October 17th, 2023 - This Week in Real Estate
Wildfires are costing the real estate market as much as $337.5 billion per year.
Freddie Mac 30 Year Fixed
(Weekly - 10/12)
7.57% (+.08 since last week)
Dow Jones Real Estate Index
(Daily - 10/17)
304.89 (+2.89 since last week)
What’s new in the world of Real Estate
Wildfires are costing the real estate market as much as $337.5 billion per year. This is according to a new congressional report examining the effects of climate change.
Real estate industry groups are urging the Fed to stop raising interest rates. This comes as rising mortgage rates have stalled the real estate market.
Average rent is now cheaper than the average mortgage payment. The gap between the two is the highest since 2015.
A study ranked the best college towns for real estate investment. In the past 12 months, the 580 college towns listed saw a 4% appreciation rate compared to 1.6% nationwide.
Listing of the week: The “Flintstone House” in Painesville, Ohio.
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Research and Insights from the Vincent team
A new congressional report found that wildfires destroy up to $337.5 billion in real estate value per year. As climate change fuels more and bigger wildfires, they have become a huge concern to homeowners and real estate investors alike. In high-risk areas in California, insurance prices have risen substantially, with some insurers no longer writing policies at all. While floods and flood insurance have long been understood as a factor to consider when buying property, wildfire risk has to now be considered as well. The impact on the overall market is still developing but it is likely to only get worse over time.
Major real estate industry groups wrote an open letter to the Federal Reserve. The letter written by the National Association of Home Builders, the Mortgage Bankers Association and the National Association of Realtors urged the Fed to not raise interest rates any further due to the damage being done to the real estate industry. They have a “profound concern” about the ongoing issues in the market due to higher mortgage rates and a shortage of housing. The Fed elected not to raise rates in its last session but indicated that one more rate hike might be coming this year.
The cost of buying compared to renting is increasing. According to Zillow’s September 2023 Market Report, average rent rose slightly to $2,047, while the average mortgage payment is $2,128, with the gap between the two the highest since 2015. Of course, there are benefits to buying as well as additional expenses that homeowners have to pay, including insurance and maintenance. It also depends on the market - with places like San Jose ($3,386 average rent, $8,771 average mortgage payment) more extreme than others.
Indiana, PA is the top college town for real estate investment according to a new study. The report looked at past and projected appreciation rates, affordability, availability and rent potential of 580 college towns nationwide. The other two in the top 3 were McPherson, KA and Brownwood, TX, while Rock Hill, SC and Pueblo, CO were the two towns with the highest projected appreciation over the next five years. College towns typically have a high demand for housing compared to supply, one reason their appreciation rate has been better than the nationwide average over the past twelve months.
Listing of the Week
A property that caught our eye
Known locally as the “Flintstone House”, the hand-sculpted home is actually named “Le Chant du Cygne” (Swan Song) and was built in 1970 by artist Wayne Trapp. The 3,600 square-foot residence has five bedrooms, 2.5 baths, a 2 car garage, a guest house, and sits on an acre of land. Located in Painesville, OH, about 30 miles northeast of Cleveland, the popular roadside attraction is on the market for $400,000.
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