With the Fed about to increase interest rates another three-quarters of a point, Wall Street is reacting, and not in a good way. The Dow Jones lost 876 points Monday — or nearly 3 percent — Nasdaq fell 4.7%, and the S&P 500 lost nearly 4%. Overall, the market is down 20% since January. Want to get more numbers? Have a listen to the PBS News Hour.
A lot of Bay Area cities are blaming each other for the housing shortage we’re all experiencing, but the truth is we aren’t building enough new housing anywhere, and we haven’t for a while.
Permits were issued for 119,636 new homes statewide in 2021 – just two thirds of the projected need – and this year it’s expected to be even less, with only a fraction in Santa Clara County. If this comes to pass, it will be the 30th year out of the past 35 that California has failed to meet housing production goals. And even permitted projects face false starts and stall outs due to shortages of labor and materials, as well as ever-present community pushback.
Bottom line: Unless hundreds of thousands of new homes are built this year and for many years thereafter, Bay Area home prices will continue to rise, and this will continue to be a seller’s market.
It’s the same story we’ve been seeing for a while in the Santa Clara County market, where sold houses in April were down 21% over last year, available houses are spending 33% less time on the market, and average sales prices are up a whopping 21% from ‘21!
Meanwhile, condos are spending less than half the time on the market that they did a year ago, but average sales prices are up just 10% year over year.
More than 60% of carbon emissions in cities come from buildings, which is just one reason why there’s an international movement to decarbonize real estate through zoning codes, building standards, incentives, and more tools. Read this dispatch from the World Economic Forum annual conference.
Digging deep into the data, the Census Bureau recently found that people are having children later in life. Between 1990 and 2019, the median age of first-time parents rose from 27 to an all-time record of 30. A variety of factors are at play here but the bottom line is more people are having kids in their 30s and 40s instead of their 20s. This shift could also have a significant impact on when new families get into the housing market. The AP has more numbers.
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