Real Estate Insider Blog
Conventional wisdom used to be that you shouldn’t even try to sell your home during the busy holiday season. Potential home buyers were too preoccupied with attending parties, cooking meals, buying presents or planning vacations. With all that going on, there just wasn’t time to ride around with a real estate agent, looking at properties.
But with the Internet, smartphones, tablets and our always-on lifestyle, that conventional wisdom isn’t relevant anymore. The reality is, the home buying season is now year-round.
Here’s why you should consider listing your home during the holidays, or even in January.
Today’s buyers never stop looking online
Today, serious buyers are always looking — and the holidays are no exception. They may check out the latest listings in a Zillow Mobile app before bed or while waiting for the kids’ school holiday show to start.
Our hectic lifestyles also play a role. Many serious buyers today work hard. They don’t shift into holiday mode until the last minute. Even during the holiday break, they’re still squeezing in work. There’s no such thing for them as “going off the grid.” So why not continue to monitor real estate listings, too?
The inventory — and the competition — is usually lighter
Despite our always-on lifestyles, many sellers still believe buyers can’t be bothered to look for a home between, say, Thanksgiving and...
The Pending Home Sales Index increased for the third straight month to a level 11.1% above the same period a year ago. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), increased 1.1% in March to 108.6, up from an upwardly revised 107.4 in February. The PHSI increased year-over-year for the seventh consecutive month, and reached its highest level in 9 years.
Regionally, the March PHSI increased 4.0% in the South and 1.7% in the West. However, the March PHSI declined by 1.5% in the Northeast and 2.5% in the Midwest. Year-over-year, the PHSI increased in all four regions. The West, South and Midwest increased by 15.6%, 12.4% and 11.3% respectively from the same period a year ago, while the Northeast increased by a slight 0.6% over March 2014.
The string of positive pending sales released during the first quarter of 2015 contrasts with the disappointing first quarter GDP results released earlier. However, the good PHSI report suggests continued good news for the existing sales market and for builders in 2015.
Stephen Melman, J.D., is the Director of Economic Services at the National Association of Home Builders. Mr. Melman is a spokesman for NAHB’s forecast of new housing trends and the analysis of the home building industry. He has published numerous research articles on topics including industry structure and publicly traded builders. Before his...
Due to current low interest rates and anticipated appreciation rates for the next few years, homeownership is "one of the last legitimate wealth creation opportunities," according to Tim Rood, chairman of Washington, D.C.-based business advisory firm The Collingwood Group in an interview with Westwood One radio host Dirk Van.
"The leveraged return if you put down 10 percent on a house, the trajectory of appreciation lately is you’re going to get your money back inside of a year and then after that 5 to 10 percent appreciation rates," Rood said. "It's phenomenal."
Many economists and analysts have indicated that first-time buyers, which will largely consist of the millennial demographic, will drive increased home sales and the recovery of the housing market. Many millennials have been slow to enter the housing market, however. Rood said millennials are generally drawn to live in urban areas because of convenience, lifestyle, and walkable amenities, but they are paying 30 to 40 percent more in rents than they would be paying if they owned a home – and a result, they cannot save enough money for a down payment for a house.
"That’s why you see the regulators coming in and saying, 'We’ve got to think creatively about removing economic barriers to homeownership like lower down-payment programs," Rood said.
When Van asked if this was a better time to rent or buy, Rood said that housing inventory is one of the best barometers for health whether...
The National Association of Realtors recently released their latest quarterly report. The report covered three important aspects of the housing market:
- Buyer Demand
- Supply of Housing Inventory
- Single Family Residential Prices
Today, we want to break down the highlights of the report along with several quotes from Lawrence Yun, the Chief Economist at NAR.
Total existing-home sales (which include single family and condo) were at an annual rate of 4.97 million in the first quarter of 2015. This represents a number which is 6.2 percent higher than the pace during the first quarter of 2014.
Yun: "Sales activity to start the year was notably higher than a year ago, as steady hiring and low interest rates encouraged more buyers to enter the market."
Supply of Housing Inventory
There were 2 million existing homes available for sale at the end of the first quarter of 2015 which represents a 4.6 months’ supply of inventory which is down from 4.9 months a year ago. A healthy balance of supply between buyers and sellers is 6 to 7 months.
Yun: "With supply remaining tight—especially at the entry-level price range—buyers will need the expertise and local market insight of a Realtor® to help them through each intricate step of the buying process."
Single Family Residential Prices
Home prices accelerated in 148 out of 174 metro areas (85%) during the first quarter of 2015 and the number of areas experiencing double-digit price appreciation...
After the invention of air conditioning, land in Florida has always been attractive, especially to retiring baby boomers.
While the oldest of the generation have already called it quits, the largest part of the population cohort, born from 1957 to 1961, have yet to retire. When they do, they'll find winters in Ohio inhospitable, and like those who've retired before them, they'll flock to warmer climes.
While Texas and other energy-rich states have gained a lot of media attention for creating jobs and attracting workers, Florida is still in the business of attracting retirees and those that serve them.
From July 2013 to July 2014, six of the fastest growing metropolitan areas in the U.S. were in Florida. The state added almost 200,000 people during that time, and passed New York as the third most populous state, with just shy of 20 million people. The fastest growing metropolitan area in the country was The Villages, a retirement community in Sumter County, FL whose population jumped by 5.4% over the course of the year.
Naples, Fort Myers, and Sarasota were also among the other top-growth spots.
This ever-growing Florida population will eventually fuel a steady rise in real estate prices. We can already see this in the number of vacation homes sold. According to the National Association of Realtors (NAR), people bought 1.13 million vacation homes last year! That was 57.4% more than 2013, which had experienced a 30% increase from 2012.
The numbers might be inflated a bit ...
By Michael Neal
According to the most recent release of the Mortgage Bankers Association's National Delinquency Survey, the share of mortgages that are considered delinquent continued to fall. The delinquency rate is at its lowest level since the third quarter of 2007.
According to the most recent release of the Mortgage Bankers Association's National Delinquency Survey, the share of mortgages that are considered delinquent continued to fall. On a seasonally adjusted basis, the share of mortgages past due declined to 5.68% in the fourth quarter of 2014, 17 basis points from the third quarter of 2014 and 71 basis less than its level in the fourth quarter of 2013. At 5.68% the delinquency rate is at its lowest level since the third quarter of 2007.
The decrease over the year in the not seasonally adjusted share of mortgages past due reflected declines over each stage of delinquency. The proportion of mortgages 30-59 days past due fell by 31 basis points to 2.97% while the percentage of mortgages considered 60-89 days past due shrank by 13 basis points to 1.02%. The share of mortgages 90 or more days past due decreased 30 basis points to 2.25%. As Figure 1 shows, mortgages 90 or more days past due averaged 0.8% between 1980 and 2005. However, the percentage of mortgages 90 or more days past due soared during the most recent recession, peaking at 5.1% in the fourth quarter of 2009. Since then, the share of mortgages 90 or more days past due has declined significantly.
BY Michael Neal
The National Association of Home Builders hosted an economic and housing outlook seminar at its International Builders' Show in Las Vegas inviting Frank Nothaft, chief economist at Freddie Mac, and David Berson, chief economist at Nationwide Insurance, to join David Crowe to discuss the outlook for 2015. Here are the highlights.
A strengthening labor market, low interest rates, improving mortgage availability and growing pent-up demand will help to significantly boost single-family housing production in the year ahead and move the housing recovery to higher ground.
Accelerating economic growth and employment gains are the primary factors that have helped consumer confidence jump back to pre-recession levels, according to NAHB Chief Economist David Crowe.
The signs point to a more robust year for housing. Household balance sheets are returning to normal levels, home owners' equity is increasing and significant pent-up demand is rising. More than 7 million existing home sales were postponed or lost during the downturn; and while some are lost forever, we should see some catch-up.
NAHB is projecting 993,000 total housing starts in 2014, up 6.7 percent from last year's total of 930,000 units.
Single-family production is expected to rise 26 percent in 2015 to 804,000 units. This is a good beginning, but is still well below a normal level of 1.3 to 1.4 million single-family starts.
On the multifamily front, NAHB is anticipating 358,000 starts in 2015,...
Relative to fundamentals, home prices nationally looked 2% undervalued in the fourth quarter of 2014. Home prices in 70 of the 100 largest metros are less than 10% over- or undervalued. That's the highest number of markets close to local long-term fundamentals since the recovery began, and a sign that the housing market is becoming more stable and healthy.
Trulia's Bubble Watch shows whether home prices are overvalued or undervalued relative to fundamentals by comparing prices today with historical prices, incomes, and rents. The more prices are overvalued, the greater the chance that a bubble might be forming. Sharply rising prices aren't necessarily a sign of a bubble. By definition, a bubble develops when prices look high relative to fundamentals.
Bubble watching is as much an art as a science because there's no definitive measure of fundamental value. To try to put numbers on it, we look at the price-to-income ratio, the price-to-rent ratio, and prices relative to their long-term trends. We use multiple data sources, including the Trulia Price Monitoras a leading indicator of where home prices are heading. We combine these measures of fundamental value rather than relying on a single factor because no one measure is perfect. Trulia's first Bubble Watch report, from May 2013,explains our methodology. This FAQ gives more detail for interpreting the results. Here's what we found this quarter.
Home Prices 2% Undervalued Nationally
We estimate that home...
We finished 2014 with the 30 year fixed mortgage rate at 3.87% as per Freddie Mac. This is very close to the historic lows in the spring of 2013.
However, the Mortgage Bankers Association projects mortgage rates to be about 5% by the end of 2015. The website Investopedia agrees and gives some perspective on the 5% rate:
"Barring another financial and housing market implosion, and if the economy continues to improve, expect interest rates to rise in the latter half of 2015. If they do jump to the 5% range it will be a modest hike when compared to historical averages. Rates will still be far below the approximately 8.5% 30-year fixed-rates mortgages have averaged since 1971 when Freddie Mac started tracking them. Rates averaged 6% in the years leading up to the recession."
Here are the latest 2015 mortgage rate projections from Fannie Mae, Freddie Mac, the Mortgage Bankers' Association and the National Association of Realtors:
Original Source: Keeping Current Matters
That is a headline you might have seen recently. And though it is true, we must understand the story behind the headline. Case Shiller reports on the year-over-year difference in home values. Their latest report revealed that the rate of appreciation has slowed – not that prices are falling!! Here is exactly what they said:
"The 20-City Composite gained 4.9% year-over-year, compared to 5.6% in August."
Prices are still up this month over last year’s values (4.9%) just not as much as they were last month (5.6%).
Home Prices are NOT Falling.
As a matter of fact, the latest Home Price Expectation Survey by Pulsenomics (a survey of a nationwide panel of over one hundred economists, real estate experts and investment & market strategists) showed that home prices will continue to appreciate for the next several years.
Both first time buyers and families thinking of moving-up to their dream home can be assured that their investment in their new home makes sense.
Original Source: Keeping Current Matters
Email Christopher Milson