Q: How do all these recent bank failures affect housing? Carl, Weehawken, NJ A: Lending across the board may get tighter in the wake of the failures of SVB & Signature. However, mortgage loan underwriting has been much more measured and responsible since the 2008 financial crisis and mortgage interest rates have recently dropped which may entice more home buyers who may have been waiting on the sidelines to buy a home. Fannie Mae’s Economic and Strategic Research (ESR) Group has raised its first-quarter 2023 GDP forecast due to stronger-than-expected economic data. It also anticipates a modest recession in the second half of 2023. Ongoing banking instability may negatively affect jumbo mortgage loans and residential construction loans but residential real […]
continue reading Q: I’ve been hearing about AI in the news a lot recently. How do you think artificial intelligence will affect real estate? Zach, Hoboken, NJ A: Artificial intelligence is already impacting residential real estate. Zillow’s Zestimate method, which unfortunately often provides wildly inaccurate property valuation estimates, is nevertheless built on AI technology. Here are 3 ways artificial intelligence may improve residential real estate moving forward: By providing curated recommendations to renters & home buyers. Artificial intelligence can tailor property listings based on buyer and renter preferences By automating and streamlining customer care, AI-powered chatbots can handle inquiries about rentals and homes for sale to help both realtors as well as renters and home buyers By automating and streamlining the mortgage […]
continue reading Q: It’s been really hard for us to staff people at our restaurant for quite a while. Has the labor shortage affected real estate? Keith, Point Pleasant, NJ A: Unfortunately there are many industries that have more unfilled job openings than unemployed workers with experience looking for work. With respect to residential real estate, the labor shortage has affected home construction and home prices by 1) increasing construction time to complete newly constructed houses (which in turn lowers housing supply which results in higher home prices). 2) Labor shortages also have increased the price of available labor and therefore increased the cost to build which de-incentivizes builders, further lowers housing supply and also increases home prices. In addition, 3) without […]
continue reading Q: I’ve read that parts of the real estate market are softening. Is that true? Judy, Clifton, NJ A: Housing inventory is an indicator that suggests how long it will take to sell the homes currently for sale in a market based on current demand. Housing inventory levels at most price points in north jersey are still relatively low which is a sign that there is still room for growth. However, at the very high end, inventory levels are incredibly high—over 2 ½ years worth of inventory for homes priced at $2.5 million or higher. This shows that even with a thriving economy, McMansions have fallen out of favor and the new tax law with limits on SALT deductions has […]
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Household income is the biggest driver of residential real estate markets.
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