These Are the Fastest Shrinking Markets in the US

More than a decade has passed since the U.S. housing bubble burst and the 2008 financial crisis began. 

Home prices in major cities across the country lost about a third of their value during the recession but national prices have since recovered and even surpassed pre-crisis levels. And though home prices are now close to their highest levels of all time, the recovery has been largely uneven. While prices in the vast majority of housing markets are growing, in a handful, prices have actually declined in the past year.

Based on median single-family home price changes over the year through the second quarter of 2019 from the National Association of Realtors, 24/7 Wall St. reviewed the fastest shrinking housing markets. Single-family home price data for the 180 metropolitan areas reviewed came from the National Association of Realtors. Income data came from the U.S. Census Bureau’s American Community Survey.

The decline in home prices in these markets, in some cases, represents part of a longer-term trend of low-demand for housing in a market that continues to struggle due to a weak economy. This is the case for places like Peoria, Ill., and Binghamton, New York, where the typical home costs over $100,000 less than the national median of $279,000. Economic struggles may not only affect residents' ability to afford housing, but may also push some away, leading to even lower housing demand. Some cities on this list are among America’s fastest shrinking cities.

16. Fargo, N.D.-Minn.

15. Bridgeport-Stamford-Norwalk, Conn.

14. Rockford, Ill.

13. Panama City, Fla.

12. Topeka, Kan.

11. Boulder, Colo.

10. Champaign-Urbana, Ill.

9. Urban Honolulu, Hawaii

8. Oklahoma City, Okla.

7. San Francisco-Oakland-Hayward, Calif.

6. Naples-Immokalee-Marco Island, Fla.

5. Oshkosh-Neenah, Wis.

4. Binghamton, N.Y.

3. Peoria, Ill.

2. San Jose-Sunnyvale-Santa Clara, Calif.

1. Bismarck, N.D.

To see all the stats, visit USA Today.

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Data Shows Substantial Housing Progress Post-Recession

Since the recession, the U.S. real estate housing markets have undergone a significant transformation, creating a booming real estate industry that is almost unrecognizable to the one we had just a decade ago.

June marked the longest period of economic expansion for the country, reaching 121 months. What’s happened in that time? According to a CoreLogic report, “The Role of Housing in the Longest Economic Expansion,” the housing flip rate and home prices and rents are up. One of the biggest indicators of change, however, is the drastic dip in homes with negative equity. All of these improvements have been driven by several economic factors, such as low unemployment and rising GDP growth rates.

“During the last nine years, the expansion has created more than 20 million jobs, raised family incomes and rebuilt consumer confidence,” says Frank Nothaft, chief economist at CoreLogic. “The longest stretch of mortgage rates below 5 percent in more than 60 years has supplemented these factors. These economic forces have driven a recovery in home sales, construction, prices and home equity wealth.”

Home Equity Rates Have Drastically Improved
Negative equity no more. In the first quarter of 2010, the percentage of underwater homes sat at a dismal 25.9 percent. Fast-forward to earlier this year, and that number has significantly dropped to a mere 4.1 percent.

Homeowners are in a more profitable space. In the first quarter of 2019, home equity across the nation totaled $15.8 trillion, a vast improvement over the $6.1 trillion in early 2009. Additionally, per homeowner, average equity increased from $75,000 to $171,000 in that time period.

According to the report, several factors contributed to this equity growth, including home price appreciation and foreclosure- and short sale-motivated debt cancellation and principal paydown.

“Home prices have increased steadily since 2011, creating record amounts of home equity and putting homeowners in a good position to weather future downturns,” said Molly Boesel, principal economist for CoreLogic, in the report.

Home Prices and Rents Have Grown
There’s been continued growth in this segment of the market. Since June 2009, U.S. home prices increased 50 percent while single-family rents got a 33 percent boost. While the homeowner households decreased by 1.1 million between 2014 and 2015, CoreLogic attributes the gap being filled in 2019 to a boost in millennial buyers. According to the report, millennials accounted for 44 percent of home-purchase mortgage applications during that time.

A rising cost of labor and materials could also be driving up home prices. The report found that in June 2018, the cost of materials increased 7.3 percent year-over-year in response to new steel and aluminum tariffs. Additionally, labor costs increased 2.3 percent year-over-year due to a low supply of construction workers. 

House-Flipping Bounced Back and Remains Stable
Going into the last housing bubble, investors worked quick to turn a profit before the real estate markets tumbled. At the peak, in the first quarter of 2006, flips made up a high 11.3 percent of homes. Post-recession, that rate dropped to 4.9 percent, bouncing back by 2018 to an even higher 11.4 percent. This may not be a sign of an upcoming recession, however. CoreLogic reports that the flipping space has widely changed, with investors making more sustainable decisions and professionals replacing the novice flippers of the past.

A Thriving Economy?
Several economic elements could be at play, shows the report. Rising employment rates could be helping with the increase in potential homebuyers and in decreasing negative equity rates. Additionally, housing is tied to wealth creation, correlating with the increase in home flips.

With steady continued growth and inflation rates below the 2 percent target set by the Federal Reserve Board, the question arises: When will the U.S. market hit its peak? According to CoreLogic, stock market bumps and drops in the 10-Year Treasury Yield are causing concerns. Data shows, however, that growth is happening at a slower pace, with mortgage delinquency rates reaching a record low of 3.6 percent in April 2019.

“We expect the housing market to enter a normalcy phase over the next 24 months,” said Ralph McLaughlin, deputy chief economist at CoreLogic, in the report. “With prices neither rising too fast nor too slow, and with a growing stream of young households looking to buy homes over the next two decades, the long-term view looks healthy.” 

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West + Main Homes Announces Partnership with Giveback Homes

New collaboration connects Colorado-based brokerage with national social good network 

Denver, CO August 19, 2019 -- West + Main Homes, a boutique real estate brokerage headquartered in Denver, Colorado, has signed on as a Giveback Homes brokerage partner. Giveback Homes is the leader in pioneering real estate's social good movement and will work with West + Main Homes on a long-term giving program that will focus on both national and local home-building programs.

“Our entire team of Realtors is so excited to be part of Giveback Homes,” said Stacie Staub, Co-Founder + CEO of West + Main Homes. “Madeline and I built our company for many reasons - and the ability to give back to both our local community as well as impoverished people the world over is one of our highest priorities.” 

West + Main Homes presented Caroline Pinal, Co-Founder of Giveback Homes with an initial contribution earlier this month, with the goal of having a local Giveback Homes Build Day this Fall in partnership with Habitat for Humanity in Denver. West + Main Homes is a full service residential real estate firm, placing a high priority on industry knowledge, customer service and exceeding expectations throughout the process of home buying and selling. West + Main Homes has been recognized by The Denver Post as a Top Workplace and has received national awards in its first three years of operation. 

“I can't think of a better way for our agents to make the world a better place,” said Greg Fischer, Managing Broker + Director of Agent Experience. "West + Main is a brokerage built by and filled with amazing people, and we are so grateful to Giveback Homes for providing them with this opportunity."

Giveback Homes has worked on over 50 affordable housing projects throughout the United States and has built over 200 complete homes for families in need around the globe. Through their partnership with Waves for Water, they’ve delivered water filters that provide clean drinking water for more than 5,000 people. In the wake of the 2017 hurricanes, Giveback Homes spearheaded efforts to raise over $35,000 for hurricane victims and distributed household goods and other items for families recovering from the storms.

Giveback Homes and West + Main are looking forward to their first collaborative project, a Build Day with Habitat for Humanity Metro Denver, which currently has 41 homes under construction across the Denver Metro area. For more information, please visit  givebackhomes.com,  habitatmetrodenver.org  and westandmainhomes.com

Mortgage Rates Hit 3-Year Low

Escalating tensions over a trade war with China sent investors rushing to the relative safety of the bond market late last week.

That pushed the yield on the 10-year Treasury, which mortgage rates loosely follow, down sharply.

The average rate on the popular 30-year fixed mortgage hit 3.70% on Friday, the lowest since November 2016, according to Mortgage News Daily. That rate will likely dip even lower Monday, as bond yields continue to fall.

The drop last week meant that 8.2 million 30-year mortgage holders could likely qualify for a refinance and save at least 0.75% off of their current interest rate by doing so, according to a new tally by Black Knight, a mortgage software and analytics company.

The size of that population, however, is still very sensitive to even the slightest rate moves, since so many borrowers have already refinanced to very low rates. Just a one-eighth of a point move lower could add another 1.5 million borrowers to the eligible refinance pool, and the same move in the other direction would knock 1.3 million out.

“Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%, meaning that they could effectively buy $45,000 ‘more house’ while still keeping their payments the same as they would have been last fall,” said Ben Graboske, president of Black Knight Data and Analytics.

“As affordability pressures have eased, it also appears to be putting the brakes on the home price deceleration we’ve been tracking since February 2018,” he added.

Rates are now incredibly favorable for both refinance and home purchase, consumers still need to shop around for the best rate. But a full one-third of them are not, according to a new survey from Fannie Mae. The vast majority of consumers will comparison shop for other products, but mortgages are apparently too daunting.

“Unfortunately, comparison shopping for a mortgage can be a much more complicated and time-consuming endeavor. Simply evaluating the ‘price’ of a mortgage involves looking at several interrelated components – including rates, fees, and points – and making an assumption about how long a borrower will stay in that mortgage,” noted Fannie Mae’s chief economist, Doug Duncan, in the report.

“While it’s easy to find “teaser” rates advertised online, a true mortgage quote is based on a handful of variables that are unique to each buyer and evaluated differently by each lender,” he continued.

Consumers instead tend to rely on advice from family and friends or simply go to the same lender they’ve used before.

“Non-shoppers also reported much less concern with competitive terms when selecting a lender, citing other non-financial priorities, such as customer service/responsiveness and having a preexisting account with a lending institution. Individual households may have good reason for accepting that tradeoff,” added Duncan.

Mortgage rates have been quite volatile lately, so borrowers who could benefit from a refinance will need to act quickly. Rates could move lower, but different lenders will be responding to the changing market conditions at different paces.

For more information, visit CNBC.

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