In the News Presented by Prairie Title
Commentary by Frank Pellegrini, Prairie Title CEO
December 8, 2014 – We are about to close the books on 2014, not exactly a banner year, but not a horrible one either. It says something about the economic straits we’ve found ourselves in for six years that results we would have considered poor a decade ago we now look upon as OK.
What’s keeping the housing market from reaching its full potential? That’s the question asked in a recent Los Angeles Times article by Lew Sichelman, a long-time real estate observer and writer. Sichelman touches on skittish demand, lack of inventory and other factors we have discussed before, but it was one number that really got my attention: Zillow reports that 32% of all adults are now living with someone (not as a couple).
The article quotes Zillow Chief Economist Stan Humphries: “The rise in doubled-up households is a troubling sign of the times and starkly illustrates one of the prime drivers behind weak sales.”
Doug Duncan, chief economist at Fannie Mae, noted the same issue when he spoke at the recent ALTA convention, telling his audience, “Today, demand weakness trumps credit tightness.” Duncan hit hopeful notes too. One of the main themes of his talk was, “Housing will continue its grind upwards. It’s in the right direction but it will be a struggle to get there.” I’d urge you to view Duncan’s excellent presentation here. His talk begins at the 1 hour, 6 minute mark.
There is positive news that supports Duncan’s thesis, as home sales and prices improved in October. NAHB also cites an uptick in existing home sales for the second straight month in October, including a 5.1% increase in the Midwest from September. And Zillow sees millenials moving more strongly into the market next year.
How should we view the current state of housing? I wish I knew the definitive answer, and that it was positive overall. I do believe that housing will continue the “grind upwards,” and that 2015 will be a better year in our industry than 2014. We’ll all just have to keeping grinding along with the market, doing all we can every day to run our businesses efficiently, keep our clients happy, and prepare for the day when the grind brings us back to prosperity in our industry.
Questions or comments? Call me at 708-386-7900, or send me an email: email@example.com.
Other stories we’re following:
Housing market inches toward full recovery.
Economists see U.S. housing as steady in ‘15.
Part 1: Great overview of REPA-TILA implementation.
Rising rates and the housing recovery.