Listing Prices Set Another Record
The median list price in the U.S. reached $310,000 in April—another record high that surpassed March’s high, realtor.com® reported in its April 2019 housing trend report this week. Listing prices continue to grow, despite an uptick in For Sale signs and home seller competition.
“The U.S. median listing price set another record this month, which we expect it to continue to do through summer when prices typically hit their seasonal peak,” says Danielle Hale, realtor.com®’s chief economist. “Despite growing availability of total homes for sale, prices are rising in response to more high-end homes for sale, which is not exactly what most shoppers in today’s market are looking for. Inventory remains limited at the entry level, where much of housing’s demand is concentrated. This mismatch is a prime driver of the weaker sales we’ve seen so far in 2019.”
Indeed, the majority of the price growth is centered among the upper tier of homes for sale, realtor.com®’s data shows. In April, the number of homes for sale over $750,000 rose 11% year over year, while homes priced under $200,000 fell by 8%.
“As the median listing price grows and the number of affordable entry-level homes decreases, entry-level shoppers will likely face tough competition this spring,” realtor.com®’s report notes.
Some of the housing markets seeing some of the highest growth in median list prices year-over-year are Milwaukee (+13%), Kansas City, Mo. (+12%), and Rochester, N.Y. (+12%).
Meanwhile, some markets did see median list prices decline in April. Most notably, San Jose, Calif., saw asking prices drop 8% year over year, followed by San Francisco (down 4%) and Dallas (down 3%).
Nationwide, about 60,000 more listings hit the U.S. market compared to a year ago. The markets seeing some of the biggest gains in inventory in April were San Jose, Calif., Seattle, and San Francisco, increasing by 92%, 82%, and 39%, respectively.
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Listing Prices Just Hit a New High, and They’re Still Heading Up
April 5, 2019
The U.S. median home list price surged in March to $300,000 for the first time ever, according to realtor.com®’s monthly housing trends report. That also marks a price increase of 7 percent year over year.
For sale sign in front of house
© Martin Barraud/OJO Images/Getty Images
“The typical U.S. home list price has set a new high right on the cusp of the spring homebuying season, and despite a slowing growth rate, home prices will likely continue to set new records later this year,” says Danielle Hale, realtor.com®’s chief economist. “Heading into spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen the last few months as fewer sellers want to contend with this year’s more challenging conditions. A buyer’s experience will vary notably depending on the market and price point they’re targeting.”
Homes priced $200,000 or below—often considered “entry-level homes”—are getting harder to find, posting a 9 percent decrease year over year.
The overall uptick in list prices in March is mostly due to the rise in inventory in the high-end market. The inventory of homes priced above $750,000 continues to increase, up 11 percent year over year.
Housing inventories are up this spring, but the rate of growth is slowing. The number of newly listed properties hitting the market fell by 0.4 percent compared to last year, “suggesting that while buyers may have more options to choose from, the share of fresh properties coming up for sale has not increased,” realtor.com® notes in its report.
The housing markets that saw the largest inventory decreases in March were: St. Louis (down 19 percent); Washington, D.C. (down 14 percent); and Oklahoma City (down 11 percent). On the other hand, the metros seeing some of the biggest upticks in inventories were mostly in pricier, West Coast markets, like San Jose, Calif. (up 114 percent); Seattle (up 77 percent); and San Francisco (up 44 percent).
Metros seeing the largest gains in inventory-March 2019
BUSINESS NEWSMARCH 5, 2019 / 10:10 AM
U.S. new home sales at seven-month high; services sector picks up
6 MIN READ
WASHINGTON (Reuters) – Sales of new U.S. single-family homes rose to a seven-month high in December, but November’s outsized jump was revised lower, pointing to continued weakness in the housing market.
While other data on Tuesday showed a rebound in growth in the vast services sector in February amid a surge in new orders, concerns about import tariffs, capacity constraints and labor shortages lingered. The trade dispute between the United States and China is among the factors that analysts say will contribute to slower economic growth this year.
Growth is softening as the stimulus from a $1.5 trillion tax cut package and increased government spending ebbs. The economy’s outlook is also being clouded by slowing global growth and uncertainty over Britain’s exit from the European Union.
“GDP growth is currently on course to drop below 2 percent in the first quarter,” said Andrew Hunter, a senior U.S. economist at Capital Economics in London.
“With the fiscal boost having now faded and higher interest rates starting to take their toll, we expect a further slowdown over the course of this year.”
The Commerce Department said new home sales increased 3.7 percent to a seasonally adjusted annual rate of 621,000 units, the highest level since May 2018. November’s sales pace was revised down to 599,000 units from the previously reported 657,000 units. October’s sales pace was also revised lower.
Economists polled by Reuters had forecast new home sales, which account for about 11.2 percent of housing market sales, falling 8.7 percent to a pace of 600,000 units in December.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They fell 2.4 percent from a year ago. Single-family home sales rose 1.5 percent in 2018.
The release of the December report was delayed by a five-week partial shutdown of the federal government that ended on Jan. 25.
The housing market hit a soft patch last year amid higher mortgage rates, expensive lumber as well as land and labor shortages, which led to tight inventories and less affordable homes. Reports last month showed homebuilding dropping to more than a two-year trough in December and home resales in January hitting their lowest level since November 2015.
Though house price inflation has slowed and mortgage rates are hovering at 12-month lows, economists expect the housing market to remain weak for a while because of persistent land and labor shortages. Investment in homebuilding contracted 0.2 percent in 2018, the weakest performance since 2010.
In December, new home sales rose in the South, West and Northeast, but tumbled in the Midwest to their lowest level since April 2016. The median new house price fell 7.2 percent to $318,600 in December from a year ago.
“This is consistent with other indicators that point to a gradual slowing in housing sector activity,” said Pooja Sriram, an economist at Barclays in New York.
The soft housing data added to weak December construction spending, retail sales, factory orders, exports and business spending plans on equipment in setting the economy on a slower growth path in the first quarter.
The Atlanta Federal Reserve is currently forecasting GDP rising at a 0.3 percent annualized rate in the first quarter. The economy grew at a 2.6 percent pace in the fourth quarter.
U.S. stocks were trading largely flat as investors waited for developments on U.S.-China trade talks. The dollar rose against a basket of currencies, while prices of U.S. Treasuries fell.
Despite the anticipated sharp first-quarter slowdown, the economy’s fundamentals remain favorable. In a separate report on Tuesday, the Institute for Supply Management (ISM) said its non-manufacturing activity index increased 3.0 points to a reading of 59.7 last month.
A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity. January’s drop in the services sector index was largely blamed on financial market volatility and the government shutdown.
The surge in services sector activity last month was in sharp contrast with an ISM survey last week showing its measure of national factory activity tumbled in February to its lowest reading since November 2016. That left some economists skeptical of February’s rebound in services industry growth.
“But one month does not make a trend and we need to see more to say that things are turning around, ideally from the consumer,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
The ISM’s new orders sub-index for the services sector surged 7.5 points to a reading of 65.2 last month, the highest level since August 2005. The ISM said industries “are concerned about the uncertainty of tariffs, capacity constraints and employment resources, however, they remain mostly optimistic about overall business conditions and the economy.”
Worries about import duties were mostly prevalent in the retail, support services, accommodation and food industries.
The ISM’s services industry employment measure fell 2.6 points to 55.2 in February, the weakest reading since June 2018. The slowdown in hiring is likely related to worker shortages.
“While employment growth is cooling, it remains solid overall,” said Jake McRobie, a U.S. economist at Oxford Economics in New York. “We expect the maturing labor market to add fewer jobs this year.”
Survey: Owners Say HOAs Protect Home Values
Many Americans recently surveyed say they prefer to live in a neighborhood with a homeowners association, also called a community association, according to the 2018 Homeowner Satisfaction Survey, conducted by Zogby Analytics on behalf of the Foundation for Community Association Research. Ninety percent of survey respondents say their association’s rules protect their investment and enhance their property values.
Survey respondents said some of the best aspects of living in a community association are having a clean or attractive neighborhood; a safe neighborhood; a maintenance-free neighborhood; and having the association help maintain property values. On the other hand, respondents said the worst aspects of living in a community association are restrictions on exterior home improvements and paying dues. The most common monthly assessments range from $100 to $300. Condo assessments tend to be higher than HOA fees, with 17 percent being more than $500 per month.
Nearly 73 percent of residents living in an HOA said they felt their community managers provide value and support to residents and their associations. Further, 84 percent of respondents said that neighbors elected to the governing board “absolutely” or “for the most part” serve the best interests of their communities.
“Community associations remain an essential component of the U.S. housing market, and—once again—a large majority of Americans who live in community associations report that they are happy and satisfied in their communities,” says Thomas Skiba, Community Associations Institute executive officer. “The most recent survey validates that the majority of homeowners believe their boards are serving their community, that their fees fall within a reasonable range, and that being a part of their community association enhances and protects their property values.”
Sixty-nine million Americans live in 342,000 common-interest communities, according to the 2016 National and State Statistical Review for Community Association Data.
Source: Community Associations Institute
Home Sales Zoom to Highest Pace in Decade
This spring’s housing mantra: Going, going, gone! “Severe” housing shortages are prompting existing homes to sell significantly faster this year, propelling home sales to the highest pace in more than a decade, the National Association of REALTORS® reported Friday.
Strong sales gains in the Northeast and Midwest were behind most of the nationwide 4.4 percent month-over-month increase in existing-home sales in March. The West was the only major region of the U.S. to see a modest decline in sales activity last month.
The following is a closer look at how existing-home sales performed across the country in March:
- Northeast: Existing-home sales jumped 10.1 percent in the region, reaching an annual rate of 760,000. Sales are now 4.1 percent above a year ago. Median price: $260,800, which is 2.8 percent higher than a year ago.
- Midwest: Existing-home sales rose 9.2 percent to an annual rate of 1.31 million in March, and are 3.1 percent above a year ago. Median price: $183,000, up 6.2 percent from a year ago.
- South: Existing-home sales increased 3.4 percent to an annual rate of 2.42 million, and are 8.5 percent above March 2016. Median price: $210,600, up 8.6 percent from a year ago.
- West: Existing-home sales in the West dropped 1.6 percent to an annual rate of 1.22 million in March, but remain 5.2 percent above a year ago. Median price: $347,500, up 8 percent from March 2016.
“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” says Lawrence Yun, NAR’s chief economist. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”
Total existing-home sales—which include completed transactions for single-family homes, townhomes, condos, and co-ops—reached a seasonally adjusted annual rate of 5.71 million in March. The sales pace is 5.9 percent above a year ago. Further, existing-home sales are now the strongest month of sales since February 2007 (5.79 million).
Here’s a closer look at some of the key indicators from NAR’s latest housing report, reflecting March housing numbers:
Home prices: The median existing-home price for all housing types was $236,400, up 6.8 percent from a year ago when it averaged $221,400.
Days on the market: Properties stayed on the market for an average of 34 days in March, down significantly from 47 days a year ago. Short sales took the longest to sell at a median of 90 days in March; foreclosures sold in 52 days; and non-distressed homes took a median of 32 days—which is the shortest length of time since NAR began tracking such data in May 2011. Forty-eight percent of homes sold in March were on the market for less than a month.
All-cash sales: All-cash transactions comprised 23 percent of sales in March, down from 25 percent a year ago. Individual investors make up the biggest bulk of cash sales. They purchased 15 percent of homes in March, up from 14 percent a year ago.
Distressed sales: Foreclosures and short sales made up 6 percent of existing-home sales in March, down from 8 percent a year ago. Broken out, 5 percent of sales in March were foreclosures and 1 percent were short sales. On average, foreclosures sold for a discount of 16 percent below market value; short sales were discounted an average of 14 percent.
Inventories: Housing inventory at the end of March rose 5.8 percent to 1.83 million existing homes available for sale. Inventory is 6.6 percent lower than a year ago (1.96 million). Unsold inventory is now at a 3.8-month supply at the current sales pace.
“Bolstered by strong consumer confidence and underlying demand, home sales are up convincingly from a year ago nationally and in all four major regions despite the fact that buying a home has gotten more expensive over the past year,” Yun says.
Real Estate Trends: Fla. ‘outperformed’ the U.S.
ORLANDO, Fla. – Jan. 27, 2017 — In 2016, Florida’s economy outperformed the nation in part because of better job creation, according to several economists who spoke to a standing-room-only crowd of about 500 Realtors® at the 2017 Florida Real Estate Trends event Thursday during Florida Realtors Mid-Winter Business Meetings.
National Association of Realtors (NAR) Chief Economist Lawrence Yun noted that the pace of U.S. home sales in 2016 at 5.5 million was “the best in a decade.” Since it’s nowhere near the 7.2 million sales peak in 2006, however, it leaves room for continued growth in 2017. And while interest rates are trending higher, it hasn’t had a dampening effect on home sales.
“A 4.2 percent mortgage rate is still a great rate,” Yun said. “As long as we’re around the 4 to even 5 percent mortgage rate, home sales are likely to stay on pace. As mortgage rates rise, job creation – which Florida excels at – could be a great neutralizer and good for home sales. In fact, Florida is outperforming the country because of better job creation.”
Other speakers who shared their views on 2017 included Dr. Elliot Eisenberg, a nationally known economist and former senior economist with the National Association of Home Builders (NAHB); Michael Johnston, Florida regional sales manager, Wells Fargo Home Mortgage; Dr. Julie Harrington, director of Florida State University’s Center for Economic Forecasting and Analysis; and Dr. Brad O’Connor, chief economist for Florida Realtors.
“The good news, here in Florida, you’re in the right place,” Eisenberg said. “The South is the right division to be in – the economic recovery here has been much more robust. Florida is doing fine economically, unemployment is OK, and foreclosures are diminishing.”
He agreed with Yun that while mortgage rates will continue to rise this year – albeit slowly – the markets will be fine as long as jobs are being created.
“Housing is improving, but in fits and starts,” Eisenberg said. “There’s not enough inventory of homes for sale, and builders aren’t building, especially at the entry-level. Bigger houses are being built, but it’s not profitable for builders to construct more affordable homes.”
Eisenberg cited worker shortages, burdensome land-use regulations and costs – land, labor and regulation – as some of the constraints homebuilders face when it comes to building entry-level homes.
“We have to try a myriad of solutions, but getting the land costs down and easing land-use regulations will be the single most important factor in solving this issue,” he said.
According to Eisenberg, forces at work in Florida and across the U.S. that are dampening real estate sales include:
Low inventory – December 2016 data, which is just a few days old, shows that the existing single-family home inventory nationwide is 3.6 months; in Florida, it’s 3.9-month months. A 6-month supply is generally considered a balanced market between buyers and sellers.
New model of renting – Six million single-family units have been taken off the market because institutional investors snapped up many homes during the Great Recession and created a new method of renting.
Mortgage rate lock – many people don’t want to sell because they’ll lose the really low mortgage rate they’re currently paying.
When it comes to financing, lenders are in a technology race to provide a digital, user-friendly experience. Their goal is to make the mortgage process easier for the customer, said Michael Johnston, Florida regional sales manager for Wells Fargo Home Mortgage.
“Today, 42 percent of homebuyers are millennials,” he said, “and with 92 million more millennials coming up, it will be an even bigger part of the housing market over the next five years. A recent survey found that 93 percent of those age 18-34 intend to buy a house sometime in their future. Millennials are always online, so creating a digital mortgage experience for them is critical.”
Johnston shared research showing that millennials value the expertise of Realtor professionals during the home buying process. “While they will go online to do home shopping, they do want to consult a trusted advisor along the way,” he said.
The condominium market is an important part of the overall real estate market, and often offers an affordable option for buyers, according to Johnston. “In Florida, the condo market is healthy and robust,” he said. “Condos make up 28 percent of all home sales in Florida; nationally, it’s 12 percent.”
Dr. Julie Harrington, director of Florida State University’s Center for Economic Forecasting and Analysis (CEFA), previewed elements of an economic impact study on Florida’s SHIP and SAIL funds by county that Florida Realtors commissioned CEFA to conduct. SHIP stands for State Housing Initiatives Partnership program, while SAIL stands for the State Apartment Incentive Loan program.
As data is collected and analyzed, researchers will construct an economic forecasting model for Florida’s future affordable housing needs, and the data will also be used to compile statewide economic impact numbers for the SHIP and SAIL programs, Harrington said.
Looking ahead to the coming months, Florida Realtors Chief Economist Brad O’Connor announced to Realtors that the state association plans to soon release housing data metrics for Florida specific to cities and zip codes. Applause greeted his announcement. O’Connor anticipates having the new statistics starting on Feb. 9, which coincides with the release of the fourth quarter 2016 and 2016 year’s end data from Florida Realtors. The statistics will be available to members at www.floridarealtors.org/research (password-protected).
Looking at all of 2016, the statewide existing homes market remained stable but was also relatively “flat,” according to O’Connor, though part of the reason for that year-to-year analysis was that “2015 was a pretty darn good year, sales-wise.”
He also pointed out that a shortage of housing inventory in markets across the state, particularly for properties values at $200,000 or less, is impacting closed sales and putting pressure on median prices. Another factor: Sales of distressed properties continue to fall.
“In 2015, 10 percent of Florida’s housing inventory was distressed at the end of each month,” O’Connor said. “This past year, it’s been 5 percent, and it’s going to keep going down in 2017.”
© 2017 Florida Realtors®
Fla.’s housing market: Median prices rise in Dec. 2016
Existing-home sales slide in December, but 2016 hits 10-year high.
ORLANDO, Fla. – Jan. 24, 2017 – Florida’s housing market had higher median prices and fewer all-cash sales in December, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide totaled 22,332 last month, up 0.8 percent from December 2015.
“The trend of tight housing supply continued to have an impact on Florida’s housing market in December,” says 2017 Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. “Last month, statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year for 61 months in row. While that’s good news for sellers, it’s continuing to put pressure on inventory for first-time homebuyers and those who may be looking for their next ‘move-up’ home.
“And that’s where your local Realtor comes in – he or she will put their expertise to work for you to successfully navigate the complexities of finding the right property in your local real estate market and will make sure you get to the closing table.”
Home sellers continued to get more of their original asking price at the closing table in December: Sellers of existing single-family homes received 96 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent (median percentage).
The statewide median sales price for single-family existing homes last month was $226,000, up 9.2 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in December was $166,900, up 7.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in November 2016 was $236,500, up 6.8 percent from the previous yearthe national median existing condo price was $222,600.In California, the statewide median sales price for single-family existing homes in November was $501,710; in Massachusetts, it was $365,000; in Maryland, it was $266,164; and in New York, it was $240,000.
Looking at Florida’s townhouse-condo market, statewide closed sales totaled 8,673 last month, down 5.2 percent compared to December 2015. Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 45 percent while short sales for single-family homes dropped 39.2 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
“Florida’s markets for existing homes closed out the year in December with a performance very much in line with what we saw over the previous 11 months of 2016,” says Florida Realtor Chief Economist Brad O’Connor. “At the local level, single family home sales increased in 15 of Florida’s 22 metro areas, while condo and townhouse sales rose in only five of these markets. And, as has been the case all year, the lack of significant sales growth in much of the state has had a lot more to do with a shortfall of supply in key price tiers than with demand.”
Inventory dipped to a 3.9-months’ supply in December for single-family homes and was at a 6-months’ supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.20 percent in December 2016, up significantly from the 3.96 percent average recorded during the same month a year earlier.
For the full statewide housing activity reports, go to Florida Realtors Research and Statistics on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors’ website.
Breakout: NAR: Existing-home sales slide in Dec. but 2016 hits 10-year high
© 2017 Florida Realtors®
Mortgage rates, home sales and prices to rise in 2017
NEW YORK – Jan. 4, 2017 – It’s been more than a year since Nate Lowenstein started shopping for a home, and he’s grown frustrated by the scant number of homes on the market. Like many house hunters in Los Angeles, he also complains sellers are unwilling to budge on prices, emboldened by offers from multiple bidders.
“It’s not a great market from a buyer’s perspective,” said Lowenstein, a lawyer. “The one good thing is that interest rates were quite low.”
Until they weren’t.
Mortgage rates have risen sharply since Election Day, to an average 4.32 percent on a 30-year, fixed-rate mortgage last week. While still low by historical standards, that’s the highest since April 2014 and well above the year’s average of 3.65 percent. The difference translates into an extra $1,852 a year in payments on a 30-year, fixed-rate loan for $400,000, for example.
Climbing rates are just one of the challenges economists predict for homebuyers this year. They also anticipate the supply of homes for sale will remain tight in many cities, and that buyers will face increased competition as more millennials shift from renting to homeownership. Economists also forecast home prices will rise again this year, albeit more slowly than in 2016.
“With higher mortgage rates, you’re increasing the cost, challenging the budgets, challenging the ability to qualify and, as a result, likely reducing somewhat the pool of potential buyers,” said Jonathan Smoke, chief economist for Realtor.com.
So far, the rate increases have not begun to worry Lowenstein. He and his wife, also a lawyer, are in the market for a house with at least three bedrooms in L.A.’s affluent west side. Their budget: Between $1.6 million and $1.8 million.
“We’re not priced out yet, but if it goes up to 5 percent or 6 percent, at some point we would be,” said Lowenstein, 38.
Rates headed higher?
Long-term mortgage rates tend to track the yield on the 10-year U.S. Treasury note. The yield goes down when investors bid up bond prices, as they did following this summer’s vote in Britain to exit the European Union. The move sent long-term mortgage rates tumbling as low as 3.41 percent.
The reverse happened after Election Day. Investors bet that a Republican-controlled White House and Congress will have a clear path to implement policies that will drive inflation and interest rates higher. A sell-off in U.S. bonds drove the yield on the 10-year Treasury note to the highest level in more than two years. Mortgage rates have been inching higher ever since.
But will they continue to do so?
Smoke predicts mortgage rates will reach 4.5 percent in 2017. Other economists expect rates will remain above 4 percent but not go beyond 5 percent next year.
That’s still low compared to the last decade. Rates didn’t dip below 5 percent before 2008.
So someone looking to buy a home in the next few months doesn’t need to panic, said Svenja Gudell, chief economist at Zillow, a real estate information company.
“My advice to buyers would be to not freak out and feel a sense of urgency,” she said. “If you aren’t able to buy a house at 4.5 percent, you probably weren’t able to buy a house at 4 percent.”
The stakes are higher for buyers in expensive markets, where housing can eat up a much larger share of household income.
Buyers have options
To offset some of the higher borrowing costs, homebuyers could consider lowering the interest rate by paying a fee to the lender upfront, something known as buying down the interest rate. This strategy makes the most financial sense for buyers planning on staying in the home for many years.
For owners looking to sell within a few years, an adjustable-rate mortgage can be an attractive alternative. ARMs have a low, fixed-interest rate for a few years, typically five or 10. The rate then adjusts to a higher rate.
Another move: Ask the seller to pay closing costs, which would free up cash for buyers to manage the higher borrowing costs. Buyers may have better luck with this tactic in markets where there is less competition and sellers are more motivated.
If rising mortgage rates deter homebuyers, that could eventually stem the rise in home prices.
Last year, the 6.5 percent gain in U.S. home prices was the highest in 10 years, according to an analysis by Zillow. The company predicts an increase of about 3 percent in 2017.
Declining affordability is one reason the National Association of Realtors predicts U.S. homes sales will rise just 2 percent this year. Compare that to the 15 percent increase in sales through the first 11 months of 2016.
Don’t expect the housing market to get any less competitive in 2017.
The number of homes for sale nationwide declined in November for the 18th month in a row, according to the NAR. At the current sales pace, it would take just four months to buy up all the homes on the market. A market that’s balanced between buyers and sellers typically has at least a six-month supply.
Homebuilders are not building enough homes to make up for the shortage, citing a lack of ready-to-build land, labor shortages and rising building materials costs.
Millennials become buyers
Homebuyers can also expect to face more competition this year as millennials transition from renting to homeownership, particularly in more affordable markets in the Midwest and South.
First-time buyers accounted for roughly 32 percent of home purchases through the first 11 months of 2016, up from 30 percent in the same period a year earlier, according to the NAR.
Affordability should be less of a hurdle for many first-time buyers, as qualifying for financing gets a bit more accessible.
The size of the mortgages Fannie Mae and Freddie Mac will buy from lenders rises this year to $424,100 from $417,000. In more expensive markets, the mortgage giants will now accept loans as high as $636,150, up from $625,500.
Banks may also have an incentive to loosen lending standards if rising mortgage rates continue to dampen demand for mortgage refinancing.
Copyright 2017 The Associated Press, Alex Veiga. All rights reserved.
Region’s housing pace surges to fastest pace in decade
By John Hielscher
The boomers are blowing up the new home market in Southwest Florida.
Housing starts surged to the fastest rate in a decade during the third quarter, and the demand from new and upcoming retirees will continue to grow, according to a new report by data supplier MetroStudy.
Builders broke ground on 1,488 single-family units in the region during the July-September period, a 14.5 percent gain over the year.
That was the top three months for home starts since third-quarter 2006, said Tony Polito, regional director of MetroStudy’s Sarasota-Bradenton market.
“The still early days of baby boomers turning 65, coupled with good job growth and low interest rates, all fueled the best post-recession quarter for housing starts activity in Sarasota/Bradenton,” Polito said.
The pace of new construction has been strong all year. Housing starts in the first and second quarters also were the highest marks since 2006.
The third-quarter numbers translate to 5,576 annual starts, which beats last year’s rate by 27.3 percent.
Buyers closed on 1,313 new single-family homes in the quarter, some 23 percent ahead of 2015, said Polito, whose report covers Manatee, Sarasota, Charlotte and a small portion of DeSoto counties.
“Because of retiree demand, there will continue to be growth in starts and closings in Sarasota over the next few years,” Polito said. “This does not mean 2003–2006 levels, but demand should continue to grow.
“Potential road bumps include rising interest rates, rising costs, affordability issues, public sentiment toward growth, the overall economy and the ability to sell homes ‘up north,’” he said.
Local builders say home sales remain robust here, paced by boomers who have retired or are making plans to head to the Sunshine State.
Neal Communities, the largest locally based home builder, posted 100 home sales in October, bringing its year-to-date total to 956.
“Traditionally, the Southwest Florida home market is stronger than trends we see nationwide, and this month continues to bolster that theory,” said Michael Storey, president of Neal Communities. “With new home sales up by more than 3 percent across the country, our results are a testament to home-buyer confidence throughout the U.S. and in Florida.”
The Lakewood Ranch-based builder reported 11 sales in Grand Palm in Venice, and nine each in Milano in Venice and Silverleaf in Parrish. The company has added 70 employees this year to support growth.
Confidence among builders in the single-family market held steady in November in the National Association of Home Builders/Wells Fargo Housing Market Index released this week.
“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector,” said NAHB chief economist Robert Dietz. “This will help keep housing on a steady, upward glide path in the months ahead.”
Nationwide, construction started on a seasonally adjusted 1.3 million new single-family and multifamily units in October, a 25.5 percent increase and the most production for any month in nine years, according to the U.S. Department of Housing and Urban Development and the
In Southwest Florida, starts for new homes priced under $250,000 increased 1.5 percent over the year, while starts above that price jumped 46 percent, MetroStudy said.
Sarasota County reported 563 housing starts in the quarter, up 15 percent over the year. Manatee County recorded 635 starts, down by 2 units from last year.
On an annual basis, Manatee reported 2,626 starts as of Sept. 30, up 15.8 percent. Sarasota showed 2,128 starts, a gain of 33.2 percent. Charlotte, with 816 starts, climbed 62 percent.
Lakewood Ranch was the busiest community, with 662 annual starts. The West Villages was second at 467, followed by Palmer Ranch with 214, South Gulf Cove with 207 and Grand Palm with 181.
The single-family inventory — homes under construction, finished vacant and models — totaled 2,871 units, some 18.6 percent higher than last year, which is a 6.7-month supply.
Home | Daily Dose | The Suspense is Over, Trump Wins the Presidency
The Suspense is Over, Trump Wins the Presidency
White House BHIt was a nail-biting election night, similar to the roller coaster that was the road to the 2016 presidential election. Every vote mattered coming down to the state counts in the swing states, hotly campaigned by both candidates. But Tuesday night, Republican Donald Trump has been elected as the next President of the United States.
What might housing policy look like under the new Trump administration, and how will Trump work with Congress on housing policy?
In the limited moments that Trump has shared his thoughts on what he would do with the housing market, he stated that one of the big issues facing the housing industry is regulation.
In his speech at the National Association of Home Builders’ 2016 Midyear Board of Directors Meeting in Miami, Florida, Trump said, in particular, there is no group regulated harder than the housing industry. Trump said these regulations kill not just the small businesses but jobs in general. Trump shared that he plans to eliminate these regulations and instead implement a method of creating jobs without regulation.
Likewise, in an interview with Reuters in May, Trump said he plans to overhaul the controversial Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed in 2010 in response to the crisis.
“Dodd-Frank has made it impossible for bankers to function,” said Trump. “It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”
Brian Montgomery, Vice Chairman and Co-Founder of The Collingwood Group and former FHA Commissioner says, “I hope both parties and the new Administration will include on their ‘priority list’ how to bring some stability and certainty to our nation’s housing finance system that will give lenders some comfort that widening the mortgage credit aperture won’t later invite regulatory intrusion. Equally important are finding solutions to the shortage of affordable rental housing in particular for very low income families and the elderly.”
A lack of priority for housing in Congress is something those in the industry hope to see change with this newly elected house.
“It’s amazing that something so vital as housing to the overall health of the American economy and the average American – is something Congress still can’t rally in support of resolving – especially when the risks associated with continued failure to do so are potentially so serious,” says Brian O’Reilly, The Collingwood Group President. “The facts are that housing is a critical component of overall economic health in the US. Thus, continued failure by Congress to address housing reform is reckless and irresponsible.”
Montgomery adds that he hopes both sides will heed the words of Franklin Roosevelt who on the eve of his reelection in 1936 while citing the amount of work to be done said ‘we will keep our sleeves rolled up.’
This Year’s Housing Forecast Looks a Lot Like 2006
Posted By Brian Honea On April 27, 2016 @ 1:06 pm In Headlines,Market Studies,News
Forecast One BHInconsistencies in the economy during the first quarter have not dampened Freddie Mac’s forecast for housing for the coming year. Freddie Mac has held fast to its prediction that 2016 will be the best year for housing since before the crisis.
Freddie Mac doubled down on its housing forecast for 2016 as it released the results of the latest Multi-Indicator Market Index (MiMi) on Wednesday. The national MiMi, which consists of the purchase applications, payment-to-income, current on mortgage, and employment indicators, stood at 83 at the end of February. It was the highest level for the national MiMi since September 2008—right at the beginning of the crisis, and the same month that Fannie Mae and Freddie Mac were taken into conservatorship by the government.
A level of 83 indicates a housing market that is on the outer range of its historic benchmark level of activity. Inside of the national MiMi, the current on mortgage indicator rose by nearly 8 percent over-the-year up to 85.5, which is the low end of the “stable” range but the highest level since August 2008—indicative of the increasingly lower levels of mortgage delinquencies that the mortgage industry is seeing.
The employment indicator rose above its historic benchmark level in February up to 106.5, driven by robust employment growth. The payment-to-income was the only one of the four indicators that declined year-over-year, largely due to low mortgage rates—though that is not necessarily a bad thing.
“Lower rates are helping to support homebuyer affordability across the country, for the moment outweighing the impact of higher house prices,” Freddie Mac Deputy Chief Economist Len Kiefer said.
“Lower rates are helping to support homebuyer affordability across the country, for the moment outweighing the impact of higher house prices.”
Len Kiefer, Deputy Chief Economist, Freddie Mac
In its April 2016 Economic Outlook, Freddie Mac downwardly revised its prediction for GDP growth in the first quarter from 1.8 percent down to 1.1 percent. Despite this, Freddie Mac held fast to its prediction for a stellar year for housing in 2016, stating that they “expect housing to be an engine of growth.”
In Freddie Mac’s March 2016 Monthly Outlook released nearly a month ago, Freddie Mac Chief Economist Sean Becketti laid out the reasons why he believes that 2016 will be the best year for housing in a decade despite widespread reports of low inventory holding back the housing market for many months.
“Low mortgage rates, robust job growth, and a gradual increase in housing supply will help drive housing markets forward,” Becketti said. “Low levels of inventory for-sale and for-rent and declining housing affordability will be major challenges, but on balance the nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017.”
The national MiMi’s February level of 83 is 40 percent higher than its all-time low, reached in October 2010 at the peak of the foreclosure crisis. Even with Freddie Mac’s prediction that 2016 will be the best year for housing in a decade, the national MiMi’s February level of 83 is still significantly off from its all-time high of 121.7 reached in 2006 during the bubble.
Fla. cities at top of luxury home list
MIAMI – April 12, 2016 – America’s top cities and ZIP codes for luxury home listings and sales kept a stable pace of growth over the last year, according to Coldwell Banker Previews International’s latest annual Luxury Market Report.
Florida cities landed in the most top spots for high-priced real estate, with luxury sales posting double-digit growth in Miami, Naples and Palm Beach. Two cities – Lake Worth and Wellington – also landed in the top 20 list for luxury home sales worth $10 million or more for the first time.
The uptick in luxury sales occurred across the country, though certain pockets showed the highest increases. In Austin, Texas, for example, sales of $1 million-plus homes last year jumped 32 percent year-over-year thanks to an increase in its tech and entertainment industries.
However, Fort Lauderdale followed closely behind with a 31 percent increase in $1 million-plus home sales, and Seattle saw a 30 percent increase.
$1,000,000-plus home sales: Florida cities in top 20
8. Naples (1,135 sales with a 93% average list price to sales price ratio)
10. Miami (1,007 with a 92% ratio)
14. Fort Lauderdale (789 with a 90% ratio)
18. Miami Beach (650 with a 92% ratio)
$5,000,000-plus home sales: Florida cities in top 20
4. Miami Beach (95 sales with a 91% average list price to sale price ratio)
5. Naples (87 with a 92% ratio)
12. Palm Beach (43 with an 89% ratio)
13. Miami (43 with an 89% ratio)
18. Boca Raton (33 with an 88% ratio)
$10,000,000-plus home sales: Florida cities in top 20
5. Miami Beach (25 sales with a 90% average list price to sale price ratio)
8. Naples (16 with an 89% ratio)
10. Palm Beach (13 with an 87% ratio)
11. Miami (13 with an 87% ratio)
17. Delray Beach (7 with a 90% ratio)
19. Wellington (7 with a 76% ratio)
20. Lake Worth (6 with an 89% ratio)
$1,000,000-plus listings: Florida cities in top 20
2. Miami (1,654 listings)
3. Miami Beach (1,473)
4. Naples (1,146)
9. Fort Lauderdale (878)
10. North Miami Beach (810)
13. Boca Raton (662)
18. Sarasota (455)
$5,000,000-plus listings: Florida cities in top 20
2. Miami Beach (365 listings)
6. Naples (120)
7. Miami (106)
11. North Miami Beach (91)
12. Boca Raton (87)
13. Palm Beach (81)
15. Fort Lauderdale (75)
18. Key Biscayne (52)
$10,000,000-plus listings: Florida cities in top 20
2. Miami Beach (152)
9. Naples (33)
10. Palm Beach (33)
13. Miami (24)
14. North Miami Beach (22)
17. Boca Raton (18)
18. Key Biscayne (18)
19. Fort Lauderdale (18)
The complete report with a ranking of all U.S. cities is available online.
© 2016 Florida Realtors®
FEWER BUYERS BRINGING CASH TO CLOSE
MIAMI – Feb. 8, 2016 – One in three buyers paid all-cash to close on their real estate transactions near the end of 2015, according to data from CoreLogic. The share of all-cash transactions dropped to 33.9 percent in October year-over-year – way down from the 46.6 percent peak reached in January 2011.
However, Florida sales still have a high percentage of all-cash transactions. Nationwide, the state ranked second behind Alabama with 46.7 percent of transactions cash sales – and in two South Florida metro areas, more than half of their October transactions were all-cash sales.
Nationally, the number of all-cash transactions dropped to 33.9 percent year-over-year in October. Still, historically on a pre-crisis average, cash sales tend to make up about 25 percent of the market. CoreLogic estimates that cash sales will return to that level by mid-2018.
Sharp declines in REO sales are the main reason cash sales are steadily dropping, CoreLogic notes. REO sales comprised 7.3 percent of all residential home sales in October 2015, a third of the peak in January 2011 at 23.9 percent.
“Foreclosure completions have fallen substantially over the past few years across the nation,” says Frank Nothaft CoreLogic’s chief economist. “This has led to a drop in REO sales. Roughly one-half of REO homes are bought for all cash. Thus, the drop in REO has been an important reason for the national decline in the cash share of all sales.”
The following states continue to see cash sales remain higher than 40 percent in October:
New York: 46.3%
West Virginia: 44.4%
By metro area, three out of the U.S. top five are in South Florida:
Miami-Miami Beach-Kendall, Fla.: 51.6%
West Palm Beach-Boca Raton-Delray Beach, Fla.: 50.9%
Detroit, Mich.: 50%
Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.: 49%
Philadelphia, Penn.: 48.9%
Source: “What’s Driving Down the Cash Sales Share?” DSNews (Feb. 4, 2016)
© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688
It’s Official: The Fed Finally Raises Rates
Posted By Brian Honea On December 16, 2015 @ 12:55 pm In Daily Dose,Government,Headlines,News | 6 Comments
seal-on-money The Federal Reserve  made the long-awaited, much-anticipated announcement on Wednesday afternoon that federal funds target rate will increase by 25 basis points from its near-zero level where it has been since 2006.
The announcement came as the Fed wrapped its eighth and final Federal Open Market Committee (FOMC)  meeting of 2015 on Wednesday afternoon. The vote was unanimous.
“The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective,” the FOMC said in its statement Wednesday . “Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”
After a widely-expected rate increase did not happen at the September FOMC meeting, the Fed stated  that “In determining how long to maintain this target range, the Committee will assess progress—both realized and expected—toward its objectives of maximum employment and 2 percent inflation.” Another FOMC meeting came and went in October, albeit with much less fanfare than the September meeting, without the Committee raising the federal funds target rate.
The Fed’s decision to raise short-term interest rates took into account, “a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.” In what many analysts and economists saw as the final piece of the puzzle, the November employment summary released by the Bureau of Labor Statistics in early December reported 211,000 jobs added in November, an unemployment rate of 5.0 percent, and an average monthly job gain of 218,000 for the three-month period from September to November.
“I applaud the Federal Reserve for making the long overdue decision to raise the federal funds rate,” said Ed Delgado, Five Star Institute President and CEO. “The housing market and the overall economy have continued to show signs of improvement throughout 2015. As the year comes to a close, this decision represents a strong statement of faith that the long-term fundamentals of the market point to a period of growth and sustainability. The cause of homeownership is well served by the Fed’s move today.”
Auction.com EVP Rick Sharga predicts that the Fed liftoff will allow housing to fight off the persistent headwinds that have been a detriment to growth.
“One of the biggest headwinds in the housing market today is tight credit,” Sharga said. “There’s virtually no non-agency lending…nothing outside of QM, other than jumbo loans to rich borrowers the banks want to grab as customers for other services. Higher interest rates would actually allow for loans to be priced in a way that accommodated some degree of risk.”
“The cause of homeownership is well served by the Fed’s move today.”
Ed Delgado, President and CEO, Five Star Institute
The Collingwood Group Director Tom Booker echoed the sentiment that the short-term rate increase is good news for the housing market
“For many in real estate, raising the cost of borrowing seems ill-timed, but for homebuyers, this may increase interest and activity,” Booker said. “The real calculus is a function of what the markets believe the next move is. Will we see one or two moves this year. Ultimately, if the near term target for interest rates is 2 percent, the path will be bumpy in the housing markets but affordable.”
Fannie Mae SVP and Chief Economist Doug Duncan described the Fed’s announcement about the 25-basis point rate increase “dovish.”
“This is one small step on an overdue journey for the Fed,” Duncan said. “It should not be any surprise that markets were unsettled prior to the September meeting (rate increase expected) and to the current meeting, given the nature and magnitude of the central bank’s intervention in the economy. Market expectations of future Fed actions will likely continue to be volatile given the deviation from traditional monetary policy tools and the Fed’s outsized balance sheet. Today’s dovish statement reinforces our expectations of a gradual pace of tightening. The comment on the reinvestment policy suggests that any shrinking of the balance sheet would not begin until perhaps a year from now. We expect three more hikes in the fed funds target next year, with the 30-year fixed mortgage rate rising from 3.9 percent this quarter to 4.1 percent a year from now.”
President and CEO of United Wholesale Mortgage Mat Ishbia also agreed that the Fed’s decision will be a positive change in the industry.
“Consumers that have been on the fence about moving forward will now be more likely to make a move,” Ishbia noted. “I do believe that purchase business is going to increase in 2016, while refinances will decline and adjustable rate mortgages (ARMs) will become a bigger part of business for loan officers. It’s imperative for people in the mortgage industry to educate themselves on the benefits of ARMs and to align themselves with real estate agents.”
Steve Hovland, Director of Research at HomeUnion, told DS News that homeownership will be a rare commodity next year as a result of the Fed’s decision to raise rates.
“Unlike previous meetings, the Fed strongly prepped the markets for this change in monetary policy, which pushed up average 30-year mortgage rates 20 basis points, and the 10-year Treasury 25 basis points over the past few weeks,” Hovland said. “We don’t expect mortgage rates to move up in-step with the funds rate, though homeownership will be further out of reach for many renters. At 63.7 percent, the homeownership rate is near a 30-year low and will likely fall further in 2016.”
In the opinion of some, the impact of the Fed raising rates will be minimal.
Dave Gorman, Regional Sales Executive at Bank of America, noted that the rate increase will “minimally impact homebuyers” and “reflect a strengthening economy, better job outlook, rising wages, increased consumer confidence—factors that help increase demand for housing. We understand the natural concern among consumers, particularly prospective homebuyers, about slightly higher borrowing costs. With rates already at such low levels, incremental increases shouldn’t take average mortgage rates into the territory we’ve seen them in the past for some time.”
“It’s a cocktail circuit conversation. Who cares?” The Collingwood Group Partner and Managing Director Thomas Cronin said. “There are several good arguments to be made for stable, even lower long-term rates, which have equally challenging implications. In any case the sky is not falling.”
The first FOMC meeting of 2016 will take place January 26-27.
Editor’s note: The Five Star Institute is the parent company of DS News and DSNews.com.
Baby boomers blamed for clog in housing market
WASHINGTON – Dec. 8, 2015 – Some economists say the baby boomers aren’t selling their homes like previous generations did and not downsizing fast enough – and that leads to shortages of homes for sale and rising prices.
Baby boomers are “clogging up the whole chain of home sales,” says Sean Becketti, chief economist of Freddie Mac. “They appear to be staying in the family home longer than previous generations, and the imbalance between housing demand and supply continues to boost prices.”
Baby boomers are big players in real estate. In 2013, people age 55 and older controlled two-thirds of all home equity, according to the Federal Reserve’s most recent Survey of Consumer Finances.
In previous generations, once the kids moved out of the house, empty nesters tended to downsize and move to smaller homes or rent apartments. But so far, boomers haven’t made a move.
“Economists say boomers’ slower-than-expected rate of downsizing and selling is playing a contributing role in supply, demand and pricing imbalances in local markets – not creating those imbalances,” The Washington Post reports.
Lawrence Yun, chief economist for the National Association of Realtors®, told The Washington Post that the lingering effects of the housing crisis and the Great Recession may be the reason more baby boomers are postponing their moves. From 2008 to 2011, homeowners of all ages lost lots of equity, and many of them may still be rebuilding equity to allow them to sell without having to bring money to closing.
But Fannie Mae’s Patrick Simmons, an economics and strategic research group director, says that the real estate pipeline clog caused by baby boomers probably won’t last much longer.
“Boomers will not inhabit this vast inventory [32 million homes] forever,” he says. Their circumstances will inevitably change with age and they will move, and “their actions will reverberate through the housing market.”
Source: “By Not Downsizing, Baby Boomers Help Clog Up the Real Estate Pipeline,” The Washington Post (Dec. 2, 2015)
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688
REAL ESTATE NEWS SOUTHWEST FLORIDA
Home Sellers Net Highest Profits in 8 Years
DAILY REAL ESTATE NEWS | FRIDAY, NOVEMBER 06, 2015
Rising home prices over the last few years are finally putting more money back into home sellers’ pockets. Home owners who sold during the third quarter saw an average price gain of $40,658 – or 17 percent – from the purchase price of their property – the highest average price increase for sellers since the third quarter of 2007, according to RealtyTrac’s Third Quarter 2015 U.S. Home Sales Report.
Read more: Fall Home Sales Rebound: 5 Stats to Know
“An increasing number of home owners in 2015 have been cashing out the home equity they’ve gained during the housing recovery of the past three years,” says Daren Blomquist, vice president at RealtyTrac. “That may be a good decision because the data points to a plateauing market going forward. Home price appreciation is slowing, a trend that will continue if interest rates rise in the coming months as expected. Meanwhile the threat of rising interest rates combined with lowered premiums for buyers using FHA loans is spurring more demand.”
In its analysis of 171 counties nationwide, RealtyTrac found that the following counties saw sellers, on average, see some of the largest gains in the third quarter:
San Francisco County, Calif.: 58.7% gain
San Mateo County, Calif. (San Francisco metro area): 55.7%
Santa Clara County, Calif. (San Jose metro area): 47.7%
Alameda County, Calif.: 43.1%
New York County, N.Y.: 41.6%
RealtyTrac’s report also showed the following counties posted the largest year-over-year increases in home prices:
San Mateo County, Calif.: up 17.6%
New York County, N.Y.: up 16.1%
Santa Clara County, Calif.: up 15.7%
Weld County, Colo. (Greeley metro area): up 14.6%
San Francisco County, Calif.: up 13.3%
This Isn’t a Housing Bubble: Here’s Why
DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 17, 2015
Home prices are rising rapidly, but economists are deflating concerns that another “housing bubble” is brewing.
A recent report from CoreLogic shows that twice as many metro markets are considered “overvalued” – prices are inflated relative to incomes — in the second quarter of this year compared to the first three months of the year. But economists say it’s not a housing bubble because bubbles eventually burst and home prices this time around aren’t likely to fall.
Read more: Home Prices Reach an All-Time High
“Just because you’re overvalued doesn’t mean that you’re in a bubble or there is an impending crash,” says Sam Khater, CoreLogic’s deputy chief economist. “Some markets are overvalued because of strong fundamentals.”
The National Association of REALTORS® reported that the national median sales price is now above its 2006 peak. The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2016 at $230,400, according to NAR.
CoreLogic’s recent report shows that home prices in 14 of the largest 100 markets have now risen above its long-term fundamental values – with six of these markets in Texas alone. Housing demand is strong and supply has been near record lows, which has paved the way for price increases among the state’s strong economy.
About 10 years ago, a housing bubble was being fueled by free and easy mortgage credit – not the case today, CNBC reports. Today, strong demand and weak supply is driving the rise in prices.
“Agents continue to highlight buyers’ growing frustration with rising prices, but see current levels largely supported by tight inventory conditions,” according to a monthly survey of real estate professionals by Credit Suisse.
Source: “Frothy, Yes, But Don’t Call it a Housing Bubble,” CNBC (Sept. 15, 2015)
A 10-Year Housing Surge on the Horizon?
DAILY REAL ESTATE NEWS | WEDNESDAY, AUGUST 26, 2015
The housing market is poised for one of its largest expansions in history. By 2024, demographic and economic changes are forecasted to bring 15.9 million additional households on board, according to a new study released by the Mortgage Bankers Association.
That means an average of 1.6 million additional households per year, sparking “housing market growth over the next decade that would be among the strongest the U.S. has ever seen,” according to the report.
The MBA report says the bulk of that growth will be from increases in the number of households who are headed by those age 60 and older and households headed by age 45 and younger. Those age group increases are expected to mitigate the decline among households age 45 to 60.
Why you shouldn’t be alarmed by dips in home ownership rates
“An aging population should gradually increase demand for home ownership, partially offsetting the influence of a more racially and ethnically diverse population on home ownership rates,” the MBA report notes.
The Census Bureau projects the following breakdown in ages emerging in 2024, as compared to 2014:
20 million more people age 60 and over than there are today (as Baby Boomers age),
4 million fewer people age 45 to 59 (as the large Baby Boomer cohorts are replaced by smaller Generation X cohorts) and
18 million more people age 18 to 44 (as smaller Generation X cohorts are replaced by larger Millennial cohorts)
Household growth is also expected to be driven by 5.5 million additional Hispanic households. For other races, 3.4 million additional non-Hispanic White households are expected to form by 2024, 2.4 million additional black households, 1.8 million more Asian households, and 730,000 additional other households.
Source: “Housing Demand,” Mortgage Bankers Association (2015)
REOs Are Back on the Rise
DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 20, 2015
Foreclosure filings were on the rise in July, as bank repossessions rapidly began to tick up, according to RealtyTrac’s July 2015 U.S. Foreclosure Market Report.
Foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were up 7 percent in July month-over-month and are up 14 percent from a year ago, according to RealtyTrac.
Read more: The Top Markets for REOs Right Now
“The increase in overall foreclosure activity over the last five months has been driven primarily by rapidly rising bank repossessions, which in July reached the highest level since January 2013,” says Daren Blomquist, vice president at RealtyTrac. “Meanwhile foreclosure starts in July were at the lowest level since November 2005 — a nearly 10-year low that demonstrates the recent rise in bank repossessions and represents banks flushing out old distress rather than new distress being pushed into the pipeline.”
Indeed, Blomquist notes that “this clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007. It’s also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory.”
Sixty-one percent of the loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68 percent last year and 75 percent two years ago, Blomquist says.
Bank repossessions last month were at a 30-month high, rising in 44 states. Still, REOs were less than half their peak of 102,134 in September 2010.
REOs have increased the most from a year ago in the following states:
New Jersey: +344%
Meanwhile, foreclosure starts have fallen to pre-crisis levels and are down annually in 31 states, RealtyTrac reports. In July, there were 45,381 properties that started the foreclosure process, down 8 percent month-over-month and down 9 percent from a year ago to the lowest level since November 2005. Foreclosure starts in July were less than one quarter of the peak of 203,948 reached in 2009.
Steady job gains likely to raise mortgage rates
WASHINGTON (AP) – Aug. 10, 2015 – A new era of higher rates on home and car loans, steeper borrowing costs for businesses and the government – maybe even a bit more return for savers – is about to arrive.
That, at least, is the word from most economists. After another solid U.S. jobs report Friday, they say the Federal Reserve seems all but sure to raise its short-term interest rate next month after keeping it pinned near zero for nearly seven years.
It would be the Fed’s first rate hike since 2006. And it would end the aggressive campaign the central bank began after the 2008 financial crisis to save a teetering banking system and energize an ailing economy. While it could take months, the Fed’s moves should eventually drive up interest rates for mortgages, auto loans and other consumer and business borrowing.
“The most advertised and anticipated play” is a Fed rate hike in September, David Kotok, chief executive at money management firm Cumberland Advisors, said Friday after the July jobs report showed that employers added 215,000 jobs and that the unemployment rate held at a nearly normal 5.3 percent. “Markets, economists, and analysts expect it.”
Not all of them do.
Some economists argue that a September rate increase isn’t guaranteed. They say Friday’s figures showed that some gauges of the job market remain weak. Pay increases, for example, are still sluggish. And hiring hasn’t been strong enough to draw millions of Americans who’ve given up on their job searches back into the hunt.
What’s more, a strong dollar is hurting U.S. exporters and making foreign goods cheaper in the United States, which could shrink inflation even further below the Fed’s 2 percent target.
“A September rate hike is by no means a done deal,” Chris Williamson, chief economist at Markit, said in a research note. “Low inflation and cooling growth will create powerful arguments against rate hikes.”
Here are three reasons the Fed will likely raise rates when it meets next month – and two reasons it may not.
In the past seven years, the economy has gone from hemorrhaging millions of jobs during the Great Recession to sluggish and intermittent hiring during the first several years of recovery to consistently strong gains.
In the past two years, employers have added a robust average of 235,000 jobs a month. Businesses have added jobs for 65 straight months, the longest such streak on records dating to 1939.
“As long as you’ve got payroll gains above 200,000 … this meets the requirement of showing some further improvement in the labor market and strengthens the case for the Fed moving in September,” said Michelle Girard, chief U.S. economist at RBS.
Relatively low unemployment
The steady job gains have helped reduce the jobless rate to 5.3 percent from 6.2 percent a year ago and 10 percent in 2009. That’s near the 5 percent to 5.2 percent range that the Fed says constitutes a normal job market. Most economists expect the rate to fall even further.
The proportion of adults who either have a job or are looking for one has also stabilized recently. That suggests that stronger hiring has been the main reason unemployment has kept falling.
Ultra-low rates hamstring the Fed
Though economic growth is still modest, Fed policymakers need to raise rates from their record lows sooner or later. Rates kept too low for too long could make it hard for the Fed to respond to any future economic slump.
Persistently low interest rates and subpar inflation leave “less scope for the (Fed) to respond” by cutting short-term rates to “counteract a weakening in the economy,” Fed Chair Janet Yellen said last month.
Girard said the length of the recovery also points to a hike in September: “Seven years into an expansion, should you still be sitting at emergency rates?” she said.
All that said, some analysts cite at least two reasons the Fed might put off a rate hike:
Job market isn’t as strong as it looks
American’s paychecks are still growing much more slowly than if the job market were really at full health. Average hourly pay rose just 2.1 percent in July from a year earlier — far below the 3.5 percent to 4 percent pace typical in a healthy economy.
That suggests that employers are still managing to find plenty of workers to fill jobs. And some Americans who have given up looking for work might resume their searches if more good openings were available.
Yellen has flagged this shortcoming: “A significant number of individuals still are not seeking work because they perceive a lack of good job opportunities,” she said in July.
Inflation remains too low
The dollar has risen roughly 14 percent in the past year compared with overseas currencies, which makes imported cars, clothes and food cheaper than U.S.-made products. That’s also depressing an already unusually low inflation rate. Consumer prices rose just 0.1 percent in June compared with a year ago. Excluding the volatile food and gas categories, they’ve risen only 1.8 percent.
Both figures are far from the Fed’s 2 percent target. Though consumers appreciate low inflation, the Fed wants a little inflation as a guard against deflation, which can drag wages down, make consumers slow to buy and make debts harder to pay off.
AP Logo Copyright © 2015 The Associated Press, Christopher S. Rugaber. All rights reserved.
Can housing’s comeback endure? The outlook dimmer
WASHINGTON (AP) – July 27, 2015 – The U.S. housing market has sizzled this summer, lifting expectations that home sales will finally help drive an economic expansion now in its seventh year.
Or will it?
Signs are emerging that housing’s momentum may be destined to falter in coming months. Analysts note that some of the key foundations needed to sustain a brisk pace of home-buying in the long run appear to be missing.
The U.S. economy had only just begun to derive strength from housing for the first time since the Great Recession began in 2007. If home sales flag, that strength would fizzle.
The main problem is the simplest: There just aren’t enough homes available. Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.
Other pressures will also likely slow sales. Steadily rising home prices can put ownership out of reach for some. What’s more, builders are increasingly focused on apartment construction rather than single-family homes.
And then there are mortgage rates, which have crept up from recent lows and made it incrementally harder for some would-be buyers already struggling to afford a purchase. Some buyers are rushing to finalize deals for fear that rates will keep rising – a trend that could depress demand later this year.
“What we fear is next is if interest rates rise and prices rise,” said Deborah Heffernan, a Boston-area broker. “That combination will definitely eliminate people from the market.”
Early this spring, buyers leapt back into the market. Mortgage rates were just slightly above their 2012 lows, and nearly two years of solid job growth had generated millions of new paychecks.
Sales of existing homes have surged 9.6 percent in the past 12 months, according to the National Association of Realtors. In June, they hit an annual rate of 5.49 million, a pace last achieved before the recession began. And sales of new homes have jumped 21 percent through the first half of 2015, the government reported Friday.
But an unusual trend has taken hold: Stronger home sales have yet to motivate many people to put their homes on the market. Listings for existing homes have barely edged up in the past year. And the pace of home building remains subpar compared with previous economic expansions.
With buyer demand outstripping supply, the national median sales price for homes last month reached $236,400, the highest ever recorded, the Realtors said.
For many would-be buyers, those higher prices are manageable if mortgage rates remain ultra-low. In June, the average 30-year fixed mortgage was 3.8 percent. The average has since topped 4 percent as the Federal Reserve has moved toward raising a key interest rate from its near-zero level. When the Fed last prepared to curtail its stimulus efforts in 2013, rates spiked and home sales sank.
Though only modestly up, the higher mortgage rates are having a dampening effect, according an index of buyer demand released Thursday by the national real estate brokerage Redfin. It expects a slowdown in the growth of sales and prices as buyers pursue less expensive homes.
“Interest rates are having an effect,” said Nela Richardson, chief economist at Redfin. “It’s making buyers a bit more conservative.”
In some key markets, prices have begun to stagnate as buyers seem to be retreating. A majority of homes in Chicago, Phoenix, Los Angeles, New York and Washington, D.C., either lost value or basically flat-lined during May, according to a study by Weiss Residential Research.
Weiss’ analysis points to a contributing factor for the shortage of available homes: Many homeowners can’t find affordable homes themselves and so can’t list their own properties for sale.
“The reason why demand is high relative to supply is that homeowners are having a hard time moving up,” said Allan Weiss, founder of Weiss Residential Research. “There is gridlock.”
In addition, many Americans remain squeezed by sluggish pay raises and have chosen to continue to rent. And some who do want to buy are unmoved by the limited selection and have decided to wait, said Tony Smith, a real estate broker in Charlotte, North Carolina.
“Buyers are leaving the market because they don’t have anything to buy,” Smith said. “Some of them get frustrated and sign another lease.”
Indeed, homeownership is declining, and renting has surged. Fewer than 64 percent of Americans own homes, the lowest level since 1989, according to the Census Bureau. The share of people under age 35 who own has dropped to around 35 percent from a high of 44 percent in 2004.
Marina Rodriguez, a 26-year-old dental hygienist, recently signed a lease on a one-bedroom apartment in suburban Chicago.
“The idea of buying is a little scary – it’s a huge financial obligation,” she said. “I would rather rent and travel and be year-to-year then be locked down.”
Builders are tapping into the rental market. Nearly all the 7.4 percent increase in June building permits came from apartment complexes, the government said last week. The three-story townhomes that Chicago-based REVA Development Partners once sold to first-timers and empty-nesters are now being rented.
“There has been a fundamental shift in people’s attitudes toward homeownership,” said the Matt Nix, the firm’s principal.
There’s also evidence that construction is topping out, a potential blow to overall economic growth. The American Institute of Architects said its index that tracks billings for houses and apartments has reached a four-year low. There’s often a nine- to 12-month lag between drawing up blueprints and a groundbreaking, a sign that builders view the current demand as short-lived.
“What we’re seeing now is going to hit construction in 2016,” said Kermit Baker, the institute’s chief economist. “It does look like that market is getting close to peaking.”
AP Logo Copyright © 2015 The Associated Press, Josh Boak. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
‘Lack of inventory’ a top real estate challenge
WASHINGTON – July 15, 2015 – Realtors®’ outlook is increasingly optimistic about the housing market in the months ahead. Confidence is staying high, buoyed by a strengthening economy and the opening of the credit box.
Reasons for confidence
Job creation has reached a pace of about 220,000 jobs per month this year, lower FHA monthly mortgage insurance premium rates have helped some buyers, and more borrowers qualify for loans thanks to new 3 percent down payment loans backed by Fannie Mae and Freddie Mac, according to the latest Realtors Confidence Index Survey from the National Association of Realtors® (NAR).
For the fifth consecutive month, indices were above 50 for all property types, reflecting strong confidence in the next six months. The single-family market had the highest confidence at 74 on the index, while townhomes registered at 55 and condos at 50. An index of 50 or more indicates more respondents view conditions as “strong” rather than “weak.”
Reasons for concern
While the real estate economy continue to grow, Realtors also listed the seven biggest challenges they currently face:
Limited inventories of homes for-sale
Financing issues, such as the difficulty qualifying for a mortgage due to higher FICO credit score requirements and downpayment standards
Appraisal issues: conservative estimates, the use of “out-of-town appraisers,” or slow turnarounds
New mortgage disclosure rules – known as TRID (truth in lending disclosure) regulations – that could potentially delay closing/settlement of transactions
A potential dampening impact on demand from higher interest rates – although buyers’ anticipation of higher rates could spur demand in the short-term
Declining demand from international buyers due to a strong U.S. dollar
Lack of FHA-approved condos
Source: “May 2015 Realtors® Confidence Index Survey,” National Association of Realtors
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688
Economists predict rising home prices, rents
MIAMI – June 29, 2015 – Spurred by tight supply, both home prices and rents will pick up this year and next, a panel of economists predicted Friday.
By the end of 2017, national home prices should match the levels they reached at the peak of the housing boom in 2006, CoreLogic chief economist Frank Nothaft said at the 49th National Association of Real Estate Editors conference in Miami.
“Consumer confidence is at the highest level it’s been in eight years – that’s a proxy for financial security,” he said.
Nevertheless, when prices do reach past peak levels, they’ll still be about 20 percent below that level in inflation-adjusted terms, he said.
Lawrence Yun, chief economist of the National Association of Realtors, expects median home prices to grow 7 percent this year and 4 percent the next.
Still, supply remains tight across the country, Yun said, partly because investors have bought up houses and have not released them into the market, and partly because builders have not created supply quickly enough to meet demand.
However, he projected housing starts would rise from 1.1 million this year to 1.4 million in 2016.
Other panelists said supply also has been constrained by homeowners who are reluctant to move, either because they refinanced at a low rate or haven’t found a suitable replacement home.
David Crowe, senior economist at the National Association of Home Builders, said that reluctance to sell an existing home has had an impact on builders.
“New home sales come primarily from existing home sellers,” Crowe said.
He expects single-family starts rising from 726,000 this year to 935,000 in 2016.
But builders are still recovering from the recession, and are being further squeezed by higher labor and land costs. Plus, some small and regional builders are having a tough time getting credit through small community banks.
All this means higher prices for homebuyers. But renters have been hit by big price bumps, too.
Stan Humphries, chief economist at Zillow, quoted May statistics that showed rents rising 4.3 percent year over year, while home prices rose only 3.3 percent.
Millennials just leaving their parents’ basements, former homeowners who lost their homes to foreclosure, and slow wage growth are all fueling the demand for rentals, he said.
But many are renters out of necessity, not choice, he added, and are giving up basics like trips to the doctor and dentist just to keep up with their rising rents.”
“The popular belief is that millennials don’t want to buy homes, but our research shows the opposite,” he said. “They’re more like the silent generation. Their biggest problem is down payments, but since rents are so high, it’s hard for them to save up.”
© 2015 the Naples Daily News (Naples, Fla.), June Fletcher. Distributed by Tribune Content Agency, LLC.
Fla.’s housing market continues growth trends in March 2015
NAR: Existing-home sales spike in March.
ORLANDO, Fla. – April 22, 2015 – Florida’s housing market continued its positive track in March with more closed sales, higher median prices, increased pending sales and new listings, according to the latest housing data released by Florida Realtors®.
Closed sales of existing single-family homes statewide totaled 24,811 last month, up 24.6 percent in a year-to-year comparison.
“Positive growth in Florida’s housing market is encouraging sellers and buyers,” says 2015 Florida Realtors President Andrew Barbar, a broker with Keller Williams Realty Services in Boca Raton. “Inventories for existing single-family homes and for townhouse-condo properties remain in a stable range with a 5 to 6 months’ supply.
“On the buyers’ side, new pending sales for existing single-family homes in March increased 12.9 percent year-over-year, while pending sales for townhouse-condo units increased 1.4 percent. On the sellers’ side, new listings for single-family homes rose 8.6 percent year-over-year and new townhouse-condo listings rose 5.5 percent.”
March marked the 40th consecutive month that statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year.
“Strong price growth has helped many Florida homeowners rebuild home equity, but it can also pose a challenge for first-time buyers hoping to close on their dream home before rates rise,” Barbar adds.
The statewide median sales price for single-family existing homes last month was $190,000, up 9.2 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $152,000, up 8.6 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2015 was $204,200, up 8.2 percent from the previous year; the national median existing condo price was $190,200.
Looking at Florida’s townhouse-condo market, statewide closed sales totaled 11,083 last month, up 13.7 percent compared to March 2014.
The closed sales data reflected fewer short sales in March: Short sales for townhouse-condo properties declined 36.9 percent while short sales for single-family homes dropped 30.5 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.
“The housing market continues to thrive on the growing Florida economy – jobs are up and so are sales,” says Florida Realtors Chief Economist Dr. John Tuccillo. “The continued fall of cash sales as a percentage of total sales suggests that demand is increasingly coming from household owner-occupants, a trend that bodes well for market stability. Days on the market are down, as is inventory, particularly at the low end of the market. This points to a potential sweet spot for homebuilders.
“If there is a concern in the market, it lies in the upper-middle price ranges, where inventories and time on the market are up even though sales growth is strong,” adds Tuccillo. “This will bear watching over time.”
Inventory was at a 5.1-months’ supply in March for single-family homes and at a 6.1-months’ supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.77 percent in March 2015, down from the 4.34 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors’ website under “Research.” Association members (login required) also have access to local data specific to their market.
© 2015 Florida Realtors®
Foreclosures hit 18-month high, no longer a bargain
IRVINE, Calif. – May 21, 2015 – Florida is once again the top U.S. state for foreclosure activity in RealtyTrac’s latest April 2015 U.S. Foreclosure Market Report. However, foreclosures are not the bargain they once were.
Compared to market value, the selling price of a Florida REO (real estate-owned property) ranged from 79 percent of actual market value in the Pensacola area to 91 percent of market value in Cape Coral-Fort Myers. Nationwide, REOs sale prices average 87 percent of estimated market value.
Selected Florida metro comparison: REO value versus market value:
Cape Coral-Fort Myers: 91%
Port St. Lucie: 90%
Miami-Fort Lauderdale-Pompano Beach: 89%
Deltona-Daytona Beach-Ormond Beach: 88%
Tampa-St. Petersburg-Clearwater: 86%
Palm Bay-Melbourne-Titusville: 83%
Pensacola-Ferry Pass-Brent: 79%
Florida led the nation in the number of April REOs for the total number of REO listings (21,182), with a year-over-year increase of 42 percent. Other states, however, had a higher percentage year-to-year increase in REOs, including California (up 53 percent), Michigan (198 percent), Illinois (46 percent) and Ohio (63 percent).
The spike in foreclosures results mainly from completions rather than starts. Year-to-year, Florida’s number of completed foreclosures rose 41.82 percent; month-to-month it rose 23.98 percent.
But foreclosure starts fell, suggesting the end of a cycle. Year-to-year, Florida foreclosure starts dropped 28.35 percent; month-to-month foreclosure starts declined 1.8 percent.
Despite a 6 percent year-over-year decrease in foreclosure filings, Florida still had the highest state rate in April: one in every 425 housing units has a foreclosure filing – nearly 2.5 times the national average.
RealtyTrac offers a Florida county-by-county breakdown on its website. The numbers include all homes that are somewhere in the foreclosure process, plus the number of foreclosed homes listed for sale.
U.S. foreclosure numbers
According to RealtyTrac’s report, April’s nationwide foreclosures increased 3 percent month-to-month and 9 percent year-to-year. The increase was driven primarily by a jump in bank repossessions (REOs), which were up 25 percent from the previous month and 50 percent year-to-year – a 27-month high.
However, the spike is still 56 percent below the peak of 102,134 REOs in September 2013.
“The REO increase in April was foreshadowed by a 23-month high in scheduled foreclosure auctions in October 2014,” says Daren Blomquist, vice president at RealtyTrac. “Many of those scheduled auctions are now taking place, and properties are going back to the foreclosing lender. Meanwhile … foreclosure starts nationwide are now running consistently below pre-crisis levels, indicating that (this) is a continuation of the clean-up phase of the last housing crisis, not the start of a new crisis.”
Blomquist says the recent REO increase might actually be good for the market, even though it tended to hurt neighborhoods in the past.
“An influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market,” Blomquist says. “Banks are liquidating these distressed properties in a seller’s market with a low supply of inventory for sale, which should help them sell quickly and at a price that is relatively close to full market value.”
In a handful of U.S. metro areas, REOs sold for full value or close to it. Those areas include: San Diego (100 percent of full market value); Charlotte, North Carolina (100 percent); San Francisco (97 percent), Bakersfield, California (97 percent) and Portland, Oregon (97 percent).
In other areas, REOs are still bargains, including: East Stroudsburg, Pennsylvania (62 percent REO prices below estimated market value), Akron, Ohio (66 percent below), Atlanta (70 percent below), Cleveland (70 percent below) and Baltimore (74 percent below).
“We are in the final innings of this extra-inning distressed ball game,” says Mike Pappas, CEO and president of the Keyes Company in South Florida. “As this tide recedes, the strong economic tide is pushing us to historic sales for our region.”
© 2015 Florida Realtors®
Home ‘flipping’ still popular in Fla.
NAPLES – May 12, 2015 – Florida tops the nation as the state with the highest percentage of single-family home flips, a new survey shows.
Irvine, California-based research firm RealtyTrac said Thursday that 6.5 percent of all single-family home sales in the state were flips, defined as properties sold at least twice as part of an arm’s-length transaction within a 12-month period.
The survey looked at first-quarter results for more than 725 metro areas nationwide. Nationwide, 4 percent of homes were flips, down from a peak of 6.8 percent in the first quarter of 2012.
Southwest Florida’s flip rate was below the state average, but above the national one.
Six percent of the total single-family properties that were sold in Naples-Marco Island were flipped in the first quarter of 2015; in Cape Coral-Fort Myers, 5.3 percent were flipped.
“The strong returns for home flippers in the first quarter demonstrates that there is still a need in this recovering real estate market for move-in ready homes rehabbed to more modern tastes, particularly given the dearth of new homes being built,” said Daren Blomquist, vice president at RealtyTrac, in a statement. “The challenge for flippers in 2015 will be finding inventory to flip.”
Copyright © 2015 the Naples Daily News (Naples, Fla.), June Fletcher. Distributed by Tribune Content Agency, LLC.
Bidding wars return
WASHINGTON – March 26, 2015 – The number of home sales that included a bidding war is trending upward. Thirty-three percent of all sales were at or above the asking price, which often indicates more than one bidder was involved in the transaction, according to data from the National Association of Realtors® (NAR).
That’s the highest rate since 2006.
A lack of houses for sale largely led to the current upswing in bidding wars. The for-sale housing inventory has been at about 1.8 million properties for the past three years. Prior to that, inventories were roughly double, reaching a peak of about 3.5 million properties in 2007.
Housing inventories are down by some of the largest amounts year-over-year in Las Vegas; Key West, Fla.; Colorado Springs, Colo.; Palm Bay, Fla.; and Columbus, Ohio, according to realtor.com’s January National Housing Trend Report.
Why such a low inventory? Some homeowners delay putting their homes on the market and opt instead to stay put until they recover more equity, which has been showing signs of improvement lately.
And while inventories remain tight, buyer demand is on the rise. An improving economy causes more potential homebuyers to enter the market.
“The result is higher prices and buyers jousting with one another to make the winning offer,” Bloomberg reports.
Source: “The Bidding Wars Are Back,” Bloomberg (March 18, 2015)
© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688
Building now cheaper, faster on Scrub Jay habitats in Charlotte County
BY CAROLYN BREWSTER • FEBRUARY 10, 2015
CHARLOTTE COUNTYTOP NEWSWINK NEWS
CHARLOTTE COUNTY, Fla. – Big news today for land owners and sellers in Charlotte County. Realtors tell WINK News development has been stunted in some areas of Southwest Florida and it’s all because of a bird called Scrub Jays.
To build on land in designated Scrub Jay habitats, you had to apply for the permit through the Fish and Wildlife Conservation Commission–which took years for approval and hundreds of thousands of dollars.
The permit for a quarter acre lot of land could cost up to $30,000 and take anywhere from 1-4 years to approve but now it will only cost $2,200 and a few days for approval.
“In 2007 I received a phone call from a gentleman from Pennsylvania who had bought a lot in deep creek and he and his wife were going to retire here and build their dream home but when he found out about the Scrub Jays he was in tears because financially he was not expecting to buy a second lot for birds and I was appalled when I heard about this,” said Tricia Duffy, Charlotte County Commissioner.
After years of drafting plans and working with FWC, Charlotte County is the first county in the state to pass the ordinance to streamline the process of getting the permit.
The Scrub Jays won’t be harmed in any way because the county has already bought acres of land for the birds’ habitats to be relocated to.
This is also good news for realtors.
“This has been at least ten years that it’s been affecting growth and building in Charlotte County…especially here in Deep Creek, Rotunda area, Gulf Cove and south Gulf Cove. It’s going to change things dramatically,” said realtor James Mulligan of Suncoasteam Realty.
Mulligan tells WINK News just in the last few weeks lots have sold for between $20,000 and $50,000 but those same size lots in the same neighborhood will barely even sell for $5,000 dollars if Scrub Jays are nearby. But Mulligan says that’s going to change now and it’s going to revitalize many parts of Charlotte County.
Tight Supplies Put Home Prices on the Move
DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 12, 2015
Home prices posted solid gains in the fourth quarter of 2014, with the majority of metro areas seeing a slightly stronger price growth, propelled by tight housing supplies, low interest rates, and a strengthening job market, according to the National Association of REALTORS®’ latest quarterly report.
Prices on the Rise
NAR: Home Sales Only Going Up From Here
More States See Rising Home Prices
The national median existing single-family home price was $208,700 in the fourth quarter, up 6 percent year-over-year, NAR reports.
The median existing single-family home price rose in 150 out of the 175 metro markets tracked – or 86 percent. That marks a stronger price gain compared to the third quarter when 73 percent of the metro areas had posted increases. What’s more, 24 areas – or 14 percent – saw double-digit increases in the fourth quarter.
“Home prices in metro areas throughout the country continue to show solid price growth, up 25 percent over the past three years on average,” says Lawrence Yun, NAR’s chief economist. “This is good news for current home owners, but remains a challenge for buyers who are seeing home prices continue to outpace their wages. Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying.”
Meanwhile, total existing-home sales – including single-family and condo – fell 1 percent in the fourth quarter to a seasonally adjusted annual rate of 5.07 million. But existing home-sales are still 2.6 percent higher year-over-year, according to NAR’s housing report.
By the end of the fourth quarter, 1.85 million existing homes were available for sale, which is slightly below the 2.01 million homes for-sale during the fourth quarter of 2013. The average supply was 4.9 months in the fourth quarter. Most economists consider a supply of 6 to 7 months a healthy balance of supply between buyers and sellers.
“Despite affordable housing conditions in most of the country, an upward pressure on home prices still persists in some metro areas – particularly in the West – where the current supply of new and existing-homes for sale is failing to keep pace with overall demand and growing populations,” Yun says. “Unless homebuilders significantly boost construction, housing supply shortages could develop and lead to further price acceleration this spring.”
5 Priciest Markets in the Fourth Quarter
The following were the most expensive housing markets in the fourth quarter:
San Jose, Calif. metro: $855,000 (median existing single-family home price)
San Francisco: $742,900
Anaheim-Santa Ana, Calif.: $688,500
San Diego: $493,100
The following is a closer look at how existing-home sales and prices fared across the country in the fourth quarter:
Northeast: total existing-home sales increased 2.5 percent in the fourth quarter and are 4.1 percent below the fourth quarter of 2013. Median existing single-family home price: $246,300, up 2.2 percent from a year ago.
Midwest: existing-home sales fell 4.7 percent in the fourth quarter and are 0.6 percent below a year ago. Median existing single-family home price: $162,000, a 6.2 percent jump from a year ago.
South: existing-home sales rose 2.7 percent in the fourth quarter and are 5.8 percent above the fourth quarter of 2013. Median existing single-family home price: $183,500, 6.2 percent above a year earlier.
West: existing-home sales fell 6 percent in the fourth quarter and are 0.9 percent below a year ago. Median existing single-family home price: $299,500, up 4.8 percent year-over-year.
Source: National Association of REALTORS®
Luxury agents selling the ‘sizzle’ need HD videos
HOLLYWOOD, Calif. – Feb. 6, 2015 – Luxury real estate agents increasingly use high-tech and digital tools, like drones equipped with HD cameras, GIS mapping and 3D imaging.
With more buyers looking at homes online, short videos are now deemed necessary to market upscale dwellings and the presumed lifestyles that accompany them.
“Buyers of high-end, high-profile properties are looking for information instantaneously,” says Mike Swan, owner of Bozeman, Mont.-based Swan Land Co. “The ability to transfer large quantities of data to buyers has really revolutionized what we do. Extensive details on a property – including satellite mapping – can now be provided at once, streamlining the process.”
Footage shot by drones walks buyers through large ranches and estates, providing an accurate representation of the property to buyers on tight timelines.
Although mobile apps make it easier for buyers to shop for real estate, however, most buyers still want to visit the home in person before making a decision.
“You can’t replace getting on a property and personally experiencing it,” remarks Swan. “(A buyer) must touch and feel it.”
Source: Variety (02/03/15) McDonald, Kathy A.
Capt Bob & Kelly Davies have been doing HD Video’s of homes for over 8 years. They were pioneers with video’s and have been on the cutting edge of technology as it has rolled out. Many of the high end buyers they have listed and sold homes for came from the video’s they do and publish to You Tube and other sources. “Still photo’s just do not cut it in todays home buying market” says Capt Bob Davies. “The video gives the buyer the experience of actually being there with me to walk through the home”. “Nearly half of the homes we sell are sight unseen, that is why we do a video and email it to our clients that are out of the area”
Zillow, ListHub to End Listings Agreement
DAILY REAL ESTATE NEWS | WEDNESDAY, JANUARY 07, 2015
The real estate website Zillow will soon stop receiving feeds of hundreds of thousands of for-sale home listings from ListHub within the next three months, as it expects to transition to its own listing syndication tool.
Zillow’s contract with ListHub expires on April 7. ListHub is a listing syndicator owned by Move Inc., operator of realtor.com®. Zillow officials say they plan to get more listings directly from multiple listing services and brokers through a new service called “Data Dashboard.”
In a statement, Move Inc. said that “ListHub has been negotiating in good faith a new listing distributing and reporting agreement with Zillow on terms that reflect the best interests of the brokerage industry. As communicated in public announcements, Zillow decided to end those negotiations and announced the launch of their own platform. Zillow chose their own route for their business model and interests.”
Zillow’s has been receiving listing data via ListHub since April 2011. Since Move’s acquisition by News Corp in December, there has been speculation about whether the agreement would be extended.
With the ListHub contract ending, Zillow’s continued flow of listings will hinge on the appeal of Data Dashboard and broker and MLS participation with it. “A few hundred thousand listings” of the 3.6 million currently displayed on Zillow would be disrupted if the ListHub contract ended today,” said Katie Curnutte, a Zillow spokeswoman, in a report on Inman News. So Zillow officials are now reaching out to MLSs and brokers to participate in Data Dashboard. Since many of Zillow’s MLS partners with Data Dashboard, so far, are located in large urban areas, Curnutte told Inman News that rural areas initially may be the most affected by the end of the agreement with ListHub.
Source: REALTOR® Magazine Daily News and “Rupert Murdoch Playing Hardball with Zillow,” Inman News (Jan. 6, 2015) [Log-in required.]
Charlotte County Officials Reach Accommodation for Scrub-Jay
A HABITAT CONSERVATION PLAN for the Florida scrub-jay can be enacted with an ordinance by the Charlotte County Commission.
SUN COAST MEDIA GROUP
By GARY ROBERTS
Published: Sunday, December 28, 2014 at 8:15 p.m.
Last Modified: Sunday, December 28, 2014 at 8:15 p.m.
NORTH PORT SUN
A HABITAT CONSERVATION PLAN for the Florida scrub-jay can be enacted with an ordinance by the Charlotte County Commission.
SUN COAST MEDIA GROUP
After seven years of working with federal officials to find a compromise between wildlife preservation and the rights of property owners, Charlotte County has received approval on an agreement to protect the endangered Florida scrub-jay, while making it easier and far less expensive to build on properties where they live.
The habitat conservation plan, the first of its kind for the Florida scrub-jay, will give the county a 30-year incidental take permit, which allows for the conservation of the species through mitigation of its habitats while allowing development to take place.
The approval, awarded by the federal Department of the Interior through the U.S. Fish and Wildlife Service, awaits a County Commission ordinance to initiate the permit.
“It provides a vehicle for areas such as Deep Creek that were locked up for a long time,” County Administrator Ray Sandrock said. “It certainly opens up the potential for development.”
There are about 18,000 lots in Charlotte County encumbered by Florida scrub-jays, said Andy Stevens, natural resources division manager for the county. Previously, property owners in the affected area would pay between $11,700 to $42,300 in federally mandated mitigation costs for a quarter-acre lot. Now, lot owners who come in for a building permit will have to pay only a one-time fee of $2,200 for the same size lot, and construction can begin immediately.
Overall, it would cost the county about $56 million over 30 years to implement the plan, Stevens said. Without it, costs would range from in excess of $350 million to more than $500 million.
Although the species has been around at least 2 million years and is exclusive to Florida, its future is in jeopardy, with the scrub-jay population declining 90 percent in the past century. Its primary threats are the destruction of its rare oak scrub habitat and the onslaught of development and agriculture.
Charlotte is the third most imperiled county for the Florida scrub-jay, Stevens said, with a current population of about 500.
Mitigation fees will go toward an endowment to pay for future land acquisition, management and monitoring of the scrub-jays. The county is looking for a suitable habitat land reserve on the county’s east side, Stevens said.
County Commission Chairman Bill Truex, who works in real estate and construction in West Charlotte County, knows many builders in the area who want to develop scrub-jay properties but are prohibited by decreased land values associated with mitigation costs and regulatory burdens. Now, he said, with the plan eliminating these hurdles and thereby returning these properties to their full market value, the land can be built on or sold much more simply.
“This is a pretty big deal for Charlotte County,” Truex said. “I think it’s a win-win for us.”
Stevens said the Florida scrub-jay also will benefit.
“In my professional opinion, without the habitat conservation plan, the species wouldn’t survive over time in Charlotte County,” Stevens said.
Building Costs Are on the Rise
DAILY REAL ESTATE NEWS | MONDAY, DECEMBER 29, 2014
Building costs are surging at the fastest pace in six years, according to a newly released report by Rider Levett Bucknall, a property and construction consulting firm, which tracks the costs of new commercial, residential, and other buildings.
Inside the New-Home Market
New-Home Sales Dip, Builders Still Upbeat
Did New-Home Price Increases Go Too Far?
Construction costs jumped 1.66 percent between July and October – the largest three-month increase since early 2008, the report notes. The firm attributes the change to improving markets, noting that as demand increases for labor and construction materials, costs increase.
“General optimism with the construction sector has continued to rise,” the report says. The firm projects that construction starts in 2015 will rise about 10 percent – nearly double the estimated growth rate of 2014.
Construction costs are rising faster than the inflation rate. However, this shouldn’t cause a decrease in activity because real estate prices are rising faster than the construction costs, says Julian Anderson, president of Rider Levett Bucknall North America.
“I would expect that costs would have gone up faster at this point in the cycle than they actually have,” Anderson adds.
Honolulu, San Francisco, and Portland saw the largest price increases, rising 2.8 percent, 2.3 percent, and 2.2 percent, respectively, between July and October, according to the firm’s data on the 12 major U.S. markets that it tracks. On the other hand, the lowest price increases were in Las Vegas (0.93%), Denver (1.03%), and Phoenix (1.04%).
Source: “Construction Costs Rising as Economy Improves,” The Wall Street Journal (Dec. 23, 2014) and “Quarterly Construction Cost Report, Fourth Quarter 2014,” Rider Levett Bucknall (December 2014)
Freddie Mac Predicts Biggest Year for Home Sales Since ’07
Posted By Brian Honea On December 16, 2014 @ 5:56 pm In Daily Dose,Headlines,Market Studies,News
Home Sales Freddie Mac  predicted that 2015 will see the highest level of home sales in the U.S. since 2007 in its December 2014 U.S. Economic and Housing Market Outlook  released on Tuesday.
In the report, Freddie Mac looked back at five key consensus predictions for 2014, how they fared, and how they will affect housing and the economy next year. In addition to home sales, the four other areas examined were mortgage originations, home values, rental market, and mortgage rates.
A 4 percent jump is expected for home sales up to 5.6 million in 2015, which would be the highest annual level home sales have experience since 2007, according to the report. A weaker than expected economy and a harsh winter brought down home sales for the first half of 2014 in spite of the healthy gains that were predicted at the start of the year. But home sales and the economy made a strong comeback for the second half of 2014, and analysts expect that recovery to continue on into 2015.
Home price gains experienced moderate gains in 2014, as were predicted following the double-digit increases in 2013. In 2014, home value gains grew at a rate of 4.5 percent, and in 2015, they are expected to increase by 3.0 percent, according to the report. Rental vacancies fell to their lowest level since 2000 in the last year, and 30-year fixed mortgage rates are expected to average 4.4 percent in 2015 after hovering just below 4 percent in December.
“The recent drop in oil prices has been an unexpected boon for consumers’ pocketbooks and most businesses,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Economic growth has picked up over the final nine months of 2014 and lower energy costs are expected to support growth of about 3 percent for the U.S. in 2015. Therefore we expect the housing market to continue to strengthen with home sales rising to their best sales pace in eight years, national house price indexes up, and rental markets continuing to display low vacancy rates and the highest level of new apartment completions in 25 years.”
Fla.’s housing market: Rising sales, prices in Oct. 2014
NAR: Existing-home sales rise in October
ORLANDO, Fla. – Nov. 20, 2014 – Florida’s housing market reported more closed sales, higher median prices and a rising inventory in October, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 21,894 last month, up 17.8 percent over the October 2013 figure.
The statewide median sales price for single-family existing homes last month was $177,000, up 4.6 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis (IDA) department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in October was $139,900, up 7.7 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
“October marks the 35th month in a row that statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties,” said 2014 Florida Realtors®President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. “The state’s housing market continues to benefit from more people moving to Florida, a steadily improving jobs outlook and growing economy.”
Statewide, the inventory (active listings) of single-family homes in October rose 4.9 percent year-over-year, while new townhouse-condo inventory rose 3.4 percent.
According to the National Association of Realtors (NAR), thenational median sales price for existing single-family homes in September 2014 was $210,300, up 5.9 percent from the previous yearthe national median existing condo price was $205,200.In California, the statewide median sales price for single-family existing homes in September was $460,940; in Massachusetts, it was $325,000; in Maryland, it was $257,575; and in New York, it was $227,500.
Looking at Florida’s townhouse-condo market, statewide closed sales totaled 9,377 last month, up 7.4 percent compared to October 2013. The closed sales data reflected fewer short sales last month compared to the previous year: Short sales for condo-townhouse properties declined 55.6 percent while short sales for single-family homes dropped 47.6 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.
“Everything appears to be moving in the right direction, against a background of moderate and sustainable price changes,” said Florida Realtors Chief Economist Dr. John Tuccillo, “Condo sales stand out, since they had been down for the first eight months of the year when compared with the previous year. However, it’s unclear whether the October numbers signal a revival of the brisk-paced recovery in the housing market, or whether this is a one-month anomaly. The next several months will tell the tale.
“We could be seeing an early onset of the ‘Winter of ’13’ effect, whereby snowbirds, fearing a recurrence of the bitter weather of last winter, are arriving early and looking to lock in homes before the main seasonal rush.”
Inventory was at a 5.4-months’ supply in October for single-family homes and at a 5.9-months’ supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.04 percent in October 2014, down from the 4.19 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, visit Florida Realtors website.
© 2014 Florida Realtors®
89% of buyers say technology makes them smarter
RIVERWOODS, Ill. – Nov. 18, 2014 – A recent independent poll commissioned by Versta Research finds that 89 percent of homebuyers use some form of online technology in the home buying process; of those, 76 percent feel technology made them a smarter buyer, and 69 percent said it made them more confident.
The Versta Research study was conducted for Discover Home Loans.
A better buyer
Almost half of all homebuyers (4%) say that technology helped them save money
92% say technology helped save time
Most buyers (90%) report an overall positive experience
Technology use addictive
While nine out of 10 buyers use online resources during the home buying process, many say it can get out of hand – two-thirds say that, for them, checking online property listings reached the point of becoming addictive.
The top three ways people use online resources in the home buying process are:
83% look at real estate listings
72% use online maps to explore neighborhoods
71% use email, apps or websites to submit documents to lenders
Of the 83% of buyers who checked online listings, 78 percent did so at work
Nearly all (93 percent) technology users say it allowed them to do things remotely they otherwise would have had to do in person
“Technology is a great resource for buyers because it gives them access to online property listings, allows them to preview homes and find reviews on real estate agents and mortgage lenders. It’s truly changing the home buying process, and the result is a more confident, informed buyer,” says T.J. Freeborn, senior manager of customer experience at Discover Home Loans.
Technology’s impact on real estate agents
Technology is becoming more important to buyers, and it’s a bigger part of the real estate agent-buyer relationship.
The real estate agent’s role remains critical. Even with technology, 83% of respondents worked with a real estate agent
74% of buyers feel it’s important for their real estate agents to be tech savvy
However, 82% say their agent was tech savvy
In communicating with agents though, nearly all (98%) communicate through phone calls
Of buyers who worked with agents, 42% felt they did most of the work to initially find a property
© 2014 Florida Realtors®
Million-Dollar Sales Are Soaring
DAILY REAL ESTATE NEWS | WEDNESDAY, NOVEMBER 12, 2014
The wealthy are splurging on million-dollar homes again, as sales of homes priced at $1 million or more climb while lower-priced properties continue to lag.
Homes that sold for $1 million or more rose by 8 percent this year, while homes at every other price point dropped by 4 percent, according to National Association of REALTORS® research.
Million-dollar homes climbed out of the Great Recession much faster than those at other price points.
“The share of homes selling for at least $1 million fell when the 2008 financial crisis hit, but it recovered faster than the rest of the market during the past two years,” The Washington Post reports. Sales in the $1 million–plus range are now approaching levels comparable to the housing boom peak in 2007, according to CoreLogic research.
Sales at the higher end are often clustered in a few areas across the country, such as the Washington region and other high-priced coastal spots. Housing analysts say one of the reasons for the surge in luxury sales is that “jumbo” mortgages that are being offered at the same — or even better — interest rates as conventional loans. Lenders have been chasing after the affluent by offering favorable terms and interest rates with jumbo loans – loans that exceed $417,000 in most parts of the country or exceed $625,000 in other high-priced markets. Indeed, the dollar volume of jumbo lending has grown to 20 percent of all home purchase loans, the highest level since 2002, according to Inside Mortgage Finance.
“Many people are finding out by accident that they can often get a better rate on a $700,000 mortgage than a $400,000 mortgage,” Guy Cecala, publisher of Inside Mortgage Finance, told The Washington Post. “The opportunities for wealthier borrowers are now better than they’ve been in a decade as far as rates and terms.”
Source: “Rich People Are Splurging on Million-Dollar Homes Again. Here’s Why,” The Washington Post (Nov. 7, 2014)
NAHB: New-home sales will ‘rev up’ in 2015
WASHINGTON – Oct. 31, 2014 – A growing economy, rising household formations, low mortgage rates and pent-up demand will help single-family housing production to rev up in 2015, according to economists who participated in yesterday’s National Association of Home Builders (NAHB) 2014 Fall Construction Forecast Webinar.
The economists also said that renter growth will keep the multifamily market at cruising altitude or higher.
“Single-family builders are feeling good. They are not overly confident, but confident enough to keep moving forward,” says NAHB Chief Economist David Crowe. He says the single-family sector will finish out the year much stronger than it began, and he set the stage for a robust 2015.
“This is mostly due to significant pent-up demand, and steady job and economic growth that will allow trade-up buyers who have delayed home purchases due to job insecurity to enter the marketplace,” say Crowe.
NAHB forecasts 991,000 total housing starts in 2014, an increase of 6.6 percent from 930,000 units last year.
Single-family production is expected to rise 2.5 percent this year to 637,000 units, increase an additional 26 percent next year to 802,000 and reach 1.1 million in 2016.
The economists used the 2000-2003 period as a benchmark for “normal housing activity,” and, in comparison, single-family starts in the third quarter of this year are 48 percent of normal. However, NAHB predicts that they’ll rise to 90 percent of normal by the fourth quarter of next year.
Multifamily starts, which Crowe says are currently at a normal level of production, are projected to increase 15 percent by the end of this year and hold steady in 2015.
Meanwhile, the NAHB Remodeling Market Index matched its all-time high of 57 in the third quarter of 2014, and it’s been above 50 for six consecutive quarters. A reading above 50 indicates that more remodelers report market activity is higher (compared to the prior quarter) than report it’s lower.
Housing to soon be undersupplied?
Taking an even more bullish outlook, Mark Zandi, chief economist at Moody’s Analytics, said that prospects are good for continued gains in overall economic and housing activity.
“The reason is that job growth is quite strong,” says Zandi. “Currently, we’re creating about 225,000 jobs per month, or 2.75 million per year. That is double the pace necessary to reduce unemployment and under employment, which augers very, very well for housing demand and the housing market more broadly.”
With the current supply of housing running just over 1 million units on annualized basis, Zandi said that this figure is well below what’s needed for the longer run.
In the aftermath of the Great Recession, new household formations were depressed as the number of Millennials living with their parents or doubling or tripling up in apartments soared to about 3 to 4 million above normal, according to Zandi. As the economy continues to improve and these 18-to-34 year-olds begin to form their own households, it will boost overall demand for new housing construction.
“In a normal year, there should be demand for 1.7 million units,” Zandi says.
Taking this one step further, Zandi said that increasing the housing stock by 700,000 units to meet this unmet demand would create 2.1 million jobs, which “would reduce unemployment by 1.5 percentage points.”
By the end of 2017, Zandi expects mortgage rates to rise from their current rate of about 4 percent back to their “equilibrium” of 6 percent, which he noted would be very consistent with a solid job market and solid housing market. “The housing market will be fine because of better employment, higher wages and solid economic growth, which will trump the effect of higher mortgage rates,” he says.
Zandi predicts that single-family starts could close in on 1 million units by the end of 2015, and multifamily production could go as high as 500,000 units.
Housing and jobs go hand-in-hand
Delving beneath the national numbers, Robert Denk, NAHB’s assistant vice president for forecasting and analysis, noted the housing recovery will vary by state and region.
“We’re getting back to the point where economic conditions are dictating the strength of local housing markets,” says Denk. “It’s very clear that those states with higher levels of payroll employment or labor market recovery are associated with healthier housing markets.”
© 2014 Florida Realtors®
Foreclosure niche is a vanishing business
WASHINGTON – Oct. 20, 2014 – As the number of foreclosed home sales rapidly falls, real estate professionals who specialize in foreclosure sales may want to start looking toward other areas of business, writes Lawrence Yun, chief economist for the National Association of Realtors®.
Foreclosed sales comprised about 6 percent of all home sales transactions in August, down from double-digit figures last year. By next year, foreclosure sales are projected to shrink to 1 to 3 percent, which will put it in line to historic norms, Yun notes.
A drop in foreclosures certainly helps homeowners, but it also has a bright side for all residential agents, according to Yun: “Fewer distressed properties will also help with the overall appraisal process of not using bad comparables.”
Yun notes that there are still more seriously delinquent mortgages and homes in some stage of foreclosure than historical norms, but that’s mostly been centered in a few states, such as Florida, where the processing of foreclosures has lagged.
For example, RealtyTrac’s latest foreclosure report showed that the foreclosure process in New Jersey takes, on average, 1,064 days to process – the longest of any other state, followed by Florida (951 days), Hawaii (937 days), New York (902 days) and Illinois (889 days).
Source: “Rapidly Diminishing REO Foreclosure Sales,” National Association of REALTORS® Economists’ Outlook Blog (Oct. 16, 2014)
© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688
Florida Home Sales, Prices Buck National Trend
Posted By Tory Barringer On September 23, 2014 @ 11:19 pm In Daily Dose,Headlines,News
Florida In contrast to what’s being observed at the national level , home sales and prices both remained on a steady track upward in Florida last month.
Florida Realtors  released Monday its data on the state’s housing market  in August, reporting a 4.2 percent year-over-year rise in single-family home sales to a total of 21,594.
The improvement comes even as the national market continues to see lower transaction volumes compared to last year.
“For several months now, stability and consistency are key trends we’re seeing in Florida’s housing market, as the state’s jobs outlook remains steady and the economy continues to grow,” said Florida Realtors’ president, Sherri Meadows.
“And once again, statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties in August—a trend we’ve been seeing for 33 months in a row,” she added.
Statewide, the median sales price for single-family existing homes in August was $181,000, Florida Realtors reported, up 3.4 percent year-over-year. The median price for townhouse-condo properties was $135,000, up 3.8 percent from a year ago.
“In August, the annual growth rate of Florida home prices continued to converge toward a level typical of what we observed back in the housing market’s stable, pre-boom days,” commented Brad O’Connor, research economist for Florida Realtors. “The fact that we continue to see price growth is an encouraging sign that more and more traditional owner-occupant homebuyers are emerging to keep demand strong in the face of a diminished investor presence in the market.”
Among other data points: The statewide inventory of active listings for single-family homes rose 13 percent annually in August. Based on the current sales pace, Florida Realtors reported inventory was at a 5.5 months’ supply.
Fla. Aug. sales up 4.2% year-to-year, prices up 3.4%
Existing home sales lose a bit of momentum in August.
ORLANDO, Fla., Sept. 22, 2014 – Florida’s housing market saw higher median prices and a rising inventory in August, according to the latest housing data released by Florida Realtors®.
Closed sales of single-family homes statewide totaled 21,742 last month, up 4.9 percent over the August 2013 figure.
“For several months now, stability and consistency are key trends we’re seeing in Florida’s housing market, as the state’s jobs outlook remains steady and the economy continues to grow,” says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. “The statewide inventory (active listings) for single-family homes last month rose 13 percent year-over-year, while the townhouse-condo inventory of active listings rose 8.9 percent.
“And once again, statewide median sales prices rose year-over-year for both single-family homes and townhouse-condo properties in August – a trend we’ve been seeing for 33 months in a row.”
The statewide median sales price for single-family existing homes last month was $180,000, up 2.9 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis (IDA) department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in August was $136,000, up 4.6 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in July 2014 was $223,900, up 5.1 percent from the previous year; the national median existing condo price was $215,700. In California, the statewide median sales price for single-family existing homes in July was $464,750; in Massachusetts, it was $360,000; in Maryland, it was $278,626; and in New York, it was $239,000.
In Florida’s townhouse-condo market, statewide closed sales totaled 8,900 last month, down 8.2 percent compared to August 2013. The closed sales data reflected fewer short sales last month compared to the previous year: Short sales for condo-townhouse properties declined 60.4 percent.
In the single-family home market, short sales dropped 49 percent year-to-year. Closed sales typically occur 30 to 90 days after sales contracts are written.
“In August, the annual growth rate of Florida home prices continued to converge toward a level typical of what we observed back in the housing market’s stable, pre-boom days,” says Florida Realtors Research Economist Dr. Brad O’Connor. “The fact that we continue to see price growth is an encouraging sign that more and more traditional owner-occupant homebuyers are emerging to keep demand strong in the face of a diminished investor presence in the market.”
Inventory was at a 5.5-months’ supply in August for single-family homes and at a 5.8-months’ supply for townhouse-condo properties.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.12 percent in August 2014, down from the 4.46 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, go to the Florida Market Reports webpage in the Florida Realtors Research & Statistics section on floridarealtors.org.
© 2014 Florida Realtors®
Uptick in Lower-End Housing Could Get More Millennials Off Sidelines
DAILY REAL ESTATE NEWS | TUESDAY, JUNE 03, 2014
Millennials delaying home ownership has been cited as a threat to the housing recovery and the reason for sluggish household formations. But Builder Magazine finds that some of the hottest markets for first-time buyers are those that have had an increase in new homes sold for less than $200,000.
More construction in the lower-end housing market may be the key to attracting more Millennial home buyers. Young adults have struggled to break into home ownership in recent years, strapped with high student-loan debt and unable to meet tighter lending standards.
About 36 percent of American adults under the age of 35 own a home, down from 42 percent in 2007, according to the Census Bureau.
In some areas of the country, builders are ramping up supply of homes costing $200,000 or less, often in college towns and areas that have improving job markets.
The following markets have had some of the largest increases in the percentage of new homes sold under $200,000 in the fourth quarter of 2013 and the first quarter of 2014:
Jacksonville, N.C.: 11.05%
Huntsville, Ala.: 5.94%
Killeen-Temple-Fort Hood, Texas: 4.68%
Columbia, S.C.: 4.18%
Durham-Chapel Hill, N.C.: 3.57%
Las Vegas-Paradise, Nev.: 3.04%
Columbus, Ohio: 2.65%
Lakeland-Winter Haven, Fla.: 2.63%
“Home builders and developers can and will develop offerings that will be in price ranges that can stir interest, but only when their supply chain of lots, materials, labor processes, and manufactured products can be ensured on a speedy and executionally excellent basis,” Builder Magazine reports.
Source: “Entry-Level Bright Spots,” Builder Online (June 2, 2014)