Homes more valuable than ever. Is that a good thing?

In The News

By Frank Pellegrini

As CNBC reported, last week Zillow said that the median value of all U.S. homes has exceeded $200,000, the highest it has ever been. Zillow also said that the inventory of homes for sale was down more than 11 percent from June 2016. Whether or not Zillow is spot on with those numbers, the fact remains that home values have risen — but at what cost?  How many potential buyers are frozen out of the market by tight inventory and the high prices that accompany a shortage of available housing?

Backing that up, NAR also noted last week that U.S. home resale volume fell more than expected in June as a “dearth of properties pushed house prices to a record high.”

High values are great if your own a home and are not looking to move up past a starter home. For the younger generation, the current shortage and high prices are clearly a deterrent.
As NAR’s Lawrence Yun put it, “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.” Let’s hope that changes soon.

CFPB’s (and Cordray’s) Future
Much uncertainty swirls around the CFPB and its director, Richard Cordray, as Congressional Republicans and the Trump Administration seek to de-fang the agency and its powerful head. Cordray, it seems, also may be on the path to giving way to the inevitable (his term expires next June) by resigning and announcing his candidacy for governor of Ohio. In the meantime, we await the federal appeals court’s decision on the constitutionality of the CFPB’s structure in PHH vs. CFPB. The regulatory environment we face could be very drastically different by early next year.

Final thought: There have been a number of stories in the news lately about scammers stealing thousands of dollars from home buyers by sending them fraudulent wire transfer instructions. These stories are real and we are the first line of defense against these cyber thieves. Proper instructions to home buyers can prevent fraudulent activity. The American Land Title Association has just produced a two-minute video explaining the danger and what industry members and consumers alike can do to prevent it. I urge you to view the video and share it with your staff and customers.

What’s your point of view? Call or email me, or write a comment here. Let’s keep the conversation going.