Happy Halloween to all the Stessa Newsletter subscribers! We’ve collected a few spooky and fun news stories that we think you’ll enjoy.
According to Realtor Magazine, the Nightmare on Elm Street house is on the market for $3.25 million. Freddy Krueger is not included, and yes, they will be accepting trick or treating on Sunday.
Source: Realtor Magazine (Oct. 21, 2021)
A Dallas homeowner is causing problems again with his neighbors with his gory Halloween decorations. “Why? Because it looks like a crime scene. This isn’t the first time this has happened, according to homeowner Steven Novak, and it most likely won’t be the last. His home went viral last year for how horrific his decorations were, and this year is no different.”
Source: Steven Novak [@omnisteven], Instagram (Oct. 2021)
We think it shows a lot of guts. In commenting on the display, the owner notes that:
“I’ve always been up to hijinks like flying ghosts or 7-foot tall snow sculptures of myself, so if I was gonna do Halloween, it was obvious that it should be hyperreal…No lights, fog machine, or camp…Something that would really freak people out walking by in the dark. So I whipped up some dummies and slung 20 gallons of blood all over.”
Home prices and mortgages in 2022
In a recent report, Zillow research predicted that home values will increase 13.6% between September 2021 and September 2022. Further, home prices are expected to end 2021 up almost 20% year-over-year.
That said, in its most recent report, CoreLogic predicted that home prices would only increase 2.2% in 2022, representing a serious cooling of the market.
Source: CoreLogic (Oct. 2021)
In commenting on the projections, Lance Lambert of Fortune reported that the housing market in 2022 will depend a lot on what interest rates are doing.
“As with most economic models, a lot of the variation boils down to assumptions. In particular, the outlook for mortgage rates. Now that elevated inflation (5.4% in September) looks like it’s going to stay for a while, the Federal Reserve is more likely to raise interest rates sooner rather than later. If it did, that would cause the average 30-year fixed mortgage rate, which is currently at 3.05%, to rise. Of course, rising mortgage rates would put negative pressure on the housing market. The sooner (and higher) mortgage rates rise, the lower price appreciation will be next year.”
Mortgage interest rates, according to the Home Buying Institute and the Mortgage Bankers Association (MBA) predictions, are expected to increase and perhaps reaching 4% by the end of 2022. Experts believe that this will cause a decline in refinancing and mortgage activity.
Lance Lambert in a second Fortune article reports on Goldman Sachs predictions for 2022, which state that:
“Goldman Sachs is forecasting U.S. home prices will soar another 16%. While that represents a slight deceleration in the growth of home prices—which are up 17.7% over the past 12 months alone—it’s hardly price relief for buyers. Simply put: The investment bank thinks the housing market frenzy set off during the pandemic has a lot more room to run.”
Why? Housing supply just isn’t keeping up with demand, nor is it expected to catch up in the coming year.
Source: Goldman Sachs
Given the projected increase in rates, now is a good time to look at your mortgages and lock in lower interest rates where possible.
A balanced market?
According to a Redfin report last week, only 59% of home offers faced multiple offers in September, the lowest level seen in the past nine months. This is a seasonality trend, but also is a reflection of a recent uptick in mortgage rates.
Redfin Deputy Chief Economist Taylor Marr commented on the new date:
“It’s typical to see a decline in competition as families head back to school and the weather cools down…Buyers also aren’t having to offer as much above the asking price as they were in the spring, when competition in the housing market was peaking. As mortgage rates continue to rise, we can expect bidding wars to keep slowing.”
Interestingly, the markets with the highest bidding war rates are Raleigh and Boston.
The National Association of Home Builders (NAHB) reported that lumber and concrete prices are falling again, with residential construction goods marking a 0.8% decrease in September. That said, building material prices are still 13.9% higher year-over-year, and 11.3% higher than January 2021.
According to Zillow, the National Association of Realtors (NAR) reported that existing-home sales in September increased 7% month-over-month, however were down 2.3% year-over-year. The median sales price nationally is now sitting at $352,800, and sales inventory in September is down 13% from this time last year. But we are seeing some recovery on inventory, according to a second Zillow report:
“The modest inventory recovery this summer, after hitting an all-time low in April, still leaves inventory down 19.9% from this time a year ago. But even there there is a silver lining — the last time the year-over-year inventory deficit was less than 20% was July 2020. It’s slow progress, and the inventory shortage remains very acute. Buyers will still see precious few options on the market in most of the country, which is likely to keep up the competitive pressure on the listings that do hit the market. But things are slowly changing in buyers’ favor.”