Home prices hit another record high in August - Yahoo Finance

Home prices finished the summer at another record high as home affordability tanks to a historical low.

The S&P CoreLogic Case-Shiller National Home Price Index increased 0.9% in August month over month and 2.6% annually on a seasonally adjusted basis. The index has risen for seven consecutive months and hit an all-time index high in August.

The index tracking existing home prices in the 20 largest US cities also gained 1.0% in August from July, exceeding the Bloomberg consensus estimate of 0.8%. The 20-city index rose 2.2% compared to last August.

August's home price increase demonstrates that underlying demand for housing is still outpacing supply even as it becomes more expensive to buy.

Read more: How to buy a house in 2023

"One measure of the strength of the housing market is the relationship of current prices to their historical levels," Craig J. Lazzara, managing director at S&P DJI, said in the press release. "On that dimension, it’s worth noting that the National Composite, the 10-City Composite, and seven individual cities (Atlanta, Boston, Charlotte, Chicago, Detroit, Miami, and New York) stand at their all-time highs."

"On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data," he added.

Housing affordability at record low in August

For the fourth consecutive month, Chicago led the chart by reporting the highest year-over-year gains among the 20 cities in August with an annual price gain at 5%. New York and Detroit followed with growths of 4.98% and 4.8%, respectively.

"Observing the breadth of price changes provides insight into another dimension of market health," Lazzara said. "On a seasonally adjusted basis, prices increased in 19 of 20 cities in August (and Cleveland only missed by a whisker); before seasonal adjustments, prices rose in 13 cities."

The re-acceleration in home prices late this summer — coupled with higher mortgage rates — pushed buyer affordability to a new low, according to the National Association of Realtors.

Read more: Mortgage rates at 20-year high: Is 2023 a good time to buy a house?

The NAR affordability index dropped to 91.7 in August from 93.9 a month prior and 110.5 a year ago. That was the lowest point on records dating back to 1989.

Any value below 100 means the typical family cannot afford a median-priced home. The affordability index measures the typical family's ability to pay up to 25% of their qualifying income on a median-priced home mortgage with a 20% down payment.

"The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more," Lazzara said. "Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

On a national level, the average mortgage payment rose 26.2%, or $464, in the last 12 months to $2,234 in August and 2.9%, or $63, from July, the NAR report found.

The majority of the sharp increases in affordability can be attributed to rising interest rates — with the average mortgage rate jumping to 7.15% in August from 5.29% last year. Not only do higher mortgage rates directly push up the mortgage payment, but they indirectly are driving up home prices. Potential sellers are not putting their home on the market because they don’t want to give up their current low rate on their mortgage and take on a new home loan with a much higher rate. That’s causing a supply chokehold in the market.

"Despite a drop in buyer activity, low for-sale inventory kept competition fierce in many areas, which propped up home prices," Hannah Jones, senior economic research analyst at Realtor.com, said in a press release.

Home sale signs are posted along Topanga Canyon road in Los Angeles on Oct. 19. (AP Photo/Richard Vogel)

This may not be the end of record prices. For instance, CoreLogic expects home prices to grow 0.2% in September from August. The firm also expects next year to post price acceleration, predicting prices will increase on a year-over-year basis by 3.4% from August 2023 to August 2024.

"While continued mortgage rate increases challenge affordability across US housing markets, home price growth is in line with typical seasonal averages, reflecting strong demand bolstered by a healthy labor market, strong wage growth, and supporting demographic trends," Selma Hepp, chief economist for CoreLogic, said.

Mortgage rates will continue to play a major role in where prices will go next.

So far, the average rate on the 30-year mortgage has progressively risen closer to 8% in recent weeks, following the yield on the 10-year Treasury, which momentarily surpassed 5% a week ago for the first time in 16 years.

Although rates are expected to stay "higher for longer" based on the Federal Reserve’s recent messaging, there are too many variables that could impact the economy over the next few months to forecast for sure.

Read more: What the Fed rate-hike pause means for mortgage rates and loans

"When you start to throw in things like fighting inflation, when you start to throw in things like a non- balancing your budget and a government shutdown, there's so many moving pieces right now that there's instability in the markets," Nathaniel Bittman, a mortgage professional and president of the Florida Association of Mortgage Professionals, told Yahoo Finance. "So there's no telling where [rates are] going to go."

The same could be said for home prices.

Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).

Click here for real estate and housing market news, reports, and analysis to inform your investing decisions.

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Rudy Giuliani cuts asking price of his Upper East Side apartment amid legal and financial woes - New York Daily News

Embattled former New York City mayor and Trump lawyer Rudy Giuliani has slashed the asking price of his posh Upper East Side apartment by $400,000 amid ongoing legal and financial troubles.

The listing with Sotheby’s is currently $6.1 million, down $400,000 from when it was first put up for sale over the summer — just weeks before he turned himself in to authorities in Georgia on charges that he and others attempted to overturn the state’s 2020 election results. He has pleaded not guilty to those charges.

Giuliani purchased the three-bedroom co-op in the landmarked 45 E. 66th St. residence in 2002 for nearly $4.8 million; he previously shared it with his ex-wife Judith.

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Rudy Giuliani’s residence at 45 E. 66th St.

The listing agent declined to speak on the matter and a Giuliani representative did not immediately respond to a request for comment.

The apartment listing boasts of “bright, high-floor outlooks and an abundance of sunshine, high ceilings, and beautiful hardwood floors,” plus a semiprivate elevator landing and conservatory.

The price cut, reported initially by the New York Post, comes as the man once dubbed “America’s mayor” is reportedly struggling under the pressure of substantial legal bills and sanctions tied to his support of former President Donald Trump.

“These are a lot of bills that he’s not paying,” his lawyer revealed during a defamation case in August brought by the voting tech company Smartmatic. “I think this is very humbling for Mr. Giuliani.”

CNN estimated at the time that Giuliani owes hundreds of thousands of dollars in various expenses, including nearly $90,000 in sanctions from a defamation case, $57,000 in unpaid phone bills, a $20,000 monthly fee for electronic record storage, at least $15,000 for a records search, plus various attorneys’ fees.

Earlier this year the Internal Revenue Service put a lien on Giuliani’s Palm Beach, Fla., condominium because he owes nearly $550,000 in unpaid federal taxes, the latest indication Giuliani is in financial dire straits; his adviser said at the time he had a “formal agreement” with the IRS to pay it off.

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Home Prices Hit Record Highs Nationally and in Seven Cities - Mortgage News Daily

Even with interest rates at a two-decade high and mortgage applications and existing home sales slipping back to 20th-century levels, home prices continue to rise. The S&P CoreLogic Case-Shiller indices increased for the seventh consecutive month while the Federal Housing Finance Agency (FHFA) reports a ninth straight gain in its Housing Price Index (HMI).

Case-Shiller’s U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, reported a 2.6 percent annual change in August, up from 1.0 percent in the previous month. The 10-City Composite showed an increase of 3.0 percent, compared to 1.0 percent in July and the 20-City Composite annual gain rose from 2.0 percent to 2.2 percent.

 

CoreLogic Chief Economist Dr. Selma Hepp says any respite from surging prices might only be temporary. “Although housing prices have increased significantly this year, climbing 5 percent from the early-year low, higher mortgage rates, and seasonal trends will slow further monthly gains – with some possible declines in winter months,” she said. “Nevertheless, the year-to-date gains indicate that growth will pick up through the end of 2023 compared to last year’s slump during this time period.”

Chicago posted the greatest appreciation among the 20 cities for the fourth consecutive month. Seven of the 20 reported lower prices in the year ending August 2023 than in the year ending July 2023 while 12 cities reported higher prices. Nineteen of the 20 cities show a positive trend in year-over-year price acceleration compared to the prior month.

Before seasonal adjustment, the U.S. National Index,10-City, and 20-City Composites, all posted a 0.4 percent month-over-month increase in August. After adjustment, the National Index was up 0.9 percent, while the 10-City and 20-City Composites each gained 1.0 percent.  

“U.S. home prices continued to rise in August 2023,” Craig J. Lazzara, Managing Director at S&P DJI said in his analysis, “One measure of the strength of the housing market is the relationship of current prices to their historical levels. On that dimension, it’s worth noting that the National Composite, the 10-City Composite, and seven individual cities (Atlanta, Boston, Charlotte, Chicago, Detroit, Miami, and New York) stand at their all-time highs. Observing the breadth of price changes provides insight into another dimension of market health. On a seasonally adjusted basis, prices increased in 19 of 20 cities in August (and Cleveland only missed by a whisker); before seasonal adjustments, prices rose in 13 cities.

“Regional differences are substantial. On a year-over-year basis, the three best-performing metropolitan areas in August were Chicago (+5.00 percent), New York (+4.98 percent), and Detroit (+4.8 percent).  Chicago has topped the leaderboard for four consecutive months, and New York moved up this month to the silver medal position. The bottom of the rankings still has a western focus, with the worst performances coming from Las Vegas (-4.9 percent) and Phoenix (-3.9 percent).  The Midwest (+3.9 percent) continues as the nation’s strongest region, followed by the Northeast (+3.8 percent).  The West (-0.9 percent) and Southwest (-0.8 percent) remain the weakest regions.

“On a year-to-date basis, the National Composite has risen 5.8 percent, which is well above the median full calendar year increase in more than 35 years of data. The year’s increase in mortgage rates has surely suppressed housing demand, but after years of exceptionally low rates, it seems to have suppressed supply even more. Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

FHFA said its HMI was up 0.6 percent in August, although this was a more modest increase than the 0.8 percent posted in July. The annual increase was 5.6 percent.

For the nine census divisions, seasonally adjusted monthly price changes from July 2023 to August 2023 ranged from a negative 0.2 percent in the South Atlantic division to an increase of 1.1 percent in both the Pacific and East North Central divisions. The 12-month changes ranged from 2.4 percent in the Mountain division to a high of 8.6 percent in the Middle Atlantic division.

“U.S. and regional house price gains remained strong over the last 12 months,” said Dr. Nataliya Polkovnichenko​, Supervisory Economist in FHFA’s Division of Research and Statistics. “The South Atlantic division showed moderate weakness in August, while the remaining census divisions posted positive price appreciation from the previous month.”

Case-Shiller Indices track the matched price pairs for thousands of individual houses. Each was benchmarked in January 2000 at 100. The current value of the National Index is 311.50 and the 10- and 20-City Composites are at 331.96 and 317.88, respectively. 

FHFA’s HPI is based on home sales financed by either Fannie Mae or Freddie Mac. It was benchmarked at 100 in January 1991 and currently stands at 411.8.

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US home prices rose in August for the seventh straight month - CNN

Washington, DC CNN  — 

US home prices continued to rise in August, hitting a new record high and marking the seventh consecutive month of increases. Even as mortgage rates topped 7% in August, historically low inventory continued to push up the price of a home.

Prices rose 0.9% in August from the month before, according to seasonally adjusted data from the S&P CoreLogic Case-Shiller US National Home Price Index released Tuesday.

Compared to a year ago, the national composite index also rose, with prices up 2.6% from August 2022, according to Case-Shiller data.

“One measure of the strength of the housing market is the relationship of current prices to their historical levels,” said Craig Lazzara, managing director at S&P Dow Jones Indices.

August saw record-high price levels, he said. The National Composite, the 10-City Composite, and seven individual cities (Atlanta; Boston; Charlotte, North Carolina; Chicago; Detroit; Miami and New York) were at all-time highs in August.

“Observing the breadth of price changes provides insight into another dimension of market health,” Lazzara said.

On a seasonally adjusted basis, prices increased in 19 of 20 cities in August — and Cleveland only missed by a hair.

Where prices are rising and falling the most

While 12 of the 20 cities reported higher prices in the year ending August 2023 versus the year ending July 2023, seven of 20 cities reported lower prices.

Chicago led the way for the fourth consecutive month, with prices up 5% from a year ago; followed by New York, with prices up 4.98% from a year ago; and Detroit, with prices up 4.8%.

Prices fell most in the West: Home prices in Las Vegas were down by 4.9% and Phoenix were down by 3.9%.

A home available for sale is shown on October 16, 2023 in Austin, Texas.

Brandon Bell/Getty Images

US new home sales surged in September

The Midwest, where prices are up 3.9% from a year ago, continues to be the nation’s strongest region. It is followed by the Northeast, where prices are up 3.8%.

In the West and Southwest prices were down 0.9% and 0.8% respectively.

Year to date, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data, Lazzara said.

“The year’s increase in mortgage rates has surely suppressed housing demand — but after years of very low rates, it seems to have suppressed supply even more,” said Lazzara.

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Gas prices in Michigan drop to lowest price since March - WXYZ 7 Action News Detroit

Gas prices in Michigan have fallen for another week and are now the cheapest price since March, according to AAA Michigan.

The agency reports that prices in the state are down 9 cents to an average of $3.31 per gallon. That's 37 cents less than this time last month and 65 cents less than this time last year.

In metro Detroit, prices dropped 6 cents to $3.36 per gallon, which is about 51 cents than this time last year.

AAA reports that gas demand decreased and gas stocks increased, which combined with declining oil prices, contributed to lower pump prices.

"Michigan motorists continue to see lower prices at the pump as gas prices drop to the lowest since early March," said Adrienne Woodland, spokesperson, AAA-The Auto Club Group. "If oil prices continue to descend, drivers can expect further price drops at the pump in the weeks ahead."

• Most expensive gas price averages:  Marquette ($3.45), Ann Arbor ($3.43), Traverse City ($3.41)
• Least expensive gas price averages: Flint ($3.20), Grand Rapids ($3.21), Benton Harbor ($3.27)

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World Bank warns oil price could soar to record $150 a barrel - The Guardian

Oil prices could soar to a record high of more than $150 a barrel if the war between Israel and Hamas leads to a repeat of the full-scale conflict in the Middle East witnessed 50 years ago, the World Bank has warned.

In the first major assessment of the economic risks of an escalation of the war beyond Gaza’s borders, the World Bank said there was a risk of the cost of crude entering “uncharted waters”.

A “large disruption” scenario comparable with the Arab oil boycott of the west in 1973 would create supply shortages that would lead to the price of a barrel of oil increasing from about $90 to between $140 and 157. The previous record – unadjusted for inflation – was $147 a barrel in 2008.

“The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s – Russia’s war with Ukraine,” said Indermit Gill, the World Bank’s chief economist. “That had disruptive effects on the global economy that persist to this day.

“Policymakers will need to be vigilant. If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades – not just from the war in Ukraine but also from the Middle East.”

The Bank said in its latest commodity markets outlook that the shock to the global economy would not be confined to energy costs but would also result in hundreds of millions going hungry as a result of higher food prices.

In its assessment, the Bank said the Israel-Hamas war had had little impact on commodity prices so far. Oil prices had risen by about 6%, but agricultural commodities, industrial metals and other commodities had “barely budged”.

It added: “The outlook for commodity prices would darken quickly if the conflict were to escalate.”

Under the World Bank’s baseline forecast, oil prices will average $90 a barrel in the current quarter before declining to an average of $81 a barrel next year as global economic growth slows. But it also sketched out three alternative paths for oil prices:

• A “small disruption” scenario, in which the global oil supply would be reduced by 500,000 to 2m barrels a day -roughly equivalent to the reduction seen during the Libyan civil war in 2011. The oil price would rise to a range of $93 to $102 a barrel.

• A “medium disruption” scenario – roughly equivalent to the Iraq war in 2003 – where the global oil supply would be reduced by 3m to 5m barrels a day. Oil prices would rise by 21% to 35% initially, taking them to between $109 and $121 a barrel.

• A “large disruption” scenario-comparable to the action taken during the Yom Kippur war of 1973 – in which the global oil supply would shrink by 6m to 8m barrels a day, resulting in a 56% to 75% increase in prices to between $140 and $157 a barrel.

The oil embargo of 1973 led to a sudden fourfold increase in the cost of crude, ushering in the higher inflation and rising unemployment that brought the long postwar boom in the global economy to an end.

“Higher oil prices, if sustained, inevitably mean higher food prices,” said Ayhan Kose, the World Bank’s deputy chief economist. “If a severe oil-price shock materialises, it would push up food price inflation that has already been elevated in many developing countries. At the end of 2022, more than 700 million people – nearly a tenth of the global population – were undernourished. An escalation of the latest conflict would intensify food insecurity, not only within the region but also across the world.”

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Middle East War Could Cause Oil Price Shock, World Bank Warns - The New York Times

A major escalation of the war between Israel and Hamas — one that spilled over into a broader Middle East conflict — could send oil prices surging as much as 75 percent, the World Bank warned on Monday.

The potential for a global energy shock in the wake of Hamas’s brutal attack on Israel has been a pressing question for economists and policymakers, who have spent the past year trying to combat inflation.

Energy prices have remained largely contained since Hamas invaded Israel on Oct. 7. But economists and policymakers have been closely monitoring the trajectory of the war and studying previous conflicts in the region as they try to determine the potential scale of economic repercussions if the current conflict intensifies and broadens across the Middle East.

The World Bank’s new study suggests that such a crisis could overlap with energy market disruptions already caused by Russia’s war in Ukraine, exacerbating the economic consequences.

“The latest conflict in the Middle East comes on the heels of the biggest shock to commodity markets since the 1970s — Russia’s war with Ukraine,” Indermit Gill, the World Bank’s chief economist and senior vice president for development economics, said in a statement that accompanied the report. “If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades — not just from the war in Ukraine but also from the Middle East.”

The World Bank projects that global oil prices, which are currently hovering around $85 per barrel, will average $90 per barrel this quarter. The organization had been projecting them to decline next year, but disruptions to oil supplies could drastically change those forecasts.

The bank’s worst-case scenario is pegged to the 1973 Arab oil embargo that took place during the Arab-Israeli war. A disruption of that severity could remove as much as eight millions barrels of oil per day off the market and send prices as high as $157 per barrel.

A less severe, but still disruptive, outcome would be if the war plays out as the 2003 war in Iraq, with oil supply being reduced by five million barrels per day and prices rising as much as 35 percent, to $121 a barrel.

A more modest outcome would be if the conflict parallels the 2011 civil war in Libya, with two million barrels per day of oil lost from global markets and prices rising as much as 13 percent, to $102 per barrel.

World Bank officials cautioned that the effects on inflation and the global economy would depend on the duration of the conflict and how long oil prices remained elevated. They said that if higher oil prices are sustained, however, that would lead to higher prices for food, industrial metals and gold.

The United States and Europe have been trying to keep global oil prices from spiking in the wake of Russia’s invasion of Ukraine. Western nations introduced a price cap on Russia’s energy exports, a move aimed at limiting Moscow’s oil revenues while ensuring oil supply continued to flow.

The Biden administration also tapped its Strategic Petroleum Reserve to ease oil price pressures. A senior administration official told The New York Times last week that President Biden could authorize a new round of releases from the nation’s Strategic Petroleum Reserve, an emergency stockpile of crude oil that is stored in underground salt caverns near the Gulf of Mexico.

Biden administration officials have publicly downplayed their concerns about the economic impact of the conflict, saying it was too soon to predict the fallout. Treasury Secretary Janet L. Yellen noted at a Bloomberg News event last week that oil prices had so far been generally flat and that she had not yet seen signs that the war was having global economic consequences.

“What could happen if the war expands?” Ms. Yellen said. “Of course there could be more meaningful consequences.”

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Gas prices continue decline amid Israel-Hamas war, but that could change - USA TODAY

Gas prices continue to fall, even as the Israel-Hamas war escalates.

The average price for a gallon of regular gas in the U.S. was $3.496 on Sunday, down about a cent from the day before, according to AAA. That price is also lower than the same time one week, month and year earlier.

But that could change depending on how the conflict plays out. “I think there’s so much uncertainty,” said Severin Borenstein, a professor at the University of California, Berkeley’s Haas School of Business and faculty director of the Energy Institute at Haas. “Things could change very quickly.”

 Here’s what U.S. consumers should know.

Why are gas prices declining?

While oil prices jumped briefly after Hamas initially attacked Israel earlier this month, Borenstein said they have come down almost $10 a barrel in the last few weeks. He said a $1 change in the price of oil typically equates to a 2.5 cent change per gallon of gas at the pump.

Because they take longer to drop than to go up, that ripple effect is gradually coming through now.

The scope of the war has also limited its impact on gas prices. “What's going on with Israel and Hamas right now has not at this point become a wider war that has encompassed major oil producers, but that could change,” he said. “And if it does, we could see crude oil prices go up.”

AAA spokesperson Andrew Gross echoed that, calling the response from the oil market “rather muted.”

Plus, gas always gets cheaper in the fall, he said. “It’s a bit of a seasonal swoon, with school back, the days getting shorter, and the weather more challenging – all of this leads to a dip in demand,” Gross said in an email.

How long will gas prices keep dropping?

Gross said that for now, prices will continue to follow a familiar pattern, and “fall lower daily toward the holidays and then slowly rise again with the arrival of spring and summer.”

If oil prices remain stable, Borenstein added that gas prices could decline by another 10 cents per gallon. “But crude oil prices are really very difficult to predict, anytime,” he said. “And right now, they're extremely difficult to predict.”

Will the Israel-Hamas war cause gas prices to go up?

Maybe. If the conflict grows into a broader regional war involving major oil producers like Iran, Borenstein said it could begin disrupting shipments or raise political blowback, driving up oil and gas prices.

Gas prices amid Israel-Hamas war:Charts show potential impact

He said he believes the former poses a bigger risk than the Organization of the Petroleum Exporting Countries reducing its output in protest, as most OPEC member countries need the money. President Joe Biden has issued repeated warnings to Iran and its proxies not to expand the conflict.

But the outcome remains to be seen, according to Borenstein. “It’s so hard to know how the war might spread,” he said.

Nathan Diller is a consumer travel reporter for USA TODAY based in Nashville. You can reach him at ndiller@usatoday.com.

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Even the listing agent thinks price for buzzy Calif. home is too high - SFGATE

This home at 6884 Poco Lago in Rancho Santa Fe has sparked attention for its flashy interior. 

Photo courtesy of Wilian Menezes

A home listed for sale in San Diego County has sparked attention for its opulent, European-style interior and steep price point. 

The house at 6884 Poco Lago in Rancho Santa Fe was sold to its current owner for $1.4 million in 2014 but is listed today for close to $20 million. Listing agent Wilian Menezes highlighted all the work that was put into its interior, which includes upholstered walls, marble fireplaces and gold-painted furniture — even a gold toilet. 

“It’s very unusual. It was a five-plus-year project,” Menezes said. 

The master bedroom at 6884 Poco Lago in Rancho Santa Fe.

Photo courtesy of Wilian Menezes

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The home’s listing describes it as being “inspired by the grandeur of the Palace de Versailles,” complete with marble imported from Turkey and Italy, hand-painted gold accents throughout each room, and “only the most prestigious brands of furniture and lighting fixtures.”

However, in a TikTok video made about the house, user @zillowtastrophes expressed skepticism about its new additions and price point.

“The listing says it’s your own mini Versailles, but Versailles doesn’t have LED lights lining their portraiture,” she says in the video. “You’ve got to have a screw loose to have a giant reprint of Napoleon in your living room. In a $20 million home, I’d expect some real art.” 

The interior of 6884 Poco Lago in Rancho Santa Fe.

Photo courtesy of Wilian Menezes

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Menezes said he expressed to the home’s owner that its listing price is likely too steep to realistically attract any buyers. 

“I don’t sugarcoat anything; I’m very straightforward,” he said. “I told them that this price is way higher than I would price it.” 

The median home price in Rancho Santa Fe is around $6 million, and homes there typically sell after 62 days on the market, according to Redfin data. Menezes said if he can’t find a buyer for the house within 60 to 90 days, the price will likely be lowered. 

“[The seller] has to justify all the money he put into the house, even though the market today is a very different market from 2020 and 2021,” Menezes said. “There are a couple houses in the area that have the same style as this one, but not as strong or elaborate. They’re in the $12 million or $13 million range.”

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A bathroom inside the house at 6884 Poco Lago in Rancho Santa Fe. 

Photo courtesy of Wilian Menezes

The seven-bedroom, nine-bathroom house sits on 2.7 acres and is less than 10 miles from the coast. 

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How Does Costco Keep Its Prices So Low? - Yahoo Finance

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Costco is notorious across the U.S. for its large warehouse-style stores, bulk products, and highly competitive prices.

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Despite recent inflation, a higher cost of labor, and rising fuel prices, Costco manages to keep prices reasonable. A perfect example is their famous $5 rotisserie chicken, which is only available for about two hours each day. People flock to Costco stores for deals like this one and its popularity as a retailer remains strong in 2023. Have you ever wondered how Costco keeps its prices to a minimum? The Kitchn reported several key reasons below.

Why Are Costco’s Prices So Low?

Costco’s reputation as a popular destination for groceries, electronics, clothing, cars, tires, an optical center, a pharmacy, and more makes it a one-stop shop for all the essentials. You can save money across all of these categories thanks to Costco’s strategic business model.

First, Costco keeps its marketing and merchandising costs to a minimum with a basic, no-frills method. Costco stores are not full of intricate displays and don’t have a premium feel compared to some other grocers. Its warehouse-style store is lined with wide aisles containing bulk products for customers to pile into industrial-sized shopping carts and dollies. Bulk products allow consumers to get a better value and a larger quantity of items for their money.

Second, Costco maintains relationships with a number of vendors that allow the company to buy very large quantities of items at a discount. This results in much lower prices for in-store products as Costco can pass on its bulk savings to its customers. To add, Costco also works with vendors to make adjustments to bulk product packaging, which also keeps prices to a minimum.

Additionally, Costco tends to have a somewhat limited selection of products in comparison to regular grocery stores. However, the trade-off is lower prices on the products Costco has to offer. Other retailers have a hard time matching Costco’s lower prices. Limited product selection plus the fact that Costco’s entire business model operates around the concept of a warehouse makes shopping there a huge cost saver.

Over the last few years, Costco has adapted to consumer demand and offers same-day delivery via Instacart.

How To Become A Costco Member

If you’re convinced and you’d like to sign up as a Costco member, follow the link here. There are two membership tiers available:

• Costco Gold Star Member ($60 Annually): As a Gold Star member, you’ll have unlimited access to Costco stores nationwide and benefits such as low everyday prices, Costco Travel, Costco Optical, Costco Pharmacy, Grocery delivery, and more.

• Costco Executive Member ($120 Annually): You’ll have access to all of the same Gold Star Member benefits plus you’ll earn an annual 2% Reward (up to $1,000) on qualified Costco purchases.

If you aren’t a Costco member yet but you love stocking up on quality products at low prices, consider signing up for a membership to start saving money today.

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This article originally appeared on GOBankingRates.com: How Does Costco Keep Its Prices So Low?

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Xbox Series S Price Rise in Brazil is Almost Anti-Consumer - Insider Gaming

It was revealed recently by Brazil’s ‘The Enemy’ publication that the Xbox Series S has seen a sharp price rise in the country that is so severe it’s almost anti-consumer in nature. Microsoft highlighted this price hike in a press release that The Enemy circulated, and for now, it seems that the boosted price tag concerns specifically the Series S model, which is supposed to be an ‘affordable entry point’ into the current generation of home consoles.

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Affordable Becomes Unobtainable

It was revealed that the suggested retail price of the Xbox Series S in Brazil would be boosted to R $3,599, which at the time of writing is just north of $700 USD. That’s a staggering price increase, especially considering the cost of a brand new PlayStation 5 console floats around $499 USD.

By way of an explanation, the reported press release that The Enemy circulated reads (translated):

On Xbox, we remain focused on delivering the best gaming experience across multiple price ranges, so players can choose the one that best suits their needs and game budget,” the company said in a statement. “In the coming weeks, we will begin reporting price adjustments for Xbox Series S consoles in Brazil. The SKU base Xbox Series S will be updated at Brazilian retailers where Xbox Series S consoles are available,” the statement said. “We kept our console prices for many years and now we’ve adjusted prices to $3,599.” While the console remains an important part of the Xbox ecosystem, we will continue to offer great games, skills and options for gamers in Brazil, so they can play as and wherever they want.

Bizarrely, it was stressed that no changes are being made to the price of the 1 TB Xbox Series S console – only the 500 GB model. There are also no changes expected to be made to the Xbox Series X console, which means the 500 GB Xbox Series S will cost more than its more powerful big brother.

The Enemy wrapped up the report by stressing that, until now, Brazilian gamers could pick up an Xbox Series S for around R $2000 – R $2500 (around $400 USD).

On social media, some gamers have voiced their dismay at the changes, stressing that Microsoft seems intent on ‘killing the Xbox Series S’ in Brazil.

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For more Insider Gaming coverage, check out the news that Disney Dreamlight Valley is going pay-to-play

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How to Price Your Photo Prints - Fstoppers

Pricing is something many photographers struggle with. While things like camera settings can be quantified and are, thus, easier to learn in a way, pricing can be a nebulous and tricky thing to nail down. So, when it comes to selling prints, how do you set your prices? This helpful video tutorial features an experienced photographer sharing some useful advice sure to put you on the right track. 

Coming to you from Keith Cooper, this great video tutorial shares a range of useful advice for pricing photography prints. The important thing to remember is that there is no one-size-fits-all approach to pricing, and photographers often get in trouble by oversimplifying the process and not considering the multitude of factors that go into it. While heuristics are tempting, they ultimately overlook things like market factors, time investment, travel, the uniqueness of a print, its demand, target market, and more. This is why (if you plan on doing it professionally) it is so important to not only have a strong understanding of how to create a compelling photo and a quality print, but of sound business approaches and tactics. Check out the video above for a lot of useful advice from Cooper. 

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Breaking News: Gold prices surpass $2000 on geopolitical risks - FXStreet

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• Gold price rallies to $2000 per troy ounce, bouncing back from daily lows of $1976.97.
• Escalating Middle East conflict and Israel military expanding its operations in Gaza.

Gold price finally broke the $2000 troy ounce barrier on Friday amidst increasing geopolitical risks, as the conflict between Israel and Hamas is at the brisk of spreading towards more countries in the region. At the time of writing, XAU/USD is trading at $2000 after the yellow metal bounced from daily lows of $1972.12

XAU/USD hits a significant milestone, fueled by Middle East conflicts and a weakening US Dollar

An escalation in the Middle East conflict keeps investors on their toes. Israel expanding ground operations in Gaza, shifted market sentiment. According to the Financial Times Israel "air force launched an intense bombardment that knocked out the enclave’s telecommunications systems." 

ISreael Rear Admidal Daiel Hagari, a spokesman for Israel's military said "In recent hours, we have intensified attacks on Gaza. The air force is widely attacking subterranean targets and terror targets in a significant fashion."

Paltel, a Palestinian telecommunications company said that Israel's bombardment, destroyed the remaining communications between Gaza and the outside world.

XAU/USD Reaction

Gold price skyrocketed from around $1985 towards the $2000 mark, achieving a daily high of $2006.91, with buyers eyeing the next target at around May 10  high of $2048.15. On the flip side, the first support is at $2000 a troy ounce, followed by the October 24 low of $1953.69.

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Oil Price Rally Reverses Despite Tightening Market Fundamentals - OilPrice.com

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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By Alex Kimani - Oct 26, 2023, 7:00 PM CDT

• Fears of a spillover in the conflict between Israel and Hamas, which could embroil Iran and its allies in the region, have offered considerable support to oil prices.
• Global oil supply has continued tightening despite record production by U.S. shale.
• Commodity analysts at Standard Chartered have predicted a further 120 mb reduction in global inventories in Q4.

The oil price rally has failed to gain any kind of momentum three weeks after tensions in the Middle East escalated despite market fundamentals strengthening. Brent crude for December delivery was down 1.8% to trade at $88.49 per barrel at 1400 hrs ET in Thursday’s intraday session while the December WTI contract fell by a similar margin to change hands at $83.88 per barrel. Brent has now declined 7.0% over the past week while WTI is down 4.8% over the timeframe as worries about the global economy and energy demand weighed on sentiment.

Oil prices have been a rollercoaster over the past couple of months as negative catalysts frequently outshine the positive ones and vice-versa. In recent times, fears of a spillover in the conflict between Israel and Hamas, which could embroil Iran and its allies in the region, have offered considerable support to oil prices. However, the U.S. and other countries have been urging Israel to delay a full invasion of Gaza, which the Middle East nation has so far complied with.

Meanwhile, global oil supply has continued tightening despite record production by U.S. shale. The latest Energy Information Administration (EIA) weekly data was highly bullish with crude oil inventories falling 4.49 mb to 419.75 mb, taking the deficit below the five-year average to 20.91 mb. Crude oil inventories in the WTI pricing hub at Cushing, Oklahoma, fell 0.76 mb to a nine-year low of 21.01 mb. Meanwhile, gasoline inventories fell 2.37 mb to 223.90 mb, thereby cutting the surplus above the five-year average to just 0.40 mb. Implied demand improved significantly w/w, with total demand climbing 2.231 mb/d to 21.897 mb/d and gasoline demand rising 362 kb/d to 8.943 mb/d. Gasoline demand for October-to-date stands at 8.792 mb/d, a mere 0.2% Y/Y contraction and good for a sharp improvement from the 5.6% decline Recorded in September. Gasoline demand is 0.4% higher in the year-to-date.

Related: Warren Buffet Snaps Up More Occidental Petroleum

Even better, commodity analysts are predicting that oil markets will continue to tighten for the rest of the year.

Commodity analysts at Standard Chartered have predicted a further 120 mb reduction in global inventories in Q4, on top of the 172 mb reduction in Q3. The experts expect the rate of inventory draw to accelerate from 0.52 mb/d in October to 1.38 mb/d in November and 1.99 mb/d in December. StanChart says it’s possible that the current dominance of Middle East headline trading has led to lower prices by distracting the market from both falling inventories and from producer policies aimed at achieving a soft landing for the market at higher price levels. In other words, the recent tendency towards higher prices with lower volatility has been replaced by a downwards drift with higher volatility.

That’s a remarkable trend considering surging U.S. production. Data by the U.S. Energy Information Administration (EIA) shows that U.S. crude production grew 0.7% to 12.99 million barrels per day (bpd) in July, its highest since November 2019, when production hit a peak of 13 million bpd. Texas production grew 1.3% to 5.6 million bpd in July, its highest on record; North Dakota's output increased 1.2% to 1.2 million bpd while production from New Mexico climbed 0.6% to 1.8 million bpd.

The demand side of the equation is equally encouraging. According toStanChart, global oil demand has already exceeded the pre-Covid oil demand set in August 2019, averaging 102.33 million barrels per day (mb/d), good for a m/m increase of 1.2 mb/d and a y/y increase of 2.3 mb/d.  The analysts have refuted arguments by some Wall Street analysts that high oil prices have already triggered demand destruction.

Underpricing Middle East Risk

Last week, Standard Chartered pointed to a medium-term reduction in Iranian oil exports as being the most likely consequence of shifts in the geopolitical landscape. It’s not a far-fetched notion either: last week, the Biden administration slapped new tariffs on Iran due to its ballistic missile and drone programs.

Back in August, we reported that Iran's oil exports had hit record highs thanks in large part to the Biden administration opting to look the other way as Tehran boosts production ostensibly in a bid to keep markets well supplied and oil prices low. The price response to the escalation in the Middle East tensions has so far been modest; however, the Israel-Gaza war is likely to cause a significant shift in U.S. policy on Iran due to its open support and backing for Hamas. 

Constraints on Iranian oil exports were eased after the signing of the Joint Comprehensive Plan of Action (JCPOA) in 2015 but tightened again after the U.S. withdrew from the JCPOA during the Trump administration, with output falling below 2 mb/d in 2020 when waivers given to consuming countries were withdrawn. Iran’s oil output and exports have increased sharply under the Biden administration, with production hitting 3 mb/d, including 500,000 b/d in the current year, while exports sit just under 2 mb/d.

StanChart says that changes in positioning in the oil futures markets have been modest despite a significant increase in volatility. The analysts note that it is not an extreme tail of the distribution as might be expected in a full-blown Middle East crisis, adding that speculative positioning is also not extreme, particularly in Brent. The latest fund manager data shows that prices are about USD 6 per barrel (bbl) lower than in late September, despite no significant loosening in fundamentals. StanChart says that the Middle East geopolitical risk is currently being significantly under-priced and that current fundamentals alone are enough to justify a complete reversal of this month’s price undershooting. 

By Alex Kimani for Oilprice.com

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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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Hong Kong property sales could surge after easing measures — but don't expect prices to pop - CNBC

Residential buildings in Hong Kong, China on October 23, 2023.

Vernon Yuen | Nurphoto | Getty Images

Hong Kong's leader John Lee this week eased the city's decade-old residential property cooling measures — but questions remain on whether it's enough to boost market sentiment and low transaction volumes for the private housing sector.

"Although relaxation of property restrictions was highly anticipated, the BSD [buyers' stamp duty] cut from 15.0% to 7.5% surprised us; the other relaxations were in-line," Citi's Ken Yeung wrote in a note.

He doesn't expect the move to reverse downward trend in Hong Kong's property prices as interest rates remain high.

According to data from real estate agency Midland Realty, the second-hand property market average turnover ratio between 2017 and 2023 stands at 3.7%. That's compared with 8.7% before the cooling measures took effect in 2010.

Buggle Lau, chief analyst at Midland Realty told CNBC the average turnover ratio in 2022 to 2023 are at historic lows, as property prices have corrected down by nearly 20% since their peak in August 2021.

He expects the policy address will give property prices "a chance to stabilize" and for volumes to pick up.

For the market to fully recover, both in terms of price and volume, interest rates will have to come down next year, the property analyst said.

He expects a further 5% downside on prices in the first half of next year should there be a rate cut. 

Homeowners' struggles

Hong Kong homeowner KC Mok has been trying to sell his apartment before his family immigrates at the end of the year — a popular reason for people selling their property in recent years.

The 41-year-old told CNBC that his 707 sq. ft. 3-bedroom apartment is currently listing at $9.5 million Hong Kong dollars ($1.21million), 20% lower than his purchase price in 2019.

He said many people have been viewing his place, but the only offer he received so far is a mismatch.

"Now when we come to selling the apartment, we found that the value of the apartment [is] already like $2 million dollars less, so a little bit depressed but we have to leave so it's the timing maybe," Mok said, acknowledging that the latest cooling measures "will help a little bit" for his situation.

Meanwhile, 33-year-old Kitty Yiu considers herself "lucky" as she sold her apartment and started renting in February, just before property prices fell and interest rates rose.

Yiu gave birth to her firstborn earlier this year and needed a bigger home to accommodate her growing family.

"To be honest, we are still in a struggle to see whether we should buy a new flat, like to buy a flat again," she said.

"I think the price at this moment is still high, even if it's having a downward trend, but for me I think it's still overpriced," said Yiu who doesn't think the latest policy relief would increase her appetite to make purchase a house.

Unlike Mok and Yiu, Eugene Law faces the struggle of rising mortgage rates as a new homeowner.

Together with his mother, Law, who is 30, purchased a flat at pre-construction in 2021 and moved in last year. His mortgage rate started at 1.9% and is currently at 3.375%. That means he needs to pay an additional HKD $6,000 ($767.09) per month for the interest, which he says makes him feel "so bad."

"[It was] unexpected … because I expected the HIBOR may rise but I didn't expect the prime rate will also rise, and also in a very high percentage."

Prospective homebuyers in Hong Kong can choose to peg their mortgage rate with HIBOR or prime rate – known as the "H Plan" and "P Plan." HIBOR refers to the interest rate for interbank borrowing, while prime rate is determined by individual banks.

In a low interest rate environment, the prime rate is usually the more popular choice as it is considered more stable, and easier for the mortgagor to make financial plans.

Despite regretting the timing of his purchase, Law said the latest easing of policy would not have affected the decision. 

Risks for Hong Kong property

A recent report from UBS showed Hong Kong is the 6th overvalued city on their Global Real Estate Bubble Index. Zurich, Tokyo and Miami are the top three.

"Biggest risk [to Hong Kong's property market] will be [a] pro-longed high-rate environment, and hence further mortgage cost increase. Longer run will be geopolitical risk," said UBS's china property market Mark Leung in an email to CNBC.

While describing the current sentiment as "a bit weak," he expects the policy address would release sizable purchasing power from non-local expats who are waiting to become permanent residents.

With the second-hand market bid-ask spread remaining high and many homeowners not willing to sell their properties at a discount, Leung said he expects little room for property prices to reverse the downward trend.

For the primary market, he expects developers will now be more willing to cut prices in order to boost sales and "recycle cash, given higher interest rate environment."

"Price-wise should be muted, as we think developers may be aggressive in price setting, hence cap the price rebound potential," he added.

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World's ghost fleet in focus over US Russian price cap crackdown - Reuters

LONDON, Oct 26 (Reuters) - U.S. penalties on shippers transporting Russian oil in breach of the G7's price cap could push more Russian cargoes onto vessels referred to as the ghost fleet and away from mainstream tankers, shipping sources and analysts told Reuters.

The cap bans Western companies from providing maritime services for Russian seaborne oil exports sold above $60 a barrel.

It was designed to keep oil flowing to markets while reducing Russia's energy earnings that it can use to finance its war on Ukraine, but it has created a two-tier global shipping market.

One tier relies on vessels known as the ghost fleet that are past their traditional lifespans, meaning they are at greater risk of leaks and spills.

The other tier comprises mainstream vessels that use Western services for legal oil shipments, including from Russia under the terms of the price cap.

Most of the dozen industry insiders and analysts interviewed by Reuters said the United States' enforcement of the price cap was likely to deter G7-owners from Russian crude trade, at least in the short term.

They cited the increased risks and costs of proving their cargoes are price-cap compliant and said the consequence could be that more ghost vessels are used for Russian shipments.

Western tanker owners have already reduced price cap shipments in recent months because of concerns a rally in global oil prices meant Russian crude values had exceeded the $60 a barrel limit.

Reuters Graphics

Major shipowners including Teekay, Euronav and Maersk, either did not immediately respond to Reuters' requests for comment or declined to comment.

The proportion of Russian crude exports loaded onto EU-based vessels fell to around 20% in October from 35% in June, said Ioannis Papadimitriou of analytics firm Vortexa.

On Oct. 12, the White House for the first time since the introduction of the price cap in December, imposed sanctions on two tankers - registered in Turkey and the United Arab Emirates - it said for carrying Russian oil in breach of the cap while using U.S. services.

Shipowners may also be discouraged from Russian voyages if energy majors tighten vessel requirements because of the sanctions.

Big oil companies, including Shell (SHEL.L) and BP (BP.L), have already been avoiding tankers known to carry Russian crude, industry sources say.

U.S oil giant Exxon Mobil (XOM.N) found itself caught up in the furore as it had previously chartered one of the tankers the U.S. imposed sanctions on - the Yasa Golden Bosphorus. There was no suggestion Exxon breached any regulations.

As some of the largest movers of oil globally, it would be a "big disincentive" to independent G-7 based owners to continue with price cap voyages if energy majors were to avoid them, Mike Salthouse of NorthStandard P&I club said.

Increased scrutiny needed to avoid problems could make costs prohibitive.

“Everyone is going to be triple checking everything they are doing is above board. That comes at a cost, and that drives freight rates higher,” energy consultants FGE told Reuters.

U.S. sanctions have already lifted freight rates, shipping sources told Reuters.

For instance, oil freight rates from Russia's Baltic ports to India, had been particularly affected by the U.S. price cap action as India has been one of the main buyers of Russian fuel since the outbreak of the Ukraine war.

However, the impact of higher Russian freight rates has been masked by a global rise in freight costs as the potential for an escalating conflict in the Middle East added a risk premium to shipping.

MORE GHOSTS?

In the short term, available ghost vessels could be in particular demand, making chartering them more expensive.

But in the longer term, increased purchases of secondhand vessels could swell the ghost fleet, Vortexa’s Papadimitriou said.

Ghost fleet vessels, which tend to be older, are covered by non-Western, rather than Western insurance, which the U.S. Treasury has warned about, given potential environmental risks.

“These ships may be unable to pay the costs of accidents in which they are involved, including oil spills, which entail tremendous environmental damage and safety risks and associated costs,” the Treasury said in an accompanying statement the day it imposed sanctions.

Shipowners will also weigh how serious sanctions on price-cap breaches are likely to be, industry insiders said.

Richard Bronze from Energy Aspects said the market has taken note that the imposition of the first sanctions focused on niche Russian crude grade Novy Port and the Pacific grade ESPO Blend, which are usually more expensive than Russia's main export grade Urals.

The sanctions on the vessels involved in carrying Urals that sold above the cap could have sent a stronger signal, Bronze said.

Even so, some analysts say removing the price cap could be the way to really punish Russia.

Adi Imsirovic, director at consultant Surrey Clean Energy and a veteran oil trader, said that if the G7 really wanted to hurt Russia it should remove the cap, let the EU/UK sanctions work, and deploy secondary sanctions against those companies and countries that buy Russian oil.

But he said that was very unlikely because the price cap at least allows Russian oil to flow, thereby moderating international prices.

"The Biden administration is already reeling from higher oil prices compounded by the unrest in Gaza, potentially spreading to a wider Middle Eastern conflict. The last thing the administration wants is even higher crude prices in the global market, leading to higher gasoline prices in the US," he said.

Reporting by Natalie Grover and Robert Harvey in London; Additional reporting by Julia Payne in Brussels and Andrea Shalal in Washington; Editing by Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

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