Archive for the ‘Uncategorized’ category

Home Sales to Have Biggest year since 07 Says Freddie Mac!!!

January 8, 2015

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.”

Author: Brian Honea 12/16/14

March 2014 Real Estate News

April 23, 2014

Existing-Home Sales Remain Soft in March
Media Contact: Walter Molony / 202-383-1177 / Email

WASHINGTON (April 22, 2014) – Existing-home sales were essentially flat in March, while the growth in home prices moderated, according to the National Association of Realtors®. Sales gains in the Northeast and Midwest were offset by declines in the West and South.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 0.2 percent to a seasonally adjusted annual rate of 4.59 million in March from 4.60 million in February, and are 7.5 percent below the 4.96 million-unit pace in March 2013. Last month’s sales volume remained the slowest since July 2012, when it was 4.59 million.

Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”

Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”

The median existing-home price2 for all housing types in March was $198,500, up 7.9 percent from March 2013. Distressed homes3 – foreclosures and short sales – accounted for 14 percent of March sales, down from 16 percent in February and 21 percent in March 2013. “With rising home equity, we expect distressed homes to decline to a single-digit market share later this year,” Yun said.

Ten percent of March sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in March, while short sales were discounted 12 percent.

Total housing inventory4 at the end of March rose 4.7 percent to 1.99 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in February. Unsold inventory is 3.1 percent above a year ago, when there was a 4.7-month supply.

The median time on market for all homes was 55 days in March, down from 62 days in February, and also 62 days on market in March 2013. Short sales were on the market for a median of 112 days in March, while foreclosures typically sold in 55 days and non-distressed homes took 53 days. Thirty-seven percent of homes sold in March were on the market for less than a month.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.34 percent in March from 4.30 percent in February; the rate was 3.57 percent in March 2013.

First-time buyers accounted for 30 percent of purchases in March, up from 28 percent in February; they were 30 percent in March 2013.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said first-time buyers have been stuck in a rut. “There are indications that the stringent mortgage underwriting standards are beginning to ease a bit, particularly regarding credit score requirements, but they remain a headwind for entry-level and single-income home buyers,” he said.

“We also have tight inventory in the lower price ranges where many starter homes are found, but rising new-home construction means some owners will be trading up and more existing homes will be added to the inventory. Hopefully, this will create more opportunities for first-time buyers,” Brown said.

All-cash sales comprised 33 percent of transactions in March, compared with 35 percent in February and 30 percent in March 2013. Individual investors, who account for many cash sales, purchased 17 percent of homes in March, down from 21 percent in February and 19 percent in March 2013. Seventy-one percent of investors paid cash in March.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.04 million in March, the same as February, but are 7.3 percent below the 4.36 million pace a year ago. The median existing single-family home price was $198,200 in March, which is 7.4 percent above March 2013.

Existing condominium and co-op sales declined 1.8 percent to an annual rate of 550,000 units in March from 560,000 in February, and are 8.3 percent below the 600,000 level in March 2013. The median existing condo price was $200,800 in March, up 11.6 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 9.1 percent to an annual rate of 600,000 in March, but are 4.8 percent below March 2013. The median price in the Northeast was $244,700, up 3.2 percent from a year ago.

Existing-home sales in the Midwest rose 4.0 percent in March to a pace of 1.04 million, but are 10.3 percent below a year ago. The median price in the Midwest was $149,600, which is 5.9 percent above March 2013.

In the South, existing-home sales declined 3.0 percent to an annual level of 1.92 million in March, and also are 3.0 percent below March 2013. The median price in the South was $173,000, up 6.7 percent from a year ago.

Existing-home sales in the West fell 3.7 percent to a pace of 1.03 million in March, and are 13.4 percent below a year ago. The median price in the West was $289,300, which is 12.6 percent higher than March 2013.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

###

 

 

3 Reasons to Buy that House NOW!

July 30, 2013

house-keysHere are three great reasons to consider buying a home today instead of waiting.

1.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released last week projects appreciation in home values over the next five years to be between 12.3% (most pessimistic) and 32.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes any sense.

2.) Mortgage Interest Rates Are Increasing

As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows.

The National Association of Realtors, the Mortgage Bankers Association, Freddie Mac and Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Repost from KCM Blog

5 Real Estate Trends to Look For in 2013

January 15, 2013

5 Real Estate Trends to Look For in 2013
Crystal-Ball
Predicting trends during volatile economic times in American is no easy task. However, we are going to give it our best shot. We strongly believe these are the five real estate items we should keep an eye on in 2013:

Demand for Housing Will Continue to Surge

The housing market has turned the corner and there is no reason to believe that buyer demand will not maintain momentum throughout 2013. Household formations shot up to boom-time levels in 2012 and are projected to increase at even a faster rate over the next twelve months. A lack of inventory will be more of a challenge to sales increases than will a lack of demand.

Generations X and Y Will Prove They Believe in Homeownership

Contrary to what many have hypothesized over the last few years, young adults (18-35 year olds) are just as committed to homeownership as previous generations. Recent studies have shown:

43% already own a home
72% see homeownership as part of their personal American Dream
93% of those currently renting plan to buy a home
This, along with the increase in household formations mentioned above, makes us believe that 2013 will be the year that many of these young adults will jump into homeownership.

Prices Will Continue to Increase

Pricing of any item is determined by supply and demand. Demand for housing will remain strong throughout 2013. At the same time, the supply of homes ready for is shrinking in many parts of the country. Outside of a few states that still have challenges with large inventories of distressed properties (NY, NJ, CT, IL for example), prices will appreciate nicely.

Even in the areas that are still dealing with high percentages of foreclosures and short sales, prices will not tumble dramatically. The increase in demand will absorb much of this inventory. In these areas, prices will either flatten or perhaps soften to a small degree.

Move-Up Sellers Will Return in Great Numbers

Perhaps what many will find as the biggest surprise of 2013 will be the return of the ‘move-up’ seller. Over the last several years negative equity has prevented many of these sellers from moving up to the house of their dreams. However, with prices recovering, more and more of these sellers will realize that now may be their greatest opportunity to make the move to a lifestyle they always wanted.

With home prices expected to increase and more stringent mortgage qualifications (QR and QRM) scheduled to be announced this year, we believe that the first half of the year will bring many of these sellers/buyers to the market.

The Consumer Will Demand That Their Agent Be an Expert

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as experts. These industry leaders will dominate their markets.

Should I Rent My House If I Can’t Sell It?

October 5, 2012

There has been a lot written about how buying a home is less expensive than renting one in many parts of the country. Rents are skyrocketing and homes are at bargain prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, they can get great rental income now and perhaps wait until house values increase in the future before selling.

This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, there is a huge difference between deciding you want to become an investor (and landlord) and deciding that renting your primary residence might be ‘easier’ than trying to sell it. As a real estate professional, it is your job to educate the homeowner to the possible challenges that might arise if they rent their home.

Here are some questions every potential landlord should consider:

10 Questions to Ask BEFORE Renting Your Home

1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2.) Because of the economy, over ten percent of homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5.) Will you allow pets? Cats? Dogs? How big a dog?

6.) How will you actually collect the rent? By mail? In person?

7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8.) Do you have a list of craftspeople readily available to handle these repairs?

9.) How often will you do a physical inspection of the property?

10.) Will you alert your current neighbors that you are renting the house?

 

*KCM Blog repost, thanks!

The Truth about the 3.8% Obama’s HealthCare Plan

September 4, 2012

The Truth about the 3.8% Obama’s Healthcare plan

by bradpearson

I’m sure you’ve gotten the chain e-mails, read the websites, or had your clients, friends, or family ask you about the 3.8% tax under the “Obamacare” plan. Needless to say, I’ve had many of our agents forward them to me from their clients asking if I “knew about this”. Every time, I simply forward the truth from NAR’s website. These chain e-mails have ridiculous examples like “if you sell a $100,000 home after Jan. 1, 2013, you will have to pay $3,800 in tax”. This couldn’t be further from the truth! I’m a devout Republican, so putting politics aside, these emails are complete fear tactics created to detract from the Obama Administration and Obama’s Health Care initiative. They’re not true and end up getting believed by people who don’t know how to use Google to verify facts before panicking. Now, don’t get me wrong, I don’t like the tax, I don’t agree with it, but it’s not AS bad as it’s being made out to be and I simply don’t want us to get caught up in spreading incorrect information received in chain e-mails.

Of course as Realtors, we can NEVER give out TAX advice, and should always refer TAX questions to the appropriate professionals, but we can simply forward the correct information as published by a reliable 3rd party.

Below I have attached a link to download the National Association of Realtors PDF booklet that very clearly and simply explains the new law. It has simple scenarios as well as examples to make it easy to understand who this tax would apply to.

Click image to download PDF

Understanding the Impact of Shadow Inventory

December 14, 2011

Standard & Poors released their Third Quarter 2011 Shadow Inventory Update yesterday. We want to cover the basic points of the report today.

What is shadow inventory?

It is an inventory of houses that will come to market as a distressed properties at a discounted price. Each of the data companies define shadow inventory in slightly different ways. Standard & Poors defines it this way:

“We include in the shadow inventory all outstanding properties for which borrowers are 90 days or more delinquent on their mortgage payments, properties in foreclosure, and properties that are real estate owned (REO).

We also include 70% of the loans that “cured” from being 90 days delinquent (loans that once again became current) within the past 12 months because cured loans are more likely to re-default. Our calculation of the months to clear the shadow inventory is the ratio of the total volume of distressed loans to the six-month moving average of liquidations.

Is this inventory increasing?

The report shows that shadow inventory is decreasing in many parts of the country as banks are starting to release distressed properties to the market. From the report:

“We estimate that it will take 45 months to clear the national shadow inventory. This is seven months below our peak estimate but three months longer than our estimate a year ago. Twelve of the top 20 MSAs recorded declines in months-to-clear during the quarter, while eight reported increases.

What impact will shadow inventory have on real estate?

One of two things will happen:

The inventory will continue to mount and be a hindrance to a housing recovery
The inventory will be placed on the market and impact prices
As the report states:

“Despite the recent stability of our months-to-clear estimates and liquidation rates, these distressed loans continue to loom over the housing market and threaten to further depress home prices. Though fewer additional loans are currently defaulting, the overall volume of distressed loans remains huge. Low liquidation rates over the past two years allowed the shadow inventory to grow as distressed homes have remained tied up in foreclosure proceedings.

The shadow inventory will continue to jeopardize the housing market’s recovery until servicers are able to improve liquidation times. However, if and when that happens, an influx of homes will likely enter the market, increasing supply and driving prices down further.”

Bottom Line

We believe the inventory will come to market impacting prices now but bringing about a housing recovery in a much shorter period of time.
Kcm repost