A prominent downtown property slated for a 46-story Ritz Carlton Nashville tower has been sold in a foreclosure auction after the developer allegedly stopped making payments to the bank.
R Squared Properties LLC of Washington bought the triangular-shaped 1.2-acre lot at 727 Korean Veterans Boulevard for $35 million on Thursday, according to the deed filed with Davidson County Register’s office.
The property was sold to the “highest bidder for cash” at Metro Nashville Courthouse on Thursday morning, the deed states. The sale price is the same amount the site sold for in March 2020 — $35 million.
R Squared officials did not immediately respond to requests about whether they will continue with development plans for the Ritz hotel.
Seller RC Nashville Development Partners, led by Timothy J. Morris, was sued for defaulting on a $10 million construction loan by Oakworth Capital Bank, the financiers for the original Ritz project. A U.S. Magistrate Judge said on April 1 that the defendants continue to fail to adequately respond to legal filings.
“RC Nashville has not filed an answer,” Judge Barbara D. Holmes wrote. “Although Morris filed a letter on behalf of himself and RC Nashville that could be construed as an answer to the complaint, RC Nashville can only appear in this case through a licensed attorney because it is a limited liability corporation.”
Ritz Carlton Nashville plans stalled shortly after they were announced
Plans announced in 2021 were to build a $585 million hotel and condominium tower filled with upscale design and amenities.
Morris told The Tennessean at the time that he was inspired by the success of Four Seasons Nashville.
“They came in as trailblazers,” Morris said. “They established the fact that people would pay the prices they’re paying for that type of luxuries and that brand and amenities.”
However, trouble surfaced in 2022 when construction was delayed due to financing challenges.
In October 2023, Oakworth Capital Bank filed a lawsuit in U.S. District Court for Middle Tennessee alleging that Morris and his RC Nashville Development Partners failed to make payments on a $10 million line of credit.
In court documents, Morris said he was beset by difficult economic conditions including high inflation and post-Covid supply chain interruptions.
“It seems only fair to a layman like me that (Oakworth Capital Bank) can take the deed in lieu of foreclosure, sell the property, a course of action I would fully support,” Morris wrote the court. “Plaintiff would be made more than 100% whole financially based on the purported value of the property.”
Morris faces numerous lawsuits
Developer Tim Morris has found himself at the center of several lawsuits regarding his business dealings.
Morris is principal of M2 Development Partners and RC Nashville Development Partners, which was also sued for allegedly failing to make payments on a $10 million loan.
In a separate suit, Oakworth Capital also alleges Morris failed to make payments on a $5.3 million loan for a project he is working on in Washington, D.C.
On April 1, U.S. Magistrate Judge Barbara D. Holmes ruled in favor of Oakworth that Morris was in default of his loan payments for that case.
“Although Morris has made some filings in this case, he failed to follow the Court’s instruction in its February 15 order to respond to the motion for entry of default,” Holmes wrote in her order. “Morris’ disregard of the Court’s order justifies entry of default against him.”
In January, real estate development company The Bradley Projects filed a suit against Morris and Patterson Street, LP, alleging the defendants failed to pay back a promissory note totaling $218,750. According to the lawsuit, the payment was due in full Dec. 31, 2023.
M2, Morris and RC Nashville are listed as defendants in another suit filed in December by office building Fifth+ Broadway in downtown Nashville. According to the complaint, M2 and RC, of which Morris is the guarantor, failed to make rent payments to the office owner. The plaintiff is seeking $184,955.46 plus additional damages and interest to be determined at trial.
Realtor commission fees consumers pay to buy and sell a house could soon change.
The National Association of Realtors, embroiled in legal battles over the real estate industry’s commission structure, has reached a settlement that could dramatically slash the fees paid to agents.
NAR said Friday that the settlement would lead to it put in place a new Multiple Listing Service rule, which would prohibit offers of broker compensation.
The association’s rules do not set commission rates, NAR said, which are negotiated between consumers and their agents.
However, the real estate industry has long worked under a model of a 5% to 6% commission paid by the seller and split between the seller’s agent and the buyer’s agent.
A federal case in Missouri that challenged that commission structure led to a jury deciding in October that NAR and large brokerage firms conspired to keep costs artificially high. The jury awarded $1.8 billion in damages, which could rise to more than $5 billion under antitrust rules.
What could happen to real estate commissions?
If the class-action case settlement announced Friday is approved, the changes could dramatically lower costs for those looking to sell their home.
The settlement must still get court approval. If it gets the okay, changes would go into effect in mid July, NAR said.
“This would mean that offers of broker compensation could not be communicated via the MLS, but they could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals,” NAR said in a press release. “Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers. They are also consistent with the real estate laws in the many states that expressly authorize them.”
Commission change is good for consumers
“This is a major win for consumers,” said Ryan Tomasello, a real estate industry analyst with Keefe, Bruyette & Woods, who has written several reports about the lawsuits challenging the industry’s fee structure and effects they could have on the industry.
“The first reason it’s a win is because this is going to add much needed transparency to the process for both sellers and buyers, particularly for buyers who historically have lacked the knowledge to be able to negotiate lower commissions that could ultimately benefit them in their home closing process,” Tomasello told USA TODAY.
A key question, Tomasello said, will be whether buyers will now be strapped with an additional cost to pay their agent, which they can’t afford, or whether there will be updated mortgage writing guidelines that would allow buyers to finance their commissions.
Sellers still have the option to offer to pay for the buyer’s agent commissions and so that would occur on a case-by-case basis, he said.
In a series of reports, Tomasello has predicted the lawsuits could result in a 30% reduction in the $100 billion paid in real estate commissions by Americans every year. Additionally, Tomasello thinks the legal decisions could result in 60% to 80% of the 1.6 million agents leaving the industry.
Commissions going away?:How much you pay to buy or sell a home may be about to change. Here’s what you need to know
According to survey data from his company, close to 75% of recent homebuyers didn’t know how their agent was compensated.
Tomasello’s firm’s research shows that overall commission prices in a home sale could come down by upward of 2% or more.
Stephen Brobek, a senior fellow at the Consumer Federation of America, has said elimination of the practice of a house seller paying fees to both the seller’s and buyer’s agent will be a watershed moment for the industry.
“This settlement over time will benefit home sellers and buyers greatly, eventually lowering agent commissions by tens of billions of dollars a year and helping align agent compensation and services rendered,” he said Friday.
The changes could eventually save consumers $20 billion to $30 billion in real estate commissions each year, he said. The Consumer Federation of America has predicted commission rates could decline from a range of 5% to 6%, to 3% to 4%.
First-time homebuyers could feel pinch
But changes to the existing commission structure could create an unfair disadvantage for first-time home buyers, especially people of color, said Gary Acosta, co-founder and CEO of the National Association of Hispanic Real Estate Professionals.
“The plaintiffs and proponents of these lawsuits claim they represent consumers but in reality, they have been nothing more than vicious attacks on first-time home buyers and small businesses,” Acosta said. “In the settlement, NAR made the right choice by prioritizing the protection of its members from unfair liability, and preserving the option of broker cooperation; which reduces the financial burden on minorities and first-time homebuyers.”
Other parts of the settlement
Another new rule that is part of the proposed settlement would require MLS participants working with buyers to enter into written agreements with those clients.
Additionally, NAR will pay $418 million over approximately four years as part of the class-action settlement.
“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers. It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals,” said Nykia Wright, Interim CEO of NAR said in a statement.
Added Kevin Sears, NAR president: “This will be a time of adjustment, but the fundamentals will remain: buyers and sellers will continue to have many choices when deciding to buy or sell a home, and NAR members will continue to use their skill, care, and diligence to protect the interests of their clients.”
The settlement by NAR resolves four class-action cases filed against the organization, according to Cohen Milstein Sellers & Toll, a firm representing plaintiffs in one of the legal actions.
“Consumers have really been locked out of the process of negotiating the price for their brokers when they’re on the buyer side of housing purchases,” said Benjamin D. Brown, managing partner of Cohen Milstein Sellers & Toll and co-chair of its Antitrust practice. “Once this relief goes into effect, I think that the industry is going to develop in a new direction where there are some innovative brokerages offering lower commissions for buyer broker services.”
Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays,here.
California is one of the largest and most populous states in the U.S. – it’s also one of the most expensive places to live. According to data from the Census Bureau’s American Communities Survey, the median monthly mortgage cost in California is $2,673. It’s not just housing that adds up – health care, taxes, food and transportation all contribute to California’s growing cost of living.
California has one of the most pricey housing markets in country
Last year, the California Community Poll found that 4 in 10 Californians were considering moving out of state, with the majority saying it’s too expensive to live there. Although the poll found a majority of Californians love living in the state, increasing costs of living is the main driver for people moving.
About 64% of counties in the Golden State having median homes values above the national median of $389,800. Four of the top five most expensive U.S. counties by median housing price were located in California.
County level data of housing statistics from the the American Community Survey shows how much homes are valued at across California.
Outside of California, Massachusetts rounds out the top five counties with the highest median home prices:
- Santa Clara County, CA: $1,583,130
- San Mateo County, CA: $1,573,470
- Marin County, CA: $1,454,450
- San Francisco County, CA: $1,332,660
- Nantucket County, MA: $1,313,450
Logan Mohtashami, lead analyst for HousingWire, a trade publication for mortgage, real estate, and housing professionals told USA TODAY that California has been ineffective in lowering the cost of living because not enough homes are being built. That means there is more demand for homes than supply.
Mohtashami called the housing market unhealthy, ” We still have too many people chasing too few homes” he said. “California is going to be a tug of war. Can they keep enough people here? Or do more people just keep moving away?”
Cost of living:Nearly half of California residents are considering leaving the state, a poll finds.
California to Texas:A move from California to Texas could save a million dollars. Many Americans are opting in
See how much homes are valued in your county
For the roughly two-thirds of Americans who do own homes, location is a major determinate of their home’s value. Home ownership is a major financial asset to many households and knowing the worth of a home can help families decide to buy or sell.
See the median value of homes in each U.S. county:
How was the data collected?
The National Association of Realtors analyzed data from the Census Bureau’s American Community Survey of median housing prices for 3,112 counties and county equivalents across the U.S. Home values reflect the overall worth of all homes in a given area rather than solely home sales data, according to the association.
The median home value by county is a less biased statistic than the mean or average price. Median is not as heavily influenced by a small number of highly priced homes and is a more accurate representation of housing prices across the U.S.
Itzel Luna contributed to this reporting
It may come as no surprise that home prices are continuing to rise in 2024: The median sale price for an existing home was 4.4% higher in December 2023 than in December 2022, according to the National Association of Realtors. Not only that, mortgage rates are twice as high now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.
Daryl Fairweather the chief economist at Redfin recently told USA TODAY that the current housing market is “the least affordable housing market in recent memory.”
Although some Americans view homeownership as a rite of passage, the current housing market has made renting look more attractive. A 2023 analysis by Realtor.com found that renting was cheaper than buying in 47 of the 50 largest metropolitan areas.
See how much homes are valued in your county
For the roughly two-thirds of Americans who do own homes, location is a major determinate of their home’s value. Home ownership is a major financial asset to many households and knowing the worth of a home can help families decide to buy or sell.
County level data of housing statistics from the the American Community Survey shows how much homes are valued at across the country. See the median value of homes in each U.S. county:
What are the most expensive housing markets in the U.S.?
The following counties have the highest median home values:
- Santa Clara County, CA: $1,583,130
- San Mateo County, CA: $1,573,470
- Marin County, CA: $1,454,450
- San Francisco County, CA: $1,332,660
- Nantucket County, MA: $1,313,450
Where is it cheapest to buy a home in the U.S.?
The following counties have the lowest median home values:
- Todd County, SD: $42,940
- Cochran County, TX: $50,140
- McDowell County, WV: $50,960
- Cottle County, TX: $53,690
- Stonewall County, TX: $57,140
Why now is a great time to rent:‘The least affordable housing market in recent memory’
Housing market predictions:Six experts weigh in on the real estate outlook in 2024
How was the data collected?
The National Association of Realtors analyzed data from the Census Bureau’s American Community Survey of median housing prices for 3,110 counties and county equivalents across the U.S. Home values reflect the overall worth of all homes in a given area rather than solely home sales data, according to the NAR.
Daniel de Visé contributed to this reporting
A teen from Illinois is speaking out on the importance of early investing after she said smart financial choices allowed her to purchase her first car, a Tesla, at just 17 years old.
Sophia Castiblanco, now a junior in high school, started making money as a social media influencer at age 14, mostly producing lifestyle content like self-care tutorials showcasing her favorite products and purchases.
“I primarily generate income from TikTok brand deals and YouTube ad revenue,” Castiblanco told USA TODAY this week.
Upon witnessing her success, Castiblanco’s parents encouraged her to invest in Vanguard and Berkshire Hathaway index funds to start building long-term wealth. The teen also chose a couple of her favorite companies to purchase stock in. First, it was Tesla and Apple. “I’ve also invested in Amazon and NU,” Castiblanco shared.
That investing has really paid off: Castiblanco said she has earned over 6-figures in returns.
Here’s her advice for teens wanting to invest.
Investing advice for teens
“My content area revolves around lifestyle, focusing on sharing insights into my daily life as a homeschooled teen creator,” Castiblanco told USA TODAY.
Though most of her vlogs center around beauty and shopping, Castiblanco also produces content for teens wanting to learn investing.
“There is no minimum age to start investing,” she said, adding that investing even a little at a time will add to long-term success.
Castiblanco advises teens to open custodial accounts under a parent’s name. In her TikTok videos, she goes over which index funds to start with and also things like choosing a broker and which stocks to buy.
As for where to start, “investing in index funds diversifies your risk and gives you a more balanced portfolio,” she shared with her audience of over 383,000 followers.
As for purchasing stocks? “It’s a long-term game,” Castiblanco shared.
“You’re investing in your future. Remember to be patient. Let your investments grow over time.”
Never too young to save for retirement:Why a custodial Roth IRA may make sense.
The young investor’s future plans
When asked about her future plans, Castiblanco shared that she is focused on content creating in the lifestyle space and will continue investing as she continues to earn.
“My goals also include venturing into real estate investing and starting my own business this year,” she said.
The publicity around her success has been “a positive experience,” Castiblanco shared. Though there are privacy concerns as she continues to grow, the teen said she is “grateful for the supportive community [she’s] built online.
“I’ve enjoyed being able to inspire other teens to invest and pursue their dreams.”
A London home that formerly belonged to Freddie Mercury hit the market for more than £30 million (approximately $38 million).
Listed by Knight Frank, the home known as the Garden Lodge was bought by the Queen rock star in 1980, according to a Monday press release.
He left the house and all its possessions to friend Mary Austin when he died in 1991.
In 2023, Austin announced she was moving on from her role as keeper of his belongings. Later that year Sotheby’s hosted the “Freddie Mercury: A World of His Own,” auction, selling his possessions including the piano he used to write “Bohemian Rhapsody”, which sold for more than $2 million.
Now, it is time to sell his former home itself.
“This house has been the most glorious memory box, because it has such love and warmth in every room,” Austin said, according to the release. “Now that it is empty, I’m transported back to the first time we viewed it. Ever since Freddie and I stepped through the fabled green door, it has been a place of peace, a true artist’s house, and now is the time to entrust that sense of peace to the next person.”
A private island:Pumpkin Key off the Florida Keys for sale at $75 million: It includes multiple houses
Primary bedroom, dressing room like a ‘stage set’
The home was built in Neo-Georgian style in 1907, and Mercury commissioned interior architect Robin Moore Ede to redesign the home to fit his unique style.
Knight Frank says the property “offers grand proportions yet a comfortable homely feel.” It includes a two-floor drawing room with grand windows where he kept his piano, an intimate dining room painted his favorite color and a garden secluded from the busy city streets.
Upstairs, the principal suite is accessible through a dressing room mirrored from floor to ceiling, which Knight Frank said is “in itself a stage set.”
“With huge enthusiasm for entertaining his close circle of friends, Freddie designed the house to be a memorable, inviting place that reflected his vibrant personality and eclectic vision,” the release states.
Contributing: Associated Press
One of Americans’ biggest pet peeves – high inflation – seemed to be in retreat the past few months but the latest report revealed an unwelcome flare-up in January. Will a lesser-known price measure that the Federal Reserve follows more closely deliver better news?
Consumer confidence, meanwhile, has been recovering from some inflation-induced blahs. Will the February report highlight more good vibes or another mood swing?
And home prices have been in the doldrums because of high mortgage rates — although borrowing costs have eased a bit lately. Could that bear fruit in the latest reading on home prices?
This week’s economic news should help answer those and other questions that matter to your wallet. Here’s a sneak peek:
Are companies spending money?
30,000-foot view: Companies have been cautious about buying more factory machines, computers and other equipment recently because of high interest rates that make borrowing more expensive.
Protect your assets: Best high-yield savings accounts of 2023
But new orders for such long-lasting goods rose in November and December. Businesses have been encouraged by fading recession fears and the Federal Reserve’s expected interest rate cuts later this year, says Nomura economist Aichi Amemiya.
He estimates a key measure that excludes aircraft and defense-related items – a proxy for business investment – will show flat or slightly higher purchases in January when the Commerce Department releases the data on Tuesday.
You should care because: More capital spending means more growth for the economy and, generally, more hiring. After all, new machines typically need workers to run them.
Are house prices in the US dropping?
For home sellers, the past six months or so have been frustrating.
30,000-foot view: Monthly increases in home prices have steadily slowed since the middle of last year as rising mortgage rates discouraged housing sales. In November, the average home price in major metro areas fell for the first time in 10 months (before seasonal adjustments), according to the S&P CoreLogic Case-Shiller Home Price Index of 20 cities.
Nomura expects more of the same in S&P’s release of the December figures on Tuesday.
You should care because: Mortgage rates generally have dipped since late last year and that should lift home sales and prices in the months ahead, Nomura says.
Is consumer confidence high right now?
Americans have been feeling better about their finances and the economy lately but that could change quickly if the outlook darkens.
30,000-foot view: In January, consumer confidence reached the highest level since late 2021 on easing inflation, strong job growth, rising stock prices and the prospect of lower interest rates. Economists surveyed by Bloomberg estimate the Conference Board will announce Tuesday that confidence held steady in February while Nomura expects a slight uptick.
You should care because: The measure affects household spending and the economy.
Is US inflation cooling down?
Inflation seemed to be on a steady downward path until the Labor Department’s consumer price index (CPI) raised concerns earlier this month.
A core measure of the CPI, which excludes volatile food and energy items, rose a sharp 0.4% in January, keeping the annual increase at 3.9%. That led some economists to push out their forecast for the Federal Reserve’s first interest rate cut from May to a bit later this year.
30,000-foot view: On Thursday, the Commerce Department releases a different inflation gauge called the personal consumption expenditures (PCE) price index. The Fed keeps a closer eye on the core PCE index than the core CPI and economists expect a similar 0.4% rise in that PCE reading as another jump in rent as well as services such as health care, finance and insurance offsets roughly flat goods prices, Barclays says.
You should care because: That rise would be the largest monthly increase in a year, Nomura notes, but would still nudge down the annual increase from 2.9% to 2.8%, a bit closer to the Fed’s 2% goal. And economists still expect inflation to continue to drop in the coming months as rent increases slow.
The PCE report is also expected to show that consumer spending increased a modest 0.2% last month, well below December’s 0.7% leap.
Is US manufacturing in a recession?
The economy has been strong and resilient. But the nation’s manufacturers have barely felt it.
30,000-foot view: U.S. manufacturing activity has contracted for 15 straight months as consumers have shifted their spending from goods to services since the pandemic and businesses have grappled with high interest rates and bloated inventories.
You should care because: On Friday, the Institute for Supply Management is expected to announce that factory activity shrank yet again in February but the total activity level – which includes new orders, production, jobs and other elements – was likely the highest since October 2022. Nomura anticipates an even bigger improvement to just below expansion territory.
A 26-acre private island know as Pumpkin Key is on the market for $75 million.
The listing managed by Liz Hogan of Compass offers combo deal including a mainland home in Key Largo and the entire island with multiple amenities for convenient management of the estate.
“There are two ways this will sell,” Hogan told USA TODAY in an interview. “Either it will go for a family looking for a family compound and a legacy property or a developer will buy it to build on the island and sell the parts.”
The estate’s current owner, a family from the Midwest, has used it as a family compound but its generations are growing out of it, Hogan said.
More:See retired Alabama football coach Nick Saban’s $17.5 million Florida home
Listing includes mainland home with dock, 4-minute boat ride to island
The mainland home as part of the listing is on the Key Largo coast closest to Pumpkin Key, and includes a dock that stretches more than 100 feet long to be able to boat quickly between the mainland and the island.
The home is also part of the Ocean Reef Club in Key Largo, which Hogan says is a fully sufficient yearlong resort. It has its own airport for private jets, a member-only hotel, another marina and two 18-hole golf courses.
If a buyer wants to give up that house, the island has its own 23-slip marina capable of accommodating a mega-yacht and tennis courts that convert into a helicopter pad for the brief jet to Miami.
Private island listing comes with 2 homes, 3 apartments and office
The listing comes with:
- A mainland house with four bedrooms, three bathrooms and a 140-foot dock
- A ranch-style house on the island with three bedrooms, four-and-a-half bathrooms and a pool
- Three apartments spread across two structures on the island, ranging from studio to two-bedrooms. The current owners have used these to house caretakers
- A 23-slip marina on the island with a dock office and master quarters
Each structure on the island has fiber optic cable, water and electricity. The 11 undeveloped lots on the island have the infrastructure ready for building as well.
Hogan said an acre-lot on the mainland sold for $24.5 million recently.
Generations of consumers have embraced homeownership as part of the American dream. Lately, though, it looks more like a pipe dream.
“Housing is becoming a luxury good,” said Christopher Mayer, a Columbia University economist.
The upside? It’s a great time to rent. The spiraling costs of homeownership have turned the perennial rent-vs.-own equation on its head. In most of the nation’s largest cities, renting is now far cheaper.
The median sales price for existing homes rose more than 40% from early 2020 to mid-2022, to a seasonal peak just above $400,000, according to the National Association of Realtors.
Prices are still rising: The median sale price for an existing home was 4.4% higher in December 2023 than in December 2022.
Learn more: Best personal loans
Mortgage rates, meanwhile, are twice as high now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.
Taken together, those two trends yield frightening math.
Rising mortgage rates should have pushed home prices down. They didn’t
Imagine you bought a $400,000 home, and you made a 20% down payment.
At 3.2% interest, your monthly principal and interest on a 30-year mortgage would have totaled $1,383, according to a Bankrate mortgage calculator.
At 6.8%, the same mortgage would cost you $2,086.
“It’s the least affordable housing market in recent memory,” said Daryl Fairweather, chief economist at Redfin.
Rising interest rates slowed the upward march of home prices, even leading to small declines in some months. Yet, the seller’s market has endured. Here are some reasons:
- Developers haven’t been building enough new homes to keep up with demand.
- The covid pandemic and remote work boom seeded even more demand, as workers sought larger homes.
- Homeowners with historically low mortgage rates don’t want to sell.
“It’s kind of the perfect storm, if you’re a consumer,” Mayer said. ‘“Perfect storm’ in a bad way.”
Homeownership has long been regarded as a rite of passage
The prohibitive costs of home purchase are reshaping common wisdom about the merits of homeownership.
Americans have long regarded home ownership as a rite of passage. Roughly two-thirds of Americans own homes. Many households count their home as their main asset.
Lately, however, the rent-or-buy calculus has favored the renter.
Many factors go into the equation.
Potential buyers consider how long they’re likely to stay in the home, how much money they can leverage as a down payment, how much interest they’ll pay on the mortgage, and whether the home is likely to increase in value.
Potential renters factor in current rental rates, whether rents are likely to rise, and the costs of rental insurance.
In a typical housing market, a home purchase might make sense for anyone who expects to stay put for, say, five years. That’s enough time to make a dent in your mortgage, building equity in the home, and for its market value to rise. Sell a home after five or 10 years, the theory goes, and you’re likely to profit.
That equation might still work. Yet, housing prices have climbed so high that many potential buyers can’t afford the investment.
“For a lot of people, it’s not an issue of choice,” Mayer said.
In the current housing market, renting looks increasingly attractive.
A 2023 analysis by Realtor.com found that renting was cheaper than buying in 47 of the 50 largest metropolitan areas.
In Austin, Texas, the monthly cost of buying a starter home was $3,946, the analysis found. That’s more than twice the monthly cost of renting, $1,670. The monthly savings: $2,276.
The report found just three metro areas where it remained cheaper to buy: Pittsburgh; Memphis, Tennessee; and Birmingham, Alabama.
A housing expert goes from owner to renter
Elizabeth Renter, a senior writer at NerdWallet who studies home prices, ran the numbers in central Durham, North Carolina, for an upcoming move. She decided to rent.
A Realtor.com rent-or-buy calculator shows home prices averaging $550,000 in central Durham. A home at that price would cost about $2,868 in monthly principal and interest, assuming a 20% downpayment and 6.8% interest. Rents in central Durham average around $1,700 a month. Renting is the cheaper option.
“I’ve never lived in Durham,” she said. “I don’t know if I want to stay in Durham long-term. So, I’m not ready to buy a house in Durham.”
Renter is selling her home, a Victorian fixer-upper in Kansas. She’s tired of fixing things.
“I’m going to love calling the landlord when something breaks,” she joked.
Rents are rising in America, just like home prices, but not at the same pace.
Rents averaged $1,958 nationwide in January, up exactly one dollar from December, according to a NerdWallet analysis.
Rents are 29% higher now than before the pandemic, NerdWallet reports.
But economists don’t expect a big spike in rents in the months to come. One reason: A surge in construction of rental housing.
“We have seen rents slow in recent months,” said Danielle Hale, chief economist at Realtor.com. “So, for people who are renting, you can take advantage of the fact that your rent may possibly go down. More possibly, it will stay fixed.”
Will the housing market ever go down?
Homeownership won’t become more affordable, economists say, without a steep decline in interest rates, home prices, or both.
Economic forecasts suggest mortgage rates might ease later this year, following a series of predicted rate cuts by the Fed.
“There is almost complete consensus that rates will come down,” said Matt Vernon, head of consumer lending at Bank of America.
Home prices are likely to remain high, largely as a matter of simple supply and demand: The pickings are slim. Sales of existing homes bottomed out in 2023, as the nation’s homeowners refused to budge.
Many homeowners refinanced their mortgages at historically low rates, before and during the pandemic. Most mortgage holders now have interest rates of 5% or lower. Home equity stands near historic highs.
“Unless you have to sell, you’ll just stay put,” said Odeta Kushi, deputy chief economist at First American Financial Corporation.
Rent or buy?The gap is narrowing for affordability in the US
Roughly two-fifths of American homes are owned free and clear, Kushi said, unencumbered by a mortgage.
“The nuance there is that a lot of those homes are owned by the baby boomer generation,” she said. “Will they move at this point? Maybe not.”
Daniel de Visé covers personal finance for USA Today.
A compound in Naples, Florida has hit the market for a whopping $295 million, reportedly the most expensive house on the market in America.
The Wall Street Journal first reported that the 9-acre gated compound in the Port Royal neighborhood with three houses and a private yacht-basin would shatter home sale records for the state if the owners get the asking price.
Though Naples Daily News, part of the USA TODAY Network, reported there are other pricy plots for sale in the area that could match it once the ink is dry.
The property known as Gordon Pointe has been growing under the ownership of the John “Jack” F. Donahue, a well-known Naples philanthropist, and his family since the 1980s. It is listed by the Coldwell Banker Realty’s Dawn McKenna Group, in partnership with The Leighton Candler Team of Corcoran and Rory McMullen of Savills.
Nick Saban:See retired Alabama football coach’s $17.5 million Florida home
Gordon Pointe: 9 acres, 3 houses, 1 yacht basin
Known as Gordon Pointe, the gated compound stretches a little over 9 acres. It includes about 708 feet of beachfront and Gulf of Mexico views, 952 feet of bay views, an “exclusive and extremely rare” yacht basin, measuring 231 feet, and a T-shaped dock for up to six boats.
There is not just one, but three houses on the property, built over time. There is also the potential to redevelop the site, with a larger family compound, or with a “subdivided community for a lucky few,” with at least six houses, according to the selling agents.
Home of Donahue’s more than 80 grandchildren
The property is owned by the Donahue family. A well-known Naples philanthropist, John “Jack” F. Donahue made his fortune running Pittsburgh-based Federated Investors, which he co-founded in 1955. He died in 2017, and his wife Rhodora died about five years later, in 2022. High school sweethearts, they started amassing the land in the 1980s, which is now in the hands of their many heirs. They had 13 children, and more than 80 grandchildren.
In 2017, the Donahue family made headlines when they began exploring the sale of 70 acres of beachfront property on Gordon Pointe and nearby Keewaydin Island, sending out a 62-page confidential offering memo to prospects worldwide. The offering was unpriced, and it included only a portion of what the family owned on Gordon Pointe, with Jack and Rhodora still alive and wanting to keep and enjoy two of their residences at the time.
Robert McEwan, one of two CBRE agents marketing that property, said parts of the listing sold for more than $45 million in 2019. Several lots that didn’t go the last time around are part of the new offering, he said.
Asked how long he thought it might take to sell the new listing, based on his own experience, McEwan said: “You never know with uber luxury things. A guy can see an article on it and come down and buy it right away.”
He commented that he wouldn’t be surprised if the eventual sale shatters records in Naples, and elsewhere in the country.
Most expensive listing in lux corner of Naples
Port Royal has long been known as a playground for the rich.
Nearly a year ago, a waterfront estate in the neighborhood came to market for more than $174 million. A price that was unheard of then. It’s still for sale.
The beachfront property, overlooking the Gulf of Mexico, is expansive, stretching more than 8.5 acres, making it a rarity, too.
More of a rarity: Neighboring property is up for sale on both sides, with the potential to carve out an even larger one-of-kind estate on Naples’ highly coveted Gordon Drive. Combined, they would cost $295 million, for more than 15 acres, with 812 linear feet of beach frontage.
Top selling homes in Florida
The most expensive home sold in the area last year fetched $46.8 million – also in Port Royal. The county record home sale price is $62 million, set in 2022.
On Florida’s other coast, a home sold for $173 million in 2022, which Palm Beach Daily News reported is a record high for the state. It was reportedly bought by software billionaire Larry Ellison of Oracle Corp.
A couple of other heavy hitter sales tailed behind it, like the $155 million sale for Rush Limbaugh’s compound, and the off-market deal for another Palm Beach County that came in at $170 million around the same time.
Contributing: Kimberly Miller and Darrell Hofheinz, USA TODAY Network