Thursday, October 23, 2014

Home Equity Rebound Slows its Pace

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 23, 2014
More home owners are eeking out equity again on their properties, but with slowing home appreciation, millions of home owners may still be at risk of foreclosure.
Equity-rich properties – those with at least 50 percent equity – grew to 10.8 million, or 20 percent of all properties with a mortgage, in the third quarter, according to RealtyTrac’s third quarter U.S. Home Equity & Underwater Report. That percentage is up from 19 percent of properties in the second quarter of 2014.
Another 8.5 million properties – or 16 percent of all homes with a mortgage -- are teetering on the edge of equity, with between 10 percent of negative equity and 10 percent of positive equity.
But many home owners have yet to regain equity. There are 8.1 million U.S. residential properties seriously underwater – in which the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market vale, according to RealtyTrac. The number of properties with negative equity has fallen to the lowest level since RealtyTrac began tracking such data in 2012. The peak was in the second quarter of 2012 when 12.8 million properties – or 29 percent of all properties with a mortgage – were seriously underwater.
“The decrease in underwater properties is promising but the estimated $1.4 trillion in negative equity means that the flood waters are not receding as quickly as they were before, corresponding to slowing home appreciation,” says Daren Blomquist, vice president at RealtyTrac. “Slower price appreciation means 8 million home owners seriously underwater could still have a long road back to positive equity.”
To paint a picture of the typical underwater home owner, RealtyTrac found it’s often a home owner who bought or refinanced during the housing bubble years (from 2004 to 2008), owns a home worth less than $200,000, and who lives in the Sun Belt or Rust Belt.
On the other hand, the highest percentage of equity rich home owners were those who bought or refinanced between 1994 and 1998; have properties valued at $500,000 or more; and tend to live in New York, California, and Washington, D.C.
The States With the Highest Levels of Negative Equity
The following states had the highest percentage of residential properties seriously underwater in the third quarter, according to RealtyTrac:
  • Nevada: 31%
  • Florida: 28%
  • Illinois: 26%
  • Michigan: 25%
  • Rhode Island: 22%
The metro area (with population of 500,000 or more) with the highest percentage of properties seriously underwater was Las Vegas at 34 percent.
The Equity-Rich Markets
The following metros had the highest percentage of equity-rich properties – those with at least 50 percent equity or more – during the third quarter:
  • San Jose, Calif.: 45%
  • San Francisco: 41%
  • Honolulu: 36%
  • Los Angeles: 32%
  • New York, N.Y.: 31%
Source: RealtyTrac


Posted by at No comments:
Labels: , , , , , , , , , ,

5 Markets to Watch for Investors in 2015

DAILY REAL ESTATE NEWS | THURSDAY, OCTOBER 23, 2014
Typical investor magnets like San Francisco, New York City, Boston, and Seattle are getting new competition from some rapidly growing markets. The coastal cities are no longer the top choices for investors: Other markets are stepping in as the ones to watch for 2015, according to Emerging Trends in Real Estate 2015, a report co-published by PwC US and the Urban Land Institute. The report is based on a survey of more than 1,000 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers, and consultants.
Houston and Austin edged out San Francisco for the top spots this year, proving to be the top picks for real estate prospects in 2015. Charlotte, N.C., nabbed a seventh place spot on the ranking list, edging out Seattle and Boston; while Nashville, ranked No. 14, topped Manhattan.
“Investors are looking closely at opportunities beyond the core markets,” says ULI Global Chief Executive Officer Patrick L. Phillips. “These cities are positioning themselves as highly competitive, in terms of livability, employment offerings, and recreational and cultural amenities,”
The report ranked the following five markets as the ones “to watch in 2015”, based on survey respondents and their outlook on each market:
  1. Houston: “Investors believe that the energy industry will continue to drive market growth and that will support real estate activity in 2015,” the report notes. “Houston was ranked number one in both investment and development expectations for next year; housing market expectations are ranked number two.”
  2. Austin: “Interviewees like the industrial base, the appeal to the millennial generation, and the lower cost of doing business in Austin,” the report notes. “The market was a top choice for both the office sector and the single-family housing sector and the number two ranked market for retail.”
  3. San Francisco: Falling from its No. 1 spot last year, survey participants note the city is still poised for growth but other cities are catching up. “The strong local economy and improved domestic and international travel have made San Francisco the number one choice for hotel investment in 2015,” the report notes. “Respondents ranked the office market number three and the retail market number four.”
  4. Denver: Proving to be one of the most popular markets with the millennial generation, “Denver’s industry exposure to the technology and energy industries has also attracted investor interest,” according to the report. “The results of the survey put Denver retail at number five and office at number six.”
  5. Dallas/Fort Worth: “The market continues to be attractive to real estate investors because of its strong job growth, which benefits from the low cost of living and doing business,” according to the report. “Single-family housing in the market is the highest ranked property sector – and it also has the highest ranked industrial sector (number four) among the top five markets from this year’s survey.”



Posted by at No comments:
Labels: , , , , , , , , , , ,

Wednesday, October 22, 2014

More Owners Delay Remodeling Projects, Again

DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 22, 2014
Remodeling and home improvement spending posted a strong rebound last year, but the rebound was short-lived, a new report says. Remodeling projects and expenditures are back on the decline this year as housing market conditions and fading tax incentives cause more home owners to delay projects once again. 
Getting Back Remodeling Bucks
The primary driver of home remodeling expenditures is the pace of single-family existing home sales, writes Robert Dietz, an economist with the National Association of Home Builders, in an article at U.S. News & World Report. Between the summer of 2013 and March of this year, existing-home sales fell, Dietz says, despite a recent rebound. As such, Dietz says the remodeling market has seen declines in the annual pace of improvement spending since December 2013. 
“Existing home owners are most likely to improve a home prior to placing the home on the market, and new home owners find the best time to make substantial changes to a home is immediately after purchase,” Dietz notes. 
The pace of remodeling in August was down more than 10 percent year-over-year, according to U.S. Census Bureau data. 
Dietz points not only to the stall in home sales but also to the expiration at the end of 2013 of a set of federal energy-efficiency tax credits for the slowdown in remodeling expenditures. The tax credits helped home owners to offset the cost of replacing older windows, hot water tanks, and appliances with new energy-efficient models. 
“Despite these economic and policy headwinds, the prospects for the remodeling sector appear more positive for 2015,” Dietz notes. An index of professional remodeler sentiment shows a gain in confidence, particularly as the existing single-family sales market improves. The National Association of REALTORS® is forecasting a 7.7 percent growth in existing sales in 2015.
“Underlying these market improvements is the fact that our nation’s housing stock continues to age, and aging homes require upgrading and modification,” Dietz notes. The median age of owner-occupied homes was 35 years old, according to the 2011 American Housing Survey (in the 1985 AHS survey, the median age was 23). 
Source: “In Need of Housing Improvement,” U.S. News & World Report (Oct. 20, 2014)


Posted by at No comments:
Labels: , , , , , , , , , , , , ,

September Marked 2014 High in Home Sales

5DAILY REAL ESTATE NEWS | WEDNESDAY, OCTOBER 22, 2014
Existing-home sales bounced back in September, surging to the highest annual pace of the year, according to the latest report from the National Association of REALTORS®. All regions except for the Midwest reported gains in sales last month.
The Future's So Bright
“Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” says Lawrence Yun, NAR’s chief economist. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline of choices due to the fact that inventory generally falls heading into winter.” 
Existing-home sales rose 2.4 percent in September, reaching an annual rate of 5.17 million. Sales are at the highest pace of 2014 but remain 1.7 percent below the 5.26 million level from last September, NAR reports.  
Snapshot of Housing Indicators for September
  • Home prices: The median existing-home price was $209,700 in September, 5.6 percent higher than a year ago. It is the 31st consecutive month for year-over-year price gains. 
  • Days on market: Homes stayed on the market longer in September — 56 days, compared with 53 days in August. Short sales remained on the market for a median 116 days in September, while foreclosures sold in 59 days. About 35 percent of homes sold in September were on the market for less than a month, according to NAR. 
  • Inventory: Total housing inventory dropped 1.3 percent to 2.30 million existing-homes for-sale, representing a 5.3-month supply at the current sales pace. Unsold inventory is 6 percent higher than a year ago.
  • All-cash sales: Sales involving all cash made up 24 percent of transactions in September, down from 33 percent compared to a year prior. 
  • Distressed homes: Foreclosures and short sales rose slightly in September to 10 percent, from 8 percent in August. Distressed sales, however, are down from 14 percent a year ago. Foreclosures and short sales in September sold for an average discount of 14 percent below market value.
By the Region
Here’s an overview of how existing-home sales performed across the country in September: 
  • Northeast: Existing-home sales rose 1.5 percent to an annual rate of 680,000, but were 1.4 percent below sales levels from a year ago. Median price: $249,800 (up 4.8 percent from a year ago)
  • Midwest: Existing-home sales fell 5.6 percent to an annual rate of 1.17 million, and remain 4.9 percent below September 2013 levels. Median price: $165,100 (up 4.9 percent from a year ago)
  • South: Existing-home sales rose 5 percent to an annual rate of 2.12 million, and are 1.4 percent higher than September 2013. Median price: $180,900 (up 5.1 percent from a year ago)
  • West: Existing-home sales surged 7.1 percent to an annual rate of 1.20 million, remaining 4 percent below levels from a year ago. Median price: $294,200 (up 4 percent from a year ago)


Posted by at No comments:
Labels: , , , , , , , , , ,

Tuesday, October 21, 2014

10 Best ZIP Codes in 2014

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 21, 2014
The ZIP code of the country's best place to call home is 20004, according to real estate company Movoto.com. Right smack in the heart of the nation's capital, it's where you'll find portions of the Smithsonian museums, Ford's Theatre, and it's close to the White House. The ZIP code boasts an average household income of $131,111 and an unemployment rate of 1.93 percent.
It's All About the ZIP
Movoto ranked the following top 10 ZIP codes top for 2014:
  1. 20004: Washington, D.C.
  2. 77005: Houston
  3. 98039: Medina, Wash.
  4. 95497: Sea Ranch, Calif.
  5. 11930: Amagansett, N.Y.
  6. 92121: San Diego
  7. 60603: Chicago
  8. 60602: Chicago
  9. 67230: Wichita, Kan.
  10. 64113: Kansas City, Mo.
To compile its rankings, Movoto factored in data from the U.S. Census' American Community Survey, researching ZIP codes for median household income (the higher, the better); unemployment rate (the lower, the better); average commute time (the lower, the better); median rent (higher rents indicate a more desirable area); median house worth (higher values indicate a more desirable area); and more.
Source: “These Are the Best ZIP Codes in America,” Movoto.com (Sept. 30, 2014)


Posted by at No comments:
Labels: , , , , , , , , , ,

Markets Still Plagued by Inventory Crunch



DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 21, 2014
The number of homes for sale is still low in many markets: Supply nationwide in September was at five and a half months; most economists consider a normal level to be six to seven months. The supply of new homes was even lower, at nearly five months, according to realtor.com®'s September National Housing Trend Report.
Inventories Show Signs of Improvements
"To truly relieve the inventory shortage on a sustained basis, new-home construction needs to rise by at least 50 percent from the current levels," says Lawrence Yun, chief economist for the National Association of REALTORS®. 
The following markets have posted some of the biggest drops in listings year-over-year:
  • Las Vegas: -37.9%
  • San Jose, Calif.: -36.2%
  • Columbus, Ohio: -29%
  • Cincinnati: -26.5%
  • Houston: -25.2%
  • Washington, D.C.: -25%
  • San Francisco: -23.4%
  • Chicago: -22.8%
Meanwhile, in some markets, home buyers have found more choices in the past year. These markets have seen the biggest growth in inventory levels year-over-year:
  • Honolulu: +27.5%
  • Orlando, Fla.: +25.8%
  • Miami: +22%
  • Charleston, W.Va.: +20.1%
Nationwide, the median age of inventory fell slightly year-over-year in September due to the reduced number of homes on the market, according to realtor.com®. Homes spent about 90 days on the market in September, three days less than a year ago.
Also, median listing prices held steady for the fourth consecutive month, maintaining a 7.7 percent gain year-over-year. The median list price in September was $214,900 nationwide.


Posted by at No comments:
Labels: , , , , , , , , , ,

Monday, October 20, 2014

Fannie, Freddie to Loosen Up on Lending

DAILY REAL ESTATE NEWS | MONDAY, OCTOBER 20, 2014
The regulator of mortgage giants Fannie Mae and Freddie Mac is reportedly working on a deal with the financing entities that will loosen up lending standards and make mortgages more affordable for those with less-than-perfect credit. The move is expected to expand home buyers’ access to financing, as tight credit the last few years has kept many sidelined. 
The new rules reportedly will include a lower minimum down payment requirement (from 5 percent to 3 percent), in order for lenders to qualify to sell a loan to Fannie Mae and Freddie Mac. That would bring down payment in sync with the Federal Housing Administration, which insures loans made to lower-income borrowers and first-time buyers. Fannie Mae and Freddie Mac guarantee about 59 percent of all mortgages written.
The Federal Housing Finance Agency, which regulates Fannie and Freddie, reportedly will include more safety measures to help lenders protect themselves from making bad loans. Lenders have faced numerous high-dollar settlements after issuing loans that later defaulted. The new agreement would give greater confidence to lenders so they won’t be penalized years after a loan is made, The Wall Street Journal reports. 
The potential agreement “would allow credit to flow more freely to lower- and middle-income households,” Mark Zandi, chief economist at Moody’s Analytics, told The Wall Street Journal. “That’s vital to getting the housing recovery moving forward.”
During the financial crisis, the financing giants faced steep losses as home loans defaulted. The spike was blamed on poor underwriting by lenders in ensuring that borrowers could afford their mortgages. In response, the companies, which were seized by the government in 2008, have had banks tighten their credit standards, which some critics say has gone too far and prevented many home buyers from qualifying for a home loan. 
The Urban Institute has estimated that 1.2 million more mortgages would have been issued in 2012 alone if lending standards that were commonly used in 2001 were still in place. 
"Understandably, after the [financial] crisis the pendulum of mortgage credit standards swung to a far extreme” Paul Leonard, California director of the Center for Responsible Lending, told the Los Angeles Times. “It's now working its way back to a more moderate position.”
The FHFA is expected to formally announce the plans later this week. 
Source: “Fannie Mae, Freddie Mac Reach Deal to Ease Mortgage Lending,” Los Angeles Times (Oct. 17, 2014) and “Mortgage Giants Set to Loosen Lending,” The Wall Street Journal (Oct. 17, 2014)


Posted by at No comments:
Labels: , , , , , , , , , , ,
Subscribe to: Posts (Atom)