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Real Estate Big Data

America’s most popular relocation destination is Austin (by a landslide)

The same issues that are driving Americans out of the US (too expensive, too chaotic, too much crime and just plain too much) are driving citizens out of most of America’s big cities and into what is referred to as second-tier cities.

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An interesting anecdote before we begin: After spending a good part of my life overseas and around the world I’ve noticed that more and more ex-pats (ex-patriots) have given up on living in the United States and packed their bags in hopes of finding that special foreign locale that offers a decent infrastructure and an inexpensive standard of living.

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For example, Panama is pretty hot right now as are Costa Rica and the Dominican Republican. In the European Union, Croatia is big and Bulgaria is right around the corner. So if you can deal with not-so-reliable internet and crazy bureaucracy, there’s a lot to be said for spending your days in a location like Coronado Beach, Panama.

What, you’re asking, does this have to do with living in the United States?

According to the latest census data and reported by Bloomberg.com, the same issues that are driving Americans out of the US (too expensive, too chaotic, too much crime and just plain too much) are driving citizens out of most of America’s big cities and into what is referred to as second-tier cities.

Headin’ West

No longer is the impetus to find a good place to retire. The incentive in the 21st century is much more practical: find a place to survive. So it is that census data released late last month gives the 2013 population estimates for metro areas and the biggest increase in domestic migration from 2010 to 2013 drew newcomers to America’s second-tier cities. At the top of the list: Austin, Texas which is fast-eclipsing Seattle, Washington as the start-up capital of the US.

population growth

Certainly there’s something positive to be said about the top ten cities on the list but as Forbes.com points out, “Austin consistently sits atop Forbes’ annual list of the best cities for jobs and scores highly in other demographics rankings.” Not only that, but Austin, Texas is the third-fastest-growing city in the nation, attracting not only large numbers of college grads, but also immigrants and families with young children.

Coming from all over

Not to single out Austin over any of the other cities on the aforementioned list (but it does happen to be #1, and The Real Daily does happen to headquartered here), things are perceived to be so good in Austin that the city is pulling in young and old alike from most of the biggest hubs in the US. Notice I said “perceived” because already doom-and-gloomers are forecasting the saturation point in this and other second-tier cities which means that sooner or later it will be the third-tier cities that will appeal more and more to individuals searching for a more affordable way of life.

moving to austin

Keeping up is hard to do

Kudos to Austin, Raleigh NC and even San Antonio, Texas (which rank in the top three) But how does a city like Chicago or New York keep up? There’s no easy solution but for sure high taxes, mortgages that are out of reach and minimum wage jobs aren’t the answer.

#ATX

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Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

Real Estate Big Data

With housing demand so high, why are sales stagnant?

(REAL ESTATE NEWS) The housing market is on fire, yet some serious constraints are holding back sales levels – let’s discuss.

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housing optimism

If you have a pulse and are on the internet, you already know that the housing market is white hot, with bidding wars in more cities than ever. So why in the world are home sales stagnating?

Pending home sales rose only 0.4 percent in March, according to the National Association of Realtors’ (NAR’s) Pending Home Sales Index (PHSI), decreasing 3.0 percent on an annualized basis – the third consecutive month of annual dips.

Despite a strong economy, NAR points yet again to “unrelenting inventory constraints” which they recently said would only be relieved by builders stepping up production, more homeowners putting their home on the market, and/or investors releasing inventory.

NAR’s Chief Economist, Dr. Lawrence Yun says contract activity is moving sideways and not breaking higher despite the strong job-creating economy.

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” said Dr. Yun.

He continued, “Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy.”

Dr. Yun forecasts that existing home sales will hit 5.61 million this year (up slightly from 5.51 million last year), also forecasting the national median home price will rise 4.4 percent.

He notes that affordability and availability are holding back home sales, combined with price appreciation outpacing incomes, and mortgage rates rising, sales will soon peak.

“Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive,” said Yun. “That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers – especially first-time buyers – will be left on the sidelines.”

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Real Estate Big Data

Home sales surge in half of the nation, slump in the other half

(REAL ESTATE NEWS) Home sales rose last month, despite challenging inventory and affordability conditions – but not in all markets.

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home sales

Talk about mixed signals. We ended last week with alarm bells that affordability is restricting the housing market, yet home sales in March actually surged in the Northeast (up 6.3 percent) and Midwest (up 5.7 percent) compared to just one month prior.

Meanwhile, home sales slipped 0.4 percent in the South, and a whopping 3.1 percent in the West. Sales levels in all four regions are lower than they were at this time last year, reinforcing the supply and demand challenges, putting homeownership out of reach for a growing pool of potential buyers.

NAR Chief Economist, Dr. Lawrence Yun has indicated that the only way to loosen the noose is a combination of more current homeowners opting to sell, builders increasing new home production, and investors releasing inventory.

In the last year, the median existing home price rose 5.8 percent to $250,4000 with March as the 73rd consecutive month of annual gains.

The average number of days on market decreased to 30 days from 37 in February and 34 in March of 2017. Half of all home sold were on the market for less than a month, and in some cities, bidding wars and immediate sales are common.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West,” said Dr. Yun.

That said, there is a silver lining.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty notes, “First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range.”

Supply conditions improve in higher up price brackets,” concluded Mendenhall, “which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search.”

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Real Estate Big Data

Housing prices rise, outpacing wage increases

(REAL ESTATE NEWS) A new joint report from NAR and realtor.com reveal that affordability conditions are eroding and there are very few cures to this problem.

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housing sales

Good ol’ economics – housing demand continues to outpace supply, and bidding wars are now common in many cities. On a national scale, affordability is increasingly threatening many peoples’ ability to buy, based on their income.

The realtor.com and National Association of Realtors joint report, the Realtors Affordability Distribution Curve and Score, examines affordability conditions compared to income levels for active inventory in local markets. Higher scores suggest a particular market has more affordable homes in proportion to local income levels.

It’s no surprise that in March, the report indicates the least affordable (in proportion to income) is Hawaii, California, Oregon, the District of Columbia, Montana, and Rhode Island. In these states, households at the median income level can only afford 19 to 23 percent of the active housing inventory.

In contrast, the most affordable states are Ohio, Indiana, Kansas, Iowa, and West Virginia, where a a typical household can afford 54 to 62 percent of all active inventory.

The report also indicates that more local markets are seeing worse affordability conditions compared to last year, with L.A., San Diego, San Jose, Ventura, and San Francisco leading the pack. In these markets, the typical household can only afford 3.0 to 11 percent of homes available for sale in their markets.

The typical household can afford nearly 75 percent of homes for sale in Dayton, OH, Toledo, OH, and Scranton, PA.

NAR’s Chief Economist, Dr. Lawrence Yun stated, “The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers – especially those at the lower end of the market, where demand is the strongest.”

The report makes even more apparent why first-time buyers “struggle finding affordable properties to buy and are making up less than a third of home sales so far this year,” said Dr. Yun.

Although wages are on the rise, housing prices are outpacing these increases, and Dr. Yun points to the solution being “more homeowners selling, investors releasing their portfolio of single-family homes back onto the market and more single-family housing construction.”

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