An analysis by Zillow has found that there are now 550 cities that they consider to be “high value,” meaning that the typical home costs $1 million or more. This is an increase of 59 cities over the previous year, and 28 cities higher than the previous high set in 2022. This effect is said to be the byproduct of low housing supply and high interest rates, which has helped to keep prices artificially high.
Despite the fact that mortgage interest rates have been falling, mortgage demand has flattened out, a sign of serious affordability issues in the market. These issues were reflected in both the stagnating demand for new mortgages, as well as a slight decline in refinancing applications. These issues stem from high home prices relative to the average household income, which has fallen behind in the past few years.
Studies of coastal properties around the world have found that the land there is sinking, which may be dramatically increasing the risks to these properties from climate change. This is due in part, ironically, to measures intended to deal with problems caused by other aspects of climate change. As a result, developers and homeowners will need to work more quickly and think more carefully about mitigating the risks that flooding and other climate factors may pose to their properties.
People who may be interested in purchasing a home are struggling to do so, as they find themselves confronting affordability issues that prevent them from even getting their foot in the door. The combination of a high cost of living plus stagnant wages have meant that many people cannot keep up with high home prices, preventing them from even being able to put a down payment on a home. This is having a depressive effect on the real estate market that is unlikely to stop until wages go up or prices come down.
The United States Supreme Court has chosen not to take up two lawsuits that were brought challenging New York’s rent stabilization laws. The lawsuits would have, if successful, potentially undermined the state’s regulations on rent stabilized apartments, potentially allowing landlords to increase the rates on regulated apartments dramatically. However, their rejection means that these laws will remain in place, at least for now.
A Hong Kong court ordered real estate giant Evergrande to liquidate its assets, ending a long legal battle over the fate of what has been described as “the world’s most indebted property developer.” The company filed for bankruptcy in the United States in 2023 after it was found that it was unable to meet its obligations, resulting in it defaulting on its debts. Though Evergrande primarily operated in China, the effect of its liquidation in bankruptcy is likely to reverberate throughout the global economy, and in particular in the real estate sector.