Digestible Real Estate News
We’re keeping this recurring piece to do a bit more for those genuinely interested in New York real estate and give my LinkedIn designation a little luster, enjoy some light real estate snacks so I can make this newsletter tax deductible.
1. We’ll start this section off with some numbers:
Only 9% of all existing mortgages in the U.S. were taken out with a rate of above 6%, according to data from the Federal Housing Finance Agency. Around 23% of all mortgages have a rate of less than 3%, and 38% homeowners have a mortgage rate of between 3% and 4%. (Marketwatch)
The US home turnover rate in the first half of 2023 has fallen to the lowest in at least a decade as high mortgage rates compel owners to stay put. About 14 out of every 1,000 US homes changed hands during this period, down from 19 in the same period during 2019. (Bloomberg)
More than 10,000 people in the U.S. turn 65 every day, a number that will peak at about 12,000 in the summer of 2024. Last year, 39% of home buyers were baby boomers – half of them being all-cash buyers – while only 28% were millennials. The median age of a typical repeat home buyer is currently 59 years old; in 1981, that age was 36 years old. (Marketwatch)
20 years ago in 2003, there were 83 million owner-occupied homes in the US, and they were changing hands at a rate of 6.5 million homes per year. Today, there are about 96 million homes, but the rate of home sales has slumped to just 4 million homes per year, a fall from 7.8% of existing homes sold per year to just 4.2%. Americans are staying in their homes for much longer than they used to, mainly for financial reasons. (Axios)
Americans are increasingly tapping their greatest source of wealth with home equity lines of credit, borrowing against the value of their homes, which skyrocketed in the pandemic real estate rally. In 2022 over 1.4 million HELOC loans, a jump from 2020 but still lower than 2005 when 3.2 million HELOC loans were taken out. Americans collectively had $28.7 trillion worth of home equity at the end of Q1 2023, up about 40% compared to 2020. Tappable equity is up 56% since 2020. Homeownership has its advantages….. (Bloomberg)
2. For everyone waiting for prices to drop, you may have missed your window last fall. With rates putting a squeeze on supply, home prices have hit a new high, setting records in some markets. Home prices hit a record high in May, rising 0.7% nationally compared with April at a seasonally adjusted rate, according to the Black Knight Home Price Index. Prices, which have been rising since January, were 0.1% higher in May than a year earlier. The sharp jump in interest rates last summer threw cold water on the piping hot housing market but by January 2023, buyer demand outweighed the razor thin supply and buyers quickly got acclimated to the new rates as it was necessary to do so if they wanted to successfully purchase a home. Supply is still declining; new listings are down about 25% from a year ago, as homeowners with sub-4% interest rates are reluctant to give those up. Total inventory is about half of what it was just before the pandemic and as of last week, the average home is now selling just above its list price for the first time in nearly a year.
3. While I know the default is to do your best to not think about it, we’ve all been dripped on by mysterious water coming from various pipes and crevices above the subway platform and Curbed recently did a semi-scientific dive into what you’re unwittingly being exposed to. The article is a great read but to spare you the details, the drops are actually quite clean. While it’s not drinking-water quality, the drips are essentially similar to fresh precipitation, albeit precipitation that has traveled through concrete. While there was no microbial test, the expert said that unless there’s a clear source of contamination like sewerage, the drips are essentially rain and shouldn’t have bacteria contamination. Subway puddles showed high concentrations of trace metals, the most notable being arsenic most likely from rat poison.
And for the two homes I’m ogling this month…
..this quintessentially perfect townhouse located at 34 W 11th Street in the West Village for $24,995,000…
…the townhouse I lay awake at night thinking about located at 20 Remsen Street in Brooklyn Heights for $11,500,00…
