To a real estate junkie like me, this was almost as exciting as getting a new Porsche: People are starting to get wise about Standard & Poor’s Case-Shiller report. Did you notice that numbers came out this week, Monday in fact, the news was pretty bleak IN SOME LOCALES, but no one (here, at least) freaked out? Then the Wall Street Journal produced what I think is one of the most significant real estate articles in eons. If you don’t subscribe and cannot read it, here is what it says in a nutshell: REAL ESTATE IS A LOCAL STORY.
Finally, some wisdom, what I have been preaching long as I’ve been blogging. Not only is real estate a local story, it is a HYPER LOCAL story, which is why Park Cities and now Preston Hollow home prices are inching upwards. Which is why North Dallas and Bent Tree is still soft and the caboose on the train.
A smattering of home-price indexes is painting a confusing picture of where housing markets are headed. One reason for the confusion is that there’s no such thing as a national housing market. That may have been true in 2004, when all housing markets rose together, or in 2008, when they all fell together. But one difficulty in writing about “the housing market” is that there isn’t “one” market—and increasingly, the nation’s many housing markets are moving in different directions.
What we are seeing are serious price declines in some parts of the country — what did someone who recently visited Detroit tell me? A home a guy bought there for $525,000 on the riverfront, once appraised at $625,000, can now be bought for $35,000. Pennies on the dollar. Atlanta, God help those poor people. (The plight of the Atlanta market will hurt second home sales in the Redneck Riviera.) Chicago is a wreck probably waiting for Obama’s re-election to pull them out. What perplexes me is that the likes of California and the Northeast are not jumping out more, with agents in the Silicon Valley area saying don’t count on the FaceBook IPO to generate any upward pressure on prices as the dot.com boom once did. New York City? Rents are going up faster than hemlines. From Bloomberg, who says investors are swooping up apartment buildings as fast as they can:
In UDR’s four other Manhattan properties, leases are being renewed at average rents that are 9 percent to 14 percent higher than a year earlier, Alcock said. New agreements are commanding rates that are 9 percent to 13 percent more. The buildings are 97 percent occupied.
New York is an international city, an economy protected, in a sense. The costlier it gets to live there, the greater the class disparity — only peeps who can afford to live there are those earning in excess of $500K a year, or their post-grad children. In Texas, we have oil and don’t punish developers — or jobs — as much as California does. Listen to Joel Kotkin:
Well, Texas has created 200,000 oil and gas jobs over the past decade; California has barely added 20,000. The state’s remaining energy producers have been slowing down as the regulatory environment becomes ever more hostile even as producers elsewhere, including in rustbelt states like Ohio and Pennsylvania, ramp up. The oil and gas jobs the Golden State political class shuns pay around $100,000 a year on average.
Want more proof? Recall my Tuesday $200 of last week? Under contract four days after the post went up. I’ve got more big sales news for you next week and Tuesday, Champ D’Or closes…