Welcome to today’s real estate news roundup! In recent developments, a recent U.S. Supreme Court ruling has given California lawmakers an opportunity to address the rising housing costs in the state. Reform may be on the horizon to alleviate California’s housing crisis, although some unanswered questions from the ruling could lead to litigation. Meanwhile, the housing market continues to experience soaring property prices, with no signs of slowing down. Despite high mortgage rates, the lack of housing supply and rising prices pose challenges for first-time buyers. However, experts predict that any market correction will be modest, with no significant price drops expected. To learn more about these topics and other housing market predictions, dive into the full articles linked below.
Supreme Court gave CA a chance to lower housing costs | Opinion
A recent U.S. Supreme Court ruling on housing impact fees has given California lawmakers an opening to address a key barrier to construction: cost. Thanks to the ruling, reform may be on the way that could help ease California’s worsening housing crisis. However, critical unanswered questions from the ruling could also lead to litigation. State legislation could avert this situation.
Is The Housing Market Going To Crash? | Bankrate
To the dismay of would-be homebuyers, property prices just keep rising. It seems nothing — not even some of the highest mortgage rates of the past two decades — can stop the continued climb of home prices. Prices increased once again in March, according to the National Association of Realtors (NAR), which reports that median existing-home prices were up 4.8 percent over last year — the ninth month in a row of year-over-year jumps. In another reflection of ongoing increases, the S&P CoreLogic Case-Shiller home price index for January was up 6 percent from a year earlier.
NAR data shows that median sale prices of existing homes are near record highs. March 2024’s median of $393,500 is off the all-time-high of $413,800, but it’s the highest March median on record. (Seasonal fluctuations in home prices typically make late spring the highest-priced time of the year — the all-time-high was reached in June 2022.)
Home prices have also risen more quickly than wages, a reality that intensifies affordability challenges, says Lawrence Yun, NAR’s chief economist. “Any time home prices outpace people’s incomes, that is not good,” Yun told reporters recently. The result is a squeeze on first-time buyers — but repeat buyers can rely on gains from the housing market and their stock portfolios to finance purchases, Yun says.
Home values held steady even as mortgage rates soared to 8 percent in October 2023, reaching their highest levels in more than 23 years. (They have since dipped, falling briefly below 7 percent before averaging 7.33 percent in Bankrate’s weekly survey released April 17.) The main culprit is a lack of housing supply. Inventories remain frustratingly tight, with NAR’s March data showing only a 3.2-month supply.
“You’re not going to see house prices decline,” says Rick Arvielo, head of mortgage firm New American Funding. “There’s just not enough inventory.” Skylar Olsen, chief economist at Zillow, agrees about the supply-and-demand imbalance. She predicts home prices will keep rising in 2024 — welcome news for sellers but not so great for first-time buyers struggling to become homeowners. “We’re not in that space where things are suddenly going to be more affordable,” Olsen says.
In fact, the trend is quite the opposite. According to Realtor.com’s March 2024 Housing Market Trends Report, high mortgage rates have increased the monthly cost of financing the typical home (after a 20 percent down payment) by 2.9 percent since last year. That equates to $63 more in monthly payments than a buyer last March would have seen.
Taking all this into account, housing economists and analysts agree that any market correction is likely to be modest. No one expects price drops on the scale of the declines experienced during the Great Recession. There are still far more buyers than sellers, and that means a meaningful price decline can’t happen: “There’s just generally not enough supply,” says Mark Fleming, chief economist at title insurer First American Financial Corporation. “There are more people than housing inventory. It’s Econ 101.”
Want to learn more about the housing market? Read the full article on Bankrate.
Is the housing market going to crash? What the experts are saying
Mortgage rates are high, but home prices keep rising — blame the lack of housing supply. Economists predict that any market correction will be modest and not on the scale of the Great Recession. Experts do not expect a housing market crash, due to low inventory, strict lending standards, and other factors.
To the dismay of would-be homebuyers, property prices just keep rising. Prices increased once again in March, according to the National Association of Realtors (NAR), which reports that median existing-home prices were up 4.8 percent over last year — the ninth month in a row of year-over-year jumps. NAR data shows that median sale prices of existing homes are near record highs.
Home prices have also risen more quickly than wages, intensifying affordability challenges for first-time buyers. The main culprit is a lack of housing supply, with inventories remaining frustratingly tight. Despite high mortgage rates, the trend is quite the opposite, with home prices predicted to keep rising in 2024.
Taking all this into account, housing economists and analysts agree that any market correction is likely to be modest. No one expects price drops on the scale of the declines experienced during the Great Recession. There are still far more buyers than sellers, and that means a meaningful price decline can’t happen due to the low supply of homes.
Want to learn more about the housing market predictions? Read the full article on Yahoo Finance.
California housing developers win first ‘builders remedy’ battles in fight to bypass local zoning
A year-long tug-of-war between California cities and developers over the state’s anarchic “builder’s remedy” law is starting to make its way to the courts as litigants spar over the intricacies of the 34-year-old pro-housing provision. And if three recent Los Angeles County court rulings are any indication, developers appear likely to come out on top of the building-and-zoning tussle.
In two of the three cases, judges sided with the builders. And in the third, the judge issued a split decision, finding that cities must comply with the builder’s remedy, but that the provision doesn’t apply to projects in California’s protected “Coastal Zone.”
Although the law has been on the books since 1990, opportunities to exploit the provision — which casts zoning rules aside in cities without state-approved housing plans — only became feasible for the first time in the past few years.
As a result, a groundswell of builder’s remedy applications hit dozens of cities in Southern California and the Bay Area over the past 1 ½ years, often with proposals for towering apartment complexes in the midst of lower-density neighborhoods.
Some cities are accommodating these applications, housing advocates say. Others, like Santa Monica, are reaching settlements to expedite approvals for scaled-down plans.
But in at least a fourth of the cases, cities are dragging their feet, one housing advocate said.
Those include the cities of La Cañada Flintridge and Los Angeles, which argued in the recent court cases that their housing plans complied with state law before the state certified them (and therefore, before builder’s remedy applications were filed). But developers say it also includes cities like Orange and Beverly Hills, where developers are facing city denials.
“Most of the time, they’re putting up some kind of roadblock. And the most common kind of roadblock is basically pretending that the builder’s remedy doesn’t apply,” said Sonja Trauss, executive director of the pro-housing group, YIMBY Law.
“Most of these cities are completely intransigent,” added Alexander DeGood, a Los Angeles attorney with Cox Castle & Nicholson, which represents developers in about 10 builders remedy cases. “They resolutely do not want to give up any local control.”
Want to learn more about the battles between housing developers and local zoning? Read the full article on The Mercury News.