A trio of troubling housing market data reports, a new wave of Texas residents and an unlikely KISS tribute. From the wild and wooly world of real estate, here are our Hits and Misses for the week of April 15-19.
MISS: Going Down the Wrong Road? This week witnessed three data reports that pointed to a housing market with more than a few problems – the 30-year fixed-rate mortgage is now averaging 7.10%, up from up from last week when it averaged 6.88%, while single-family housing starts for March crashed by 12.4% from the previous month and existing home sales dropped by 4.3% from February to March. With rates becoming increasingly onerous while the inventory supply remains too tight for comfort, it looks as if the housing market will be contributing more than its fair share of woes to the American economy. Let’s hope these reports are aberrations and a more vibrant market with less burdensome rates will be ahead of us.
MISS: Going Down Another Wrong Road? Another troubling data report was published this week by ATTOM, which found there were 625 commercial real estate foreclosures were recorded in March, up 6% from February and up by 117% from March 2023. California had the highest number of commercial foreclosures last month at 187, up 8% from February but up by an astonishing 405% from one year earlier. Federal Reserve Chairman Jerome Powell has been glumly observing this situation and noted in recent congressional testimony that “this is a problem that we’ll be working on for years more, I’m sure. There will be bank failures, but not the big banks.”
HIT: You’re Not Alone in the Lone Star State. Texas Realtors’ newly published 2024 Relocation Report found approximately 102,000 Californians, 41,000 Floridians and 30,000 New Yorkers moved to Texas during 2022. There was additional inbound migration from Illinois, Louisiana, Colorado, and Oklahoma – each state contributed roughly 25,000 residents moving into Texas. Overall, approximately 668,000 people relocated to Texas from other states in 2022, creating a net population gain of nearly 175,000 new residents. What is the secret behind this drawing power? As Texas Realtors Chairman Jef Conn noted, “Texas has vibrant large cities, charming small towns, and rural areas with all the space you’d ever want. You can find pretty much any lifestyle you’re seeking here.”
HIT: Green Light for Disney. A big corporate winner this week was the Walt Disney Co., which received preliminary approval from the Anaheim City Council for its proposed $1.9 billion expansion of Disneyland. Anaheim is also a winner here – the company agreed to buy three local streets from the city for $40 million while allocating $30 million for the development of local affordable housing. This news reinforces Disney CEO Bob Iger’s plans to emphasis real estate development as a key to strengthening the company’s fortunes after less than stellar results from its film and streaming endeavors. As Iger stated last month, if “you look at the land that we have, you look at the demand that exists in the marketplace, and you look at the return on investment capital, it’s a no-brainer to invest that way.”
HIT: Good News from Detroit. While most data studies related to Black homeownership focus on challenges and disparities with other demographics, a new study released this week by the University of Michigan’s Poverty Solutions offered a much-need jolt of good news. This study determined that Black homeowner-occupants in Detroit amassed $2.8 billion in added home value between 2014 and 2022, an 80% increase during that time. While the net value of all owner-occupied homes in Detroit increased from $4.2 billion in 2014 to $8.1 billion in 2022, Black homeowners realized the vast majority of that gain in wealth, with their home values rising from $3.4 billion in 2014 to $6.2 billion in 2022. The study also noted neighborhoods that had the lowest values in 2014 recorded a nearly 300% increase in value in 2022, while those areas of comparatively middle and high value saw increases of 99% and 131%, respectively.
MISS: Oh, Beth, What Can I Do? Wednesday’s meeting of Manhattan Community Board 4’s transportation planning committee became the center of attention with a debate on whether to co-name the southwest corner of W. 23rd St. and Eighth Avenue in honor of the rock band KISS. The Wall Street Journal reported the meeting was attended in person and via Zoom by spirited supporters of the iconic group who insisted a street co-naming tribute was fitting for the band, which has its roots in New York City. However, there were also fervent opponents to the idea who complained that the proposed co-name of “KISS Corner” could jam the neighborhood with selfie addicts posing for lip-lock photos at the site – and some opponents noted KISS had very little connection with that specific section of Manhattan. The committee rejected the proposal, although KISS fans can still push for the co-naming honor before the full board in May and, potentially, the City Council. While the band’s followers were disappointed with the committee’s decision, KISS frontman Gene Simmons was flippantly unconcerned, observing, “Not everybody likes Jesus, either.”
