Much-Needed Clarity for Bethany Beach, DE Real Estate Watchers
By the end of Friday, Bethany Beach, DE real estate watchers who hadn’t been paying close attention might have headed into the weekend thinking that home prices weren’t rising as quickly as expected. Or they might have thought the opposite. Likewise, mortgage rates again were on the rise (or perhaps they were headed south). And the volume of home sales? Up, surprisingly up! Or perhaps not…
Mortgage News Daily’s Friday edition performed a genuine public service for Bethany Beach, DE readers doing their best to keep up with the latest real estate moves. “Disconnect Between Home Sales, Prices, and Rates” demystified the apparently conflicting information in digestible language. The reports, in a nutshell:
The one getting the most play—the March New Homes Sales number—grabbed the most attention by registering “over 1 million” for the first time in 15 years.
Countering that, the volume of March Existing Home Sales fell below December’s. That explained why some reports listing one “Home Sales” number as an undifferentiated statistic could be reported any which way.
Even so, median New Home Prices were reported as flat. Since they had actually fallen in previous months, the resulting median prices were “basically unchanged” from a year ago.
At the same time, the widely-followed Federal Housing Finance Agency’s House Price Index was “breaking records.” The FHFA’s supporting graph ended in a nearly vertical line that could have doubled as a SpaceX launch trajectory. That was explained by the fact that FHFA’s data “doesn’t capture new home prices at the time of construction”—instead, tracking new home data separately.
The resulting encouraging/discouraging, up/down reporting could leave readers with conflicting impressions. But when you get down to it, the only piece that’s truly puzzling is why new home prices haven’t risen more. The lack of inventory explains the steady climb of existing home prices—but wouldn’t their rise pull new home prices up, too?
MND supplied the answer. It’s size.
New homes have been built with footprints averaging 200 square feet smaller than they were in 2017—on lot sizes even smaller. Bethany Beach, DE real estate observers know that the pandemic created a home office phenomenon that spawned a desire for larger—not smaller—homes. Add in a couple of complicating factors—like lumber prices “in the insanity zone” offset by lower home loan rates—and the result is complicated but understandable: price moderation, followed by an uptick in new home sales.
- Written by Jimmie Bachand
Odds that Bitcoin will Buy Today’s Fenwick Island, DE Homes for Sale
Local homeowners with Fenwick Island, DE homes for sale may be tradition-bound when it comes to how they plan on being paid (that is, with money)—but not every homeowner is equally old-fashioned. As CNBC pointed out last week, dollars aren’t the only option. Their report, “Real estate catches onto the crypto craze as people buy homes with bitcoin,” promised to examine how real estate agents “are pivoting to work with the cryptocurrency…”
The three-minute report that aired earlier this month did deliver on part of the premise, but fell short in verifying that much actual ‘pivoting’ has yet taken place. Boiled down to its verifiable elements, they reported—
Cryptocurrencies are cited as a growing trend for Realtors® buying and selling homes with Bitcoin. Party-poopers might point out that since no number is given for either before or after, a “trend” might mean only a couple of actual transactions. That would constitute a trend if zero is the starting point.
Crypto market capitalization is now pegged at $1.9 trillion. Party-poopers would have a hard time explaining that—even after last week’s $200 billion Bitcoin price plunge.
CNBC’s Diana Olek (who has been reporting on cryptos for years) says that only three years ago, “selling a home with Bitcoin was almost impossible.”
As it digs deeper into the “craze,” CNBC does back off of adjectives like “mania,” preferring descriptions like “seeping” or “trickling in” to its effect on real estate. It turns out that “more and more” home sellers are “asking how to go about using Bitcoin as the form of currency.” In other words, “asking how” seems to be the actual trend that’s on “a steep incline”—while literally completing a sale may be a relative rarity. One reason is that in order to complete a sale, you need a crypto-real estate attorney and third-party escrow firm “experienced in how to transfer and hold the token.”
Despite the hurdles, few observers question the future of cryptocurrencies—or that of government-issued digital currencies. Especially at the high end of the luxury market, international buyers may be attracted by listings that include a price tag in Bitcoin. Admittedly, even those properties usually wind up being purchased with the less speculative alternative: cash.
- Written by Jimmie Bachand