HOW AN ECONOMIST TOSSES AND TURNS
Zillow.com chief economist Stan Humphries, creator of the “Zestimate” of home values, is interviewed in this section today. During their conversation in Tampa, Real Estate Editor Harold Bubil asked him, “What keeps you awake at night, economically speaking?”
“Underestimating the impact that low mortgage rates have had on the housing recovery,” he replied. “There is no doubt that they have been a big demand stimulant, but it is my belief that the fundamentals (of the market) also look very good because of huge price resets (declines).
“It is a minor fear, but it exists because of the impact of the Federal Homebuyer Tax Credits. We were very vocal that those were not a good idea, that we were going to see demand go away, and we were right. Our assessment now is the federal stimulus (the Federal Reserve has been buying $85 billion of mortgage-backed securities each month to keep interest rates low) has been very helpful for the market, and is definitely the right stimulus, but the (market’s) fundamentals themselves have been driving the recovery because prices are so darn cheap,” Humphries said.
“If this is wrong and the recovery has been entirely induced by the Federal Reserve stimulus, it means that as we pull the stimulus out of the market, the response would be . . . a return to broad-based home value declines. That is what keeps me up at night.
“The responsible thing to do is pull that stimulus out of the market. I believe the fundamentals are there for the market to stand on its own. My ‘5-percent fear’ is that we have overestimated the fundamentals of the market and that the recovery is all on the back of low mortgage rates.”
NEAL COMMUNITIES OPENS SUGAR MILL LAKES
Neal Communities has opened a family-oriented new-home development, Sugar Mill Lakes, at 4539 28th Ave. E. in Palmetto. The Sunlight 3 is the new model.
Amenities include a family recreation center, children’s playground, tennis court and lake views. Homes range in size from 1,569 to 2,233 square feet; pricing starts in the high-$100,000s.
MEDALLION HOME SELLS TO NFL PLAYER
Tracy “Ace” Sanders, a wide receiver for the Jacksonville Jaguars of the National Football League, has signed a contract with Medallion Home to build a house in its Gamble Creek community.
Sanders was born in Bradenton and played at Manatee High. He played college football at the University of South Carolina and was drafted in the fourth round of the 2013 NFL Draft by the Jaguars.
