Despite forecasts that prices will increase less in 2013 than this year, buyers are more concerned by rising prices than the overall economy. Thirty-three percent of buyers listed rising prices as a major concern in the fourth quarter, up from just 23 percent in the third quarter. Meanwhile, 22 percent said they were concerned with a weak economy, down from 27 percent in the third quarter, according to the Redfin Real-Time Homebuyer Survey. From November 30 to December 2, 2012, Redfin surveyed 1,084 active homebuyers who had toured a home with a Redfin agent since August 14.
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Sales of newly built, single-family homes rose 5.7 percent to a seasonally adjusted annual rate of 389,000 units in September, according to newly released figures from HUD and the U.S. Census Bureau. This is the fastest sales pace recorded since April of 2010.
“Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, today’s data provides further confirmation that a gradual but steady housing recovery is underway across much of the nation,” says Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under today’s exceedingly stringent guidelines.” Print This Post
By Shawn Tully, senior editor-at-large October 18, 2012: 5:00 AM ET
As Fortune predicted last year, a robust recovery in home prices is under way.
FORTUNE — In spring 2011 this writer penned a controversial cover story titled “The Return of Real Estate” that predicted a strong rebound in housing. At the time, prices and sales were still tumbling, and the prevailing view among economists and pundits was that the slide would drag on and on. But Fortune’s contrarian forecast proved right. By October of last year, new- and existing-home sales and housing starts had begun an upswing that’s been gathering strength ever since — and prices joined the march in early 2012. The data conclusively confirm what Fortune predicted back then: “Housing is back.”
And yet skepticism about the strength of the recovery persists in some quarters. So we decided to revisit the metrics that led to our bullish conclusion on home prices. In the 2011 story, Fortune argued that a severe shortage of new homes was providing the foundation for a resurgence in both sales and prices. Much of our data was provided by Mike Castleman, chief of Metrostudy, whose inspectors drive by 5 million lots every three months to gauge how many homes feature a for sale sign and how many are actually being sold. We asked Castleman where the recovery stands now and how it’s likely to play out. Print This Post
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 2.4 percent to 101.7 in July from 99.3 in June and is 12.4 percent above July 2011 when it was 90.5. The data reflect contracts but not closings.
Lawrence Yun , NAR chief economist, said the index is at the highest level since April 2010, which was shortly before the closing deadline for the home buyer tax credit. “While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity,” Yun said. (More …) Print This Post
Builder confidence in the market for newly built, single-family homes gained five points in May from a downwardly revised reading in the previous month to reach a level of 29 on the National Association of Home Builders/Wells Fargo (More …) Print This Post
Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco recently sent to Congress a strategic plan for the next phase of the conservatorships of Fannie Mae and Freddie Mac (the Enterprises).
The plan builds on the Acting Director’s February 2010 letter to Congress on the conservatorships and sets forth objectives and steps FHFA is taking or will take to meet FHFA’s obligations as conservator. Fannie Mae and Freddie Mac were placed into conservatorships Sept. 6, 2008 and have since received more than $180 billion in taxpayer support. (More …) Print This Post
by The KCM Crew on January 3, 2012
1. Buyers Will Return
In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.
2. Foreclosures Will Increase
The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.
3. Prices Will Soften
As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:
- They will eat up some of the buyer demand in the market.
- They will impact the appraisal on ALL transactions in the area.
An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.
4. Short Sales Will Increase
As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.
5. Great Agents Will Be VERY Successful
Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.
Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.
This blog will help you with the what and the why. If you are looking for help with how to communicate this information to clients and customers, go here. Print This Post
Posted By The KCM Crew On November 29, 2011
The National Association of Realtors recently released their 2011 3rd Quarter Housing Report. In the report, they showed that combined sales of single family homes, condos and co-ops increased in EVERY state as compared to the 3rd quarter of last year. Here are the state-by-state numbers.
The next time someone says houses aren’t selling, ask them which state they live in and show them the chart. Print This Post
by Dean Hartman on June 9, 2011
As people go through the mortgage process today, I believe that they wonder if their lender has gone insane. Lenders ask for documentation repeatedly, constantly updating, asking for further clarification and explanation for everything. Income, credit, assets and appraisals are scrutinized at a level unseen in my 25+ years. It almost seems like they are trying to find reasons NOT to lend.
But, I assure you, that is not the case. The only way lenders can stay in business is to lend money. It is what funds the operation and pays for salaries, rent and paper clips. Lending is what creates the value of the company. No closings, no revenue, no company.
So why the perception of over-documentation and over analysis when we know the lenders have to make loans? This is the reality of a post-subprime world. Lenders got too liberal and under-documented files and forgot the primary role of underwriting (judging a borrower’s ABILITY and WILLINGNESS to repay the loan) as they approved files. And now, the pendulum has swung back to a very conservative stance. Common sense seems to have been replaced by a “Cover Your Butt Mentality”.
No one is immune. Appraisers error on the side of lower valuations and heightened criticism of a home’s condition. Underwriters labor over pay stubs, tax returns, bank statements and credit information. Closing agents meticulously examine title and closing documents. Each of them has learned that their mistakes, miscalculations, or errors in judgment (no matter how minor) can result in a loss of their job, a bad loan, and/or monetary damages to their companies.
So, today I just wanted to counsel home buyers. Your lender WANTS to make your loan. However, understand that they have been burned by borrowers, burned by their bad judgment, burned by moronic industry trends of the past. Lenders are going to be a little gun shy. If you can prove that you are willing and able to repay the loan, lenders have lots of money available at incredible (once-in-a-lifetime) rates. When you think your lender is asking for too much, know it’s because they want to say “yes” AND know that their decision is both a good and defendable one. Print This Post
By Steve Cook
RISMEDIA, May 5, 2011—It’s still very much a “cold” buyer’s market according to the Institute for Luxury Home Marketing’s April 24 Luxury Housing Report, but early numbers from the spring home buying season suggest that demand is warming up.
Inventories of homes over $1 million built up over the winter, but even with more properties coming on market with warmer weather, increasing the national inventory from 27,500 to 32,500 since January, days on market have dropped markedly in recent weeks. (More …)