Shadow Inventory and Its Impact on Prices

January 9, 2013 By EmmanuelFonte Leave a Comment

Many analysts differ on what impact shadow inventory will have on house values in 2013. Some warn that these distressed properties will still play a major role in limiting appreciation. Others believe that the increases in buyer demand will more than offset the increase in supply. The only thing on which everyone agrees is that there will be millions of distressed properties that will need to be liquidated over the next few years. How these properties are handled will have an effect on the impact they will have on values.

According to the National Association of Realtors, foreclosures sell at a 20% discount while a short sale sells at a 16% discount. Therefore, a short sale has less of a negative impact on prices compared to a foreclosure. Obviously, if the mortgage is modified, no sale takes place and there is no impact on surrounding home prices.

The U.S. Treasury Department just issued their latest OCC Mortgage Metrics Report which reports on how these distressed properties are currently being handled. Here is a graph showing how these properties are being processed now as compared to a year ago.

source: KCM

Filed Under: Blog, Economy, Housing Market, Real Estate Updates

U.S. Census, HUD Release American Housing Survey

January 8, 2013 By EmmanuelFonte Leave a Comment

The U.S. Census Bureau and HUD recently released the 2011 American Housing Survey, a biennial comprehensive national housing survey that provides data on housing inventories, demographics, home improvements, mortgages, and more.

The 2011 survey indicates that almost 20 percent of new home owners chose their neighborhood based on convenience to the workplace.

The poll of the nation’s 115 million occupied homes also reveals the median size of single-family detached and mobile residences to be 1,800 square feet — versus 2,200 square feet for newly built homes — and the median year of construction for owner-occupied units to be 1976.

Sixty-four percent of homes have three or more bedrooms and 52 percent have two or more bathrooms. In terms of accessibility, 64 percent have floors with no steps between rooms, 48 percent have entry-level bathrooms, and 36 percent have entry-level bedrooms.

The survey also found that 20 percent of recent movers located their current homes through a real estate agent, 17 percent through Realtor.com, and 16 percent by word-of-mouth. Additionally, households spend about 24 percent of their household income on housing.

This data and more is now available for the first time through the U.S. Census Bureau’s American FactFinder data access tool.

Source: “HUD and Census Bureau Expand Access to Include Housing Info” National Mortgage Professional

Filed Under: Blog, Economy, Housing Market, Real Estate Updates

Bellevue could see another boom

January 8, 2013 By EmmanuelFonte Leave a Comment

It’s been a little over four years since downtown Bellevue has seen an office tower go up. The 15-story Summit III project was left unfinished in 2009 when the recession hit. But some developers believe that this Eastside hub will soon become the site of large-scale construction, reports the Seattle Times.

Five residential projects with more than 1,100 units and three office towers featuring 1.5 million square feet are in the works for 2013. Kemper Development plans to expand Lincoln Square by building two office towers to create additional office and retail space as well as a 120-room hotel and 200 condos or apartments. CEO Kemper Freeman says that construction should start in the early summer.

Demand for living and office space in the region is on the rise, and developers are focusing on downtown Bellevue, with its relatively low office-vacancy rate, as a site for construction. There’s growing concern that Seattle neighborhoods are getting overbuilt. Traffic, tolls on Highway 520, and talk of additional tolls on other roadways are causing commuters to consider living in the city where they work.

Lisa Picard, executive vice president of developer Skanska USA, says that the Bellevue “has really developed into an urban center.” The second largest city center in Washington made CNN Money’s 100 Best Places to Live list for 2011. What used to be a suburban business district has transformed itself into an urban destination with retail shops, restaurants, and cultural amenities.

Filed Under: Blog, Economy, Housing Market, Real Estate Updates Tagged With: bellevue real estate

2012 United States and Canada Household Moving Migration Patterns

January 6, 2013 By EmmanuelFonte 1 Comment

source: AltlasVanLines.com

Filed Under: Blog, Economy, Housing Market, Random Thoughts

List on Friday for the best price!

January 4, 2013 By EmmanuelFonte Leave a Comment

Filed Under: Blog, Housing Market, marketing

Housing: Year End Reports Reveal Market Coming Back

January 2, 2013 By EmmanuelFonte Leave a Comment

Every year-end housing report revealed that the real estate market is recovering quite nicely. Here is a quick synopsis of each:

Existing Home Sales Report

Total existing-home sales rose 5.9 percent in November over last month
Sales are 14.5 percent higherthan November 2011
Sales are at the highest level since November 2009
The national median existing-home price was $180,600 in November, up 10.1 percent from November 2011
Total housing inventory at the end of November fell to a 4.8-month supply; it was 5.3 months in October, and is the lowest housing supply since September of 2005 when it was 4.6 months

Pending Sales Report

Pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years
The index is at the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit
With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007
On a year-over-year basis, pending home sales have risen for 19 consecutive months

New Home Sales Report

Sales of new homes rose 4.4% in November to a two-and-a-half-year high
This is the highest level since April 2010, when a temporary tax credit boosted demand.
Sales are now 15.3% higher compared to one year ago

Case Shiller Home Price Index

Home prices rose 4.3% in the 12 months ending in October
In nineteen of the 20 cities covered, annual returns in October were higher than September

source: KCM

Filed Under: Blog, Housing Market

Rental Demand to Edge Higher in 2013?

January 2, 2013 By EmmanuelFonte Leave a Comment

Five to six million new renter households may be created within the next 10 years, likely caused from low inventories of homes available and tight credit conditions, according to the Bipartisan Policy Center.

Rental demand is expected to particularly increase among seniors looking to downsize their homes, as well as young adults and a growing immigrant population.

“We expect to see an increase in household formation and for a variety of reasons that household formation is likely to be more heavily concentrated among renters and households who are likely to be renters for somewhat longer than was the case for the last 20 years,” Barry Zigas, director of Housing Policy for Consumer Federation of America, told HousingWire.

Tight credit conditions continues to be one main culprit holding back home ownership among some potential buyers.

“Credit for home ownership borrowing will likely be tighter and potentially more expensive, relative to earlier times,” Zigas predicts. “Families will likely have less wealth because the rising generation is starting with less wealth. If down payments are at any significant level, it will be a barrier to acquiring a home for longer than may have been the case in the past.”

Source: “Small Housing Inventory May Push Rental Demand for Years,” HousingWire

Filed Under: Blog, Housing Market, Real Estate Investment

Home prices expected to go up in 2013

December 31, 2012 By EmmanuelFonte Leave a Comment

Home prices have gone up by more than 4 percent in 2012, and many professional forecasters anticipate that we will continue to see gains around 3.1 percent in the upcoming year. The December 2012 Zillow Home Price Expectations Survey found that optimism is strong among more than 100 economists, real estate experts, and investment and market strategists, reports National Mortgage Professional Magazine. While the fate of the mortgage-interest deduction and the Mortgage Forgiveness Debt Relief Act of 2007 remains unknown, there are still signs for positive growth in the housing market.

As housing continues to recover around the nation, some regions have become more favorable to sellers, and others more optimal for buyers. According to Zillow’s analytics, sellers’ markets tend to be clustered in the West, while buyers’ markets appear to be more prevalent on the East. In a sellers’ market, homes move more quickly and at prices close to the asking price, while in a buyers’ market, houses tend to stay on the market longer and are sold at prices lower than the listing price.

The number of homeowners with a mortgage in negative equity fell below 30 percent, reports Forbes. As home values continue to rise in the upcoming year, more underwater homeowners may take the opportunity to sell, which could both slow the upward trend in prices but also ease tight inventory in metro areas like Phoenix and Miami, where buyers have very slim pickings.

Qualifying for a home loan at historically low interest rates have saved households money. Between 1985 and 2000, Americans spent an average of 20 percent of household income on mortgage payments. The spending spiked to more than 24 percent before 2006, and fell to 13 percent by the second quarter of this year. If rates continue to stay low, homeowners and buyers will be able to continue stretching their dollars toward the purchase or refinance of a house in the new year.

Filed Under: Blog, Housing Market

Pending Home Sales Rise Again

December 28, 2012 By EmmanuelFonte Leave a Comment

Pending home sales increased in November for the third-straight month and reached the highest level in two-and-a-half years, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October and is 9.8 percent above November 2011 when it was 96.9. The data reflect contracts but not closings.

The index is at the highest level since April 2010, when it hit 111.3 as buyers were rushing to beat the deadline for the home buyer tax credit. With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9.

Lawrence Yun, NAR chief economist, said home sales are on a sustained uptrend. “Even with market frictions related to the mortgage process, home-contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”

On a year-over-year basis, pending home sales have risen for 19 consecutive months.

The upward momentum means existing-home sales should rise 8 to 9 percent in 2013 to approximately 5.1 million, following a 10 percent gain expected for all of 2012. The median existing-home price is projected to rise just over 4 percent in 2013, after rising more than 7 percent in 2012.

The PHSI in the Northeast rose 5.2 percent to 83.3 in November and is 15.2 percent above a year ago. In the Midwest the index edged up 0.1 percent to 103.8 in November and is 15.2 percent above November 2011. Pending home sales in the South were unchanged at an index of 117.2 in November and are 13.9 percent higher than a year ago. In the West (see Greater Seattle stats) the index rose 4.2 percent in November to 110.1, but is 3.2 percent below November 2011 with inventory constraints limiting sales.

Source: NAR

Filed Under: Blog, Housing Market, Real Estate Investment, Real Estate Updates