On the Market: Is This the Time to Buy?

On the market: Is this the time to buy?: MyFoxBOSTON.com

Home Sales on the Rise: Ready for Spring Buying Season?

DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 23, 2012

Existing-home sales rose 4.3 percent in January to a seasonally adjusted annual rate of 4.57 million, marking the third gain for home sales in the last four months, the National Association of REALTORS® reports.  

“The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents,” NAR’s Chief Economist Lawrence Yun says.

While sales ticked up, inventories of for-sale homes also continued to show improvement, NAR reported. At the end of January, total housing inventory fell 0.4 percent to 2.31 million existing homes for sale, which represents a 6.1-month supply at the current sales pace. 

“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun says. “Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”

Unsold listed inventory has steadily dropped since reaching a peak of 4.04 million in July 2007. It now is 20.6 percent below where it was a year ago, NAR reports. 

Housing Affordability Improves

As home prices have fallen and mortgage rates at all-time record lows, housing affordability is at some of its highest levels on record. 

“Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” says NAR President Moe Veissi. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”

The national median existing-home price for all housing types in January was $154,700, which is down 2 percent year-over-year. 

Distressed sales, which tend to sell at steep discounts, continue to hamper home prices nationwide. Foreclosures and short sales accounted for 35 percent of all January home sales, which is up slightly from 32 percent in December. 

Still, “home buyers over the past three years have had some of the lowest default rates in history,” Yun said.  “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”

Breakdown by Housing Type

Here’s a closer look at how home sales fared by housing type in January: 

Single-family home sales: increased 3.8 percent to a seasonally adjusted annual rate of 4.05 million in January from 3.90 million in December. They are 2.3 percent above the 3.96 million-unit pace a year ago. Median price: $154,400 in January, down 2.6 percent from January 2011.

Existing condominium and co-op sales: rose 8.3 percent to a seasonally adjusted annual rate of 520,000 in January from 480,000 in December. They are 10.3 percent lower than the 580,000-unit level in January 2011. Median price: $156,600 in January, up 2 percent from a year ago.

Home Sales by Region

The following is a breakdown of existing-home sales in January by region: 

• Northeast: increased3.4 percent to an annual pace of 600,000 in January and are 7.1 percent above a year ago. Median price: $225,700, which is 4.2 percent below January 2011.
• Midwest: increased 1 percent in December to a level of 980,000 and are 3.2 percent higher than January 2011. Median price: $122,000, down 3.9 percent from a year ago.
• South: rose 3.5 percent to an annual level of 1.76 million in January but are unchanged from a year ago. Median price: $134,800, which is 0.3 percent below January 2011.
• West: increased 8.8 percent to an annual pace of 1.23 million in January but are 3.1 percent below a spike in January 2011. Median price: $187,100, down 1.8 percent from a year ago.

Contract Delays, Cancellations Remain High

Twenty-one percent of NAR members in January reported delays in contracts, and 33 percent said contracts fell through, according to NAR. The number of contract cancellations remains mostly unchanged from December. 

The increase in the past year of contract cancellations or delays has been blamed on more lenders declining mortgage applications from stricter underwriting standards and low appraisals coming in under the agreed upon contract price. 

Source: National Association of REALTORS®

Warren Buffett Says He’d Buy a Couple Hundred Thousand Homes

Mortgage rates hover near 60-year lows

By Kerri Panchuk • March 1, 2012 • 9:11am • On housingwire.com


Fixed mortgage rates fell slightly for the week ending March 1, keeping interest rates near their 60-year lows, Freddie Mac said Thursday.


Freddie's Private Mortgage Market Survey shows the 30-year, fixed-rate mortgage averaging 3.90% for the week, which is down from 3.95% the previous week and 4.87% a year ago.


In addition, the 15-year FRM hit 3.17%, down from 3.19% a week earlier and 4.15% a year ago.


Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.83% this week, up from 2.80% the week before and 3.72% a year ago.


The one-year Treasury-indexed ARM hit 2.72%, down from 2.73% a week earlier and 3.23% last year.


"Fixed mortgage rates bottomed out in January and February of this year which is helping spur the housing market," Frank Nothaft, vice president and chief economist with Freddie Mac.


He added, "For instance, pending existing home sales rose in January to its strongest pace since April 2010 and sales figures for December saw upward revisions. In addition, the Federal Reserve noted in its February 29th regional economic review (or Beige Book) that residential real estate activity increased modestly in most of its Districts over the course of January and early February, with several reports of increased home sales."


kpanchuk@housingwire.com

Rent vs. buy: Decision comes down to job, finances

February 19, 2012|By Paul Owers, Sun Sentinel

South Florida renters constantly hear jeers that they're paying somebody else's mortgage.

They feel pressure to escape rent increases and take advantage of low home prices last seen a decade ago.

But a home still may be a stretch financially. And prices may decline further, embittering new owners who see their prized asset lose value.

For most, the decision boils down to whether their jobs are stable, how much savings they'd have after buying and how long they intend to stay in the area.

"No one thinks of housing as a risk-free investment anymore," said Jed Kolko, chief economist for real estate website Trulia.com. "If you're going to buy, you need to be in a financial position where you're able to deal with the risks of prices going down."

Housing industry experts weigh in on the rent vs. buy debate in three hypothetical South Florida case studies.

Scenario One: A police officer making $60,000 a year, newly married, currently renting a two-bedroom apartment for $1,500, never owned a home before.

Jim Flood, regional manager for Supreme Lending in Boca Raton, said he'd work with the officer to determine his cash position.

A new homeowner still should have at least two to four months' of cash in savings after buying, Flood said. Assuming he has the appropriate savings and his job is safe, the officer is a good candidate to own, Flood said.

If he put down 3.5 percent on a $150,000 home and had an interest rate of about 4 percent, his total monthly payment (principal, interest, taxes and insurance) would be roughly $1,100 — a savings of $400 from what he pays in rent.

Bottom line: Easy call. Buy.

Scenario Two: Recent college graduate, living with her parents, monthly payments of $300 for a car and $400 for student loans, has minimal savings and a $40,000-a-year job, but is willing to relocate for another.

The car and student loan debts are the biggest obstacles to buying, Flood said. She'd have to buy a small home or condominium, but she's likely better off staying a renter.

"If it was my daughter, I'd tell her to pay off the car or student loans and save more money for a rainy day," Flood said.

Randy Bianchi, co-owner of Paradise Properties of Florida in West Palm Beach, agrees, adding that the uncertainty over how long she'll be in the area is another concern. Plan to live in a home you buy for at least five years, experts say.

"Homes are cheap right now, but owning will tie you down," Bianchi said.

Kolko offers another consideration: If she's still living with her parents, she'd be a first-time homeowner with little or no experience in maintaining a house by herself. She'd have to cut the grass and deal with the occasional broken dishwasher. "That's a lot of firsts all at once," Kalko said.

Bottom line: Stay with parents or rent cheaply

Scenario Three: Retired couple in their mid-60s, small pension, just sold their house for a $15,000 profit, looking to stay in the area and downsize.

The major factor here is the modest profit on the home sale. It's not enough to buy another home or condo outright or to significantly pay down a mortgage on a new place, said Michael Citron, a real estate agent in Broward County.

The couple likely would spend $1,200 to $1,500 a month on a mortgage and association dues, but probably only about half that amount if they moved into a 55-and-over rental community, Citron said.

"That's much more manageable for them," he said. "The lawn is taken care of and they can call maintenance if anything needs to be fixed. They just don't have enough money to buy a home."

Bottom line: Rent

powers@tribune.com, 561-243-6529 or Twitter @paulowers

Warren Buffett Betting on Housing in 2012

By Nathaniel Popper

February 27, 2012, 8:37 a.m.

Reporting from New York— 

The U.S. housing market disappointed Warren Buffett last year, but he hasn't given up hope.

Buffett said in his annual shareholder letter, posted this weekend, that he was "dead wrong" when he predicted last year that the rebound in U.S. home prices would begin within a year.

This year, though, he's betting again that the housing market will recover, and for an interesting reason: hormones.

As Buffett explains it, the housing market is currently depressed because young Americans have stayed at home rather than going out and setting up their own households.

"People may postpone hitching up during uncertain times, but eventually hormones take over," Buffett wrote in the letter to shareholders in his investment company Berkshire Hathaway. "And while 'doubling-up' may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure."

That is not the entirety of his argument. He also says that currently home builders are not creating enough new supply. As a result the excess inventory that built up after the financial crisis is slowly disappearing, paving the way for new demand.

During an appearance on CNBC this morning, Buffett said he would buy up millions of U.S. homes if it were possible.

Data out this morning seemed to support Buffett's contention. The National Assn. of Realtors announced that the number of people buying used homes in January rose to a 21-month high.

As usual, the annual letter was an opportunity for Buffett to provide a candid assessment of Berkshire Hathaway's wins and losses, most of which were in the volatile energy sector. He said his entire $2-billion investment in a Texas utility company may be wiped out unless natural gas prices rise substantially.

"In tennis parlance, this was a major unforced error by your chairman," he wrote.

Buffett also used the letter to reveal that he has chosen a CEO to succeed him at Berkshire Hathaway -- he just refused to provide the identity of that person.

Berkshire's class B stock was down 0.6% in early trading this morning.

Kennewick: A housing market to watch in 2011 (Inman)

Three structures at 300 Area of the U.S. Department of Energy's Handford Site are demolished with explosives on Oct. 9, 2010. Handford demolition and cleanup work is helping drive the Kennewick area economy. (Handford/U.S. Department of Energy)

The Kennewick area is one of “10 real estate markets to watch in 2011,” according to Inman News.

“(H)ousing appreciation in the Kennewick area remained modest while the rest of the country was experiencing a boom,” the real estate news service wrote Friday.

The metro area has fairly low unemployment compared to the national rate and was one of three markets on the list to see household income rise between 2008 and 2009. Population and in-migration from other states also rose during that time, each up 4.2 percent. Median sales price in the Kennewick market rose 8.9 percent from fourth-quarter 2009 to fourth-quarter 2010.

And there’s economic strength in Kennewick, Don Havre, broker at The Real Estate Firm there, told Inman.

We are a transportation hub with rail, barge traffic and (a) freeway network. Our economy includes agriculture, with its growing grape/wine market, high-tech companies like Infinia, which manufactures generators powered by the sun’s energy, Pacific Northwest Laboratory, and the Hanford Project.

Speaking of federal projects, the No. 1 market to watch was Washington, D.C. No other Northwest areas made the list.

Aubrey Cohen

Aubrey Cohen is the aerospace and real estate reporter for seattlepi.com. 

Housing Trends For the Tri-Cities Washington

Housing Trends - Ron Almberg

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and REALTOR.com local community reports.

WA - Kennewick-Richland-Pasco Region Real Estate Market

WA - Seattle Region Real Estate Market

WA - Spokane Region Real Estate Market

WA - Yakima Region Real Estate Market

BABY BOOMERS AND REAL ESTATE

Harris Interactive reports most baby boomers are still in the workforce, and are a driving force in the housing market. The same report concludes 42% of baby boomers would like to retire in the South, 32% in the Western United States, 15% in the Midwest, and 12% in the Northeast. Which means the bulk of opportunity for marketing luxury real estate remains in the Sunbelt.

Four out of ten or 40% of baby boomers own second, separate vacation homes. In fact, baby boomers account for 57% of all vacation home ownership, and own 58% of all rental properties in the United States. Ten percent of baby boomers plan to buy real estate over the course of the next year. Two-thirds of those will buy a new home, a second home, or commercial property.

According to a National Association of Realtors survey, baby boomers expect to use a professional realtor when they buy property. Not only will they utilize real estate agents, but they will demand excellent service and expertise from their agent. Of boomers in the rich category, 97% own homes, and 47% own other additional real estate.

Interestingly, American Demographics states that the future intentions of baby boomers regarding real estate investments, their thinking, and their attitudes are influenced by the media and outside pressures, including marketing.

Bellmarc Realty, which is a leading residential broker, offers the following advice for marketing real estate to affluent baby boomers:

Baby boomers believe bigger is better, so they are attracted to larger custom houses in luxury gated communities.

Use word-advertising to describe and promote large luxury houses. Most baby boomers have acquired many possessions over time and need lots of space.

Luxury properties should be suggested as long-term investments. Generally speaking, the appreciation rate on luxury houses is exceptional. Affluent baby boomers are very concerned with investment potential, which heavily affects their decision to purchase.

Location remains vital to affluent baby boomers. They desire traditional residential neighborhoods, especially if gated and exclusive.

Baby boomers find large, luxury houses with panoramic views very appealing.

Many rich and ultra-rich baby boomers desire spacious apartments in long-established co-ops, especially in the Eastern United States, since many of them come from sorority/fraternity backgrounds. In such instances, co-ops carry definite snob appeal, which is usually best described as “upper-class luxury.”

Affluent baby boomers often want to see all available luxury properties before they make a decision, so real estate agents should be prepared to be helpful and generous with their time.

Younger baby boomers, those in the 45 to 50 age-group, are interested in “up-and-coming” neighborhoods. The investment potential may take longer to reach fruition, but they are willing to wait.

Make sure to mention at least one nearby “destination restaurant” to younger baby boomers.

Younger baby boomers are interested in luxury apartments as long as they come with a doorman, an elevator, service amenities, and exclusive designer interiors. Younger boomers relish the latest gadgets and chic name brand appliances as well.

Since most baby boomers are still working full-time, and are technologically capable, use email and cell phones to contact prospective clients. Phone calls and emails should be short, because baby boomers are busy and on-the-go.

Some affluent baby boomers, according to the National Association of Home Builders, desire to “age in place.” This means they will not purchase new houses. Instead, they will re-model their present houses. Baby boomers in this segment want easy-to-use luxury products, such as more efficient lighting, convenient control devices, easy-grip handles and luxury cabinet hardware, adjustable showerheads, seats, bars, and luxury bathtubs with textured bottoms. Other desired luxury items include low-step showers, wider doorways, ground-floor bathroom additions, hardwood flooring, luxury carpeting, electric stair-lifts, and even in-home elevators.

Zero maintenance is of primary importance to affluent baby boomers. Many of them own two or more homes and they do not want to worry about security or upkeep when they are gone. They also want energy efficiency and attractive exteriors in their properties.

Read the article from Blogcritics.org

The largest and wealthiest group of buyers in the U.S. and Canada is over 50. Understand their maturing motivations and build your business by earning the SRES^® designation. The SRES^® designation prepares REALTORS^® to approach mature clientele with the best options and information for them to make life-changing decisions.