NAR: Pending home sales edge up in April

WASHINGTON – May 30, 2013 – Pending home sales improved slightly in April and continue to be well above a year ago, according to the National Association of Realtors® (NAR). Gains in the Northeast and Midwest were offset largely by declines in the West and South.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.3 percent to 106.0 in April from 105.7 in March, and is 10.3 percent above April 2012 when it was 96.1; the data reflect contracts but not closings.

It’s the highest pending index in three years – since it hit 110.9 in April 2010, immediately before the deadline for the homebuyer tax credit. Pending sales have been above year-ago levels for the past 24 months.

NAR Chief Economist Lawrence Yun said a familiar pattern has developed. “The housing market continues to squeak out gains from already very positive conditions,” he said. “Pending contracts so far this year easily correspond to higher closed home sales in 2013.” Total existing-home sales are expected to rise just over 7 percent to about 5 million this year.

“Because of inventory shortages, higher home sales will push up home values to the highest level in five years,” Yun said. The national median existing-home price should increase close to 8 percent and exceed $190,000 in 2013.

The PHSI in the Northeast jumped 11.5 percent to 92.3 in April and is 17.7 percent above a year ago. In the Midwest, the index rose 3.2 percent to 107.1 in April and is 15.1 percent higher than April 2012. Pending home sales in the South slipped 1.1 percent to an index of 119.2 in April but are 12.3 percent above a year ago. With pronounced inventory constraints, the index in the West fell 7.6 percent in April to 94.6 and is 2.6 percent below April 2012.

© 2013 Florida Realtors®

U.S. home prices rise 10.9% – most since 2006

Florida city home sales

The 20-city Index considers two Florida cities for its results – Miami and Tampa. In Miami, S&P/Case-Schiller found a 10.7% year-over-year price rise; in Tampa, it found 11.8%.

WASHINGTON (AP) – May 29, 2013 – U.S. home prices jumped 10.9 percent in March compared with a year ago, the most since April 2006. A growing number of buyers are bidding on a tight supply of homes, driving prices higher and helping the housing market recover.

The Standard & Poor’s/Case-Shiller home price index released Tuesday also showed that all 20 cities measured by the report posted year-over-year gains for the third straight month.

And prices rose in 15 cities in March from February. That’s up from only 11 in the previous month. The monthly figures aren’t seasonally adjusted and may reflect the beginning of the spring buying season.

Prices rose in Phoenix by 22.5 percent over the past 12 months, the biggest gain among cities. It was followed by San Francisco (22.2 percent) and Las Vegas (20.6 percent).

New York City had the smallest year-over-year increase at 2.6 percent, followed by Cleveland at 4.8 percent.

“Rising home prices may begin to alleviate a lack of housing inventory … by encouraging more homeowners to put their properties on the market,” said Maninder Sibia, an economist with Economic Advisory Service, in a note to clients. “The housing market is clearly improving.”

The 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 March figures are the latest available.

The U.S. housing market is steadily recovering, buoyed by solid job gains and near-record low mortgage rates. Sales of new homes rose in April to nearly a five-year high. And sales of previously occupied homes ticked up in April to the highest level in three and a half years.

Despite the gains, a limited number of homeowners are putting their houses on the market. That’s helped lift home prices. And it’s made builders more willing to ramp up construction. Applications for building permits rose in April to the highest level in nearly five years.

The supply of available homes jumped in April, but was still 14 percent below its level a year earlier.

Stan Humphries, chief economist at Zillow, a real estate data provider, said that the increase in the Case-Shiller index has been skewed higher by cities such as Phoenix and San Francisco. Fewer homes are available in those areas because many homeowners still owe more on their mortgages than their homes are worth. That makes it difficult to sell.

Still, even excluding those markets, home prices are rising steadily nationwide, Humphries said. The increases are “certainly confirmation that the housing market is experiencing a brisk recovery,” he added.

The housing recovery is creating more construction jobs and bolstering the economy in other ways. Higher home prices make homeowners feel wealthier and encourages them to spend more.

Rising prices also encourage more would-be buyers to purchase homes, before prices rise further. They also enable more homeowners to sell homes, by reducing the number of people who owe more on their mortgages than the homes are worth.

Prices have been increasing steadily since last summer. Still, they are about 29 percent below the peak reached in July 2006.

Banks have raised their credit standards since the housing bubble burst and are demanding larger downpayments. That’s made it particularly hard for potential first-time buyers to get a mortgage.
 Copyright © 2013 The Associated Press, Christopher S. Rugaber, AP economics writer. All rights reserved.

U.S. consumer confidence hits five-year high

NEW YORK – May 28, 2013 – The Consumer Confidence Index is arguably the most important economic statistic released each month that most people ignore.

A positive index number means Americans are feeling secure in the economy and their ability to spend – and their spending feeds an increased rebound as they buy homes, furniture, cars and more. Upbeat attitudes are a precursor to other positive indicators, such as a rising home demand and selling prices.

The Conference Board Consumer Confidence Index, which had improved in April, increased again in May. The Index now stands at 76.2 (1985=100), up from 69.0 in April. The Present Situation Index increased to 66.7 from 61.0. The Expectations Index, which gauges attitudes about the future six months from now, improved to 82.4 from 74.3.

“Consumer confidence posted another gain this month and is now at a five-year high,” says Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions was more positive, and they were considerably more upbeat about future economic and job prospects. Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike and sequester.”

May’s present-day conditions
Consumers saying business conditions are “good” increased to 18.8 percent from 17.5 percent, while those stating business conditions are “bad” decreased to 26.0 percent from 27.6 percent.

Consumers’ assessment of the labor market was also more positive. Those claiming jobs are “plentiful” increased to 10.8 percent from 9.7 percent, while those claiming jobs are “hard to get” edged down to 36.1 percent from 36.9 percent.

Future expectations
Consumers were considerably more optimistic about the short-term outlook. Those expecting business conditions to improve over the next six months increased to 19.2 percent from 17.2 percent, while those expecting business conditions to worsen decreased to 12.1 percent from 14.8 percent.

Consumers’ outlook for the labor market was also more upbeat. Those expecting more jobs in the months ahead improved to 16.8 percent from 14.3 percent, while those expecting fewer jobs decreased to 19.7 percent from 21.8 percent. The proportion of consumers expecting their incomes to increase dipped slightly to 16.6 percent from 16.8 percent, while those expecting a decrease edged down to 15.3 percent from 15.9 percent.

Nielsen, a global provider of information and analytics around what consumers buy and watch, conducts the monthly Consumer Confidence Survey based on a probability-design random sample. The cutoff date for the preliminary results was May 15.

© 2013 Florida Realtors®

Report: Where do Americans want to live?

SAN DIEGO – May 24, 2013 – A report from the Urban Land Institute (ULI) finds a strong influence from the U.S.’s growing demographic groups – Generation Y, African Americans and Latinos.

An overall view of the survey suggests that demand will continue to rise for infill residential development that is less car-dependent, while demand could wane for isolated development in outlying suburbs. Among all respondents, 61 percent said they would prefer a smaller home with a shorter commute to a larger home with longer commute. Fifty-three percent want to live close to shopping; 52 percent would prefer to live in mixed-income housing and 51 percent prefer access to public transportation.

Generation Y
Of the three major generations in the report (Gen Y, Gen X and Baby Boomers), Gen Y – the largest generation, the most racially and ethnically diverse, and the one not yet fully immersed in the housing and jobs market – is the generation likely to have the most profound impact on land use.

Fifty-nine percent of Gen Y said they prefer diversity in housing; 62 percent want a mix of shopping, dining and office space; and 76 percent place high value on walkability.

Sixty-three percent of the Gen Y respondents plan to move in the next five years, along with 63 percent of African Americans, 54 percent of Latinos, and 56 percent of those currently living in a large city.

The preferences of Gen Y are similar to those of people of color across all the generations. These different demographic cohorts are all growing in number, and together are creating a significant market shift toward compact, mixed-use development close to transit.

African Americans
Seventy-five percent of African Americans indicated a preference for mixed-use developments; 63 percent prefer mixed-income communities; and 56 percent prefer a mix of housing types. Seventy-seven percent desire access to public transit. Nearly half (47 percent) African Americans surveyed are part of Gen Y.

Latinos
Fifty-eight percent of Latinos prefer to live in a mixed-use community; 48 percent prefer mixed-income communities; and 50 percent prefer a mix of housing. More than half (54 percent) of Latinos surveyed are Gen Yers.

“We’ve entered an era in land use that will be defined by development that conserves land and energy, and which offers consumers plenty of options in where they live and how they get from one place to another,” says ULI Chief Executive Officer Patrick L. Phillips

Other survey findings

• In general, the lure of homeownership remains strong: Seventy-one percent of respondents said buying a home is a good investment despite the housing crisis and price declines.

• The quality of public transit is acceptable where it’s available: Of those with access to buses and trains, 75 percent rate the quality as satisfactory. However, half of those with no access to buses and trains were dissatisfied by this situation. Fifty-two percent of the population said that convenient public transportation was important to them.

• Safety and high-quality schools top the list of most sought-after community attributes: Ninety-two percent of all respondents ranked neighborhood safety as the most important attribute; good schools ranked as the second highest (79 percent).

• In seemingly contradictory responses, 72 percent of the survey participants said having space between neighbors is a priority; yet 71 percent placed a high value on being close to employment, schools and healthcare facilities; 70 percent rated walkability as a key attribute.

• Seventy-seven percent of the respondents reported using a car, truck or motorcycle nearly every day. However, 22 percent said they walk to a destination almost daily, and 6 percent said they take public transit.

The full report is posted on the Urban Land Institute’s website.

© 2013 Florida Realtors®

Fla.’s housing market shows strong gains in April 2013

Related:

NAR: April existing-home sales up but constrained.

ORLANDO, Fla. – May 22, 2013 –Florida’s housing market reported more closed sales, rising median prices, increased pending sales, more new listings and a lower inventory of homes for sale in April, according to the latest housing data released by Florida Realtors®.

“Buyer demand is rising, but the inventory of homes continues to be tight in many areas across Florida,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “That’s putting some upward pressure on prices. April is the 16th month in a row that we’ve seen the statewide median sales prices increase year-over-year for both single-family homes and for townhome-condo properties.

“In another positive sign for Florida’s housing market, sellers received over 93 percent of their original listing price in April, whether they were selling a single-family home or a condo. Now is a good time for sellers who have been waiting on the sidelines to enter the market.”

Statewide closed sales of existing single-family homes totaled 20,662 in April, up 17.4 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 31.9 percent over the previous April. The statewide median sales price for single-family existing homes last month was $165,000, up 14.2 percent from the previous year.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in March 2013 was $185,100, up 12.1 percent from the previous year. In California, the statewide median sales price for single-family existing homes in March was $378,960; in Massachusetts, it was $290,000; in Maryland, it was $241,413; 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 11,183 units sold statewide last month, up 13.6 percent compared to April 2012. Meanwhile, pending sales for townhouse-condos last month increased 22.7 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $128,000, up 16.4 percent over the previous year. NAR reported that the national median existing condo price in March 2013 was $178,900.

The inventory for single-family homes stood at a 5.2-months’ supply in April; inventory for townhouse-condos was at a 5.6-months’ supply, according to Florida Realtors.

“To a certain extent, the real estate story remains the same: prices and sales are up and inventory is low,” said Florida Realtors Chief Economist Dr. John Tuccillo. “We are also seeing a continued stabilization of the distressed property market with short sales down, and foreclosure and REO (real estate owned) sales essentially unchanged. But there is also a bit more to the story.”

He explained, “Because the government is selling foreclosed properties in bulk and also using online auctions, our sales numbers actually understate the vigor of the market. The increased importance of government sales in this market is reflected in the continuing fall in inventory in MLS listings.” MLS stands for multiple listing service.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.45 percent in April 2013; lower than the 3.91 percent average during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Media Center  and look under Latest Releases, or download the April 2013 data report PDFs under Market Data.

© 2013 Florida Realtors®

Distressed homes lure cash investors

MIAMI – May 20, 2013 – House hunters looking to buy a foreclosure in South Florida often discover they are getting outflanked by the pros: investors wielding cash.

“If you don’t have cash, or you’re looking for financing, you can’t play in the distressed arena,’’ said Doug DeWitt, owner and broker at Concierge Real Estate Services in Miami Beach, who markets bank-owned properties for some major lenders.

When a bank-owned house in the Hammocks in West Kendall went on the market in late April, the 3-bedroom, 2-bath villa drew 29 purchase offers and 60 showings over a 10-day listing period mandated by the bank. The asking price was $159,900.

The lender narrowed the field to the all-cash buyers, who were told to make their highest and best offer, and the house is now under contract.

“It went for well above asking price. They all do,’’ said DeWitt, who is the listing agent. “I have one happy buyer and 28 people I sent on their way.’’

DeWitt said he feels sorry for the first-time buyers and other house hunters looking simply to finance the purchase of a home they plan to live in.

“The banks need to move these properties. The cash offers weren’t low, they were right in line,’’ DeWitt said. “If you can take the [uncertainties of] the appraisal and inspection out of the parameters, your chance of closing goes up substantially.’’

To be sure, homebuyers still can ferret out opportunities to purchase distressed properties. Fannie Mae, for instance, offers financing with low downpayments and no mortgage-insurance requirement on select Fannie Mae-owned homes under its HomePath mortgage program.

“On some of Fannie Mae’s foreclosed properties, Fannie Mae is putting them back on the market and offering up to 97 percent financing,’’ said Ray Barkett, regional vice president and district sales manager at Keyes Realtors in Fort Lauderdale.

Another option, Fannie’s HomePath mortgage renovation program, even provides funds to fix up rundown foreclosures.

One of the top worries during the real estate crash was that the housing market would take another nosedive when lenders dumped a slew of distressed properties on the market. So far, that simply hasn’t come true. Lenders have managed the flow of properties onto the market. Indeed, many real estate agents are clamoring for more such inventory in South Florida, where the inventory of homes and condos for sale has plunged to its lowest level since 2005.

“There is definitely an increase in REO [bank-owned] inventory,’’ said Dewitt, “but the whole theory of shadow inventory dragging down the market has proven completely false.’’

Victor Gonzalez, a Miami real estate investor who bids on foreclosures at Miami-Dade county’s cash-only online courthouse auctions, said banks have gotten more aggressive in bidding on properties they have foreclosed on, rather than letting them go at discounts.

“It’s getting very competitive again. Prices are going up,’’ Gonzalez said.

Even in auctions where lenders don’t take back properties themselves, competition is keen from institutional buyers like hedge funds and investor groups created to snap up distressed properties, Gonzalez said.

And the process is fraught with uncertainty. Scheduled auctions of homes often get cancelled at the last minute for a host of reasons, such as a lender’s decision to go with a short sale.

Those bidding at auctions need to know how to search records for liens. Even so, they can’t be sure how much is due in homeowners’ association or condominium fees. “I research 20 or 30 properties before bidding on one,’’ Gonzalez said.

Copyright © 2013 The Miami Herald. Distributed by MCT Information Services.

NAR: Housing and economic forecast solidifying

WASHINGTON – May 20, 2013 – Growth in home sales and prices is contributing to a broader improvement in the overall economy, aided in part by current homeownership tax treatment, according to presentations at a residential real estate forum during the National Association of Realtors® Midyear Legislative Meetings & Trade Expo.

NAR Chief Economist Lawrence Yun said a multiyear housing recovery is likely. “Steady job creation and household formation have been helping to unleash a pent-up demand in the housing market,” he said. “Lagging housing starts and a continuing housing shortage mean home prices are primed to rise further, by 13 percent cumulatively in 2013 and 2014, which will add more than $2 trillion to household wealth over this period.”

Existing-home sales continue to improve, although Yun said inventory constraints are preventing stronger growth. After four years of relatively flat activity from 2008 through 2011, existing home sales rose 9.4 percent to almost 4.3 million in 2012 and are forecast to increase to nearly 5.0 million this year; he projects 5.3 million sales for 2014 and 5.7 million in 2015.

Investment home sales jumped to elevated levels in 2011 and 2012, and are holding up this year, while vacation home sales slowly recovered in the past two years. “Growth in household wealth will help vacation home purchases moving forward,” Yun said.

Home price growth is likely to moderate with more new home construction. “Double digit price gains are within reach in 2013 because inventory is bouncing near 13-year lows, but some relief to inventory will occur later in the year,” Yun said. After rising 6.4 percent in 2012, the median existing-home price should increase about 8 percent this year and 5 percent in 2014.

Yun calculates that 51 percent of renters are financially qualified to purchase a home, up from 24 percent in 2005 and 33 percent in 2000, although their credit scores are unknown and not factored. “Just looking at the financial qualifications, this means there about 8 million more renters with the income necessary to buy a home now than in 2000, but they are choosing not to, or are unable to become a homeowner,” Yun said.

With the financial industry enjoying high profits, Yun hopes it may be ready to dial down the credit stringency. If the average credit scores of approved loans return to normal – about 720 for conventional loans and 660 for FHA loans¬ – he projects home sales could be 15 to 20 percent higher. During the past four years, the average credit score of approved conventional loans has been in the range of 760 to 770.

Mortgage interest rates are expected to rise gradually this year, with the 30-year fixed rate reaching 4.0 percent in the fourth quarter and averaging 4.6 percent in 2014. Housing starts, which remain below the long-term average of 1.5 million per year, are seen at 1.1 million in 2013, up from only 780,000 last year, and are projected to reach nearly 1.4 million in 2014.

Yun doesn’t expect a recession and said the Gross Domestic Product should grow 2.1 percent this year and about 3.0 percent in 2014.

LaVaughn Henry, vice president and senior regional officer at the Cincinnati branch of the Federal Reserve Bank of Cleveland, noted that all of the housing measures have been showing positive movement. “We are in a solid, sustainable recovery, with an alignment of fundamentals of what makes housing work,” he said. “While lending for residential real estate is increasing, underwriting standards remain tight, thus slowing the rate of recovery.”

The ratio of home prices to rents, considering norms over the past 30 years, indicates that home prices have recovered to a fair value, and builders are responding to higher demand by gradually rebuilding the diminished supply.

Henry noted that housing has always led an economic recovery, but the market is still picking up speed and he hopes it can boost the economy into a stronger recovery. “Growth in the Gross Domestic Product is running at about half speed for this point in the recovery,” he said. Fiscal austerity is a drag on growth in the short term, but it’s important to get control of debt, said Henry.

“Household wealth continues its recovery to pre-financial crisis levels,” he said. Since the economic crisis, consumers have reduced the ratio of household debt to disposable income, reversing a 30-year trend of rising debt, and the debt service ratio is at a 30-year low.

Foreclosure rates continue to decline across all major loan types, and mortgage delinquency rates also are declining. “Banks are becoming better managers of their credit. Lenders remain reticent in loosening tight underwriting standards on mortgage loans, but are selectively increasing lending in response to growth in demand,” Henry said. “Lenders aren’t quick to change their standards, but they will become less restrictive over time.”

The Federal Reserve’s monetary policy has helped reduce mortgage interest rates to historic lows. It expects to keep the fed funds rate low as long as unemployment remains above 6.5 percent, the inflation outlook for the next year or two is no more than 2.5 percent, and longer-term inflation expectations continue to be well anchored.

Danielle Hale, research economist at NAR, also spoke at the session and addressed homeownership tax policies. “While U.S. publicly held debt has exceeded 75 percent of the Gross Domestic Product, there are some misconceptions about the mortgage interest deduction that are important to consider when reviewing the tax code,” she said. Approximately three out of four homeowners with a mortgage – a quarter of all taxpayers – claim the MID, which is about the same number of taxpayers who claim charitable contributions.

Almost all first time homebuyers, who are critical to the overall health of the housing industry, finance their purchase. While the MID provides great benefits to owners in the early years of a mortgage, toward the end of a loan the amount of interest paid is so little that the standard deduction becomes a better option.

“At any given time, only half of homeowners claim the mortgage interest deduction, but over the course of a lifetime we estimate that roughly 70 percent of households that ever own a home will use the MID,” Hale said.

The typical beneficiary of the mortgage interest deduction is under 45 years old, married, has children and earns less than $200,000.

© 2013 Florida Realtors®

CoreLogic: 2012 big year for home price increases

IRVINE, Calif. – May 17, 2013 – Home prices in the U.S. rose 7.3 percent in 2012 and are projected to rise 3.9 percent annually for the next five years, according to the latest CoreLogic analysis.

Florida cities, however, vary from the nation and even each other in 2012 home values, as well as CoreLogic’s projections for the future. Prices rose during 2012 in all six Florida cities tracked by the index, varying from a low of 3.5 percent in Jacksonville to a high of 13.5 percent in Miami. However, the company predicts a slight price decline in five cities by the close of 2013. It predicts only Tampa will see an increase this year, with prices rising 3.9 percent.

As 2013 continues, CoreLogic predicts, “market dynamic shifts” in bubble/crash metro areas. The company points out that homes are still undervalued in bubble cities, including some in Florida, but it predicts that investor demand for foreclosed properties will decline.

In addition, today’s rising prices will, over time, make a home purchase less affordable for some families, and  “other demand factors that have driven recent double-digit price gains are unlikely to persist throughout the year.”

CoreLogic also thinks higher home sale prices will draw more sellers into the market, particularly those who recently emerged from being underwater. That higher inventory of for-sale homes coupled with lower investor demand will, according to CoreLogic, moderate price increases in 2013.

“Home prices were up in seven out of every 10 metro areas (nationally) in 2012,” say Dr. David Stiff, chief economist for CoreLogic Case-Shiller. “In 2011, prices appreciated in fewer than one-in-five markets.”

Stiff isn’t worried about another housing bubble, however. 

“Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming,” he says. “That’s because single-family homes in these markets are still very affordable, even after last year’s large price gain.”

He does expect some price volatility, however, as the market adapts to changing conditions. Nationally, CoreLogic forecasts a 2.5 percent price increase in 2013.

Florida cities

The CoreLogic analysis offered three price points for six Florida cities – the price increase or decrease over three years at the end of 2012; the price increase or decrease in 2012; and the forecasted price increase or decrease in 2013. They include:

Fort Lauderdale: A 3% price increase in the three years prior to Dec. 31, 2012; a 9.6% rise in 2012; and a 3.9% price decline forecast for 2013.

Jacksonville: A 10.2% price decline in the three years prior to Dec. 31, 2012; a 3.5% rise in 2012; and a 0.8% price decline forecast for 2013.

Miami: A 7.2% price increase in the three years prior to Dec. 31, 2012; a 13.5% rise in 2012; and a 4.4% price decline forecast for 2013.

Orlando: A 1.1% price decline in the three years prior to Dec. 31, 2012; a 9.5% rise in 2012; and a 2.9% price decline forecast for 2013.

Tampa: A 3.3% price decline in the three years prior to Dec. 31, 2012; a 7.1% rise in 2012; and a 3.9% price increase forecast for 2013.

West Palm Beach: A 1.5% price decline in the three years prior to Dec. 31, 2012; a 9.8% rise in 2012; and a 3.4% price decline forecast for 2013.

© 2013 Florida Realtors®

Home appraisals no longer derailing sales

JACKSONVILLE BEACH, Fla. – May 16, 2013 – Are more home sales going through because appraisals are coming in at – or above – contract prices? A CNN story says they are.

Home sale transactions often collapsed during the housing bust because appraisals fell well below selling prices, and low-ball appraisals made homes too costly for some buyers.

However, appraisers now are valuing homes at or above their selling prices as residential prices rise and housing inventories narrow, according to National Association of Realtors chief economist Lawrence Yun.

As an example, prices have swelled 15 percent over the past year in Jacksonville Beach, Fla., and agent Cara Ameer had an appraisal come in above the selling price on a two-bedroom townhouse. She sold the townhouse for $5,000 more than its $189,000 asking price.

“It was FHA financing and [the FHA is] typically much more strict,” Ameer said.

Source: CNNMoney.com (05/15/13) Christie, Les

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

Chinese buyers can’t resist lure of Florida homes

WASHINGTON – May 15, 2013 – The National Association of Realtors says foreigners – primarily from Canada, China, and Latin America – made $82 billion in U.S. real estate purchases last year.

Chinese buyers, in particular, seem to have a hearty appetite for American real estate – especially in California, New York and Florida. Garrett Kenny, CEO of Century 21 Team Feltrim in Florida, is courting Chinese buyers, traveling overseas to network with Chinese agents and investors and tout the benefits of owning property in Florida.

He was impressed with the OPP Tour of China, which covered four cities in 10 days. “Three days back and already dealing with three agents successfully,” he says. “We will certainly be going on more tours with OPP in 2013.”

With two-bedroom apartments in Shanghai fetching more than $2 million, it is no surprise that Chinese buyers are drawn to Florida, where three-bedroom homes in some areas can be had for about $200,000.

Not only do the Chinese view U.S. real estate as a good value, but they also view U.S. properties as status symbols, says Las Vegas real estate agent Betty Chan.

Source: RealtyBizNews (05/14/13) Wheatley, Mike

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

Real estate reality TV shows: Fact vs. fiction

SAN FRANCISCO – May 14, 2013 – Network television offers a slew of reality shows that supposedly give viewers an inside glimpse into the home buying process, but the programs aren’t necessarily a true representation of the real-world experience.

San Francisco-based realty broker Herman Chan, a previous guest on two HGTV reality shows, notes that much of it is staged. Moreover, the shows mainly cover the fun parts of homebuying and ignore the unglamorous aspects. For example, viewers rarely see house shoppers selecting a property agent, meeting with home inspectors or applying for a mortgage.

“It’s a very condensed version of what to expect,” says Chan, who agrees the shows focus on the happy moments. “Afterward is when it gets problematic,” he says. “What if the appraisal doesn’t come in, or there are whackadoo neighbors?”

In addition, the listings featured on TV shows suggest that they’re clean and well lit. But in reality, Chan says, “Babies might be crying or peoples’ laundry might be hanging in the background.”

However, Chan and other realty professionals say that actually could help by convincing sellers to “up their game.”

Janice Leis – who handles properties in Pennsylvania, New Jersey and Florida – says sellers “can learn that you need to clean out your house, you need to paint it. The outside needs to be cleaned up, and you need to take furniture out. (Reality TV) shows sellers what’s important to the masses of people that are out there looking.”

Buyers can also learn a thing or two from the reality shows, even if the examples deviate from real life.

Especially useful, Leis and Chan say, are home buying shows that ask buyers to list their needs and wants first. They say it also helps buyers by getting them to expect some compromises along the way.

As Chan puts it: “There’s no perfect house.”

Source: U.S. News & World Report (05/13/13) Johnston, Susan

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

Forecast improves for late ‘13 economy

WASHINGTON – May 13, 2013 – Political paralysis in Washington won’t stall an economic recovery that’s revving up across the rest of the country. That’s the consensus of economists surveyed by USA Today, who predict the recovery will accelerate late this year even without a deal by Congress and the White House to lessen the impact of automatic federal budget cuts.

The across-the-board spending cuts will cause growth to slow in the middle of 2013. But the negative effects will ease by the fourth quarter as the private sector gathers strength, according to the 43 leading economists surveyed May 6-9.

This year, the budget cuts are expected to pare federal spending by $65 billion and shave half a percentage point off economic growth, according to the Congressional Budget Office (CBO) and Moody’s Analytics.

The economy expanded at a 2.5 percent annual rate in the first quarter. Economists’ median estimates project growth is likely to average about 2 percent annually this quarter and next.

Monthly job growth, which averaged 206,000 in the first quarter, will average 165,000 in the second quarter and 172,000 in the third quarter, the economists say.

Many top economists, including Federal Reserve Chairman Ben Bernanke, have urged delaying much of the belt-tightening until the economy is on more solid footing. While the White House and a divided Congress are making little progress in talks, more than two-thirds of the economists surveyed say it’s unlikely even the fiscal 2014 budget cutbacks will be tempered.

An additional $40 billion in cuts next year will reduce 2014 economic growth by 0.3 percentage points, the CBO and Moody’s say. Even so, the economists expect growth to pick up in the fourth quarter and approach 3 percent by early next year as job gains climb to a 200,000 monthly average.

Since the job market hit bottom in early 2010, the economy has grown about 2 percent annually and monthly job growth has averaged 162,000.

“There are some powerful positive forces to offset” budget cuts, says Jim O’Sullivan, chief U.S. economist of High Frequency Economics.

The Fed’s bond-buying initiative, he says, has held down long-term interest rates, juicing housing and driving up stock markets.

Housing starts are likely to total 990,000 this year and about 1.2 million in 2014, according to Standard & Poor’s, up from 780,000 in 2012.

O’Sullivan says higher home and stock prices are making consumers feel wealthier, so they’ll spend more. Continued job gains, he says, will further bolster spending.

Wells Fargo economist Mark Vitner says the stock market rally has mostly benefited the wealthy while wage gains for average Americans have languished: “We’re getting a recovery. It’s just a slow recovery.”

Copyright © USA TODAY 2013

Average on 30-year mortgage rises to 3.42%

Mortgage Rate Trend Index

Expect no change over the short term, say 54% of the mortgage industry experts polled this week by Bankrate.com. The rest break evenly: 23% foresee an increase while 23% predict a decline.

WASHINGTON (AP) – May 10, 2013 – Average U.S. mortgage rates rose this week but remained near historic lows. Cheaper mortgages have encouraged more homebuying and refinancing.

Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year fixed mortgage edged up to 3.42 percent from 3.35 percent last week. That’s still near the average of 3.31 percent reached in November, the lowest on records dating to 1971.

The average on the 15-year fixed-rate loan rose to 2.61 percent from 2.56 percent last week, which was the lowest on records going back to 1991.

Low mortgage rates have buttressed the housing recovery that began last year. Home sales and construction are up from a year ago, and prices are rising in most U.S. markets.

A survey released Tuesday showed that U.S. home prices rose 10.5 percent in March compared with a year earlier, the biggest year-over-year gain since March 2006.

The survey from Core Logic, a real estate data provider, showed that year-over-year prices have risen for 13 straight months. Prices are rising in part because more buyers are bidding on a limited supply of homes for sale.

Prices rose in 46 states over the past year. Eleven states posted double-digit gains.

And excluding distressed sales, which comprise foreclosures and short sales, prices rose in every state. A short sale is when a home sells for less than what’s owed on the mortgage.

Sales are rising in some markets hit hardest by the housing bust in part because investors are scooping up homes in hopes of turning a profit.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year mortgages was 0.7 point, unchanged from last week. The fee for 15-year loans also held steady at 0.7 point.

The average rate on a one-year adjustable-rate mortgage fell to 2.53 percent from 2.56 percent last week. The fee for one-year adjustable-rate loans rose to 0.4 point from 0.3 point.

The average rate on a five-year adjustable-rate mortgage increased to 2.58 percent from 2.56 percent. The fee was unchanged at 0.5 point.
 Copyright © 2013 The Associated Press, Marcy Gordon, AP business writer.

Fla.’s housing market shows momentum in 1Q 2013

Related: NAR: Metro area home price growth trend continues in 1Q

ORLANDO, Fla. – May 9, 2013 – Florida’s housing market gained strength in first quarter 2013 with increased closed sales, more pending sales, higher median prices and a reduced supply of homes for sale compared to the same quarter in 2012, according to the latest housing data released by Florida Realtors®.

“The first three months of 2013 demonstrate that Florida’s housing market is gaining momentum and continuing to bolster the state’s economy,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “More people went back to work as more jobs were created in Florida during the first quarter, and our population is also growing – which provide a solid foundation for growth in the housing market. It’s taking less time to sell a home and, coupled with tight inventory, that shows buyers are eager to lock in historically low mortgage interest rates and take advantage of favorable, but rising prices.”

Statewide closed sales of existing single-family homes totaled 48,976 in 1Q 2013, up 10.2 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 rose 26.8 percent in the first quarter compared to the 1Q 2012 figure. The statewide median sales price for single-family existing homes in 1Q 2013 was $153,000, up 13.4 percent from the same quarter a year ago.

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 24,655 units sold statewide in the first quarter, up 3.2 percent from the first three months of 2012. Pending sales for townhouse-condos in 1Q 2013 increased 13.7 percent compared to a year ago, while the statewide median for townhouse-condo properties was $116,000, up 18.4 percent over the same quarter last year.

In 1Q 2013, the median days on market (the midpoint of the number of days it took for a property to sell that month) was 60 days for both single-family homes and for townhouse-condo properties.

The inventory for single-family homes stood at a 5.3-months’ supply for 1Q 2013; inventory for townhouse-condos was at a 5.8-months’ supply for the same period, according to Florida Realtors.

Florida Realtors Chief Economist Dr. John Tuccillo said, “In a sense, these numbers are old news since we release the monthly numbers separately. But they are important in that they confirm the sales and price trends we have seen shaping up in the market. If you look back at the quarterly numbers, comparing year to year, you see, at least in single-family sales, the steadiness of the market since 2009. We expect that the year-over-year increases we have seen for the past several years will continue into 2014.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.50 percent for 1Q 2013 down from the previous year’s average of 3.92 percent, according to Freddie Mac.

To see the full statewide housing activity reports, go to Florida Realtors Media Center and look under Latest Releases, or download the 1Q 2013 data report PDFs under Market Data.

© 2013 Florida Realtors®