News & Event
The home real estate market has been on an upward swing in the past three years, with median prices rising and houses being bought within days of them going on the market. Inventory is down. It’s a seller’s market.
It’s no wonder to Dean deTonnancourt, of Homesmart and president of the Rhode Island Association of Realtors, that some Warwick property owners who haven’t been watching the market should be shocked by the latest property assessment. Valuations as determined by the recently completed statistical valuation as of Dec. 31, 2018 were mailed last week and posted to the city’s website on Friday.
A random survey using the city website found only a few properties – usually homes in the $500,000 range and above – with minimal increases, while homes valued in the range of $180,000 to $225,000 as of 2015 seeing increases as high as 32 percent.
This is no surprise to deTonnancourt, who points out that sector of the market has been especially hot. Furthermore, as current sales are used as a guide to values in a statistical revaluation, it stands to reason that neighborhoods with the greater sales would reflect the most change.
According to City Tax Assessor Neal Dupuis, hearings for those questioning their valuations held by Vision Government Solutions, that conducted the revaluation, should be completed this month, but depending on the volume could extend into May.
“Assessments are intended to reflect market value [what a property could be sold for]. So people that schedule appointments will be asked what they feel their house is worth and if they have any information (such as an appraisal or market analysis) to support their opinion. However, property owners do not need to have any documentation in order to schedule a meeting and discuss their proposed assessment with a representative of the revaluation company,” Dupuis said in an email.
Hearings may be scheduled by calling Vision Government Solutions at 888-844-4300. Hearings will be held between 9 a.m. and 4 p.m. Monday through Friday at the now closed Randall Holden School at 61 Hoxsie Avenue. The deadline for scheduling a hearing is April 16.
“Revaluations are performed using only current market data. We do not start with the old assessments and apply an adjustment to reflect what the market has done over the last three years,” Dupuis said. “A percentage change from a prior assessments is not a meaningful way to determine the accuracy of a new assessment. Therefore, we do not work with these figures. What is important is what the property is currently worth. If that figure is correct, it does not matter whether the assessment went up down or sideways from the prior assessment.”
DeTonnancourt cautioned property owners not to look at average increases. He said that could be useful in parts of the country where houses are identical, but “there’s no such thing as an average priced house in Rhode Island.”
As for what the market has done over the past three years, deTonnancourt said median single-family home prices have consistently increased, citing a 20 percent median price increase in West Warwick. He said some of the greatest increases have been in multi-family housing, where the median price increased by 24 percent in a single year.
DeTonnancourt cautioned property owners not to confuse an increase in assessment with an increase in taxes. A 15 percent increase in valuation, for example, does not translate into a 15 percent increase in taxes. Customarily, the tax rate declines following a revaluation, however, because assessments are generally higher the actual tax bill is greater.
“Taxpayers’ values will increase, but they’re not going to see taxes go up proportionally,” he said.
Revaluations are mandated by state law. Full revaluations where each property is visited and appraised are to be conducted every nine years. Statistical revaluations where recent sales are used to establish assessments are conducted on the third and sixth year in the nine-year cycle.
Vision Government Solutions conducted the revaluation at a cost of $275,000. As the State of Rhode Island mandates that statistical revaluations be performed, they reimburse the city at 60 percent of the project cost. So the net cost to the city is $110,000, said Dupuis.
Courtesy of Warwick Beacon
Citizens Bank announced recently that its Community Development Group has provided $9 million in financing in the form of a tax-exempt bond to Pawtucket Development Group, LLC for the acquisition and renovation of a vacant historic mill, known as Lippitt Mill, located in West Warwick, into 65 residential housing units.
Twenty-eight of the units will be available to tenants at or below 60 percent of Area Median Income and 37 units will be market-rate units. The project is financed with low-income housing tax credits, federal and state historic tax credits and Rebuild RI Tax Credits.
“We greatly value our partnership with Citizens Bank and appreciate the Community Development Group’s market knowledge and excellent execution,” said Kris Shaw, president of Pawtucket Development Group, LLC. “We look forward to continuing to work with the Citizens team as this project reaches its potential.”
The team behind New York-based Pawtucket Development Group has extensive experience with complicated real estate projects like the Lippitt Mill project, converting several other mills in Rhode Island and New York into residential and mixed-use buildings.
“This project meets an important need in the community and Citizens’ leadership is another sign of our strong commitment to supporting affordable housing for Rhode Island residents,” said Keith Kelly, president, Rhode Island, Citizens Bank.
Since 2013, Citizens’ Community Development Group has committed nearly $2 billion in loans and investments to support the development and rehabilitation of affordable housing units and economic revitalization activities in our communities. These efforts have resulted in more than 15,000 new or rehabilitated housing units and the development of more than 400,000 square feet of commercial space in low and moderate income communities served by Citizens.
Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens Commercial Banking approach puts clients first by offering great ideas combined with thorough market knowledge and excellent execution to help our clients enhance their business and reach their potential.
By Mary MacDonald | April 27, 2018 6:30 am
R.I. Housing and Mortgage Finance Corp. is celebrating its 45th anniversary this year in a position of financial strength, says Executive Director Barbara Fields.
It has created programs to assist first-time homeowners, expanded its servicing of mortgages to include those generated by MaineHousing and emerged from the Great Recession with a surplus of financial assets.
But it is working against a backdrop of unaffordability. Half of all renters and 30 percent of homeowners in Rhode Island are housing-cost burdened, paying more than 30 percent of their take-home income on rent and utilities.
Fields has been executive director of the quasi-public agency since January 2015. She previously was the New England regional administrator for the U.S. Department of Housing and Urban Development and the director of the Local Initiatives Support Corp. in Providence.
What’s the best way for Rhode Island to increase access to affordable housing?
“Build, build, build,” she said.
How has the mission of R.I. Housing changed over the past 45 years? R.I. Housing was established by the General Assembly in 1973 as a public corporation of the state. We have an independent existence from the state, although they exercise a central control over our board. Our primary purpose was to encourage investment of private funds for the development of housing for low- and moderate-income persons, and to function as a source of capital for affordable-housing development. We were basically set up to be the state’s housing bank at a time when many other states were doing this. Today, there are 53 housing finance agencies [nationally].
Within Rhode Island, what is your share of home loan origination? Last year, we did 13 percent of the mortgages in the state. Origination … is only 15 percent of our business. Eighty-five percent of our business comes from working with 40 brokers and lenders and we consider them, obviously, critical and important partners. The No. 1 is [Coastway Community Bank]. They help bring us business. Housing is economic development. We help support local businesses. … Also, we were set up to bring private money in to help people get into home ownership. We go to Wall Street and float taxable and tax-exempt bonds, both for single-family and multifamily.
Since the [Great Recession], what has changed in our business is we also sell in the secondary market. We get a warehouse line of credit. We work with three or four banks. We purchase the mortgages and when we get enough, we bundle them and we sell them in the secondary market as securitized mortgages.
What’s the benefit of doing that? The interest rates have been extremely low. There are key Rhode Island officials … who got their first mortgages at RIHousing. [Former Auditor General] Ernie Almonte in 1982 or 1983 bought [his] first house. The rates were 15-16 percent and we could get you 12 [percent]. We forget. In a video on our website he stands in front of his first house. That speaks to what our major focus and mission is. People who are early in their career, buying a home and setting roots in the community. Last year was a banner year. We did almost 1,800 mortgages. The average age of someone who got a mortgage through RIHousing last year was 37.
Is there any focus this year for the organization? Rental apartments for working families, working individuals and a lot more seniors. We have a growing senior population. … [Recently], we got the first-ever Capital Magnet Fund. We got one of the largest in the country. It’s from the U.S. Department of Treasury. It’s $4.7 million and it will help us on a key focus. … We run a lot of federal programs on behalf of the state. One of them is the federal low-income housing tax credit. … There are two sets of credits. One is a deeper subsidy, called the 9 percent. It’s highly competitive. We’re doing as much as we possibly can with what we get. The other, which is a shallower subsidy [of 4 percent] that has to be used with our first mortgage, that is limited by the state’s bond capacity. We are not tapped out, and we would love to do more of those deals. And produce more rental housing and preserve housing that exists. [With] that Capital Magnet, we’ll be able to fill that hole, between the 4 percent and the 9 percent.
What is the profile of your mortgage borrower? The average household income for the homeowners we served last year was … about $66,000 to $67,000. That’s teachers who may be in for a few years, certified accountants, nursing assistants, construction workers. This is the heart and soul of what makes up our middle class. And the average sale price was just under $200,000. And I’m proud of the fact that 27 percent of our mortgages are reaching the minority community. We’re seeing rising prices, so some of that rise is good, it means our economy is getting better. … One of the challenges is … just having more housing built in the state.
You’ve touched on the lack of inventory in single-family homes. What is the solution? How do we get more inventory? Build, build, build.
How? There are different pieces. Some of them we’re beginning to explore: if there are zoning challenges and communities that aren’t interested. Personally, I’ve been going around the state for the past year. I’ve been in Barrington, Middletown, Cumberland, talking to mayors, city councilors and town councils. I would have to say, by and large, they are welcoming. Everyone at this point has a story to tell. It’s either my son won’t leave the house, [or] soon it will be my mother won’t leave the house. Or my sister-in-law’s godchild and her fiancé are looking for a house, and they can’t find it. Seniors are staying longer in their homes. They’re living longer and are in better health. That’s not freeing [housing] up.
If there is an understanding of what the issue is, why aren’t more towns creating zoning to allow more density? I think South Kingstown just did some [rezoning] along Route 1. As I say to the communities, think about your community. I’ve been out with two mayors now, I’m about to go with a third, [and I say] drive me around your city, your town, and tell me, where do you want development? Because it is likely to come, and wouldn’t you want to proactively direct it to those places? In South Kingstown, they started talking about some properties that they knew.
There is always going to be some NIMBY-ism [or “not in my backyard”], but we have not had that raised as a major issue. We’re now funding our second project in Barrington. … We have done one now in Shannock Village, in Charlestown. These are apartments for families, most earning between $30,000 and $50,000 a year. Anyone can apply. But mostly you get people from your community. When we run the numbers in these communities, usually you find 20 percent of current residents would be eligible. … The most important thing to understand is there isn’t one type of housing that we advocate for. We have high-rise buildings. We have single-family homes being built. We have duplexes. We have ground-floor retail and townhouses.
So, people may have a visual that pops into their head when they think of affordable housing. They don’t want it developed in their community because they think it’s going to be ugly? We’re smarter about how to build [today]. We think about housing as part of the community, and community is the economic life of the state. I’m a community-development person coming into housing, so I am always thinking about the connection. We always look when we are financing multifamily rental, where are the parks, where’s the bus line, where do you shop for groceries? What is it that makes a community?
People still assume millennials are living in the basement with their parents. But they’re out there buying now, they are the starter-home market. You have a variety of mortgage programs, including down-payment assistance. But they’re running into an inventory problem. Are the state’s demographics part of the problem? It’s a variety of factors. You have millennials who are now ready to buy. You have a tremendous change in the economy. We went from the second-worst unemployment rate in the country to one of the lowest. We did a 10-year study. Even if the population grows slowly, we projected it would grow at 5 percent [over 10 years]. Households will grow at 12-13 percent. People are waiting longer to marry. You have a lot of singles, or two people in a house without a child until later. So, people need more houses. People are divorcing. You have more households being created by all of these factors. Especially if you go back and see what was going on 30 years ago. The average size in public housing is smaller. Occasionally we will see a proposal come in with a four-bedroom unit or a five-bedroom unit. But we are building one, two and three [bedrooms].
There is some pushback in Providence that the new housing being constructed is primarily downtown housing not designed to accommodate families, who also need housing. Does Rhode Island need more small apartments? A healthy rental market has about a 6.5-7.5 percent rental vacancy rate, so you have turnover, you have empty units for people to come and look at. The nation is below that. Rhode Island dropped last year … to under 4 percent. And Providence is lower than the state. Providence is about 2 percent. So, we need rental apartments, as well as owner-occupied apartments. We’re in a niche, but it’s needed across the income ranges. Part of what’s increased the demand here also is people coming from the Boston area. This is an attractive place to live.
In Massachusetts, a state law called 40B seems to have more strength in getting affordable housing built in individual towns. (The law allows developers to bypass local zoning in towns or cities that have less than 10 percent of the housing stock available at affordable prices.) What is the challenge for Rhode Island’s affordable-housing requirement? FortyB has a lot more teeth. I would say, yes, we have a 10 percent law. … A [state] commission is looking at how to make it stronger.
Do you think it needs to be made stronger, to distribute affordable housing? Yes, I believe so. When you sit down and talk to a community about who would live in the housing you’re talking about, it becomes a very different story. Up here, it’s like numbers, ideas and images. Down here, it’s “Oh, it’s my best friend. It’s my brother-in-law.”
There are many Rhode Islanders who earn less than the state median, as well. I don’t care what your job is. No one makes in their first five years what they might later. We want to accommodate that. I’m sure Ernie Almonte’s salary is different today than it was 25 years ago, when we helped him buy his first house. But that was a good investment to make. It wasn’t a giveaway.
Some activist groups have recommended rent control in Providence, to dampen price escalation. Is rent control an option? My preference is to build. Supply is the approach now being done in Boston. If we can increase the supply, it helps to moderate the prices. We are also involved in several efforts to make sure we maintain the affordable units that we have, that work for people at the lowest income levels. We are very committed to preservation, whether it’s senior units or family housing. We need to preserve what we have. A lot of the housing we’re preserving is 30 years old.
Some community advocates in Providence think city incentives via tax-stabilization agreements should not be used on luxury housing. The Fane Organization tower could be the next argument over this. Should public incentives be used for luxury product? I would just say the TSA process needs to be predictable. No matter what program we run, people want predictability. In Providence, TSAs are needed so we have predictability. If you meet these requirements, you can come in.
Sen. Howard Metts, D-Providence, has raised the issue of discrimination against Section 8 tenants, that the people who hold the vouchers are having trouble finding apartments. He has proposed a law that would prevent landlords from using the source of income as a reason to block a lease. Is this an issue? Absolutely. Thirteen states have that law, including four New England states. We’re supportive of [his proposal].
Gov. Gina M. Raimondo has proposed a transfer to the state of $5 million from R.I. Housing in fiscal 2019. Can the state “scoop” your funds? The board will have to vote on it. We’re going to minimize the impact. It will have an impact, obviously, but we’re going to minimize it. This came up in January. We know the budget will be made by the end of June.
Why did you agree to do it? The governor controls the board and we’re part of the team. Someone talked to the chairman. It’s not an optimal situation. But we’re going to minimize it. We get rated by the bond-rating agencies and we’re talking with them. They will take a look at our rating. But we happen to be in a strong position.
According to your most recent annual audit, your loan-loss contribution fell dramatically in fiscal 2017. What is the story behind that? The market is doing better. People are doing better. We had tremendous losses during the recession, now we’re on a different path. We hope it continues.
The same audit indicated that the three-month delinquencies on R.I. Housing mortgages rose between 2016 and 2017. What is the reason for that? We had a slight uptick, but we are on top of it. We are below nationwide and below New England. We have new metrics we’re following and are working with our 40 brokers and lenders. We look at people’s credit scores and we look at their ratios. We meet, we want [the Federal Housing Administration] to purchase our mortgages, FHA and Fannie Mae. We have some flexibility. We instituted a credit score to raise it a little, to make sure we’re in line with the rest of the New England states.
Some people think homeownership shouldn’t necessarily be identified as a dream for everyone. That maybe we shouldn’t be encouraging homeownership. Do you have any thoughts on that? We should always have a range of housing options. … There are people who need a homeownership opportunity, they’ve saved for years. It may be a single-family, a townhouse, a condominium. We need rental opportunities. Seniors who owned a home who need a rental opportunity. Supportive opportunities, say veterans, where there are services on-site for them. And we also work on properties where we have the vouchers. Every community needs to think, at different points in people’s lives … there are different reasons why people choose types of housing.
Courtesy of Providence Business News
Wednesday, November 1, 2017
2200 Southwood Drive, Nashua, NH
We invite you to be a part of the second New England Lead Conference taking place on Wednesday, November 1, 2017 in Nashua, NH. Hosted by the New England Lead Coordinating Committee, the conference will include a variety of educational sessions focusing on lead prevention, policy, model programs, outreach, the EPA’s Renovation, Remodeling and Repair Rule (RRP), lead abatement, compliance, and the economics of lead poisoning.
Read more >
October 4, 2017 in Events, Local Interest
The Narragansett Times: Dziobek steps down as Welcome House director
By KENDRA GRAVELLE Sep 29, 2017
SOUTH KINGSTOWN—When Joseph Dziobek accepted the position of executive director of Welcome House of South County nearly three years ago, he had expected the job would make for a simple transition into retirement.
But what was intended as a part-time gig turned into much more than that for Dziobek, who this week left his post.
“It’s been a challenge,” said Dziobek, whose last day on the job was Monday. “And it’s been very satisfying—I feel very close to the people who have been a part of it.”
Dziobek, 66, took the job at Welcome House after retiring from his career as CEO of Fellowship Health Resources. He said he intended only to stay for two or three years.
October 4, 2017 in Local Interest
Final Days to Register: 2017 Housing Fact Book Release
Date: Wednesday, October 11, 2017
Luncheon: 12:00pm - 1:30pm
Location: Rhode Island Convention Center, 1 Sabin Street, Providence RI
October 3, 2017 in Events, Local Interest
Rhode Island College: The Defamation Experience
Monday, October 30, 2017
5:00PM - Doors Open
6:00PM - Performance
SPONSORED BY: THE DIVISION OF COMMUNITY EQUITY AND DIVERSITY AND THE DIVISION OF STUDENT SUCCESS
THE PLAY * THE DELIBERATION * THE DISCUSSION
September 27, 2017 in Events, Local Interest
NLIHC: Sign Letters to Support Equitable Housing Recovery after Devastating Hurricanes
Help ensure that low income people and neighborhoods are treated fairly after Hurricanes Harvey, Irma, and Maria. A broad coalition of national, state, and local organizations is calling on Congress, FEMA, and HUD to ensure that the federal response to Hurricanes Harvey, Irma, and Maria is complete and equitable for everyone, especially families and individuals with the lowest incomes who are often the hardest hit by disasters and have the fewest resources to recover afterwards.
September 27, 2017 in Local Interest, National News
Roger Williams University: Social Justice Month Events
Thursday, Oct 19
Mary Tefft White Center
How Housing Works
4:00pm – 6:00pm
Sponsored by Housing Works RI and RWU Chief Diversity Officer
Keywords: socioeconomic status, race, jobs, housing, equity
Workshop with Brenda Clement, Director of Housing Works Rhode Island and Ame Lambert, RWU Chief Diversity Officer.
An overview of housing issues in Rhode Island and connections to the larger social justice agenda.
September 25, 2017 in Local Interest
Providence Journal: People on the move for the week of Sept. 17
Posted Sep 13, 2017 at 5:34 PM
Updated Sep 13, 2017 at 5:34 PM
Rhode Island LISC
Rhode Island Local Initiatives Support Corportation has welcomed two new employees. Jeremiah O’Grady, of Lincoln, joined LISC as program officer after spending more than 12 years at ONE Neighborhood Builders as real estate project manager and director of asset management and operations.
Liz Klinkenberg, of Warwick, was hired as communications director. She brings more than 15 years of public relations experience to her new position, including work for The Miami Herald and The Providence Journal.
The Providence American: Reed Announces $300k in Community Development Grants for NeighborWorks Affiliates
WASHINGTON, DC – In an effort to promote healthy, vibrant neighborhoods across Rhode Island, U.S. Senator Jack Reed today announced an additional $300,000 in federal funding for three Rhode Island-based affiliates of NeighborWorks America (NeighborWorks). These federal funds will help NeighborWorks Blackstone River Valley, ONE Neighborhood Builders, and West Elmwood Housing Development Corporation to provide affordable housing opportunities, generate job growth, and enhance economic stability for working families. Earlier this year, Senator Reed also helped to secure over $750,000 in federal funding for NeighborWorks affiliates in Rhode Island, bringing total NeighborWorks investment in the state to above $1 million for fiscal year 2017.
September 21, 2017 in Federal News, Local Interest
The Providence American: Providence Unveils PVD Gives Donation Station
PROVIDENCE, RI – Mayor Jorge O. Elorza today joined members of the City Council, public safety officials, and community leaders who have been named to the PVD Gives commission for the unveiling of the City’s first Donation Station at Kennedy Plaza. The retrofitted parking meter is one of ten stations that will be installed across the city to collect funds that will support local organizations that provide housing and services to those in need.
“PVD Gives and the new Donation Stations make it easier to give back,” said Mayor Jorge Elorza. “Our collective generosity can make all the difference in the lives of those striving to get back on their feet. I encourage visitors and residents to chip in and be part of the solution.”
September 21, 2017 in Local Interest
Providence Journal: Report: New England losing 65 acres of forestland per day
By Steve LeBlanc / Associated Press
Posted Sep 19, 2017 at 11:21 AM
Updated Sep 19, 2017 at 11:21 AM
BOSTON — New England has been losing forestland to development at a rate of 65 acres per day — a loss that comes at a time when public funding for preservation of open land, both state and federal, has also been on the decline in all six states.
That’s the conclusion of a report released Tuesday by the Harvard Forest, a research institute of Harvard University.
The study found public funding for land conservation in New England dropped by half between 2008 and 2014 to $62 million per year, slightly lower than 2004 levels.
The low inventory of affordably prices homes continues to shrink, and Freddie Mac announced its plan focuses on supporting underserved markets by financing more rural and manufactured homes. With this effort, the company hopes to preserve affordable housing for homebuyers and renters across the U.S.
Fannie Mae explained the plan complements its ongoing efforts to bring innovative affordable housing solutions to market in a safe and sound manner. It listed three categories of underserved markets its new plan targets.
“This is an important milestone in Fannie Mae’s ongoing efforts to improve access to mortgage financing and create affordable housing opportunities for people of modest means across the country,” said Jeffery Hayward, Fannie Mae executive vice president and head of multifamily. “Our Plan will use analysis, testing, innovative partnerships, and loan purchases to serve markets that need help the most.”
“We are excited to expand on our mission to make affordable housing options available to Americans in all markets and enhance our efforts to identify solutions to the tough challenges that underserved markets face,” Hayward said.
Back in May, the Federal Housing Finance Agency requested public input on the GSE’s new proposed Underserved Markets Plans under the Duty to Serve program.
The plans, also released in May, from Fannie and Freddie, must find a way to reach three specified underserved markets including manufactured housing, affordable housing preservation and rural housing in a safe manner for residential properties that serve very low-, low-, and moderate-income families.
Now, the GSEs presented their final plans. In order to reach single-family underserved markets, Freddie Mac announced its plans:
“We’re developing responsible solutions to help make home possible for more American families,” said Danny Gardner, Freddie Mac vice president of single-family affordable lending and access to credit. “Addressing the affordability crisis today will benefit our country for decades to come.”
The GSEs will also start several initiatives in the multifamily market in order to help low-income renters cope with the rising costs of rental units.
Some of Freddie Mac's multifamily plans include:
“For more than 45 years, our innovations have brought liquidity, stability and affordability to the mortgage markets, and Duty to Serve is an important continuation of those efforts,” said David Leopold, Freddie Mac Multifamily vice president of targeted affordable sales and investments. “Freddie Mac is uniquely suited to tackle some of America’s most persistent housing problems, and we look forward to deepening this work.”
To learn more about Duty to Serve, and to read each of the GSEs' full plans, click here.
Courtesy of HousingWire
The moment we’ve all been waiting on baited breath for finally happened this week, as Amazon revealed the 20 finalists for its second headquarters, commonly referred to as Amazon HQ2.
According to CNN, Amazon received bids from 238 cities and regions throughout North America, all vying for their chance to be the online retail giant’s second home.
Amazon said that it expects to invest more than $5 billion and plans to grow its second headquarters into a “full equal” to Amazon’s current headquarters in Seattle. Amazon also expects to create as many as 50,000 “high-paying jobs” for the selected area.
But what else might come with that much corporate investment and new high-paying jobs? Higher home prices.
And for half of the 20 markets on Amazon’s shortlist, home prices are already on the verge of overheating.
The 20 markets on Amazon’s list are: Atlanta, Georgia; Austin, Texas; Boston, Massachusetts; Chicago, Illinois; Columbus, Ohio; Dallas, Texas; Denver, Colorado; Indianapolis, Indiana; Los Angeles, California; Miami, Florida; Montgomery County, Maryland; Nashville, Tennessee; Newark, New Jersey; New York City, New York; Northern Virginia; Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; Raleigh, North Carolina; Toronto, and Washington, D.C.
Of those, 19 are in the U.S., and a newly released analysis from CoreLogic shows that home prices in 10 of those 19 U.S. markets are already overvalued.
CoreLogic monitors the health of the housing economy through historic home price changes and other market conditions including sustainability of prices in the market, referred to as the CoreLogic Market Condition Indicators.
The MCI analysis defines an “overvalued” market as one where home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one where home prices are at least 10% below the sustainable level.
According to CoreLogic’s report, home prices in Austin, Dallas, Denver, Los Angeles, Miami, Montgomery County, Nashville, New York City, Northern Virginia, and Washington, D.C. qualify as “overvalued” right now, with home prices above 10% of the sustainable level.
On the other hand, home prices in Atlanta, Boston, Chicago, Columbus, Newark, Philadelphia, and Raleigh are all categorized as “normal” in CoreLogic’s view.
Meanwhile, home prices in Indianapolis and Pittsburgh are “undervalued.”
(Click to enlarge. Image courtesy of CoreLogic.)
Regardless of which city Amazon picks (and the retail monolith has given no further indication of which one of the 20 markets it is going to choose), home prices are expected to rise in the winning city.
And for those markets where prices are already arguably too high, being the winning city may be a bit of a housing catch-22, according to CoreLogic Chief Economist Frank Nothaft.
“As leaders at Amazon continue to narrow their location choices, the housing situation is an important consideration,” Nothaft said.
“Some of the contenders have home price increases that are trending higher than the national average of 6%,” Nothaft said. “Denver and Nashville lead the pack with home price increases at more that 8%, but CoreLogic research indicates that these markets are overvalued right now. Adding a job creator like Amazon would add further housing demand and upward pressure to housing costs.”
In his remarks at the NMHC's Fall Meeting, Carson essentially rehashed what he has been saying all along: Less money, fewer regulations, better programs and an incentive to move out are the factors in the public housing reform he thinks the nation needs. Time will tell whether his policies help or worsen the affordability crisis.
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