that is, moves to a different county. Moves within the same county have stayed relatively steady since 2000.
Why People Choose to Stay or Go is Shifting
The reasons why Americans move – which we think is one of the most fun questions asked in any Census survey – have changed over the course of the boom, recession, and recovery. During the boom, compared with the period after the bubble burst, more people moved to have a new or better home, or because they wanted to own instead of rent. By contrast, during the recession, the percentage of people who moved for cheaper housing went up.
Most recently, in the year ending March 2014, the percentage of people who moved because they wanted a new or better home or apartment increased. But the percentage of people who moved for cheaper housing also increased, though it didn’t return to its level in 2009, 2010, and 2011, when more people moved for cheaper housing than for a new job.
Continued economic recovery should boost the number of Americans who move for a job. At the same time, more homeowners are getting back above water into positive home equity, and that should also increase mobility. Yet, rising home prices and higher mortgage rates might mean that more people move in search of cheaper, rather than new or better, housing.
To see the full article, including more details about the data and analysis, click here.
Looking ahead, the rate of home price growth may slow even further, especially if mortgage rates increase.
While housing prices continue to rise, the rate of that growth nationally slowed in June, according to a leading gauge of the real estate market.
The S&P/Case-Shiller Home Price Indices showed that home prices throughout the country increased 6.2% since last year. Meanwhile, separate indexes that track 10 and 20 large U.S. cities showed gains of 8.1% during the same time period.
Though decent, those gains were a far cry from the double-digit growth in home prices late last year. Moreover, all three indexes showed deceleration from the prior month, and every city measured experienced lower year-over-year price growth.
“Home price gains continue to ease as they have since last fall,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators — starts, existing home sales and builders’ sentiment — are positive. Taken together, these point to a more normal housing sector.”
Blitzer also cautioned that an increase in interest rates, which Federal Reserve chair Janet Yellen hinted at last week, may mean further deceleration if they lead to higher mortgage rates.
“Bargain basement mortgage rates won’t continue forever,” he said. “Recent improvements in the labor markets and comments from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first quarter of 2015. Rising mortgage rates won’t send housing into a tailspin, but will further dampen price gains.”
To be sure, home prices are still going up across the board. All cities reported higher prices for the third consecutive month, and price growth in markets such as Dallas and Denver has continued unabated.
Nationally, average home prices in June are back to Spring, 2005 levels. But city composites are still roughly 17% down from their peak prices in June/July of 2006.
There are probably lots of great things about your town. But if you had to pick just one, what would it be?
What becomes of a trendy gay neighborhood when housing prices soar and straight people move in?
As gay acceptance has risen over the years, gay people have increasingly moved away from historically gay neighborhoods, such as the Castro in San Francisco and Chicago’s Boystown. Simultaneously, more and more straight individuals and couples have felt comfortable enough to move into these neighborhoods. As a result, many gay neighborhoods—call them “gayborhoods”—aren’t nearly as gay as they used to be.
That’s the gist of a new book called There Goes the Gayborhood? by Amin Ghaziani, an associate professor of sociology at the University of British Columbia. His research traces the changing face of gay neighborhoods and explores the implications of these shifts in cities around the U.S.
For instance, from 2000 to 2012, the number of same-sex couple households increased in nearly every neighborhood in Seattle, with one glaring exception: Capitol Hill, described as the “center of the city’s gay and counterculture communities,” according to Wikipedia, experienced a 23% decrease in same-sex households over the same time span, the Seattle Times noted.
“This isn’t unique to Seattle,” Ghaziani explained. As gays have moved far beyond gayborhoods to other parts of cities and into small towns and the suburbs, a “straightening” has taken place in neighborhoods like Capitol Hill.
Much of Ghaziani’s research is based on Chicago’s Boystown, where he lived for nearly a decade, and where the idea for the book was born. “My friends and I began to notice changes in the character and composition of the neighborhood,” he said to the Chicago Tribune “We’d notice more straight couples holding hands and more baby strollers. That became a symbol. Oftentimes a sex store would close and a nail salon would open in its place.”
The shifting demographics must be viewed as a sign of growing acceptance—that of straight people in traditionally gay neighborhoods, and of gay people throughout the land. Still, many of the sources quoted in Ghaziani’s book worry that the blurred lines could mean that much of what makes a gayborhood special will disappear. In an op-ed he wrote recently, Ghaziani quoted Dick Dadey, who was the executive director of Empire State Pride Agenda in the 1990s, explaining, “there is a portion of our community that wants to be separatist, to have a queer culture.” Still, Dadey said, “most of us want to be treated like everyone is,” and, “we want to be the neighbors next door, not the lesbian or gay couple next door.”
Then there are the financial implications of all of these shifts. “It’s impossible to discuss gay neighborhoods without considering economic factors like rent and housing prices,” Ghaziani said in an email to MONEY. He pointed out some data from Trulia in the book showing that several traditionally gay neighborhoods, like West Hollywood and New York’s West Village, are extremely expensive places to live.
Meanwhile, according to 2013 report from Trulia, prices in urban U.S. neighborhoods have been increasing at a faster pace than the suburbs, and prices soared in gay-friendly city neighborhoods in particular:
Neighborhoods where same-sex male couples account for more than 1% of all households (that’s three times the national average) had price increases, on average, of 13.8%. In neighborhoods where same-sex female couples account for more than 1% of all households, prices increased by 16.5% – more than one-and-a-half times the national increase.
These numbers are backed up by other research, such as that highlighted earlier this year by Richard Florida, the celebrated urban theorist and author of The Rise of the Creative Class. In a City Lab post, Florida summed up recent research indicating “a connection between gay neighborhoods and some of the markers of gentrification,” and that “neighborhoods that began the decade with larger concentrations of gay men saw greater income growth, and, especially in the Northeast, greater population growth as well.”
Ghaziani writes, “I don’t think gayborhoods are dying.” But Florida doesn’t sound quite as convinced, writing, “As these areas of the city continue to change, potentially pricing out some of the gay couples who moved in decades ago, gayborhoods could just as easily become a thing of the past.”
Some areas have rebounded nicely since the financial crisis. But many have not.
On Wednesday, the Department of Commerce announced the U.S. economy grew a healthy 4% in the second quarter of 2014. The good news aligns with other positive economic signals, like an increase in hiring, and suggests the nation as a whole might be on the road to recovery.
Unfortunately, this rosy picture hasn’t been shared equally across the United States. Some areas have recovered well, while others have struggled. A new report from personal finance social network WalletHub highlights which municipalities have made the most progress toward normalcy since the downturn, and the areas that still have a way to go. To compile the list, WalletHub analyzed 18 economic metrics for the 180 largest U.S. cities, including the inflow of college-educated workers, the rate of new business growth, unemployment rates, and home price appreciation.
Here are the results.
Most Recovered Cities
1. Laredo, Texas
Over the past seven years, this Southern Texas city’s median income has increased 5% while the population has surged 13%. State-wide bankruptcy is down, and new business growth is up.
2. Irving, Texas
Irving, sandwiched between Dallas and Fort Worth, earned high marks for rising median income (up 6% since 2007) and a decreasing ratio of part-time to full-time workers. The area has seen more college-educated workers moving in.
3. Fayetteville, North Carolina
More workers moved from part-time to full-time gigs in this city than any other place. Plus more college-educated workers are coming than going, helping the population spike over 14% since 2007.
4. Denver, Colorado
The Mile High City has seen a 12% jump in median income since the financial crisis. Most impressively, it’s one of the few areas to have seen home prices completely recover (and then some) from the housing crash.
5. Dallas, Texas
Dallas is still dealing with an increased ratio of part-time to full-time workers, but median income is up nearly 4% and home prices have appreciated a shocking 17% since the housing bubble burst.
Least Recovered Cities
1. San Bernardino, California
This Southern California city ranks as the farthest away from a full recovery. Both income and housing prices have dropped since 2007, with median income down 4%, and home prices down 43%. San Bernardino’s ratio of part-time to full-time jobs has also gone up nearly 14%.
2. Stockton, California
This Northern California inland area isn’t doing so well either. Incomes are down. Home prices have severely depreciated (down more than 43% from seven years ago), and the foreclosure rate is close to 18%.
3. Boise City, Indiana
Residents of Boise City have suffered an 8% drop in their median income since the crisis. Despite there being increasingly more full-time work opportunities, relative to part-time roles, new business growth remains far below its pre-recession level, down roughly 11%.
4. Newark, New Jersey
The median income remains down almost 5% in this urban area, adjacent to New York. Homes have been hit hard too. Housing prices are about 41% lower than they were in 2007.
5. Modesto, California
This town, which neighbors depressed Stockton, also hasn’t been able to break out of its post recession funk, likely because home prices remain down about 35%, and new business growth almost 9%.