Oct. 2012 pending home sales highest in over five years

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Oct. pending home sales highest in over five years

WASHINGTON – Nov. 29, 2012 – Pending home sales rose strongly in October with mixed regional results, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI) based on contract signings increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September. The PHSI is 13.2 percent above October 2011 when it was 92.6. The data reflect contracts but not closings.

“We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about homebuying now that home prices have clearly turned positive,” says Lawrence Yun, NAR chief economist.

Outside of a few spikes during the tax credit period, pending home sales are at the highest level since March 2007 when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 consecutive months.

Yun says there are clear regional patterns: “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West.”

“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” says Yun.

The PHSI in the Northeast slipped 0.1 percent to 79.2 in October, but it’s 13.3 percent above a year ago. In the Midwest, the index jumped 15.6 percent to 104.4 in October, and it’s 20.0 percent above October 2011.

Pending home sales in the South rose 5.5 percent to an index of 117.3 in October, and it’s 17.4 percent higher than a year ago. In the West, the index declined 1.1 percent in October to 105.7, but it’s 0.9 percent above October 2011.

© 2012 Florida Realtors®

 

 

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Investors see shrinking 2-year window to buy up REOs

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Investors see shrinking 2-year window to buy up REOs

NEW YORK – Nov. 16, 2012 – The big discounts in the housing market are fading, and investors are taking notice that time is ticking. Blackstone Group LP, one of the world’s largest private-equity firms, says that investors likely have less than two years to buy up foreclosed U.S. homes as prices rise and supplies shrink.

“Prices are starting to move faster,” Jonathan Gray, global head of real estate for Blackstone, told Bloomberg. “That’s one of the risks that emerge as more people like us get into the space and as individual homeowner confidence grows. Frankly, buying a home today is pretty compelling.”

Blackstone has spent about $1.5 billion on 10,000 foreclosed homes this year alone. It is the biggest buyer of single-family homes in the nation. According to Blackstone, the investment firm purchases $100 million in these kinds of properties per week. The strategy is to purchase foreclosed single-family homes at steep discounts and turn them into rentals.

“The recovery in house prices could surprise people,” Gray told Bloomberg. “They have just gotten beaten down so much and we’re not building enough to keep up with the population growth. Affordability is there. I think as homeowners get a little bit of confidence, we will steadily have more people lean toward buying homes, faster home-price appreciation, which will be good for this investment strategy and good for the economy at large.”

Source: “Blackstone Sees 2-Year Window to Buy Distressed Homes: Mortgages,” Bloomberg (Nov. 14, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

 

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Fla.'s housing market continues positive trends in Oct. 2012

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Fla.’s housing market continues positive trends in Oct. 2012

ORLANDO, Fla. – Nov. 19, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in October, according to the latest housing data released by Florida Realtors®.

“With Thanksgiving just around the corner, we have a lot to be thankful for here in Florida,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that Florida is on a positive path and has been for months. Pending sales, closed sales and prices are trending up.”

Statewide closed sales of existing single-family homes totaled 17,779 in October, up 25.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 56.7 percent over the previous October. The statewide median sales price for single-family existing homes in October was $145,000, up 9 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year. In California, the statewide median sales price for single-family existing homes in September was $345,000; in Massachusetts, it was $294,900; in Maryland, it was $244,357; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 8,252 units sold statewide last month, up 16.4 percent compared to October 2011. Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $107,000, up 20.2 percent over the previous year. NAR reported that the national median existing condo price in September 2012 was $181,000.

The inventory for single-family homes stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Once again, everything that should be going up in the market is going up, and everything that should be going down is going down,” said Florida Realtors Chief Economist Dr. John Tuccillo. “As impressive as the year-over-year gains for October are, far more impressive are year-to-date gains of 2012 over 2011. They indicate the depth and resilience of this recovery.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

© 2012 Florida Realtors®

 

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Housing market uptrend expected through 2014

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·         Housing market uptrend expected through 2014

·         ORLANDO, Fla. – Nov. 12, 2012 – The housing market recovery should continue through the coming years, assuming there are no further limitations on the availability of mortgage credit or a “fiscal cliff,” according to forecast presentations at a residential forum at the 2012 Realtors® Conference and Expo. Lawrence Yun, chief economist of the National Association of Realtors (NAR), said the housing market clearly turned around in 2012.

“Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases,” Yun said. “Disruption from Sandy likely will be temporary, notably in New Jersey and New York, but the market is likely to pick up speed within a few months with the need to build new homes in damaged areas.”

Yun sees no threatening signs for inflation in 2013, but projects it to be in the range of 4 to 6 percent by 2015. “The huge federal budget deficit is likely to push up borrowing costs and raise inflation well above 2 percent,” he said. Rising rents, quantitative easing (the printing of money), federal spending outpacing revenue, and a national debt equal to roughly 10 percent of Gross Domestic Product are all raising inflationary pressures.

Mortgage interest rates are forecast to gradually rise and to average 4.0 percent next year, and 4.6 percent in 2014 from the inflationary pressure.

With rising demand and an ongoing decline in housing inventory, Yun expects meaningfully higher home prices. The national median existing-home price should rise 6.0 percent to $176,100 for all of 2012, and increase another 5.1 percent next year to $185,200; comparable gains are seen in 2014.

“Real estate will be a hedge against inflation, with values rising 15 percent cumulatively over the next three years, also meaning there will be fewer upside-down homeowners,” Yun said. “Today is a perfect opportunity for moderate-income renters to become successful homeowners, but stringent mortgage credit conditions are holding them back.”

Existing-home sales this year are forecast to rise 9.0 percent to 4.64 million, followed by an 8.7 percent increase to 5.05 million in 2013; a total of about 5.3 million are seen in 2014.

New-home sales are expected to increase to 368,000 this year from a record low 301,000 in 2011, and grow strongly to 575,000 in 2013. Housing starts are forecast to rise to 776,000 in 2012 from 612,000 last year, and reach 1.13 million next year.

“The growth in new construction sounds very impressive, and it does mark a genuine recovery, but it must be kept in mind that the anticipated volume remains below long-term underlying demand,” Yun said. “Unless building activity returns to normal levels in the next couple years, housing shortages could cause home prices to accelerate, and the movement of home prices will be closely tied to the level of housing starts.”

“Home sales and construction activity depend on steady job growth, which we are seeing, but thus far we’ve only regained half of the jobs lost during the recession,” Yun said.

Yun projects growth in Gross Domestic Product to be 2.1 percent this year and 2.5 percent in 2013. The unemployment rate is showing slow but steady progress and is expected to decline to about 7.6 percent around the end of 2013.

“Of course these projections assume Congress will largely avoid the ‘fiscal cliff’ scenario,” Yun said. “While we’re hopeful that something can be accomplished, the alternative would be a likely recession, so automatic spending cuts and tax increases need to be addressed quickly.”

Regardless, Yun said that four years from now there would be an even greater disparity in wealth distribution.

“People who purchased homes at low prices in the past couple years, including many investors, can expect healthy growth in home equity over the next four years, while renters who were unable to get into the market will be in a weaker position because they are unable to accumulate wealth,” he said. “Not only will renters miss out on the price gains, but they’ll also face rents rising at faster rates.”

Also speaking was Mark Vitner, managing director and senior economist at Wells Fargo, who said the fiscal cliff is the biggest situation that needs to be addressed. “Beyond concerns about the fiscal cliff, the economic improvement seems to be broadening,” he said. “Housing will strengthen in 2013 even if the economy weakens, because there is a demand for more construction, and the demand for apartments is rising at a faster rate than the need for more single-family homes. Unfortunately, apartment construction is focused on about 15 submarkets, so additions to supply will be uneven.

Even with declining market shares of foreclosures and short sales, Vitner said they would continue. “Distressed homes right now are like an after-Christmas sale – most of the best stuff has been picked over, but make no mistake, they’ll be with us for a while.”

Yun projects the market share of distressed sales will decline from about 25 percent in 2012 to 8 percent in 2014.

© 2012 Florida Realtors®

 

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Cape Coral VA facility unveils 'healing environment,' added capabilities

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·         Cape Coral VA facility unveils 'healing environment,' added capabilities

·         12:10 AM, Sep. 28,

·         Written by

·         Frank Gluck

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·         Scott Rogowski shows off an operating room at the VA outpatient clinic in north Cape Coral that opens in December. / Andrew West/news-press.com

·         The facility

·         • Location: 2489 Diplomat Parkway E., Cape Coral. 
• Open date: Dec. 17 
• Size: 220,000 square feet 
• Some of what it offers: Eight operating rooms, four soundproof audiology booths for hearing evaluation, a 3,200-square-foot laboratory, a 4,500-square-foot pharmacy and nine dental offices.

·         The first thing apparent when you step inside the soon-to-open VA outpatient clinic in Cape Coral is the light.

·         Broad windows and expansive views of the surrounding landscape define the new 220,000-square-foot building on Diplomat Parkway. The concept is part practical — it helps reduce the electric bill for artificial lighting — and part therapeutic.

·         The front lobby design includes a four-story “glass curtain” wall to flood the building with sunlight and convey a wide open sense of space.

·         “It’s very much a healing environment,” said Suzanne Klinker, director of the Bay Pines VA Healthcare System, which oversees the new clinic. “Light makes everyone feel good.”

·         Klinker, assorted VA officials and members of the media got an early look inside the new $60 million building Thursday, almost three months before its scheduled Dec. 17 opening date.

·         Today, construction is largely done and workers are installing medical equipment and furniture.

·         The new clinic is triple the size of the VA clinic in Fort Myers and has room for expansion on the 30-acre site, officials say.

·         It is designed to serve the estimated 250,000 veterans living in Southwest Florida, snowbird veterans and the more than 31,000 patients the Fort Myers clinic saw last year.

·         Like the existing 14-year-old clinic on Winkler Extension in Fort Myers, this facility is an outpatient clinic only and is not designed for overnight stays.

·         But it allows for expanded services including primary care, orthopedics, imaging and health testing, mental health, dental services and women’s care.

·         The new building includes eight operating rooms, four soundproof audiology booths for hearing evaluation, a 3,200-square-foot laboratory, a 4,500-square-foot pharmacy and nine dental offices, according to Manhattan Construction, which supervised the project.

·         Unlike the existing clinic, the new facility also will have an on-site coffee and food “bistro” for staff and visitors.

·         The VA is recruiting another 70 hospital staffers, including doctors and nurses, who will bring the total employee number to 400.

·         Some preference will be given to veterans, said VA spokesman Jason Dangel.

·         “We really enjoy employing veterans — veterans serving veterans in our facility,” he said.

 

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Housing may help give the economy a lift

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·         Housing may help give the economy a lift

·         NEW YORK – Nov. 9, 2012 – Lately, the housing market may be the one thing going right for the economy, Reuters reports. Several signs have pointed to a housing market in full recovery mode.

“Higher sales, prices and building, albeit modest so far, are a welcome boost as other drivers of the economy falter,” Reuters reports.

Unlike the “boom” years, housing has accounted for a small fraction of the gross domestic product in recent years. In 2005, it accounted for 6 percent, compared to 2.5 percent in the third quarter of this year.

The housing sector “would have to be on steroids to significantly boost GDP growth,” Paul Dales, an economist with Capital Economics, wrote in a recent research note.

Still, several economists are hopeful that residential investment could add two- to three-tenths of a percentage point to the GDP next year.

An increase in housing-related jobs also may help give the economy a lift. Housing-related jobs increased an average of 11,000 per month this year, a significant shift from 2011 when housing-related jobs declined, on average, by 1,000 per month.

But even the 11,000 per month could pale by 2013 if they hit an average of 30,000 per month, as predicted by Jim O’Sullivan, chief of U.S. economist at High Frequency Economics. That could make housing a significant contributor to chipping away at the unemployment rate. Analysts estimate that the economy needs 150,000 jobs created each month to keep the unemployment rate steady.

Housing may also help lift consumer spending, another important factor that needs to increase to give the economy a jolt. Real estate wealth can help, economists say. As more homeowners refinance into record low mortgage rates, these households will have more to spend.

Source: “Housing Market Rebound Fails to Recharge Economy,” Reuters (Nov. 5, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda

 

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Short sale worth the extra hit?

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·         Real Estate Q&A: Short sale may be worth the extra tax hit

·         FORT LAUDERDALE, Fla. – Nov. 8, 2012 – Question: I have decided to sell my home through a short sale. I have heard that the deadline for the tax waiver is the end of the year. After that, you have to pay taxes on any debt that the lender forgives. I don’t want to owe money to the government. Now I’m unsure whether to go through with the short sale. – Sarah

Answer: The Mortgage Forgiveness Debt Relief Act of 2007 does expire at the end of this year, and industry groups and observers are concerned about the effect on homeowners and the real estate market in general. Most pundits, including me, think the law will be extended at some point. Still, this isn’t something you can count on.

As it is now, the amount the lender forgives on most primary residences is not taxable. No extension would make short sales less attractive next year and beyond because sellers would have to pay taxes due to the forgiven debt. This could result in tax hits of a few thousand dollars or considerably more.

Despite the potential tax liability, a short sale still may be the best choice – particularly if you owe much more than the house is worth, you’re getting divorced or you have to move quickly for a new job. Consult an accountant and see about your specific situation. Despite its reputation, the Internal Revenue Service often is willing to work with taxpayers.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

Copyright © 2012 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by McClatchy-Tribune News Service.

 

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Home prices rise all over the US

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WASHINGTON – Nov. 7, 2012 – Growth in metropolitan area median home prices increased in the third quarter, and more areas are showing gains, according to the latest quarterly report by the National Association of Realtors® (NAR).

The median existing single-family home price rose in 120 out of 149 metropolitan statistical areas (MSAs) based on closings in the third quarter compared with same quarter in 2011, while 29 areas had price declines. In the second quarter 110 areas showed increases from a year earlier, while in the third quarter of 2011 only 39 metros were up.

NAR Chief Economist Lawrence Yun said the growth in home prices gets down to supply and demand. “Housing inventories have been gradually trending down from a record set in the summer of 2007,” he said. “Earlier this year, a broad equilibrium began to develop in most areas between home buyers and sellers, which led to a sustained upturn in home prices. We expect fairly normal appreciation patterns in 2013, but there is a risk of price acceleration if builders are unable to increase supply to meet the needs of our growing population and household formation.”

The national median existing single-family home price was $186,100 in the third quarter, up 7.6 percent from $173,000 in the third quarter of 2011, which is the strongest year-over-year price increase since the first quarter of 2006 when the median price rose 9.4 percent. In the second quarter the price increased 7.2 percent from a year earlier.

The median price is where half of the homes sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions.

Some of the price gain resulted from a smaller share of distressed home sales in the market, but the higher prices significantly reflect a market recovery. Distressed homes - foreclosures and short sales that generally sell at deep discounts - accounted for 23 percent of second quarter sales, down from 30 percent a year ago.

A separate breakout of income requirements to buy a home on a metro area basis shows buyers in the vast majority of areas had ample income in the third quarter, assuming they could meet stringent mortgage credit standards.

Total existing-home sales, including single-family and condo, rose 3.2 percent to a seasonally adjusted annual rate of 4.68 million in the third quarter from 4.54 million in the second quarter, and were 10.3 percent higher than the 4.25 million pace during the third quarter of 2011.

At the end of the third quarter 2.32 million existing homes were available for sale, which is 20.0 percent below the close of the third quarter of 2011 when 2.90 million homes were on the market.

According to Freddie Mac, the national commitment rate on a 30-year conventional fixed-rate mortgage averaged a record low 3.54 percent in the third quarter, down from 3.80 percent in the second quarter and 4.31 percent in the third quarter of 2011.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said affordability conditions are a big factor in rising sales. “Historically low mortgage interest rates are encouraging many buyers who were on the sidelines,” he said. “Sales this year are notably higher than the levels seen in 2008 through 2011, so we’re clearly in a recovery phase with rising sales, declining inventory and rising prices. Of course the recovery would be stronger and more stable if we could return to safe but sensible mortgage underwriting standards.”

A breakout of incomes required to purchase a median-priced existing single-family home by metro area shows the typical buyer had more income than necessary in the third quarter. Income amounts are determined using several downpayment percentages, assuming a mortgage interest rate of 4 percent and 25 percent of gross income devoted to mortgage principal and interest.

The national median family income was $61,700 in the third quarter. However, to purchase a home at the national median price, a buyer making a 5 percent downpayment would only need an income of $40,900. With a 10 percent downpayment the required income is $38,700, while with 20 percent down the necessary income is $34,400.

In the condo sector, metro area condominium and cooperative prices - covering changes in 54 metro areas - showed the national median existing-condo price was $180,800 in the third quarter, up 7.7 percent from the third quarter of 2011. Thirty-three metros showed increases in their median condo price from a year ago and 21 areas had declines.

First-time buyers purchased 32 percent of all homes in the third quarter, down from 34 percent in the second quarter; they were 32 percent in the third quarter of 2011.

The share of all-cash home purchases was 27 percent in the third quarter, down from 29 percent in the second quarter and 29 percent in the third quarter of 2011. Investors, who make up the bulk of cash purchasers and compete with first-time buyers, accounted for 17 percent of all transactions in the third quarter, down from 19 percent in the second quarter and 20 percent a year ago.

“The modest decline in first-time buyers and investors shows the impact of limited inventory in the lower price ranges from a shrinking share of distressed homes, which are popular with both of these groups,” Yun explained.

Regionally, existing-home sales in the Northeast increased 1.7 percent in the third quarter and are 9.8 percent above the third quarter of 2011. The median existing single-family home price in the Northeast slipped 0.3 percent to $246,900 in the third quarter from a year ago.

In the Midwest, existing-home sales rose 5.2 percent in the third quarter and are 17.8 percent higher than a year ago. The median existing single-family home price in the Midwest increased 4.2 percent to $151,100 in the third quarter from the same quarter in 2011.

Existing-home sales in the South increased 5.4 percent in the third quarter and are 11.7 percent above the third quarter of 2011. The regional median existing single-family home price rose 5.7 percent to $165,400 in the third quarter from a year earlier.

In the West, existing-home sales slipped 1.2 percent in the third quarter due to limited supplies, but are 2.1 percent higher than a year ago. With the tight inventory, the median existing single-family home price in the West surged 20.2 percent to $247,400 in the third quarter from the third quarter of 2011.

© 2012 Florida Realtors

 

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