Thursday, February 5, 2015

January 2015 National Housing Trends Newsletter

Angela Yglesias

Levesque Realty 

Cell: 805-490-4944   
Phone: 805-490-4944 

Housing Trends

January 2015


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National market update

Existing-Home Sales Rebound in December, 2014 Total Sales Finish 3 Percent Below 2013

WASHINGTON (January 23, 2015) – Despite low inventory conditions, existing-home sales bounced back in December and climbed above an annual pace of 5 million sales for the sixth time in seven months, according to the National Association of Realtors®. Median home prices for 2014 rose to their highest level since 2007, but total sales fell 3.1 percent from 2013.

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Ready for a Jolt to the Housing Market?

The strengthening of the economy will drive the housing market forward this year and make up for last year’s "unspectacular” housing activity, according to Fannie Mae’s Economic & Strategic Research Group’s report, released Thursday. Stronger wages for many Americans likely will lead to a higher rate of household formation in 2015, Fannie researchers note.

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National housing indicators

Existing home sales (January)

5.04 millions units*

Existing home median price (January)

$209,500

Housing Starts (January)

1.089 millions units*

New home sales (January)

4.38 millions units*
*Seasonally adjusted annual rate. Source: NATIONAL ASSOCIATION OF REALTORS®.

National economic indicators

Home ownership

3rd Qtr 2014

+64.4%

3rd Qtr 2013

+65.3%
The homeownership rate in the third quarter 2014 was 64.4 percent, down 0.9 (+/- 0.4) percentage points from the third quarter 2013 rate of 65.3 percent. The homeownership rates in the Northeast, Midwest and South were lower than the rates in the third quarter 2013, while the rate in the West was not statistically different from the rate a year ago.

New home sales

November 2014

-1.6%

October 2014

-2.2%
Sales of new single-family houses in November 2014 were at a seasonally adjusted annual rate of 438,000. This is 1.6 percent (+/- 12.3%)* below the revised October 2014 estimate of 445,000.
Source: U.S. CENSUS BUREAU

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Regional market updates

View market statistics for your region.

Click on the links below to view data from two different industry sources. Choose information on local prices & state sales from any of 150 metropolitan housing markets prepared by the National Association of REALTORS® or information on sales & price activity from local area markets in 25 states prepared by Clarus MarketMetrics.

Local Prices & State Sales

Local Sales & Price Activity

Representing residential and commercial buyers and sellers in Ventura and LA Counties.
Disclaimer: The views, opinions, statements and/or ideas expressed in this Message Section do not reflect the ideas, policy, position, views or opinion of Move,Inc.

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When Pending Sales Go Bad: How to Save the Transaction

It’s not a common occurrence, but just in case it happens to you, you need to know how to pick up the pieces.

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6 Rules to Follow When Pricing Your Home

When it’s time to sell, you have to price your home right, using tangible factors. Here are six rules to remember.

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The $25,000+ Mortgage Mistake Nearly Half of Borrowers Make

You may be throwing tens of thousands of dollars of your hard-earned money at the bank, when you might not need to.

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Existing Home Statistics

View statistics based on national data, regional data and data gathered from 159 cities & metropolitan areas.

National Statistics

Statistics by City or Metropolitan Area

Regional Statistics

Source: NATIONAL ASSOCIATION OF REALTORS®.
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Tuesday, January 27, 2015

6 Rules to Follow When Pricing Your Home

It’s time to move on. You’ve decided to sell your home and embark on a new adventure.

Unfortunately, potential buyers don’t care about how long you obsessed over choosing the perfect bathroom tiles or the number of carpenters you interviewed to make the perfect built-in bookcase. To the buyer, those items may not matter to the value of the home, even if you think they should.

When it’s time to sell, you have to price your home right, using tangible factors. Here are six rules to remember:

1. Price is king

Your asking price determines how long the home will sit on the market. Pricing the home too high may reduce the number of interested buyers, which can cause your home to sit on the market too long. If your house is on the market too long, it may create the perception that there’s something wrong with it. It can also lead a buyer to think that you’re desperate for an offer. You want to avoid these outcomes and not overvalue your home.

On the flip side, pricing the home too low may create some skepticism and raise unwanted questions about the home’s true value. This will hit you in the bank account if multiple offers don’t drive the price up to its true market value.

2. Use comparable sales

The simplest way to figure out the right price for your home is to compare similar homes that have sold in your neighborhood. Instead of skulking in the shadows and casing the neighbor’s house, use realtor.com to check out nearby stats.

Compare your house with those with the same number of bedrooms, bathrooms, and square footage. If you find comparable homes with similar floor plans and outdoor space, all the better. See how many homes in your area have sold recently and what they went for. You can also work with a real estate agent to help you compare houses.

3. Compare fairly

Make sure your comparison is fair. If there are neighborhoods in your city that are more desirable, consider that in your comparison. Also consider your location and what buyers want. If a similarly sized new-construction townhouse sold for top dollar down the block, you may not get the same amount for your cute ’40s bungalow.

4. Check the market history

To get a more comprehensive picture of the real estate market in your neighborhood, check the listing history of a home. Compare the original asking price with the final sale price, and note the amount of time the house was on the market until it sold. A REALTOR® can help you with this step.

If you’re looking to speed up the process, you may want to price your house a bit lower. However, if profit is your motive, you may need to wait a few months for a sale on the high end of the spectrum.

5. Consider special improvements

Consider whether major improvements you’ve made warrant a higher asking price. If you’ve remodeled the kitchen and put down a new parquet floor, or if you really feel the special woodwork details will clinch the sale, make sure those enhancements are reflected in the price of the home. Be reasonable. Don’t be surprised if you don’t get as much money as you expected—improvements don’t always recoup their cost.

6. Don’t ignore supply and demand

In a buyer’s market, with many homes for sale and sellers competing for attention, you may want to ask a bit less for your home to make it more attractive to potential buyers. In a seller’s market, where there is little home supply and much buyer demand, you may want to ask a bit more and maximize your profit.

By: Craig Donofrio
Updated from an earlier version by Aviva Friedlander
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Wednesday, January 21, 2015

Where the Next Office Boom Will Be

Investors are turning to NERDS for the next big office boom.
We're not talking Steve Urkel here. JLL, a real estate investment management firm, classifies NERDS as the five cities expecting to benefit most from the next wave of commercial real estate success: Nashville, Tenn.; East Bay, Calif.; Raleigh-Durham, N.C.; Denver; and Salt Lake City.
These cities, which are expanding and command lower prices than the U.S. average, are replacing big markets such as New York, San Francisco, and Washington, D.C., as big draws to investors. Companies seeking office space can get rental rates there that are 35 percent lower than the average U.S. rate, according to JLL. These cities also offer potentially high returns for investors in office REITS with cap rates, or income returns, between 5.5 percent and 7.5 percent.
"These markets are going to become attractive as these other markets continue to get hot, driven by Millennials who are going for quality of life," says Stephen Collins, who heads the America Capital Markets business of JLL.
Here's a closer look at each of the "hot office markets," according to JLL:
  • Nashville: Education and health care jobs account for 15.5 percent of the employment in the city.
    Office employment: 25% of total employment
    Vacancy rate: 8.6%
  • East Bay, Calif.: A more affordable option near San Francisco and Silicon Valley, this area boasts rental rates that are 54 percent lower.
    Office employment: 24% of total employment
    Vacancy rate: 15.8%
  • Raleigh-Durham, N.C.: Population growth has surged 7 percent since 2010, and professional jobs have risen 30 percent since 2011. JLL predicts that rent growth here will rise 6 percent this year.
    Office employment: 26% of total employment
    Vacancy rate: 12.8%
  • Denver: The city's diverse industry composition of tech, biotech, and professional and business sectors will likely help cushion the blow from the recent drops in the energy industry, JLL notes.
    Office employment: 29% of total employment
    Vacancy rate: 14.1%
  • Salt Lake City: The city, as well as its state of Utah, has offered several tax breaks to entice more businesses to come.
    Office employment: 27% of total employment
    Vacancy rate: 11.7%
Source: “Where to Find the Next Office Hot Spots,” CNBC (Jan. 9, 2015)
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Survey: Investors Preferred Flipping to Renting in Q4

Author: Brian Honea January 21, 2015
Courtesy of: DS News http://dsnews.com/news/01-21-2015/survey-investors-preferred-flipping-renting-q4
A nationwide survey of real estate investors bidding on properties offered for auction during the fourth quarter of 2014 revealed that flipping was the preferred investing strategy over renting, according to Auction.com's Q4 2014 Real Estate Investor Activity Report.
Though various reports have suggested in the last year that flipping opportunities are dwindling, Auction.com's latest survey affirms that flipping is still going strong: 50 percent of investors said they intended to flip the homes they purchased, compared to 47.3 percent who said they intended to rent them out (2.7 percent were undecided).
"I think two things are probably true. I think the notion that flipping had gone away was probably overstated to begin with," Auction.com EVP Rick Sharga said. "I think in certain markets, conditions have changed to the point where buying and renting is less affordable and flipping makes more sense from an investor perspective. But I really do think that the decision to flip or to rent very often will come down to the location of the property."
Sharga said in areas such as California and in Northeastern states, investors are more likely to flip. Lately, he said there has been more of a shift toward flipping over renting in Washington State and in Arizona that can be tied to two factors – home price appreciation combined with lack of inventory.
"One is the fact that the properties are more expensive now, which makes them harder to rent at a profit, because you have fewer potential renters willing to pay higher prices," Sharga said. "The other is that some of these states have a very low inventory of existing homes for sale. So flippers can come in, invest some money in fixing up properties, and sell them pretty quickly at fair market value."
According to Auction.com's Q4 data, investors who purchased properties at live auctions were more inclined to flip. About 56 percent of investors who purchased properties at live auctions said they intended to flip, compared to 41.1 percent who said they intended to rent (2.8 percent undecided). The percentage of those who intended to flip was higher than those who intended to rent in all 10 states where Auction.com conducted live events in Q4. Washington (72.1 percent) and Nevada (71 percent) had the highest percentage of flippers among investors who purchased at live auctions.
Meanwhile, investors who purchased properties through online auctions showed more of a propensity to rent over flipping, according to Auction.com. About 55.1 percent of investors who purchased online in Q4 said they intended to rent the properties out, compared to just 42.3 percent who said they intended to flip (2.5 percent were undecided). Of the four regions (West, Midwest, South, and Northeast), the Northeast was the only one with a higher percentage of flippers purchasing online (50 percent) compared to renters (46.5 percent).
Auction.com's survey also revealed that the more properties an investor purchased, the more likely they were to flip. Of the investors who purchased an average of only one property per year, 36.3 percent intended to flip while 61.1 percent intended to rent. For those who purchased between two and 49 properties per year, 54.9 percent intended to flip compared to 42.7 percent who intended to rent; and for those who purchased more than 50 properties per year, 56.3 percent said they would flip compared to 39.6 percent who said they would rent.
Sharga said he expects the strong flipping numbers to continue through the year, albeit on a more regional basis.
"It'll be interesting to see if the numbers shift a little bit as more investors, perhaps, come back into the market," he said. "One of the things you have to keep in mind is that these percentages are based to a certain extent on where we're seeing the most investment activity. If we happen to go through a period, where, say, California is especially strong, that'll tilt the numbers a little bit in the direction of flippers. On the other hand, as weather warms up, if we see more investment activity in the Midwest, for example, that could make the numbers go in a different direction. By and large, I think we're going to see a very healthy market for property flipping in 2015."
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Sunday, January 11, 2015

Mortgage Rates Kick Off 2015 at 20-Month Low

Borrowing costs moved even lower this week, with the 30-year fixed-rate mortgage averaging 3.73 percent, its lowest average since May 2013. 
"Mortgage rates fell to begin the year as 10-year Treasury yields slid beneath 2 percent for the first time in three months,” says Frank Nothaft, Freddie Mac’s chief economist. “Meanwhile, the Fed minutes indicated ongoing discussion regarding the timing of the first rate hike.” Many housing economists have predicted that mortgage rates will rise sometime this year, with the 30-year fixed-rate mortgage likely reaching the upper 4 percent or 5 percent range by the end of the year.
More mortgage news:
Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 8:
  • 30-year fixed-rate mortgages: averaged 3.73 percent this week, with an average 0.6 point, dropping from last week’s 3.87 percent average. The 30-year rate has not averaged this low since May 23, 2013, when it was 3.59 percent. A year ago at this time, 30-year rates averaged 4.51 percent.
  • 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.5 point, dropping from last week’s 3.15 percent average. Last year at this time, 15-year rates averaged 3.56 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.98 percent, with an average 0.5 point, dropping from last week’s 3.01 percent average. A year ago, 5-year ARMs averaged 3.15 percent.
  • 1-year ARMs: averaged 2.39 percent, with an average 0.4 point, falling from a 2.40 percent average the previous week. Last year at this time, 1-year ARMs averaged 2.56 percent.
Source: Freddie Mac
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Friday, January 9, 2015

Housing In 2015: Four Reasons For Optimism (And One For Worry)

A builder works on the construction of new homes in Belmar, N.J. Increased hiring and a boost in consumer confidence are expected to lift the housing market this year.
A builder works on the construction of new homes in Belmar, N.J. Increased hiring and a boost in consumer confidence are expected to lift the housing market this year.
Mel Evans/AP
Six years ago, homebuilders and Realtors were facing brutal business conditions: millions of Americans were losing their jobs and homes.
As 2015 begins, hiring is strong and economic indicators are pointing up. Could this be the year when the housing market finally breaks out of its tepid recovery and takes off?
Economists see several reasons why 2015 might be a banner year for homebuying — and not just in San Francisco and Miami.
They also see One Big Factor that potentially could block a buying binge.
Before considering that possible downer, let's first look at the upside:
Employers are hiring again.
When companies are hiring, would-be homebuyers feel more confident about taking on mortgage debt.
During the recession, companies kept slashing positions, sending the unemployment rate soaring to 10 percent and frightening potential homebuyers. But job growth has been strong lately, with employers adding 321,000 jobs in November. The unemployment rate has tumbled to 5.8 percent.
As that good news sinks in, optimism is rising. The Conference Board's latestConsumer Confidence Index shows confidence is running 19.5 percent higher than a year ago.
Home prices just took a breather, which helps.
From January to October, home prices rose 4.5 percent nationally, according to the latest S&P/Case Shiller Home Price Index. That gain was subdued compared with October 2013, when home prices jumped 11 percent higher than the previous year.
But slower price appreciation in 2014 may have set the stage for a buying surge in 2015. That's because buyers need the right combination of steady income, decent savings, low interest rates and reasonable home prices to jump into the market.
The Labor Department's latest jobs report showed an uptick in wages, and the surging stock market has been boosting savings. Mortgages have been holding below 4 percent for 30-year fixed rates.
And now the decelerating growth in home prices may be creating an affordability opportunity that will attract buyers in early 2015.
Rents are high.
When millions of Americans were losing their homes in the recession, many started moving into apartments. That shift caused rents to soar.
"With rents now rising at a seven-year high, historically low [interest] rates and moderating [home] price growth are likely to entice more buyers to enter the market in upcoming months," Lawrence Yun, the National Association of Realtors' chief economist, said in a release.
Millennials are sick of Mom's basement.
The Census Bureau says just 36 percent of Americans under age 35 own a home. In 2007, that figure was 42 percent.
Some young people enjoy renting, but a recent survey by Fannie Mae showed 9 in 10 would prefer to own. They have been held back by tight lending standards that have made it tough to get around their heavy student debts and light savings.
But in December, Fannie Mae and Freddie Mac announced programs that would allow first-time buyers to get homes with down payments of just 3 percent, instead of 5 percent.
That lower amount would allow creditworthy but cash-strapped young buyers to qualify for mortgages. "If access to credit improves, we could see substantially larger numbers of young buyers in the market," Jonathan Smoke, chief economist for Realtor.com, said in his 2015 outlook.
But there's one reason for pessimism.
For years, many economists have been saying mortgage interest rates would rise. In 2015, they finally may be right.
That's because the Federal Reserve, which has held down both short- and long-term interest rates since 2008, has been signaling a coming change. The Fed is expected to allow rates to drift up, probably starting this summer.
The Federal Reserve, headed by Janet Yellen, is expected to begin raising interest rates later this year. Higher mortgage rates could scare off some potential homebuyers.
The Federal Reserve, headed by Janet Yellen, is expected to begin raising interest rates later this year. Higher mortgage rates could scare off some potential homebuyers.
Jim Watson/AFP/Getty Images
Industry economists generally expect mortgage rates to reach 5 percent by year's end. That would still be quite low by historical standards, but after having such cheap mortgages for so long, even a modest rate increase could scare off buyers, according to Lindsey Piegza, chief economist for Sterne Agee.
"A rising monthly payment — thanks to rising interest rates — could cause an unwelcome sticker shock for many potential homebuyers," she said.
Source: npr
By:  Marilyn Geewax


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Thursday, January 8, 2015

Stronger Economy Drives New Home Buyers

The strengthening of the economy and the labor sector is prompting more young professionals to gradually return to the real estate market.
Since the housing turnaround started in 2012, many first-time home buyers have been shut out, with a poor labor market and low wages forcing many young professionals to move back with their parents or to rent. Last year, the number of first-time buyers plunged to a 30-year low, according to data from the National Association of REALTORS®.
The New Crop of Buyers
“Credit tightness has been an issue for the housing market but demand weakness has been a bigger one,” says Douglas Duncan, chief economist at Fannie Mae. “The improving economy is going to put renters in a better place to buy.”
Duncan predicts a 6.3 percent jump in mortgage lending this year – that would follow a 9.6 percent drop in 2014. Growing confidence in the job market is the strongest indicator that home sales will improve, Duncan says.
With added jobs, more consumers see their wages growing too. Overall, consumers expect a 1.7 percent rise in their incomes this year, the highest increase since 2008, according to the Thomson Reuters/University of Michigan consumer sentiment poll. Americans under the age of 45 years old are expecting the largest gains in incomes at 4.7 percent.
“Young renters have wanted to keep their living situations flexible because they didn’t know if they were going to have to move for a job,” Duncan says. “More of them are going to be willing to put down roots if they feel more confident in the labor market.”
The economy added more than 2.7 million jobs in 2014, the highest amount since 1999, according to data from the Bureau of Labor Statistics.
Household formation is a key measure of real estate demand. Household formation is expected to increase to 1.1 million this year, the highest in three years, according to IHS Global Instight Inc. forecasts.
“If the first-time buyers aren’t in the market, the sellers can’t move up and buy their next houses,” Bill Banfield, vice president of Quicken Loans Inc. in Detroit, told Bloomberg News. “The real estate market needs an increase in entry-level demand” for it to fully recover.
Source: “Young Home Buyers Return to U.S. as Economy Enlarges,” Bloomberg News (Jan. 5, 2015)
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