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THE BIG SPLASH

Americans are Flocking to More Affordable Cities

San Francisco, New York City, and Los Angeles are the top cities Americans are searching to move away from, according to a recent report by real estate company Redfin. The shift is likely due to remote work, which has allowed people to relocate to more affordable areas. 

• Redfin's report identified other major cities, such as Chicago, Boston, Seattle, Denver, and Washington, D.C., as other destinations on the top ten metro areas list that residents are most looking to leave. 

• The data was based on how many more users based in these areas looked at listings between December and February for properties in a different area than the number of people looking to move to that area. 

• The trend is consistent with the ongoing decrease in population growth in California and a decline in New York City's population since 2016. 

• Among those looking to leave San Francisco, Sacramento was the most popular choice, while Miami was the most popular city among those looking to leave New York City. Miami tops the list of metro areas most homebuyers are looking to move to, followed by Phoenix and Las Vegas.

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A SCOOP OF COMPETITION

11 Renters Compete for Every Apartment in Silicon Valley

Silicon Valley's rental market is becoming increasingly competitive as would-be homebuyers struggle to afford skyrocketing real estate prices and high interest rates on home loans. RentCafe's report found that eleven renters are competing for each available South Bay apartment, compared to a national average of eight applications per advertised rental unit. 

• One reason for this is the attraction of artificial intelligence and other innovations by the South Bay's leading industry, which is luring tech workers back to the region. However, despite the increase in demand, rental prices have not risen significantly, possibly because of the opening of more apartment complexes amid statewide efforts to spur construction. 

• Nevertheless, the prices are still out of the range of many apartment hunters. The modest price gains in March reflect a return to seasonal trends following the Bay Area rental market's unpredictable ride during the pandemic. 

• Rent prices have rebounded in 2021, but they have not come close to reaching pre-pandemic levels. 

• The local rental market will likely remain one of the most expensive in the country, even as more apartment buildings open and prices remain relatively depressed in some areas.

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A SCOOP OF MARKET DATA

Housing Market Surprises with a Sharp Turnaround in Prices

After several months of declines, home prices in the US saw an unexpected surge at the beginning of this year, thanks to the rebound in mortgage rates. According to Black Knight, home prices rose 0.16% in February, the strongest one-month gain since May 2021. 

• The shift in the property market was due to the wide swings in mortgage rates, with rates on the 30-year fixed rising from just over 4% to over 7% in the fall of 2022. 

• In December and January, mortgage rates began to pull back, leading to a 14.5% jump in closed sales of existing homes in February. However, the price dynamics differ depending on location, with Miami, Cincinnati, Columbus, Ohio, and Cleveland seeing the largest price gains, while Austin, Las Vegas, Salt Lake City, Seattle and San Francisco continue to see falling prices. 

• The number of homes available for sale fell in February for the fifth straight month to the lowest level since May 2021, adding to the upward pressure on prices. While Black Knight predicts prices will move lower again throughout the rest of the year, if supply continues to drop, prices may not have far to fall.

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A SCOOP OF REGULATION

South Florida Gets State Funding to Help Alleviate the Housing Crisis

Florida Governor Ron DeSantis has signed the "Live Local Act" into law, redirecting tax revenue to make housing more affordable in the state. South Florida is set to benefit from the state's $711m plan, which includes $252m directed to the State Housing Initiatives Partnership program, $150m per year to the State Apartment Incentive Loan program and an additional $100m for the Hometown Heroes program. 

• The funds will be used for mortgage buydowns, buying property for affordable housing, down payment and closing-cost assistance, impact fees, construction and gap financing, among other items. 

• The bill also offers incentives to developers to create more affordable housing. However, the "Live Local Act" preempts local zoning laws and allows developers to build units in commercial and industrial areas, stripping local governments’ power to enact any sort of rent-control measures and preempts local laws in regards to density and building heights in certain circumstances. 

• Despite these concerns, South Florida leaders and advocates feel that the new effort is an important step in helping to address an affordability crisis that is fueling homelessness and forcing local residents to sacrifice on basic necessities to make rent.

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