Welcome to today’s roundup of real estate news, where we delve into the latest trends and challenges shaping the housing market across various regions. From the ongoing housing shortage in Kansas City to innovative construction processes in Illinois, and from predictions about home affordability to the rising popularity of new constructions, our coverage spans a broad spectrum of issues critical to homebuyers, investors, and policymakers alike. Whether you’re looking to buy your first home, invest in properties, or simply stay informed about the real estate market, our articles provide valuable insights and updates. Dive into our detailed reports to understand how these developments might impact you and explore potential opportunities in the ever-evolving landscape of real estate.
Housing market shortage comes to Kansas City
If you’re looking to buy a home in Kansas City, be prepared for scarcity and tough competition. Homeowners are reluctant to sell and take on higher interest rates, resulting in a shortage of existing houses on the market. This has led to a surge in home construction, but rising labor and materials costs make it difficult to keep up with demand and maintain affordability for first-time homebuyers.
In February, the median sale price of a home in Kansas City reached $250,000, marking an 11% increase from last year. The trend of large corporate investors purchasing single-family residences to convert into rentals further intensifies competition among buyers.
Low interest rates stimulated borrowing and lending, but rates have since increased, causing homeowners to hesitate in selling and taking on higher mortgages. However, experts suggest that rates are unlikely to go back down to historic lows, urging young homebuyers to purchase now and refinance later.
The shortage of homes on the market and the increasing costs of construction materials have made newly constructed homes more expensive than resale homes. Some empty lots in the Kansas City market run north of $100,000, making it challenging to build affordable homes.
Builders also face challenges with varying construction rules and codes across different cities, adding to the complexity and cost of meeting demand. Despite a dip in building permits after the adoption of new codes, Kansas City has yet to recover.
To learn more about the housing market shortage in Kansas City, click here.
Illinois cities could significantly speed up new home, business construction
A new proposal in Illinois aims to reduce the lead time on construction projects by allowing local architects and engineers to handle cities’ permitting and review processes. By adopting a self-certification process similar to what Phoenix, Arizona implemented in 2012, Illinois cities and villages could cut down the time it takes to issue permits from months to just days.
Phoenix’s experience with self-certification resulted in reduced building permit and plan review process times, often taking less than 24 hours. This streamlined approach led to significant growth in the city, with a 10% increase in housing units over a decade. The self-certification process not only saved time and money but also provided greater predictability for developers.
Illinois cities, particularly Chicago, could benefit from adopting a 24-hour self-certification ordinance. The city currently faces an affordable housing gap of nearly 120,000 homes, and the implementation of this process could drive down overall housing costs and increase opportunities for residents.
To learn more about how Illinois cities can speed up construction processes and improve growth, click here.
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
As we enter peak home-buying season, the housing market shows signs of life. However, high mortgage rates and home prices, coupled with historically low housing stock, continue to make homeownership unattainable for many. Additionally, a monumental $418 million settlement by the National Association of Realtors is set to upend the buying and selling model that has been in place for years.
Experts predict that the housing market will face affordability constraints due to high home prices and elevated interest rates in 2024. While Fannie Mae forecasts an increase in home sales transactions compared to last year, the rise in home prices is expected to be slower. However, price fluctuations will vary regionally and depend on local market supply.
Despite ongoing affordability hurdles, experts remain optimistic about a housing market recovery this year. They anticipate an increase in housing inventory and a gradual cooling of mortgage rates. However, a rapid decline in rates could create a surge in demand, potentially driving home prices back up.
The housing market faces challenges related to changes in broker commissions following the settlement with the National Association of Realtors. The new rules will impact how compensation is offered and negotiated, potentially causing chaos in the market.
While some areas of the country are experiencing monthly price declines, a housing market crash is unlikely in 2024 due to the strong equity position of homeowners and the overall strength of the economy. Foreclosure activity remains below pre-pandemic levels, and experts expect it to stay that way.
For those considering buying a home, experts advise focusing on personal financial readiness rather than trying to time the market. Building equity and net worth through homeownership is still seen as a worthwhile long-term investment.
To read more about housing market predictions for 2024, click here.
New construction remains popular as existing home listings continue to lag | Fox Business
Newly built homes are gaining popularity among homebuyers due to the low inventory of existing homes. The National Association of Home Builders/Wells Fargo Housing Market Index rose by three points in March, reaching its highest level since July. This increase indicates a growing desire for new construction among current homebuyers.
New builds offer a welcome reprieve for buyers compared to existing homes, which often go for more than listed and involve bidding wars. Builders have made efforts to attract buyers by offering incentives such as funds for closing costs or flexible dollars for home upgrades. Additionally, builders have focused on building smaller and more affordable homes, meeting the demand for affordability.
While new construction is on the rise, the existing home market remains largely unaffordable for the average buyer. Mortgage rates remain high, and housing prices have risen faster than income levels. However, despite these challenges, homebuyers remain optimistic about the housing market.
To read more about the popularity of new construction and the challenges in the existing home market, click here.
The D.C. region needs to build 87 new homes per day. It’s not close. – The Washington Post
A Washington Post analysis has found that the D.C. region is falling behind in meeting its target of building at least 320,000 housing units in the next decade. The Metropolitan Washington Council of Governments set this target to address the worsening housing shortage in the area, which would require adding more than 87 units per day.
However, from 2020 to 2023, the region only produced an average of about 60 units per day, resulting in a deficit of over 40,000 units. Housing production varies across jurisdictions, with some exceeding their share of the targets while others lag behind. Fairfax County, the most populous jurisdiction, is on pace to build only 36% of its target.
The shortage of affordable housing disproportionately affects low earners and people of color. Many neighborhoods in the region are not zoned for dense housing development, and historical protections can also impede new development. Regulatory barriers and opposition from local groups further contribute to delays in housing development.
Efforts are being made to streamline the housing development process and subsidize affordable housing. Proposed legislation aims to remove red tape and expand tax credits for affordable housing. However, there is no single solution to the problem, and addressing the housing shortage requires a multifaceted approach.
To read more about the housing shortage in the D.C. region and the challenges in meeting housing targets, click here.
Home builders interpret latest Freedom Works Here ad as recruiting workers, not bosses
The recent “Freedom Works Here” advertising campaign by Governor Kristi Noem is being interpreted by home builders in Sioux Falls as a call to recruit more workers rather than more bosses. The Home Builders Association of the Sioux Empire emphasizes the need for more laborers to support the industry, rather than an influx of builders. While the campaign highlights the growth of home building in South Dakota, the focus should be on attracting more hands-on workers to meet the demand. The association is actively working to introduce young people to opportunities in the industry at an early age and raise awareness within the community about the available career paths. The mild winter and increased activity in early February have contributed to a rise in construction permits, but the shortage of skilled workers remains a challenge. The association sees the campaign as a positive way to shine a light on the industry and attract more skilled individuals.
To read more about the interpretation of the “Freedom Works Here” ad by home builders in Sioux Falls, click here.