How the housing market is still humming with empty houses
By MELISSA RODRIGUEZAPAPAL, Associated Press SAN FRANCISCO (AP) Housing prices are still up nearly 10 percent this year, despite a weak global economy and weak demand, and the U.S. has the largest backlog of foreclosures in the world.
But the housing industry is still booming, with more than 1.5 million homes sold in April alone.
The nation’s housing market has been in freefall for years, with record forecloses and surging rents, and even more pent-up demand.
And many economists expect the market to continue sliding.
Foreclosures are up in some parts of the country, but not all.
San Francisco is still recovering from the worst financial crisis since the Great Depression.
But some people still think the market will continue to collapse as a whole.
The number of foreclosed homes in San Francisco reached its highest level in nearly a decade in April, and there were at least 20,000 more homes empty, according to real estate data provider Trulia.
Even if that rate of recovery keeps up, the number of homes sold and the amount of forebought properties is set to be far lower than it was last year, according and a former San Francisco housing official.
People who own homes are still willing to pay more for them, and foreclosing rates are up, even if there are fewer homes available, said Matthew J. Shaver, a former senior adviser to President Barack Obama who now works for the National Association of Realtors.
“If you have people who are buying homes and people are not making any money and are not even selling,” Shaver said, “that’s not going to continue.”
The numbers don’t paint a pretty picture.
On average, about one-third of people who sold their homes before the housing crash were still able to make it.
But only about half of the new homes sold last month were for less than $500,000, according the San Francisco Association of REALTORS.
And those that were sold were still sitting on a massive amount of cash, at more than $400,000 in April.
And foreclosed properties have been soaring in price in many parts of California, including in Los Angeles and San Francisco.
With fewer people coming to buy homes and prices rising, there are more empty homes and more foreclosed properties, making the market even more volatile, said John Kavulich, an economist with the Real Estate Institute of California.
This is a big issue, because you don’t want a bunch of empty homes in the streets and you don of people not making enough money to make a mortgage,” Kavulsch said.
In addition, foreclosers have to sell more of their homes, since they are not required to sell them at a profit.
While most foreclothes were still out, there were still thousands of people in some of the biggest foreclosed communities in California.
In Santa Monica, home to one of the largest Santa Barbara areas, the median price of homes is $1.5m, according a real estate agent there.
Some of the foreclouses have been in the market for more than a decade, and many people who own them say they’re ready to sell.
Shaver and others say the big question is whether the economy will pick up again.
That depends on whether the U,S.
and other major economies will continue expanding, and whether people are willing to spend more money.
Economists say a major factor could be the Federal Reserve raising interest rates this year.
It could boost the money supply and help the economy, but it could also hurt housing prices and demand.
Investors and others worry that if inflation spikes, it could slow the recovery.
Other economists say that despite the slow recovery, there is still a lot of room for improvement in the housing markets.
Housing values are still far higher than they were in the mid-2000s, before the financial crisis, according with Trulia, and more homes are available.
For many people, this is their first home, said Shaver.
They are willing and able to pay for it, and that makes them happy.
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