Discussing the latest Case-Shiller home price indices and what is happening in Anderson County, several encouraging reports on economic confidence, and why a lack of affordable housing is a bad thing for society as well as the housing market!
US Home Prices Increased 6%
From the S&P CoreLogic Case-Shiller Indices:
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.0% annual gain in July, down from 6.2% in the previous month. The 10-City Composite annual increase came in at 5.5%, down from 6.0% in the previous month. The 20-City Composite posted a 5.9% year-over-year gain, down from 6.4% in the previous month.
Check out the chart showing US home prices according to their data ( not seasonally adjusted ):
Don’t let the reports about home price appreciation slowing fool you into thinking that home prices are falling.These reports are simply saying that the pace of home price increases is slowing.
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, said:
Rising homes prices are beginning to catch up with housing. Year-over-year gains and monthly seasonally adjusted increases both slowed in July for the S&P Corelogic Case-Shiller National Index and the 10 and 20-City Composite indices.
The slowing is widespread: 15 of 20 cities saw smaller monthly increases in July 2018 than in July 2017. Sales of existing single family homes have dropped each month for the last six months and are now at the level of July 2016.
Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.
Please do not panic or think this report accurately describes what is happening in every local market. Real estate is different in every market and national statistics can trick you!
For example, if we look at the July 2018 WUAR MLS data for Anderson County SC, we will see that the median home price was 2.4% lower than June 2018 BUT 2.3% higher than July 2018. This is for ALL types of homes in all of Anderson County and does not tell you what you can expect for a specific home.
CEO Economic Outlook Remains Strong
From Business Roundtable:
The economic outlook among Business Roundtable CEOs remained strong in the third quarter of 2018 according to results of Q3 2018 Business Roundtable CEO Economic Outlook Survey. However, the Q3 CEO Economic Outlook Index – a composite of CEO expectations for sales and plans for capital spending and hiring over the next six months – decreased slightly as business leaders experience uncertainty and negative effects from the Administration’s actions on trade.
The Q3 2018 CEO Economic Outlook Index is the fifth-highest in the survey’s 16-year history and well above the historical average of 81.6. This is the seventh straight quarter where the Index has exceeded its historical average, signaling a continued positive direction for the U.S. economy.
Great news other than the uncertainty about trade policies. Uncertainty could affect both capital investment and hiring plans.
Consumer Confidence Increased
The Conference Board Consumer Confidence Index for September 2018 increased, following a large improvement in August. Check out some of the highlights:
- Consumers’ assessment of current conditions held steady
- Consumers’ optimism about the short-term outlook improved considerably
- Consumers’ assessment of the labor market was somewhat more favorable
- Consumers’ outlook for the labor market was also more upbeat
Lynn Franco, Director of Economic Indicators at The Conference Board, said:
After a considerable improvement in August, Consumer Confidence increased further in September and hovers at an 18-year high. These historically high confidence levels should continue to support healthy consumer spending, and should be welcome news for retailers as they begin gearing up for the holiday season.
Combine this good news with the strong economic outlook of CEOs and it appears we could have a very good end to 2018.
Why Affordable Housing Is Expensive
Highlights from a must read article in CityLab:
Affordable housing isn’t cheap to build. It’s no surprise that it costs more to build where land prices are higher, but there’s another factor that inflates the costs: local regulations. When homeowners and neighborhoods fight to slow or stop development, it makes low-income developments harder and more expensive to build.
When homeowners fight affordable housing tooth and nail, it makes low-income developments harder and more expensive to build. That’s a real cost—and maybe a very high one.
The lack of affordable housing has a high cost that goes beyond just the money. There is a cost to society that also must be considered.
When we talk about affordable housing it isn’t just about homes that are affordable to buy or own. It also refers to homes that are affordable to rent.
If a household is spending too much of their income on monthly housing costs, it will affect their quality of life. If this issue were affecting the members of all the country clubs in the US, you bet our politicians and policy makers would be working overtime to find a solution.
Well that is all I have time for today! Please share this post on Facebook, Twitter or Google if you enjoyed it!