NAHREP report: Hispanics lead first-time homebuyer purchases

SAN DIEGO – March 28, 2013 – Hispanics are the fastest-growing group of first-time homebuyers and have the purchase power to push the U.S. housing recovery into high gear if inventory shortages and investor-favored regulations didn’t challenge them, according to the 2012 State of Hispanic Homeownership Report released by the National Association of Hispanic Real Estate Professionals (NAHREP).

The NAHREP report offers an update on the Hispanic homebuyer market and traces the minority group’s rise in household formations, jobs, income and education – variables that make them homeownership-ready and able to drive demand in the current first-time homebuyer market. Based in San Diego, NAHREP has more than 20,000 members in 48 states and 50 affiliate chapters.

“Despite a difficult economic environment and a tight mortgage market, Latinos are making gains in all the ways that make them ready for homeownership,” said Juan Martinez, president of NAHREP. “Their biggest obstacle now coming into the market isn’t the credit crunch, it’s the lack of available housing to purchase. They will play an increasingly significant role in the nation’s home purchase market, if conditions permit.”

According to the report, Hispanics continue to lead the surge in U.S. homeownership and accounted for 355,000, or 51 percent, of the total net increase of 693,000 owner households. This trend has unfolded over the past 12 years and shows homeownership gains in all but two of those years, despite losses suffered during the foreclosure crisis.

The number of Hispanic homeowners grew from 4.24 million in 2000 to 6.69 million in 2012, a remarkable increase of 58 percent at a time when the rest of the U.S. population saw a net increase of only 5 percent.

Notably, the data indicates that while the Hispanic homeownership rate has dropped from 47.5 percent to 46.1 percent since 2010, the total number of owner households has increased by nearly 500,000. This is due to the net increase of more than 1 million total Hispanic households in the U.S. during the same two-year period. As their population increases and Latinos start to buy housing en masse, the most outstanding metric of their impact will be the total owner-occupant housing units purchased, not the homeownership rate, according to study findings.

The report, which was researched and produced by NAHREP, asserts that a combination of economic and demographic trends explains why this consumer segment will be a major factor in the revitalization and growth of the nation’s economy in the future. Some of the key statistics highlighted in the report include:

Population Driver: Hispanics continue to lead population growth in America. Hispanics have accounted for more than half of the U.S. population increase over the past decade. Every month, 50,000 young Hispanics reach the age of 18. Hispanics dominate household growth. Over one million Hispanic households were formed in 2012, compared to a decrease of 704,000 non-Hispanic White households.

Education: Hispanics are achieving higher educational milestones. Hispanics are now the largest minority group on the nation’s college campuses. In 2011, the number of 18 to 24-year-old Hispanics enrolled in college exceeded two million and reached a record 16.5 percent share of all college enrollments.

Employment and Income: Hispanics are dominating the growth of the nation’s workforce. In 2012, Hispanic job growth accounted for approximately half of total U.S. job growth. They are also earning more. Forty percent of Hispanic households earned over $50,000. Hispanic households earning more than $50,000 are growing at a faster rate than that of the total number of U.S. households.

Consumerism: Hispanic purchasing power exceeds $1 trillion. The purchasing power of Hispanics is estimated to be $1.2 trillion and is projected to grow to $1.5 trillion by 2015.

Homeownership: Surveys show they remain passionate about homeownership. Fifty-six percent of Hispanics said that a major reason to buy a home was because it represents a symbol of success or achievement, compared to only 32 percent of all Americans.

Hispanic real estate leaders assert that despite historic low rates and housing values and the sizable opportunity this market presents, large investor-controlled housing markets threaten the growth of Hispanic homeownership. Specifically, government and corporate policies like REO-to-rental programs have removed affordable housing stock from the owner-occupied market, creating an imbalance in supply and demand. This constitutes the most significant barrier to Hispanic homeownership, according to NAHREP leaders.

“It is critical to understand the demographic trends which are likely to impact housing demand in the years ahead,” said Mike Fratantoni, vice president of research and economics for the Mortgage Bankers Association. “This report provides information for lenders, builders and policymakers regarding the future shape of housing demand, which will be substantially impacted by the housing choices of Hispanic households.”

Source: National Association of Hispanic Real Estate Professionals

© 2013 Florida Realtors®

Pending home sales slip on constrained inventory

WASHINGTON – March 27, 2013 – February pending home sales flattened with limited buyer choices, but remained at the second highest level in nearly three years, according to the National Association of Realtors^®(NAR). 

The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.4 percent to 104.8 in February from a downwardly revised 105.2 in January, but is 8.4 percent higher than February 2012 when it was 96.6. Contract activity has been above year-ago levels for the past 22 months; the data reflect contracts but not closings.

Before January, the last time the index showed a higher reading was in April 2010 when it was 110.9, shortly before the deadline for the homebuyer tax credit. 

NAR Chief Economist Lawrence Yun said limited inventory is holding back the market in many areas.

“Only new home construction can genuinely help relieve the inventory shortage and housing starts need to rise at least 50 percent from current levels,” he said. “Most local home builders are small businesses and simply don’t have access to capital on Wall Street. Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market.”

The PHSI in the Northeast declined 2.5 percent to 82.8 in February but is 6.8 percent above February 2012. In the Midwest the index rose 0.4 percent to 103.6 in February and is 13.2 percent higher than a year ago. Pending home sales in the South slipped 0.3 percent to an index of 118.8 in February but are 12.1 percent above February 2012. In the West the index increased 0.1 percent in February to 101.4 but is 0.8 percent below a year ago.

Yun projects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity.

“The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months,” he said.

The national median existing-home price is forecast to rise nearly 7 percent this year, while mortgage interest rates should remain historically low but trend up slowly and reach 4 percent in the fourth quarter. 

© 2013 Florida Realtors®

U.S. home prices rise 8.1%, most since June 2006

WASHINGTON (AP) – March 26, 2013 – U.S. home prices rose in January at the fastest annual pace since June 2006, just before the housing bubble burst. The gain shows the housing recovery is strengthening ahead of the all-important spring buying season.

The Standard & Poor’s/Case-Shiller 20-city home price index climbed 8.1 percent in the 12 months ending in January. That’s up from a 6.8 annual gain in December. Prices rose in all 20 cities. Eight markets posted double-digit increases, led by a 23.2 percent gain in Phoenix. Prices rose 17.5 percent in San Francisco and 15.3 percent in Las Vegas, one of the nation’s hardest hit markets during the crisis.

Prices rose in 11 of 20 cities on a month-over-month basis. The monthly numbers are not seasonally adjusted and reflect the slower winter buying period.

The S&P/Case-Shiller index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The January figures are the latest available.

Home prices nationwide are still 29 percent below their peak reached at the height of the housing bubble in August 2006. They are only back to where they were in August 2003.

Still, steady price increases should help make the housing recovery sustainable and add to economic growth. Higher home prices encourage more people to buy before prices rise further.

“Over time, persistently rising house prices also boost household wealth, make lenders more willing to lend because the asset they’re underwriting is appreciating, and ease pressure on local government budgets that get revenue from property taxes,” Jonathan Basile, director of economics at Credit Suisse, wrote in a research note.

Other recent reports have shown a strengthening recovery in housing, helped by near-record-low mortgage rates. Construction of single-family homes rose in February at the fastest pace in 4 ½ years. Sales of previously owned homes rose last month to their fastest pace in more than three years.

More Americans are putting their houses on the market, suggesting they believe the housing market will continue to strengthen.

The number of available homes for sale rose 10 percent last month, the first monthly gain since April. Even with the gain, the inventory of homes for sale was still 19 percent below a year ago.

Investment in housing, including home construction, contributed to the nation’s economic growth last year for the first time since 2005; from 2006 through 2011, a drop in housing investment dragged economic growth down.

Copyright © 2013 The Associated Press.

Home listings: 20 seconds for love at first sight

NORFOLK, Va. – March 25, 2013 – Researcher Michael Seiler tracked the eye movements of 45 people viewing 10 online real estate listings with six photos in August 2011, determining that 95 percent of participants viewed the first photo – an exterior property shot – for just 20 seconds.

The study is relevant because knowing how house-hunters view a listing online can help agents fine-tune their marketing approach. Founder and director of Old Dominion University’s Institute for Behavioral and Experimental Real Estate, Seiler says participants moved their eyes in a “Z” pattern from the upper left corner and after reaching the bottom right corner, they scanned up the right column of the screen.

After viewing the home-exterior photo, 76 percent looked at the property description; but 41.5 percent did not bother to ever read the agent’s remarks – which can be annoying if they include all capital letters, overhyped adjectives and brand names. Seiler determined that overall, participants devoted 60 percent of their time to photos, 20 percent to property descriptions and 20 percent to the agent’s comments; and he found that their interest diminished after clicking through numerous properties.

“You have to grab people’s attention within two seconds,” Seiler remarked. “Do it the way a billboard does.”

Some agents ensure the photos, property descriptions and remarks can be seen without scrolling; while others limit their remarks to only a few paragraphs and focus more on the lifestyle and neighborhood than appliances and other features.

Source: Wall Street Journal (03/22/13) P. M7; Tanaka, Sanette

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

Property near public transportation worth 42% more

WASHINGTON – March 22, 2013 – Location, location, location. A new study by the American Public Transportation Association (APTA) and the National Association of Realtors® (NAR) finds that residential property values performed 42 percent better on average if near public transportation with high-frequency service.

“Transportation plays an important role in real estate and housing decisions, and the data suggests that residential real-estate near public transit will remain attractive to buyers going forward,” says NAR Chief Economist Lawrence Yun. “A sound transportation system not only benefits individual property owners, it also creates the foundation for a community’s long-term economic well being.”

“It’s the equivalent of creating housing as desirable as beachfront property,” says APTA President and CEO Michael Melaniphy. “This study shows that consumers are choosing neighborhoods with high-frequency public transportation because it provides access to up to five times as many jobs per square mile as compared to other areas in a given region.”

The study, “The New Real-Estate Mantra: Location near Public Transportation,” investigated how residential properties located in a half-mile proximity to high-frequency public transportation or in the “public transit shed” performed in holding their value during the recession compared to other properties in the area.

While residential property values declined substantially from 2006 to 2011, properties close to public transit showed stronger resiliency.

The following are a few examples from the study: In Boston, residential property in the rapid transit area outperformed other properties in the region by an incredible 129 percent. In the Chicago public transit area, home values performed 30 percent higher than the region; in San Francisco, 37 percent higher; Minneapolis-St. Paul, 48 percent; and in Phoenix, 37 percent higher.

The study looked at five regions. High-frequency public transportation includes subway (heavy rail), light rail and bus rapid transit. This sample projects the nationwide average (42 percent) variance among properties located near high-frequency public transportation and those that are located further away from public transit.

© 2013 Florida Realtors®

Fla.’s housing market continues positive trends in Feb. 2013

Related: 

NAR: Feb. home sales highest since Nov. 2009 when tax credit expired.

ORLANDO, Fla. – March 21, 2013 – Florida’s housing market reported more closed sales, rising median prices, increased pending sales, more new listings and a reduced inventory of homes for sale in February, according to the latest housing data released by Florida Realtors®.

“Each month brings more positive signs for the state’s housing market,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “For example, February is the 14th month in a row that statewide median sales prices for both single-family homes and for townhouse-condo units increased year-over-year, according to Florida Realtors’ data.

“Properties are selling more quickly statewide, especially at certain price points – the median days a home is on the market dropped about 15 percent for single-family homes and 10 percent for townhouse-condo units in February. Plus, sellers are receiving more than 92 percent of their original listing price in both the single-family home and townhouse-condo markets.”

Statewide closed sales of existing single-family homes totaled 15,666 in February, up 10.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 26.7 percent over the previous February. The statewide median sales price for single-family existing homes last month was $150,000, up 12.8 percent from the previous year.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in January 2013 was $174,100, up 12.6 percent from the previous year. In California, the statewide median sales price for single-family existing homes in January was $337,040; in Massachusetts, it was $282,500; in Maryland, it was $223,469; and in New York, it was $220,000.

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 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 townhouse-condos, a total of 8,028 units sold statewide last month, up 7 percent compared to February 2012. Meanwhile, pending sales for townhouse-condos in February increased 14.3 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $115,000, up 21.1 percent over the previous year. NAR reported that the national median existing condo price in January 2013 was $169,600.

The inventory for single-family homes stood at a 5.5-months’ supply in February; inventory for townhouse-condos was at a 6.1-months’ supply, according to Florida Realtors.

“Several things are particularly striking about the February data,” said Florida Realtors Chief Economist Dr. John Tuccillo. “First, we note the continuing growth of cash sales, which are now half of existing single-family closed sales statewide and more than three-quarters of townhouse-condo closed sales. Second, we’re seeing more new listings and that trend is turning positive. This is the first sign that low inventories are convincing sellers to come to the market.

“Third, and related to the last point, the lowest price tiers (for home listings) are just about wiped out and are moving in a direction counter to the state trend,” Tuccillo noted. “The biggest movements in listings as well as the other metrics are in the $300,000-$500,000 price tier.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.53 percent in February 2013, down from the 3.89 percent average during the same month a year earlier.

To see the full statewide housing activity report, go to the Florida Realtors Research page on the website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the February reports. Or go to Florida Realtors Media Center  and download the February 2013 data report PDFs under Market Data.


© 2013 Florida Realtors®

Cheaper to own than rent regardless of mortgage rate

SAN FRANCISCO – Mar 20, 2013 – Trulia’s Winter 2013 Rent vs. Buy Report looked at homes for sale and for rent on Trulia between Dec. 1, 2012, and Feb. 28, 2013, and compared the costs, factoring in transaction costs, taxes and opportunity costs. For homeownership costs, study authors assumed a 30-year fixed-rate mortgage, 20 percent down, itemizing tax deductions at the 25% bracket and a stay of seven years in the home.

Overall, buying a home is 44 percent cheaper than renting nationwide – down just slightly from 46 percent in 2012. In each of the 100 largest metros, buying is more affordable than renting, though it ranges significantly – from 70 percent cheaper to buy than rent in Detroit to only 19 percent cheaper in San Francisco.

In the 10 Florida markets checked by Trulia, savings ranged from 40 percent to 60 percent. The include:

Miami: 43% cheaper to buy
Fort Lauderdale: 53% cheaper to buy
West Palm Beach: 56% cheaper to buy
Cape Coral-Fort Myers: 45% cheaper to buy
North Port-Bradenton-Sarasota: 51% cheaper to buy
Lakeland-Winter Haven: 55% cheaper to buy
Palm Bay-Melbourne-Titusville: 50% cheaper to buy
Orlando: 51% cheaper to buy
Tampa-St. Petersburg: 55% cheaper to buy
Jacksonville: 54% cheaper to buy

Individual own-versus-rent savings will vary depending on details, but Trulia posed an adjustable map on its website.

Visitors can change the map to suit their circumstance by choosing the mortgage rate they expect to pay (3.5%, 4.5% or 5.5%), their IRS tax bracket (none, 15%, 25%, 35%) and the length of time they expect to be in the house. The map then changes its buy-versus-rent estimates based on input.

For example, changing a Miami buy-versus-rent decision to a three-year stay, 15 percent tax bracket and 5.5 percent mortgage interest rate makes it wiser to rent for a 1 percent savings.

“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat,” says Jed Kolko, Trulia’s chief economist. “Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets – so long as they can get a mortgage in the first place.”

© 2013 Florida Realtors®

U.S. housing starts rise, permits at 4 ½-year high

WASHINGTON (AP) – March 19, 2013 – U.S. builders started more houses and apartments in February, while requesting permits for future construction at the fastest pace in 4 ½ years. The increases point to a housing recovery that is gaining strength.

The Commerce Department said Tuesday that builders broke ground on homes last month at a seasonally adjusted annual rate of 917,000. That’s up from 910,000 in January. And it’s the second-fastest pace since June 2008, behind December’s pace of 982,000.

Single-family home construction increased to an annual rate of 618,000, the most in 4 ½ years. Apartment construction also ticked up, to 285,000.

The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000. That was also the most since June 2008, just a few months into the Great Recession.

The U.S. housing market is recovering after stagnating for roughly five years. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.

In addition, more people are seeking their own homes after doubling up with friends and relatives in the recession. That’s leading to greater demand for apartments and single-family homes to rent.

Still, the supply of available homes for sale remains low. That has helped push up home prices. They rose nearly 10 percent in January compared with 12 months earlier, according to CoreLogic, the biggest increase in nearly seven years.

The number of previously occupied homes for sale has fallen to its lowest level in 13 years. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market.

Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.

Homebuilders have become much more confident over the past year. But in March, a measure of home builder confidence fell for the second straight month over concerns that demand for new homes is exceeding supplies of land, building materials and workers. In the short term, that could slow sales.

But the survey noted that the outlook for sales over the next six months rose to its highest level in more than six years.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the homebuilders.
 Copyright 2013 The Associated Press, Christopher S. Rugaber, AP Economics Writer.

Milestone: Fla. unemployment rate now lower than national rate

Employment affects home sales

Economic indicators can seem like abstract numbers, but they have a real-world effect on real estate sales. To better understand the market and where it’s heading, check the, videos, blogs and reports issued by Florida Realtors research department.

TALLAHASSEE, Fla. – March 18, 2013 – Florida’s economic rebound hit a watershed moment in January when the state’s unemployment rate of 7.8 percent fell below the national unemployment rate for the first time in five years.

Florida Realtors Industry Data Analysis (IDA) department has continuously analyzed the state’s unemployment rate, noting the direct relationship jobs have with homeownership.

“It’s always been clear that a strong real estate market – both commercial and residential – requires a strong job market,” says John Tuccillo, Florida Realtors chief economist. “It might seem simplistic to say that those out of work don’t buy and sell houses, or need places to work, but that’s the simple truth of how the market operates. In turn, real estate strength helps build job growth.”

Gov. Rick Scott heralded the latest drop of the unemployment rate in a release. “We have added more than 280,000 private-sector jobs over the last two years, and as we continue to focus on greater economic growth, we will see even more jobs created,” Scott said.

Every March, the Bureau of Labor Statistics in the U.S. Department of Labor and the Florida Department of Economic Opportunity release January employment and unemployment estimates and revised historical data. The benchmark revisions take place this same time every year in each state nationwide.

Employment numbers cited by governor’s office

• Florida has had positive annual job growth for 30 consecutive months.
• Florida’s job growth month-to-month has been positive for 18 of the last 19 months.
• Florida is expected to create 900,000 new jobs by 2018, according to the Florida Economic Estimating Conference.
• Florida’s unemployment rate has now declined year-over-year for 27 consecutive months.
• Initial claims for Reemployment Assistance benefits were down by almost 15 percent from one year ago.
• A recent U.S. Census Survey reported that Florida experienced an influx of people moving into the state. Florida also led the nation in migrations from Puerto Rico.
• In February, the state’s 24 Regional Workforce Boards reported more than 38,000 Floridians placed in jobs.
• More than 426,000 Floridians were placed in jobs in 2012, with 111,173 former claimants finding employment.

“Governor Scott’s emphasis on improving Florida’s economic climate has led to an increase in housing starts and more job creation, most recently in the construction industry,” says Dean Asher, 2013 president of Florida Realtors and broker-owner with Don Asher & Associates in Orlando. “More people are moving into Florida because of our improving economy, and Floridians are feeling more confident about their finances. Florida Realtors and our 118,000 members statewide look forward to continuing to provide world-class customer service and experience in helping Floridians realize the American dream of homeownership.”

© 2013 Florida Realtors®

Economists revise housing figures amid optimism

NEW YORK – March 15, 2013 – Several economists have recently revised their predictions on housing values to reflect a stronger-than-expected real estate rebound, and some have even doubled their original forecasts over the rise in home prices. For example, economists at Bank of America revised their home price forecast from 4.7 percent this year to 8 percent.

Capital Economics’ Economist Paul Diggle upwardly revised his home price forecast too, from a 5 percent projection to an 8 percent rise in home prices this year.

“Prices of both new and existing homes are picking up, the latter by over 10 percent year-on-year,” Diggle notes. “Indeed, after a couple of years during which new house prices outperformed, primarily owing to builders constructing more homes for the higher-end market, we now expect existing house prices to close the gap. As more consumers are able to access mortgage credit, home builders should widen their offering, while continued investment demand will bid up existing house prices.”

Consumers are growing more optimistic about home prices too. A recent report of consumers from mortgage giant Fannie Mae showed that 48 percent believe home prices will rise over the next year.

Ivy Zelman, an independent real estate analyst, told CNBC last week that “we’re in a nirvana for housing. I’m the most bullish I’ve ever been.” Zelman said that home prices could rise for another four to six years.  

Source: “Why A Bunch Of Economists Expect The US Housing Market To Go On A Huge Tear,” Business Insider (March 8, 2013)

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

Hard-hit Sun Belt starting to bounce back

ORLANDO, Fla. – March 14, 2013 – After years of record foreclosures and job losses, the Sun Belt is recovering some of its lost appeal as the population begins to grow again in counties from Florida to Arizona.

At the same time, new ways to tap the nation’s rich supply of natural resources – from oil to gold – continue to create boom towns in some remote Western counties and parts of the Great Plains that have suffered decades of population declines.

Census county population estimates out today for July 1, 2012, show a nation in flux after a grueling economic downturn. Counties such as Arizona’s Maricopa (Phoenix), Nevada’s Clark (Las Vegas) and Florida’s Orange (Orlando) all show population gains that are once again outpacing national growth.

“Even the deepest recession since the Great Depression cannot permanently disrupt the decades-long trend of growth in the South and West,” says Robert Lang, professor of urban affairs at the University of Nevada-Las Vegas. “Now that we’re several years past the recession, things are slowly getting back to where they were.”

Some of the fastest recent gains are in or near the Great Plains and Texas – regions benefiting from oil and gas drilling and processing. Texas had 11 of the 50 fastest-growing counties. In Elko, Nev., one of the fastest-growing small urban areas, gold mining is the lure.

Williams, N.D., was the fastest growing among counties with more than 10,000 people. Williston, its main city, and surrounding areas gained 9.3 percent in one year.

“Parts of the country that were given up for dead end up producing new life,” Lang says. “Technology keeps changing, so our ability to access resources changes. America’s mineral and energy abundance is the gift that keeps on giving.”

Despite glimmers of growth and rebound, the recession’s impact on birthrates is being felt in more corners of the country. Natural decrease (when deaths outnumber births) occurred in a record 1,135 counties, or more than a third, according to Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey Institute. For the first time, two states had more deaths than births: Maine and West Virginia.

As recently as 2009, this scenario happened in just 880 counties.

Natural decreases are happening more often because there are fewer births, Johnson’s analysis shows – 4 million last year nationwide compared with a record 4.3 million before the recession.

“It is no longer an isolated phenomenon,” Johnson says. “Once natural decrease begins in a county, it is likely to recur. … With few young adults and a growing older population, the future viability of many natural decrease areas is not encouraging.”

Florida, one of the states hardest hit by foreclosures, is making a comeback.

“We’ve become more affordable and people are coming back,” says Lesley Deutch, senior vice president at John Burns Real Estate Consulting in Boca Raton.

The lure of striking it rich quickly is fueling much of the growth in the Great Plains, and that doesn’t necessarily portend a bright future, retired RAND demographer Peter Morrison says. “Like their 1970s predecessors, today’s energy boom towns will find that newcomers who make instant cities don’t always make instant citizens,” he says.

Copyright © USA TODAY 2013

Kiplinger: Housing recovery firmly underway

WASHINGTON – March 13, 2013 – Prices are rising and inventories are falling in markets throughout the United States, which has led financial reporting and forecasting firm Kiplinger to declare the housing recovery “firmly” in motion. Moreover, the company says housing will help carry the overall economy at a time when U.S. exports are decreasing, says Karen Mracek, a Kiplinger editor and real estate analyst.

“The biggest reason we think we’re on firm ground is that we’re seeing every indicator on the way up,” Mracek says. “As with the overall economy, it’s kind of hard to call the bottom or the pivot point. But we’re seeing a range of indicators that suggest pretty solid growth going forward.”

In addition to home values and supply, positive indicators include the number of multiple-bid situations, new-home construction and credit availability, she says. Solid improvements in those fundamentals will lead to formation of new households and help more borrowers come out from underwater – and trade up to a new home. They’ll also create new jobs in real estate and construction, Mracek explains.

The recent gains made in housing have some concerned that real estate could be entering another bubble market, but Mracek disagrees with that assessment. “There might be [a bubble] in some concentrated markets,” she says. “But I don’t think it will be a bubble that’s as widespread and disastrous as the one that happened in the last decade.”

Improvements have been – and will continue to be – uneven. The turnaround will probably be slower in metro areas in Florida and the Midwest.

Nationally, Mracek says the current housing recovery is real and sustainable, but she also acknowledges that the rise in home values and decline in inventories won’t maintain their current pace.

“We see prices leveling out a bit more [in the future] from the late jumps in 2012,” she says. “There are still foreclosures for the banks to work through. As prices improve, you’re going to see banks get rid of REOs.”

Source: Brian Summerfield, REALTOR® Magazine

© 2013 Florida Realtors®

Economist: Big discounts on foreclosures fading

NEW YORK – March 12, 2013 – Homebuyers may not get as great of a deal on a foreclosure as they once did, according to Paul Diggle from Capital Economics in a new report.

Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen.

The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.

“Ultra-low mortgage interest rates and steady, if not spectacular, job creation could mean that the delinquency rate and foreclosure start rate are falling quickly,” Diggle writes.

Source: “Those Amazing Deals on Foreclosed Homes Are Disappearing,” Business Insider (March 7, 2013)

© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

Home is where the tax breaks are: 7 tips

WASHINGTON – March 11, 2013 – While economists and investors can debate whether buying a home is still part of the American dream, it’s undeniable that the tax code remains highly favorable to people who own instead of rent.

Whether you were a first-time buyer, a longtime homeowner who refinanced or a seller, there are a host of important deductions available.

The easiest way for a family to get more than just the standard deduction is to claim tax breaks related to a house. Charitable deductions or a smattering of health care costs might not get you above the $5,950 deduction for individuals or the $11,900 mark for married couples. But a few of these big-time breaks in housing can push you over the top and result in a much bigger refund.

The downside is no more simple tax returns since you’ll have to itemize. But the money you’ll get back makes it worthwhile.

Here are seven important tax tips for homeowners:

• Mortgage interest is your best friend. Taxpayers collectively get roughly $100 billion annually in mortgage interest breaks. If you bought a home or refinanced in the last few years, the savings are even more significant, as more than half your monthly payment goes toward interest.

• Mortgage insurance is still deductible. There were fears that the deduction for personal mortgage insurance would fall victim to fiscal fights in Washington. However, Congress left it in place. That’s a huge boon to lower-income homeowners who often can’t afford a big down payment and must pay private mortgage insurance until they have at least 20 percent equity in their homes.

• Taxes are tax deductible. It sounds odd and is frequently overlooked, but homeowners can deduct their local and state property taxes on federal tax returns. There also may be special property tax benefits for lower-income homeowners based on your state or municipality of residence, so look into further breaks specific to your community.

• Qualified renovations count. Fixing a leaky faucet or putting crown molding in the living room is not tax deductible. But there are a number of items in the tax code that allow for tax breaks and credits. A host of items covered under residential energy efficiency can provide tax relief, including new solar panels or certain water heaters. There are also deductions available for home office improvements, as well as for medically necessary changes, such as an entry ramp or a handicap-accessible bathtub.

• Unqualified renovations can count later. While that addition might not be “necessary,” the expense could be an important part of reducing your tax burden when you sell. This is especially noteworthy in hot real estate markets or for homeowners sitting on big property appreciation. The IRS allows you only $250,000 of tax-free profit when you sell a primary residence, but you can deduct any renovations that boosted your home’s value from any total profit to get under that threshold. Find those receipts if you’re sitting on a big profit and planning to sell.

• Claim selling costs. If you sold a home in the past year, costs including title insurance, advertising and real estate broker fees can be claimed. You can claim certain repairs to reduce capital gains on the sale, presuming they were made within 90 days of sale and clearly for the intent of marketing the property.

• Don’t forget moving expenses. If you bought a home in 2012, there’s a chance you did so because of a job-related move. If this is the case, you may be able to deduct some expenses, provided you have the receipts. You must have moved 50 miles or more, and the reasons for your move can’t be personal.

Copyright USA TODAY 2013; Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks.

Forget ‘improving’ or ‘rebound’ – Fla. is ‘on fire’

WEST PALM BEACH, Fla. – March 8, 2013 – Lesley Deutch, senior vice president at John Burns Real Estate Consulting, said the “Florida market is on fire” in her latest update on the state’s housing market.

Deutch says she traveled the state recently and visited more than 20 communities. While recovery reports differ between Florida cities and urban areas, she reports five major trends:

1. Land prices. While the price of land continues to rise quickly statewide, Orlando feels the most pressure. Deutch says she saw some submarkets where “land and finished lot prices have now surpassed peak levels.” In Orlando, she sees developers buying raw land “just to gain a position and market share.”

2. Home prices. Some communities, such as Orlando and Naples, are seeing 1- to 2-percent new-home price increases monthly, Deutch says. The hallmarks of a seller’s market have also returned, such as lotteries. She expects a 2013 price increase of at least 10 percent in many Florida markets.

3. 55-plus market. Deutch reports a 20- to 25-percent jump in potential buyers interested in active adult living, according to builders in Southwest Florida. She also notes a boost in customer traffic in second- and third-tier markets.

4. Foreign buyers. It’s more than Miami, Deutch says. While in Orlando, she visited a sales office that had three active buyers: One from Brazil, one from Germany and one from China.

5. Foreclosures. While the state has a notoriously long foreclosure process, Deutch says banks are slowly releasing foreclosures. But investors continue to buy new foreclosures shortly after they hit the market.
 
© 2013 Florida Realtors®

Immigrants to help shape future housing demand

WASHINGTON – March 7, 2013 – Homeownership and rental demand may both get an uptick. A large number of immigrants are expected to enter the United States and call it home by 2020, according to a new study sponsored by the Mortgage Bankers Association’s Research Institute for Housing America.

The study, conducted by the University of Southern California, makes projections to the year 2020 on the growth of U.S. homeowner households headed by immigrants.

The number of foreign-born homeowners continues grew bigger each decade, according to the report. For example, the number of foreign-born homeowners rose 800,000 from 1980 to 1990; by 2.1 million from 1990 to 2000; and then by 2.4 million from 2000 to 2010.

For the 2010 to 2020 period, researchers project that number to rise 2.8 million.

The Hispanic immigrant population has shown a strong growth pattern. In 1990, Hispanic immigrants had a 15 percent homeownership rate that grew to nearly 53 percent in 2010. By 2020, Hispanics’ homeownership rate is expected to rise above 61 percent, according to researchers.

The states with the greatest demand from the foreign-born on homeownership are California and New York.

“As the housing market continues its recovery, it is important to understand the demographic trends which are likely to impact housing demand in the years ahead,” says Michael Fratantoni, RIHA’s executive director. “This study provides information for lenders, builders and policymakers regarding the future shape of housing demand, which the authors clearly show will be substantially impacted by the housing choices of foreign-born households, whether they are renters or homeowners.”

Source: “Housing demand to grow as new immigrants arrive,” HousingWire (March 5, 2013)

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