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Housing Market Expected to Stay Stable as COVID-era Protections End

Only a small share of inventory is expected to come from homeowners foreclosed upon after the expiration of key federal protections.
The post Housing Market Expected to Stay Stable as COVID-era Protections End appeared first on Zillow Research.

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  • Foreclosures are predicted to make up the smallest single source of available inventory at just 5.4%.
  • Homeowners listing their houses should make up 40% of inventory in the coming year.
  • Expiration of the eviction moratorium is not expected to have major impacts on rent prices.
  • Appreciation should moderate but will stay historically high over the next five years.

Housing inventory is expected to come from a number of sources over the next year, including from existing homeowners and home builders — but very little is expected to come from homeowners foreclosed upon after the expiration of key federal protections, according to a Zillow survey of experts. The housing market is expected to stay largely stable as homeowners exit forbearance, while rents and vacancies are not expected to rise dramatically following the end of the federal eviction moratorium. 

As part of the Q3 2021 Zillow Home Price Expectations Survey, more than 100 real estate experts and economists nationwide were asked for their thoughts on expected home price appreciation over the next five years, inventory and the state of the market once key pandemic-era housing protections end. The survey is sponsored by Zillow, and conducted quarterly by Pulsenomics. Panelists said they expect the largest single source of available housing inventory will be existing homeowners buying and moving to a different home, comprising 39.7% of the supply that is expected to hit the market over the next year. 

Inventory trended downward throughout 2020 and into 2021 as demand for homes took off, driven by the Great Reshuffling, low interest rates, and a demographic surge of millennial and baby boomer home buyers. The combination of low supply and high demand pushed prices into new territory, reaching record-high 17.7% annual appreciation in August. But at the same time, inventory rose from the month prior and the share of listings with a price cut grew for the fourth straight month, suggesting some modest improvement in buying conditions. In February, the panel accurately predicted that additional inventory would enter the market in the second half of the year as existing homeowners became more comfortable listing their homes under a widespread vaccine distribution.  

The panel expects home foreclosures to make up the smallest source of available inventory, at 5.4%. Additional supply is expected to come onto the market over the next few months as homeowners exit forbearance and some sell their homes, according to previous Zillow research. The federal foreclosure moratorium ended on July 31, and roughly 850,000 borrowers are expected to exit forbearance programs before November 2021. 

However, strong price appreciation over the past few years and very few loans with negative equity mean open market sales are a realistic option for the majority of distressed borrowers. That's unlike in 2008, when financial conditions and a souring housing market pushed many homeowners into involuntary foreclosure.

New construction is forecast to be the second-largest source of inventory, at 22.5%. New home construction has been weighed down in 2021 due to shortages of key building materials, but even despite the setbacks has largely remained above pre-pandemic levels. 

Existing homeowners intent on renting, or not buying again, should contribute 9.6% of supply, according to the panel. 

Limited Rental Market Impact

In the rental market, in light of the expiration of the federal eviction moratorium, Zillow projects evictions will be roughly 1.5 times what they would typically have been before the pandemic.

After the moratorium expired on July 31, the Centers for Disease Control and Prevention imposed a new policy to prevent evictions in areas with high COVID infection rates. However, the Supreme Court blocked the new ban, leaving a number of renters at risk of eviction. Zillow estimates there will be more than 485,000 eviction filings in September and October after the Supreme Court's ruling, with a projected 268,000 likely to be evicted - roughly 0.6% of the 43.9 million renters in the U.S. 

The vast majority of survey participants do not expect rents to change much as a result of the moratorium ending. The largest single group of panel participants - 34% - said no change is likely to occur, while 26% expect rents to rise slightly. A total of 14% of respondents said rents will fall either slightly or modestly. Predictions for rents to rise modestly were cast by 20% of the panel, and those believing rents will increase significantly accounted for 6%. 

When asked how rental vacancy rates will be affected, the largest share of respondents (38%) said vacancies would rise slightly as a result of the end of the moratorium, just ahead of predictions that vacancies would  not rise (37%) and beyond calls that they would rise modestly (24%). 

How many at-risk renters will be evicted will be greatly impacted by the pace of distribution of federal relief funds. According to the U.S. Department of the Treasury, only $5.1 billion of the $46.5 billion in rental relief has been distributed by state and local governments as of Aug. 25.

Silver Lining

Experts surveyed expect home prices nationwide to increase a cumulative 31.8% through 2025, the equivalent of an average annual rate of 5.7% - far below the current annual appreciation of about 17%.

"Across the U.S., home value appreciation rates and annual rent price increases are at historically high levels, and home price expectations are now the highest we've recorded in the 12-year history of this survey," said Terry Loebs, founder of Pulsenomics. "The silver lining for aspiring homeowners is that the worst of the housing supply crunch looks to finally be behind us, and most experts believe that the past year's rapid price boil has begun to simmer down."     

The post Housing Market Expected to Stay Stable as COVID-era Protections End appeared first on Zillow Research.

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Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid ‘Green Pass’ Takes Effect

Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid ‘Green Pass’ Takes Effect

Following Israel across the Mediterranean being the first country in the world to implement an internal Covid passport allowing only vaccinated citize

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Huge Dock Worker Protests In Italy, Fears Of Disruption, As Covid 'Green Pass' Takes Effect

Following Israel across the Mediterranean being the first country in the world to implement an internal Covid passport allowing only vaccinated citizens to engage in all public activity, Italy on Friday implemented its own 'Green Pass' in the strictest and first such move for Europe

The fully mandatory for every Italian citizen health pass "allows" entry into work spaces or activities like going to restaurants and bars, based on one of the following three conditions that must be met: 

  • proof of at least one dose of Covid-19 vaccine

  • or proof of recent recovery from an infection

  • or a negative test within the past 48 hours

Via AFP

It's already being recognized in multiple media reports as among "the world's strictest anti-COVID measures" for workers. First approved by Italian Prime Minister Mario Draghi's cabinet a month ago, it has now become mandatory on Oct.15.

Protests have been quick to pop up across various parts of the country, particularly as workers who don't comply can be fined 1,500 euros ($1,760); and alternately workers can be forced to take unpaid leave for refusing the jab. CNN notes that it triggered "protests at key ports and fears of disruption" on Friday, detailing further:

The largest demonstrations were at the major northeastern port of Trieste, where labor groups had threatened to block operations and around 6,000 protesters, some chanting and carrying flares, gathered outside the gates.

    Around 40% of Trieste's port workers are not vaccinated, said Stefano Puzzer, a local trade union official, a far higher proportion than in the general Italian population.

    Workers at the large port of Trieste have effectively blocked access to the key transport hub...

    As The Hill notes, anyone wishing to travel to Italy anytime soon will have to obtain the green pass: "The pass is already required in Italy for both tourists and nationals to enter museums, theatres, gyms and indoor restaurants, as well as to board trains, buses and domestic flights."

    The prime minister had earlier promoted the pass as a way to ensure no more lockdowns in already hard hit Italy, which has had an estimated 130,000 Covid-related deaths since the start of the pandemic.

    Meanwhile, the requirement of what's essentially a domestic Covid passport is practically catching on in other parts of Europe as well, with it already being required to enter certain hospitality settings in German and Greece, for example. Some towns in Germany have reportedly begun requiring vaccination proof just to enter stores. So likely the Italy model will soon be enacted in Western Europe as well.

    Tyler Durden Sat, 10/16/2021 - 07:35

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    Tracking Global Hunger & Food Insecurity

    Tracking Global Hunger & Food Insecurity

    Hunger is still one the biggest – and most solvable – problems in the world.

    Every day, as Visual Capitalist’s Bruno Venditti notes, more than 700 million people (8.8% of the world’s population)..

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    Tracking Global Hunger & Food Insecurity

    Hunger is still one the biggest - and most solvable - problems in the world.

    Every day, as Visual Capitalist's Bruno Venditti notes, more than 700 million people (8.8% of the world’s population) go to bed on an empty stomach, according to the UN World Food Programme (WFP).

    The WFP’s HungerMap LIVE displayed here tracks core indicators of acute hunger like household food consumption, livelihoods, child nutritional status, mortality, and access to clean water in order to rank countries.

    After sitting closer to 600 million from 2014 to 2019, the number of people in the world affected by hunger increased during the COVID-19 pandemic.

    In 2020, 155 million people (2% of the world’s population) experienced acute hunger, requiring urgent assistance.

    The Fight to Feed the World

    The problem of global hunger isn’t new, and attempts to solve it have making headlines for decades.

    On July 13, 1985, at Wembley Stadium in London, Prince Charles and Princess Diana officially opened Live Aid, a worldwide rock concert organized to raise money for the relief of famine-stricken Africans.

    The event was followed by similar concerts at other arenas around the world, globally linked by satellite to more than a billion viewers in 110 nations, raising more than $125 million ($309 million in today’s dollars) in famine relief for Africa.

    But 35+ years later, the continent still struggles. According to the UN, from 12 countries with the highest prevalence of insufficient food consumption in the world, nine are in Africa.

     

    Approximately 30 million people in Africa face the effects of severe food insecurity, including malnutrition, starvation, and poverty.

     

    Wasted Leftovers

    Although many of the reasons for the food crisis around the globe involve conflicts or environmental challenges, one of the big contributors is food waste.

    According to the United Nations, one-third of food produced for human consumption is lost or wasted globally. This amounts to about 1.3 billion tons of wasted food per year, worth approximately $1 trillion.

    All the food produced but never eaten would be sufficient to feed two billion people. That’s more than twice the number of undernourished people across the globe. Consumers in rich countries waste almost as much food as the entire net food production of sub-Saharan Africa each year.

    Solving Global Hunger

    While many people may not be “hungry” in the sense that they are suffering physical discomfort, they may still be food insecure, lacking regular access to enough safe and nutritious food for normal growth and development.

    Estimates of how much money it would take to end world hunger range from $7 billion to $265 billion per year.

    But to tackle the problem, investments must be utilized in the right places. Specialists say that governments and organizations need to provide food and humanitarian relief to the most at-risk regions, increase agricultural productivity, and invest in more efficient supply chains.

    Tyler Durden Fri, 10/15/2021 - 23:30

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    Economics

    China Coal Prices Soar To Record As Winter Freeze Spreads Cross The Country

    China Coal Prices Soar To Record As Winter Freeze Spreads Cross The Country

    One week ago we discussed why the "worst case" scenario for China’s property crisis is gradually emerging; to this we can now add that China’s worst case energy crisi

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    China Coal Prices Soar To Record As Winter Freeze Spreads Cross The Country

    One week ago we discussed why the "worst case" scenario for China's property crisis is gradually emerging; to this we can now add that China's worst case energy crisis scenario is also about to be unleashed as cold weather swept into much of the country and power plants scrambled to stock up on coal, sending prices of the fuel to record highs.

    Electricity demand to heat homes and offices is expected to soar this week as strong cold winds move down from northern China, according to Reuters with forecasters predicting average temperatures in some central and eastern regions could fall by as much as 16 degrees Celsius in the next 2-3 days.

    Shortages of coal, high fuel prices and booming post-pandemic industrial demand have sparked widespread power shortages in the world's second-largest economy. Rationing has already been in place in at least 17 of mainland China's more than 30 regions since September, forcing some factories to suspend production and further disrupting already broken supply chains.

    On Friday, the most-active January Zhengzhou thermal coal futures closed at a record high of 2,226 per tonne early. The contract has risen almost 200% year to date.

    China's three northeastern provinces of Jilin, Heilongjiang and Liaoning - also among the worst hit by the power shortages last month - as well as several regions in northern China including Inner Mongolia and Gansu have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.

    Meanwhile, even though Beijing has taken a slew of measures to contain coal price rises including raising domestic coal output and cutting power to power-hungry industries and some factories during periods of peak demand, so far all measures have failed with coal surging by 40% in just the past three days. Beijing has also repeatedly assured users that energy supplies will be secured for the winter heating season, and went so far as to order energy firms to "secure supplies at all costs." Well, the energy firms heard it, because on that day, thermal coal closed at 1,436 yuan. Two weeks later it is some 800 yuan higher.

    Unfortunately for Beijing, the power shortages are expected to continue into early next year, with analysts and traders forecasting a 12% drop in industrial power consumption in the fourth quarter as coal supplies fall short and local governments give priority to residential users.

    Earlier this week, we reported that China undertook its boldest step in a decades-long power sector reform when it allowed coal-fired power prices to fluctuate by up to 20% from base levels from Oct. 15, enabling power plants to pass on more of the high costs of generation to commercial and industrial end-users. read more

    Steel, aluminium, cement and chemical producers are expected to face higher and more volatile power costs under the new policy, pressuring profit margins.

    Meanwhile, the latest Chinese "data" on Thursday showed factory-gate inflation in September hit a record high; but since thermal coal is the one commodity that correlates the closest to PPI, absent a sharp drop in coal prices in the next few weeks, expect the next PPI print to be far higher. Meanwhile as the power crisis leads to further shutdowns in domestic production, some banks - such as Nomura - have gone so far to predict that China's GDP is set to shrink in coming quarters.

    China, which laughably aims to be "carbon neutral" by 2060 even as its president announced he will skip the COP26 UN Climate Change Conference in Glasgow, has been "trying" to reduce its reliance on polluting coal power in favor of cleaner wind, solar and hydro. But coal remains the source for some 70% of China's electricity needs.

    Of course, China is not the only nation struggling with power supplies, which has led to fuel shortages and blackouts in many European countries. and threatens to send US heating bills up as much as 50% this winter. he crisis has highlighted the difficulty in cutting the global economy's dependency on fossil fuels as world leaders seek to revive efforts to tackle climate change at talks next month in Glasgow.

    China will strive to achieve carbon peaks by 2030, Vice Premier Han Zheng said in a video message at the Russian Energy Week International Forum, according to state-run news agency Xinhua late on Thursday. He also said that China and Russia are important forces leading the energy transition and they should cooperate and ensure smooth progress of major oil and gas pipeline and nuclear power projects.

    Translation: Russia better save that nat gas and not ship it to Europe as China will soon be needed even BCF Russia an provide. As for China

     

    Tyler Durden Fri, 10/15/2021 - 22:50

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