Friday, September 19, 2014

The 12 Best Cities to Live Are ...

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 19, 2014
Newton, Mass., has been crowned as this year’s best U.S. city to live in, according to rankings from 24/7 Wall St. The publication narrowed its list to 550 cities (all of which have more than 65,000 residents) and ranked the cities based on seven major categories: crime, economy, education, housing, environment, leisure, and infrastructure.
The labor market was one of the key measures used to identify the best cities, with top cities having to show positive employment growth between 2011 and 2013.
More Best Cities:
24/7 Wall St. noted that “surprisingly, none of America’s largest cities are on this list,” citing that the largest cities tend to have higher crime rates that automatically excluded them from consideration, as well higher poverty rates.
Below are the 12 cities that topped 24/7 Wall St.’s list. Visit 24/7 Wall St. to view the full methodology used in the rankings for each of the top cities. 
  1. Newton, Mass.
  2. Bellevue, Wash.
  3. Mountain View, Calif.
  4. Pleasanton, Calif.
  5. Evanston, Ill.
  6. Irvine, Calif.
  7. Troy, Mich.
  8. Cary, N.C.
  9. Flower Mound, Texas
  10. Johns Creeks, Ga.
  11.  Boca Raton, Fla.
  12. Carmel, Ind.
Source: “America’s 50 Best Cities to Live,” 24/7 Wall St. (Sept. 17, 2014)


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Where Did Americans Move This Summer?

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 18, 2014
Chicago, Washington, D.C., and Atlanta were the most popular moving destinations of this summer, according to United Van Lines' Summer Long-Distance Moving Trends Study. The moving company giant found that more Americans this summer left cities in the Sun Belt and West Coast to move to Midwestern and Northeastern cities.
On the Move
"Bucking recent trends, more people are moving to cities in the Northeast and Midwest," says Michael A. Stoll, economist, professor, and chair of the Department of Public Policy at the University of California, Los Angeles. "Popular metropolitan destinations driving city-to-city migration are those with a highly educated labor force and that have growing or mature business, financial, and insurance services. In addition, strong technology and health care industries are driving migration, sectors where recent job growth has been relatively robust in the broader economy."
The most popular metro areas for U.S. family moves during the peak moving season (based on United Van Lines' summer moving volume data) are:
  1. Chicago
  2. Washington, D.C.
  3. Atlanta
  4. Boston
  5. Los Angeles
  6. Dallas
  7. Phoenix
  8. New York City
  9. Minneapolis
  10. San Diego
What had people moving this summer? Seventy-one percent moved for a new job or corporate transfer; 13 percent moved because of retirement; and nearly 10 percent moved for health or other personal reasons, according to the United Van Lines survey. Dallas/Fort Worth, Atlanta, and Los Angeles were the most popular destinations for new jobs and corporate transfers, according to the survey.


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Thursday, September 18, 2014

Get a Discount on Your Mortgage

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 18, 2014
Lending giants Bank of America Corp. and Citigroup reportedly will offer mortgages at discounted rates to stir more lending among low-income borrowers and those with subprime credit histories. The loans will be originated through a program by the Neighborhood Assistance Corp. of America, a national nonprofit group that primarily assists low- to moderate-income borrowers.
Credit Standards Easing
Under the new program, the discounts, which will be offered on fixed-rate mortgages, will be greater than what banks usually reserve for borrowers with high credit scores, significant assets, and large down payments. To get the discount in the new loan program, the borrowers will have to pay mortgage points, which are upfront fees that lower the interest rate on a mortgage.
For example, if borrowers pay a mortgage point — which is equal to 1 percent of the total loan amount taken — they typically receive a discount of 0.25 percent on the mortgage interest rate. However, under the new loan assistance program, the banks will offer a 0.5 percent discount for a single mortgage point.
NACA, the originator of loans under the program, doesn't require borrowers to have down payments or to pay closing costs. It also approves borrowers for mortgages as soon as 12 months after a default on a loan. NACA conducts in-depth reviews of applicants' payment histories and requires income and asset documentation, according to CEO Bruce Marks.
The banks' move to work with NACA follows on the heels of a $16.65 billion settlement reached by Bank of America with government regulators in August, as well as a $7 billion settlement Citigroup reached in July. The settlements were reached following accusations that the banks sold risky mortgage securities during the run-up to the housing crisis. Neither bank admits to wrongdoing. But the settlements do require that the banks assist struggling home owners, such as lending to low-income borrowers.
The banks, however, say that their decision to issue NACA loans isn't related to the settlements.
Source: “Citigroup and Bank of America Offer Mortgages with Discounted Rates,” The Wall Street Journal (Sept. 16, 2014)


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Another Dip in Home Affordability, But...

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 16, 2014
Housing affordability nationwide creeped lower once again, as home prices continue to outpace incomes, according to the National Association of REALTORS®' Monthly Housing Affordability Index. Nevertheless, price gains are slowing and mortgage rates are hovering near yearly lows, which is helping to keep homes more affordable to the average family.
A Growing Problem
The median single-family home price in July was $223,900, rising 5.1 percent year-over-year.
Affordability in July fell from the previous month in all regions, excluding the Midwest. NAR researchers note that the Midwest was the only region to experience a slight gain in affordability because of lower home prices and qualifying incomes.
However, affordability has fallen from year-ago levels in all regions, with the West seeing the largest decline — 4.6 percent.
"The rise in mortgage rates was modest this month, so purchases at this time are still favorable when you compare the locked-in monthly payment of a mortgage to the rise in rents," according to NAR's affordability analysis. "New-home construction and an increase in inventory during a time of low rates could lead to more manageable price growth and more sales."
Source: “The Latest Housing Affordability Index Data,” National Association of REALTORS® Economists’ Outlook Blog (Sept. 15, 2014)


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Wednesday, September 17, 2014

Economist Calls for National Policy to Reinforce Home Ownership

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 15, 2014
In a recent column for HousingWire, Jonathan Smoke, chief economist at realtor.com®, breaks down the good and the bad of the housing recovery. He notes certain areas are close to a complete recovery, such as employment, home prices, distressed existing home sales, multifamily new construction, and rents. On the other hand, Smoke says the recovery is far from normal levels in terms of single-family new-home construction, mortgage applications and originations, household formation, and home ownership.
“The most negative sales signal comes from the new-home market, where new-home sales came in at an estimated annualized rate of 412,000 in July, the second lowest rate in the last 10 months,” Smoke notes. New-home permits and starts have failed to reach a pace that economists consider healthy for the sector, which is generally above one million.
Smoke points to another troubling area: Mortgage applications, which fell to the lowest level in 14 years at the beginning of September. Mortgage applications remain low despite the fact that rates are hovering near yearly lows.
“Mortgage applications are considered a leading indicator for future home sales, but I believe the decline is not so much a signal of another downturn in demand but rather an indication of a seriously hobbled housing credit market,” Smoke writes. He says many buyers are being sidelined due to a very “small credit box,” where only consumers with easily documented incomes, strong credit scores, and large down payments are able to qualify for financing on a home.
Another housing hurdle Smoke notes is the abnormal levels of supply and demand. “Affordable homes aimed at the first-time buyer segment are not being built,” he says. “Hedge funds bought up most of the affordable distress inventory over the last three years and have turned them into rentals. Home values have recovered the least in affordable price points, resulting in higher numbers of existing owners with negative equity and therefore unable to sell.”
Smoke says that the continuing declines in areas of home ownership will portend to bigger problems ahead for the overall economy.
“Without a strong housing policy, the mortgage market is incapable of adequately addressing risk-appropriate access to credit that supports home ownership,” Smoke writes. “Fundamentally, we need new directions for national housing policy to address the broken credit market, find solutions for affordability housing across all income levels, reinforce home ownership as the cornerstone of financial security, and fulfill the housing needs of older households.”
Source: “Economist: Here’s Why Mortgage Supply and Demand Isn’t Normal,” HousingWire (Sept. 12, 2014)


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Wells Fargo: Fear Is Holding Many Buyers Back

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 15, 2014
Nearly two-thirds of Americans recently surveyed say they believed a stellar credit score was necessary to purchase a home, and more than 40 percent said they needed a down payment equal to or at least 20 percent of the purchase price to buy a home today, according to a new survey released by Wells Fargo.
Back in April, 56% of all potential home buyers said they were waiting to purchasebecause they feared being rejected by lenders.
However, the nation’s largest mortgage lender says many customers believe it’s much more difficult to get a mortgage than it really is.
Franklin Codel, Wells Fargo’s head of mortgage production, notes that the bank has lowered minimum credit scores for loans backed by the government in an effort to expand its eligible borrower pool.
“When we expanded FICO ranges, we saw not only an increase in applications but we also saw an increase in approval rates,” Codel says.
The lender acknowledges that mortgage credit has tightened since the financial crisis. But buyers’ fear of being turned down by a bank are needlessly keeping some of them out of the housing market, analysts note.
For example, in 2013, 19 percent of families said they did not apply for a consumer loan due to fear of rejection – which is above the 16.4 percent rate of families who actually are turned down for credit, according to a recent Federal Reserve survey.
Source: “Wells Fargo Finds Mortgage Myths Hamper Home Purchases,” Reuters (Sept. 15, 2014)
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Tuesday, September 16, 2014

What Makes a City Smart?

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 15, 2014
Everyone wants to live in a smart place. But the magic mix that draws people in is composed of a lot of different dynamics coming together all at once, according to the National Geographic Channel’s Smart Cities program.
“A city needs a heart and soul—typically the center, where people congregate for work and leisure. Smart cities are well-connected locally and internationally, have a sustainable lifestyle, and are places where people come first,” says Ian MacFarlane, consultant for the program.
National Geographic’s Traveler magazine recently compiled a list of the 50 top attributes that make for a smart city, naming cities that exemplify each factor along the way. Of course, the authors were thinking of travel destinations when they put the list together, but many items on their list matched attributes that make for a top place to live, too. Here are a few that resonated with the U.S. real estate industry:
  • Support for local artisans. Example: Paducah, Ky. was recently named a UNESCO City of Crafts and Folk Art for its promotion of its fiber arts assets and its attempts to attract creative types to its LowerTown Arts District.
  • Dreamers who foster innovation. Example: San Francisco is a city that has more than its fair share of tech start-ups and their eager investors.
  • Urban farming. Example: Manhattan was ahead of the curve when Bell Book & Candle started growing greens in aeroponic rooftop gardens many years ago.
  • High-tech data streams. Example: Chattanooga, Tenn. got the nickname of “Gig City” for its lightning-fast Internet.
The magazine included 47 other examples from around the world of how cities are demonstrating the types of intelligence that delight travelers and residents alike in the upcoming issue.
Source: “The 2014 Traveler 50: World's Smartest Cities,” National Geographic’s Traveler magazine (October 2014 issue).


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Monday, September 15, 2014

Low Mortgage Rates Are Lingering

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 12, 2014
The average percentage rates for fixed-rate mortgages inched up slightly this week, but continue to hover near yearly lows.
Mortgage Rates' Impact:
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 11:
  • 30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.5 point, up slightly from last week’s 4.10 percent average. Last year at this time, 30-year fixed-rate mortgages averaged 4.57 percent.
  • 15-year fixed-rate mortgages: averaged 3.26 percent, with an average 0.5, rising from last week’s 3.24 percent average. A year ago, 15-year fixed-rate mortgages averaged 3.59 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 2.99 percent, with an average 0.5 point, rising from last week’s 2.97 percent average. Last year at this time, 5-year ARMs averaged 3.22 percent.
  • 1-year ARMs: averaged 2.45 percent, with an average 0.4 point, rising from last week’s 2.40 percent average. A year ago, 1-year ARMs averaged 2.67 percent.
Source: Freddie Mac


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Priced to Sell at $30M? Apparently, Yes!

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 12, 2014
Luxury homes are selling faster than last year, and the homes fetching some of the heftiest price tags are spending less time lingering on the market, according to new data from realtor.com®. An uptick in the stock market and improving economy may be helping to boost the luxury market in recent months.
The High-End Market isBooming:
For homes listed less than $1 million, the median age of listings ranged from 80 days to a median of 180 days for homes just under $30 million, according to realtor.com®. But for homes above $30 million, the median time to market dropped to 139 days.
Jonathan Smoke, realtor.com®’s chief economist, says the faster times are often because these high-ticketed homes are marketed quietly before hitting the open market. This market segment is attracting a more engaged group of buyers lately, he says.
For example, in Vail, Colo., homes above $15 million used to sit on the market for more than two years, but now are selling in “months, not years, and sometimes in weeks,” Tye Stockton, a real estate professional with Ascent Sotheby’s International Realty, told The Wall Street Journal. In Greenwich, Conn., Tamar Lurie with Coldwell Banker told The Wall Street Journal that she is expecting about 20 sales above $10 million this year – double the number sold last year.
A $2 million listing in the Hancock Park area of Los Angeles sat on the market last year before it was removed after never hooking a buyer. But this month, the owners put the home back on the market and sold above the asking price in just one day, says Billy Rose, co-founder of the Agency, a real estate brokerage in Beverly Hills, Calif.
Source: “Luxury Homes: Priced to Sell at $30 Million,” The Wall Street Journal (Sept. 10, 2014)


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Thursday, September 11, 2014

More Singles Than Ever: How It Affects Real Estate

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 11, 2014
In the age of "selfies," the majority of adults are sticking to themselves. Single Americans now make up more than half of the adult population, the first time the number of singles has passed the 50 percent mark since the government began tracking such data in 1976.
A Force to Be Reckoned With
About 124.6 million Americans indicated they were single in August; 50.2 percent were age 16 or older, according to new data from the Bureau of Labor Statistics. The percentage has been gradually trending upward since the beginning of 2013.
The rise of single households has "implications for our economy, society, and politics," writes Edward Yardeni, president of Yardeni Research Inc., in a report called "Selfies." He called the proportion of singles today "remarkable."
What are the implications for real estate? Singles, particularly younger professionals, are more likely to rent than own a home. They are less likely to have children, and the growth in single households likely will exaggerate income inequality, Yardeni notes.
"While they have less household earnings than married people, they also have fewer expenses, especially if there are no children in their households," Yardeni writes in his report.
The number of never-married adult Americans has been on the rise, too, increasing to 30.4 percent from 22.1 percent in 1976. The number of divorced, separated, or widowed adults also has risen up to 19.8 percent from 15.3 percent.
Some real estate analysts are expecting an increase in singles heading into home ownership in the coming years. For example, single women make up the second largest segment of home purchases, with one out of every five homes purchased by a single woman, according to National Association of REALTORS® data. More than 25 million single women over the age of 45 — who may be either divorced, widowed, or never married — are also making up a growing number of home owners, real estate professionals report.
Some builders are even catering to this growing segment, reportedly adding two master bedrooms to appeal to the 40 percent of single women who choose to have non-romantic roommates, according to AARP surveys. 

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Tuesday, September 9, 2014

Mortgage Rates Stay Near Yearly Lows

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 05, 2014
For the third consecutive week, the 30-year fixed-rate mortgage held steady, with borrowing costs for home buyers and refinancers remaining near its lows for the year.
Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 4:
  • 30-year fixed-rate mortgages: averaged 4.10 percent, with an average 0.5 point, holding the same as last week. Last year at this time, 30-year rates averaged 4.57 percent.
  • 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.5 point, dropping from last week's 3.25 percent average. A year ago, 15-year rates averaged 3.59 percent.
  •  5-year hybrid adjustable-rate mortgages: averaged 2.97 percent, with an average 0.5 point, holding the same average from last week. Last year at this time, 5-year ARMs averaged 3.28 percent.
  • 1-year ARMs: averaged 2.40 percent, with an average 0.4 point, rising from last week's 2.39 percent average. A year ago, 1-year ARMs averaged 2.71 percent.
Source: Freddie Mac


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Friday, September 5, 2014

Where Homes Are Most Affordable

DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 05, 2014
Home affordability varies greatly depending on where a buyer lives, as well as other factors. Using RealtyTrac's income-to-price affordability ratios from more than 2,000 counties, 24/7 Wall St. pinpointed where home affordability is highest. In fact, in some markets, home owners may need to use only about 3 percent of their income to afford a median-priced home.
The Affordability Crisis
Unsurprisingly, San Francisco County in California had the least number of affordable homes in the nation. In San Francisco, the median selling price for houses and condos recently reached the million-dollar mark. 
But on the opposite end of the spectrum, the following seven markets are considered some of the most affordable in the nation. (The affordability rate is the percentage of the county's estimated median household income needed to make monthly payments — including mortgage, property taxes, and homeowners insurance — on a median-priced residential property.)
  1. Chattooga County, Ga.
    Affordability rate: 3.75%
    Household median income: $41,864
  2. Lake County, Tenn.
    Affordability rate: 5.75%
    Household median income: $33,512
  3. Edgecombe County, N.C.
    Affordability rate: 6.17%
    Household median income: $40,726
  4. Upson County, Ga.
    Affordability rate: 6.31%
    Household median income: $37,601
  5. Barnwell County, S.C.
    Affordability rate: 6.81%
    Household median income: $35,219
  6. Obion County, Tenn.
    Affordability rate: 6.88%
    Household median income: $45,919
  7. Lamar County, Ga.
    Affordability rate: 6.92%
    Household median income: $33,661
Source: “The 10 Most Affordable Markets in America,” 24/7 Wall St. (Sept. 4, 2014)


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Thursday, September 4, 2014

Where Autumn is Hot for House Hunting

DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 04, 2014
Home searches often slow down in the autumn season, but not everywhere.
A new study by Trulia shows that of the 500 largest U.S. metros, some markets see house-hunting pick up in the fall — particularly markets in New England, the San Francisco Bay area, and New York state.
In analyzing home searches on its site, Trulia found the following metros often have the highest numbers in autumn:
  1. Peabody, Mass.
  2. Worcester, Mass.
  3. San Francisco
  4. Oakland, Calif.
  5. Seattle
  6. San Jose, Calif.
  7. Albany, N.Y.
  8. Long Island, N.Y.
  9. Buffalo, N.Y.
  10. Gary, Ind.
Some smaller markets also find autumn to be their prime house-hunting season, particularly counties in vacation spots near mountain or forest attractions and ski resorts. Some of the smaller markets to see a boost in the autumn are Lincoln, N.M.; Teton, Wyo.; and Watauga, N.C.
Meanwhile, the housing markets that often see search activity drop the most in the autumn tend to be in college towns, such as College Station-Bryan, Texas; Columbia, Mo.; and Iowa City, Iowa. Also, search activity often slows in Florida vacation spots in autumn, such as Key West, Punta Gorda, and Naples-Marco Island, according to the analysis.
Source: “House Hunters Head for the Hills After Labor Day,” Trulia Trends (Sept. 2, 2014)


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Wednesday, September 3, 2014

Student Debt Burden Holding First-Time Buyers Back

DAILY REAL ESTATE NEWS | WEDNESDAY, SEPTEMBER 03, 2014
Carrying student loan debt is making it more difficult for many young professionals to qualify for a mortgage. Recent college graduates with student loan debt who want to own a home will need to earn about one-third more annually — or $8,969 more — than those who are debt-free, according to new research by the real estate data firm RealtyTrac.
The Student Loan Debt Crisis
“To overcome the additional debt from student loans, indebted college graduates need to make more income than college graduates without student loans to be able to afford a home,” says Daren Blomquist, a vice president at RealtyTrac. For its analysis, RealtyTrac factored in the median home price for each state and county and calculated the minimum amount of income needed to qualify for a loan to purchase a home at that price.
RealtyTrac found that graduates with student loans who are earning the median U.S. household income can afford to make the monthly payments on a median-priced home in 96 percent of the 494 county markets it analyzed.
But many graduates with student loans are saddled with high debts and are struggling to break ahead.
The average graduate in 2014 carried $33,000 in debt, an amount that has tripled over the last 20 years, according to Edvisors.com, a network of websites about planning and paying for college. The average starting salary for an employee holding a bachelor’s degree is around $45,000.
“The average student loan debt varies from state to state, and somewhat counterintuitively, some of the most expensive states for housing also have the lowest average student loan debt,” Blomquist says. For example, while California has one of the lowest levels of student loan debt, it boasts some of the highest home prices in the nation.
In some cases, college grads with student loan debts are having to earn a lot more money than their debt-free counterparts if they want to buy a home. According to RealtyTrac’s analysis, the following states are where recent graduates with student loans need to make even more income to match the purchasing power of students without loans:
  • Connecticut: 58%
  • Rhode Island: 56%
  • Michigan: 55%
  • Ohio: 52%
  • Pennsylvania: 49%
Student loan debt is a pressing hurdle for graduates not only in purchasing a home but also in building wealth over the long term. For example, households headed by young, college-educated adult without any student debt have about seven times the typical net worth ($64,700) than households headed by young, college-educated adults with student debt ($8,700), according to data from the Pew Research Center. About a quarter of households headed by an adult under 40 has student debt, a record high, according to Pew.
Source: “College Grads Face High Hurdles to Buying First Homes,” MarketWatch/The Wall Street Journal (Aug. 28, 2014)


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Sluggish Housing Market Blamed for Drop in Title Insurance Volume

DAILY REAL ESTATE NEWS | WEDNESDAY, SEPTEMBER 03, 2014
Title insurance premium volume has fallen 16.6 percent during the second quarter of this year compared to last year, according to the American Land Title Association.
“A lackluster spring homebuying season that was weaker than anticipated, coupled with a substantial decline in refinance activity, resulted in the drop in title insurance premium volume,” says Michelle Korsmo, ALTA’s CEO. “Despite the lull in the housing market, the title insurance industry remains in a strong financial position posting more than $90 million in net income this quarter. … For more than a century, title insurance companies have protected the interests of home buyers through a process that has given Americans a sense of security in what is almost always their most significant investment – their homes.”
Capitalizing on Titles
During the second quarter of 2014, the title insurance industry generated $2.7 billion in title insurance premiums, compared with $3.3 billion during the second quarter of 2013, according to ALTA.
The title insurance companies that have the largest market share in the industry are Fidelity Family (34%); First American Family (27%), and Old Republic Family (14%).
Meanwhile, the following states generated the most title insurance premiums in the second quarter of 2014:
  • Texas: $430 million, down 1.5% from the second quarter of 2013
  • California: $354 million, down 21.5%
  • Florida: $264 million, down 10%
  • New York: $225 million, down 0.6%
  • Illinois: $101 million, up 2.9%


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Tuesday, September 2, 2014

FHFA Seeks to Expand Mortgage Access

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 02, 2014
The Federal Housing Finance Agency announced that it wants housing finance giants Fannie Mae and Freddie Mac to provide greater support to low-income mortgage borrowers and refinancers.
FHFA, which is the regulator for Fannie Mae and Freddie Mac, outlined goals for 2015-2017 aimed at advancing that goal. It wants to ensure that low-income families account for 23 percent of the GSE’s purchases of single-family home mortgages. Also, the agency seeks to ensure that the firms raise the share of their purchases that back mortgages in low-income areas with large minority populations. FHFA has charged the firms with raising the share of their mortgage refinance operations that target low-income Americans, Reuters reports.
Find out why first-time and low-income mortgage borrowersmay have an easier time qualifying for a Federal Housing Administration loan.
More specifically, FHFA has charged Freddie Mac with gradually expanding the number of loans it backs for low-income multifamily buildings, such as apartment buildings. It wants Freddie Mac to expand such loans to 230,000 by 2017; currently it’s target for this year is 200,000.
Some lawmakers may view FHFA’s move as controversial, with critics saying that boosting the support of mortgage access for low-income borrowers is what led to the housing bubble that burst in 2006, Reuters reports.
Source: “U.S. Housing Regulator Seeks More Support for Poor Borrowers,” Reuters (Aug. 29, 2014)


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Why Redfin Is Predicting a Home Sales Surge

DAILY REAL ESTATE NEWS | TUESDAY, SEPTEMBER 02, 2014
A slowdown in home price growth and a shift in pricing power from sellers to one that more closely aligns with buyers expectations will “drive an unusual surge in home sales this fall,” predicts analysts at the real estate brokerage Redfin in its latest housing report.
“Home buyers who have been willing to wait for better deals are starting to be rewarded for their patience, as sellers drop listing prices to meet buyers’ more value-focused expectations,” Redfin notes in its latest report.
Reason for Optimism? 
The number of homes that sold above list price in July was down nearly 7 percent to 20.1 percent from 26.8 percent a year ago, according to Redfin’s analysis.
“Sellers are finally catching on that it’s not a seller’s market anymore,” says Jeremy Cunningham, a Redfin real estate professional in Virginia.
Sellers are adjusting their prices, particularly in markets that have seen a large increase in for-sale inventories or big increases in home price appreciation over the past year.
According to Redfin, Denver is the metro that has registered the largest percentage of listing price drops. Its median sales price has increased by 15 percent year-over-year compared with an average of 5.5 percent for all metros.
On the other hand, Ventura County and Sacramento, Calif., have seen more moderate price growth year-over-year but have seen their for-sale inventories rise by 25.6 percent and 18.3 percent, respectively. The two metros had the second and third largest percentage of homes for sale with price drops in July, according to Redfin.
Some of the metros with the fewest price drops tended to have smaller increases in median home prices and for-sale inventories, analysts note. On the other hand, some West Coast markets like San Francisco, San Jose, Los Angeles, and Seattle continue to sell for more than list price.
Get Ready for a Hot Fall?
Redfin analysts are predicting a surge in home sales in September and October.
“We continue to see strong buyer demand as we head into fall,” according to Redfin’s housing report, which shows the number of tours and offers picking up from July and into August. “The buyer fatigue from competing against multiple offers, bidding wars. and tight inventory is diminishing. Additionally, the widespread increase in price drops is likely to give buyers even more confidence that they have regained some of the bargaining power lost last year.”
Also, analysts note that borrowing costs still remain attractive, which will help buyers off the fence.Mortgage rates continue to hover near yearly lows. 


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