High Priced Housing, Slowing Sales, People Moving? Oh... was this a Secret?
"Sales of new single-family homes declined to a 1.233 million unit annual pace from an upwardly revised 1.298 million unit rate in December, the Commerce Department said."
"The report illustrates the fact that housing is not defying gravity and is not likely to do so this year," said Anthony Chan, chief economist at JPMorgan Private Client Services. "We're going to see chipping away of housing."
"Sales of new U.S. homes fell 5 percent in January to their slowest pace in a year while the number of homes on the market hit a record high."
"The number of new homes available for sale at the end of January rose to a record 528,000. At the current sales pace, that represented 5.2 months' supply -- the largest inventory since November 1996, the government data showed."
"The U.S. housing market has begun to show signs of cooling after a five-year rally that shattered sales and construction records, and sent prices soaring more than 50 percent on average nationwide."
"Home prices, however, have been more resilient, and economists chalk that up to stubborn sellers trying to cash out at the market's highs."
Meanwhile... in the Bay Area...
"The Bay Area Council's annual poll found that concerns about housing ranked as the region's second-most-vexing problem, behind transportation woes. "
"Two out of five residents of the nine-county region have given serious thought to moving away -- mostly because of high housing costs, according to a survey released today by a business and public policy group. "
"Even with some recent cooling in the local housing market, the price for a middle-of-the-road single-family home hovers around $628,000, or about triple the national average. That means many families with two income-earners are having a hard time managing. "
"In 1996, as the real estate market began to recover from the early 1990s recession, only 1 percent of respondents cited housing as a big concern."
"The annual survey, which takes the public's temperature on a range of issues, echoes similar findings by the Public Policy Institute of California, which in 2004 found that exorbitant home prices were forcing 31 percent of those ages 18 to 31 to ponder moving away from the region or out of the state."
" There's a ripple effect as people leapfrog from the Bay Area to the interior parts (of California)," said Rob Wiener, executive director of the California Coalition for Rural Housing. "As housing becomes less affordable, people who earn wages in those communities have to move farther out as well." Some of them don't stop at the state line."
"Such sentiments worry Wunderman, whose group represents many companies that are struggling to recruit workers to the high-cost Bay Area. At the same time, Wunderman and others say Northern California is increasingly divided between the wealthy and not-so-wealthy -- particularly teachers, firefighters and midlevel managers who are priced out of the market or who must endure long commutes to far-flung suburbs. "
"Question: If you have seriously considered moving out of the Bay Area, how much of a factor is the high cost of housing in your considerations about moving -- a major factor, a minor factor or not a factor?"
Major factor 70%
Minor factor 15%
Not a factor 15%
"Question: Which of the following two ways do you favor more to address the shortage of housing in the Bay Area -- building more new homes and apartments on vacant lots or underused spaces within existing Bay Area communities; or building more homes on land outside existing Bay Area communities?"
Infill housing 58%
Expand into rural areas 25%
No opinion 5%
Source: Bay Area Council