Posts Tagged ‘Housing’

Richard Florida
by Richard Florida
Mon May 25th 2009 at 5:40pm UTC

State of Denial

Monday, May 25th, 2009

Real estate got just about everyone into trouble in Phoenix, and the thinking seems to be that real estate is going to get everyone out.

A real estate “frenzy” is apparently developing there, the NYT reports, as bottom-feeders gobble up mass foreclosures.

It’s not just Phoenix I fear, it’s our national mind-set writ large.

Richard Florida
by Richard Florida
Tue Mar 31st 2009 at 3:48pm UTC

Housing Crisis Goes Global

Tuesday, March 31st, 2009

The housing crisis has spread globally according to data from The Economist.

Source: The Economist.

Housing prices were down the most in the United States (nearly 20 percent), but substantial declines have also occurred in Britain and Hong Kong – two countries with large and dominant financial sectors. Prices were also down significantly in Ireland, New Zeland, the Netherlands, Denmark, and Singapore. Prices have held up in Switzerland, Italy, and France, according to this data.

The second graph charts the trend in commercial real estate.

Source: The Economist.

Commercial office rents fell by 41 percent in London and 25 percent in Mumbai and Sydney. Office rents were off by more than 5 percent in New York, Hong Kong, Frankfurt, and Sao Paolo. Rents were up in Tokyo, Moscow, Beijing, and Dubai.


David Miller
by David Miller
Wed Dec 24th 2008 at 3:34pm UTC

2009: SUVs and Real Estate?

Wednesday, December 24th, 2008

If you own a home, chances are you are racing to refinance and mortgage brokers are calling you. Lots of folks are taking advantage of record low rates on vanilla-flavored 30-year loans. Cash in your pocket! Some are wondering, is it time to pick up a second home? Invest in a downtown condo?

Moreover, oil has crashed and there is little that OPEC or traders on global and virtual exchanges can do about demand reality. Is it time to pull that SUV back out and drive it around town? Maybe take a weekend trip with the kids? (There are lots of hotel deals!)

Is this how its gonna play out? Are we gonna stumble out of this recession and back into our old habits?  Remember in about two months the Fed will be writing out a lot of checks. Record spending + cheap money + cheap commodities = ?  What do you think? Happy Holidays to all!

Richard Florida
by Richard Florida
Thu Oct 16th 2008 at 10:08am UTC


Thursday, October 16th, 2008

Housing prices still have a long way to go before they hit bottom, when you look at metrics like the ratio of home prices to rents according to this report (and graph) in the New York Times.

One reliable proxy of housing values — the ratio of home prices to rents — indicates that in many cities prices are still too high relative to historical norms. In Miami, for instance, home prices are about 22 times annual rents, according to analysis by Moody’s The average figure for the last 20 years is just 15 times annual rents. The difference between those two numbers suggests that a home valued at $500,000 today might be worth only $341,000 based on the long-term relationship between prices and rents. The price-to-rent ratio, which provides one measure of how much of a premium home buyers place on owning rather than renting, spiked across the country earlier this decade.

Richard Florida
by Richard Florida
Thu Sep 25th 2008 at 4:07pm UTC


Thursday, September 25th, 2008

That’s the number of new single-family home sales this past August, down 34.5 percent from a year ago and the lowest level since 1982 and getting close to modern historic lows (via Calculated Risk).  How low will it go?

Richard Florida
by Richard Florida
Mon Jun 16th 2008 at 7:42am UTC

The Shape of Things to Come

Monday, June 16th, 2008

Real estate economist, Richard Green thinks rising gas prices will have significant impact on real estate markets and geographic patterns (via Mark Thoma):

Over the past six years, the price of gasoline has risen about $2 per
gallon. What does this mean for relative urban land prices?

say the average household makes five one-way trips per day–for work,
shopping, entertainment, etc. Let’s also say that the average car gets
20 mpg in city driving. Each mile of distance to work, shopping, etc.
is therefore now 50 cents per day per household more expensive than
before. A household living immediately adjascent to work and shopping
should then be willing to pay $5 per day more in rent than a household
10 miles away compared with six years ago, all else being equal. This
becomes $150 per month, or $1800 per year. Assuming a five percent cap
rate for owner occupied housing, this translates to $36,000 in relative
change in value. Given that the median house price in the US is about
$220k, this is kind of a big deal.

The assumptions here are
pretty crude (particulalry the ceteris paribus assumption), but if gas
remains at its current real price, we will see the shape of US cities

Separately, the Washington Post reports that the real estate crunch is already limiting geographic mobility.

Richard Florida
by Richard Florida
Thu Jun 5th 2008 at 12:44pm UTC

Global Superstar Cities

Thursday, June 5th, 2008

Business Week put together this list of the world’s most expensive real estate markets using data from the London office of Knight Frank the global real estate firm (h/t: Dean Alexander).

1. London, $6,191 per sq. ft., Up 29%
2. Monaco, $5,888 per sq. ft.; Up 25%
3. St. Jean Cap Ferrat
(France), $5,853 per sq.
ft. Up 39%
4. Courchevel (France),  $4,710 per sq. ft., Up,5%

5. Hong
Kong, $4,507 per sq.
ft., Up 21%

6. Manhattan, $4,320
per sq. ft., Up  25%

7. Cortina d’Ampezzo
(Italy), $3,028 per sq.
ft., Up 22%

8. Portofino (Italy), $2,692 per sq. ft., Up 14%

9. Singapore, $2,423 per sq. ft., Up 31%
10. Tokyo, $2,334 per sq. ft.