Welcome to today’s roundup of news in the Real Estate category. In our first story, Bankrate explores the question of whether the housing market is heading towards a crash. Despite rising property prices and high mortgage rates, economists believe that a significant crash is unlikely due to strong personal balance sheets of homeowners and cautious construction pace by builders. Moving on, Pleasanton Weekly highlights the failure of California’s housing laws to address affordability, with a recent court ruling declaring Senate Bill 9 unconstitutional. The article emphasizes the need for cities to challenge state overreach and find solutions that address economic factors and powerful interests contributing to the crisis. Meanwhile, C.A.R. reports an improvement in housing affordability during the first quarter of 2024 in California, although the figure remains lower than previous peaks. Lastly, KQED explores the idea that small houses could offer a solution to the housing crisis, discussing the potential benefits of smaller multifamily dwellings in neighborhoods with fewer zoning restrictions. To dive deeper into these stories, click on the respective links provided.
Is The Housing Market Going To Crash? | Bankrate
To the dismay of would-be homebuyers, property prices just keep rising. Despite high mortgage rates, home prices have continued to climb, with median existing-home prices up 4.8% over last year. This trend is fueled by a lack of housing supply, intensifying affordability challenges for first-time buyers. While some markets may see small declines in prices, economists agree that a significant crash is unlikely. Homeowners’ strong personal balance sheets and cautious construction pace by builders contribute to the ongoing shortage of homes for sale. Although the housing market is cooling, it’s not a typical real estate downturn, and the correction will be far less severe than the Great Recession. Find out more about the state of the housing market and why a crash is unlikely on Bankrate.
Guest Opinion: California housing laws have failed. The crisis is housing affordability – Pleasanton Weekly
A recent court ruling declared Senate Bill 9 unconstitutional for five “charter law” cities in Los Angeles County, highlighting the failure of California’s housing laws to address affordability. The ruling emphasized the lack of evidence that SB 9 would increase the supply of below-market-rate housing or lower costs for the majority of households. This decision presents an opportunity for more cities to challenge state overreach and protect local control. The state’s numerous laws eroding local democracy have not made housing more affordable for those who need it most. Cities like Pleasanton are experiencing the negative impacts of this overreach, with elected officials unable to stand up for constituents due to threats of lawsuits from developers and the state attorney general. While cities have produced market-rate housing, it has only made housing less affordable. State mandates for affordable housing are unrealistic and require billions of dollars in subsidy that most cities cannot meet. The result is the transfer of local authority to for-profit development interests. California’s new Regional Housing Needs Allocation (RHNA) cycle targets have doubled without justification, and many cities will struggle to achieve these inflated mandates. The state must stop blaming cities and address economic factors and powerful special interests contributing to the affordability crisis. It is time to acknowledge the limitations of market-driven housing policies and end the war on communities. To read more about the failure of California’s housing laws, visit here.
Improvement in home prices, interest rates lifts California housing affordability during first-quarter 2024, C.A.R. reports
The California Association of Realtors (C.A.R.) has reported an improvement in housing affordability during the first quarter of 2024 in California. Seventeen percent of homebuyers could afford to purchase a median-priced existing single-family home, up from 15 percent in the previous quarter. However, this figure is still significantly lower than the peak of 56 percent in 2012. The report highlights that the U.S. economy’s better-than-expected performance makes it unlikely for the Federal Reserve to cut interest rates until at least the summer, hindering significant improvements in affordability. To learn more about the housing affordability in California, visit here.
Arizona Should Not Look to California for Housing Solutions: News: The Independent Institute
The fear of Californians bringing their housing policies to Arizona has led to the slogan “Don’t California my Arizona.” However, Arizona’s attempt to replicate California’s policies through House Bill 2815, known as the “Yes In God’s Backyard” (YIGBY) bill, raises concerns. While both YIGBY bills aim to loosen zoning and permitting regulations, they only apply to certain landholdings, leaving out equal rights for all citizens. Moreover, Arizona’s YIGBY bill includes counterproductive regulations such as requiring 40% of units in qualifying developments to be reserved for low-income housing. Economic research shows that inclusionary zoning, like California’s policies, exacerbates the shortage of affordable housing. Instead, Arizona should learn from areas like Houston, which has kept housing prices below the national average by not adopting zoning and providing a simple and transparent permitting system for everyone. To read more about why Arizona should not imitate California’s housing solutions, visit here.
Small Houses Pose Solution to Housing Crisis | KQED
Los Angeles urban planner Max Podemski explores the idea that solutions to California’s housing crisis can be found in smaller multifamily dwellings in neighborhoods and cities with fewer zoning restrictions. In his new book, “A Paradise of Small Houses,” Podemski discusses this concept. The potential of small houses as a solution to the housing crisis is further explored in an interview with Saul Gonzalez on The California Report. To learn more about this innovative approach, visit here.