Emmanuel Fonte | Music | Art | Leadership
If music be the food of love, play on. Emmanuel Fonte website is about music, art, real estate, architecture, design and decor. Occasionally, I talk about my other passion, hockey.
The housing market has changed a lot over the last 40 years, with the number of home sales, the size of homes, and the cost of homes all changing since the 1970s. Check out this great infographic below to see the ups, and downs, of the housing market over the last 40 years.
source: MitchellHomesInc.com
The current rate of household formation in the United States is still well below the expected trend and faulted as a major culprit for “pent-up demand.” According to an analysis by Trulia, an online residential real estate site, potentially 2.4 million households are hitting the pause button. The majority of that number is comprised of young people between the ages of 18 and 34 who have delayed moving out on their own for a variety of reasons.
An average of 1.1 million new households are formed each year in the United States. But from the first quarter of 2008 to the first quarter of 2011, just 450,000 new households have been added on an annual basis. This sluggish rate means a decrease in the overall demand for housing, which affects the annual construction rate. But this “pent-up demand” driven by young adults who are still living at home or doubling up with roommates is bound to give way, say some housing experts.
Will household formation increase sooner or later? Housing Wire is optimistic, reporting that the conditions are better today for emerging households. Steady job growth over the last several years is a good sign. Sterne Agee analyst Jay McCanless says, “We believe steady, if unremarkable, monthly job growth is creating a…household formation environment for 2013 which should support our positive housing outlook.”
If that projection holds true, increased demand is merely a matter of time. When households come out of hiding looking for single- and multi-family residences or apartments, they could potentially inundate the market.
More than 44 percent of home buyers who plan to buy a home within the next two years said they would be willing to go over their budget by up to 10 percent in order to buy in their preferred school boundaries, according to a new survey by realtor.com®.
Three out of five home buyers surveyed said that school boundaries greatly impact their home purchasing decision. Nearly 9 percent of buyers indicated that they’d be willing to pay 11 to 20 percent above their budget to get a home in a desirable school district, the survey found. About 17 percent of buyers said they want to live within a mile of a school so their children can walk there.
Some home buyers said they’d even be willing to trade certain home amenities for good schools: About 62 percent said they’d give up a pool or spa, 50 percent would give up accessibility to shopping, and nearly 44 percent would pass on a bonus room.
“Our survey demonstrates the large impact school boundaries have on those looking to purchase a home,” says Barbara O’Connor, chief marketing officer at Move Inc.
The survey comes after realtor.com® launched a new mobile school search tool in April, allowing buyers to search for listings in specific school and district boundaries.
Source: realtor.com®
The July 2013 report shows that the rate of housing sales increased strongly in June 2013 growing 10.2 percent from June 2012. The annual rate of new and existing home sales for June 2013 was 5.612 million up from the 5.091 million recorded in June 2012 but down from the 5.984 million annualized rate in May 2013.
The average price of homes sold increased by 7.8 percent in June 2013 compared to June 2012.
July 2013 – The REAL Trends Housing Market Report showed that the combination of new and existing home sales in June 2013 continued to show strength across all regions in both unit sales and the average price of homes sold when compared to a year ago.
The annualized rate of the combination of new and existing home sales increased to 5.612 million in June 2013 up from the 5.091 million recorded in June 2012 but down from a rate of 5.984 million in May 2013.
The average price of homes sold in June 2013 was up 7.8 percent from the average price of homes sold in June 2012 marking the 15th consecutive month of increased home sale prices on a year over year basis.
Housing unit sales for June 2013 were up 14.6 percent in the South, the strongest showing in the country. The next highest region was the Midwest region at 12.5 percent, the Northeast region was up 6.3 percent and the West was up 4.7 percent.
The average price of homes sold in June 2013 increased 7.8 percent across the country, nearly the same increase as that recorded a month earlier. The West had the best results with the average price of homes sold increasing 15.5 percent followed by the Midwest region at 9.5 percent and the South at 9.3 percent. The Northeast saw a small decrease in average price coming in with a decrease of 0.3 percent.
“June 2013 sales of new and existing homes continued to show strength across all regions and are evidently shaking off the impact of relatively low inventories in most markets. The two regions of the country with the lowest average sales prices, the South and Midwest, continue to outperform other regions in terms of unit sales increases. The average price of homes sold was up solidly again due to supply and demand imbalances. As this report and other housing indicators show the scarcity of inventory and buyer demand are creating a situation where prices are advancing at far greater rates than had been predicted due to high levels of housing affordability and restricted inventory,” said Steve Murray, editor of the REAL TrendsHousing Market Report.
Via: REALTrends.com
There is no doubt that the housing market is coming back nicely. What, if anything, could slow down the current momentum? We believe it may be sellers’ over exuberance when it comes to pricing. There is little doubt that house prices have appreciated over the last twelve months in most regions of the country. However, with both the inventory of homes for sale and interest rates increasing, we have to be careful to not over judge what the market can bare.
Trulia just reported that asking prices have jumped dramatically and the increase is accelerating:
No expert is expecting home prices to shoot up 18% in the next twelve months. If anything, price appreciation may slow as rates and inventories increase. Investors will begin to slow their purchases and the first-time buyers expected to take their place will be working within a pre-set budget in many cases.
Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).
This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.
If you are thinking about selling your home, don’t get carried away with current headlines about home price increases that have taken place over the last twelve months. Instead, call a local real estate professional. They will be best prepared to explain where prices are headed over the next six months.
Seattle housing prices rise as U.S. cities post solid gains:U.S. home prices jumped 12.1 percent in April from a year ago, buoyed by strong demand and a limited supply of available homes. Strong gains in most cities measured point to a broad-based housing recovery. The Standard & Poor’s/Case-Shiller 20-city home-price index released Tuesday also showed a 2.5 percent increase in April from March, the biggest month-over-month gain on records dating back to 2000.Source: The Seattle Times, July 2, 2013 http://seattletimes.com/html/businesstechnology/2021266046_caseshillerxml.html
Despite the construction of more new apartments this year than in any year in the past two decades, rent prices in King and Snohomish counties have continued to rise while vacancies remain low, according to a leading research firm. While the price bump doesn’t bode well for renters, the relatively seamless absorption of more than 2,000 new apartments indicates a healthy rental market, said Tom Cain of Apartment Insights, an industry analysis firm.Source: The Seattle Times, July 1, 2013 http://seattletimes.com/html/businesstechnology/2021308680_rentpricesxml.html
Low- to mid-priced houses for sale in Western Washington are getting as many as seven offers, a real estate group said Wednesday. Rising mortgage rates, tight inventory and declining unemployment are driving more buyers into what is already an “extremely competitive housing market,” said OB Jacobi of the Northwest Multiple Listing Service.Source: Puget Sound Business Journal, July 3, 2013 http://www.bizjournals.com/seattle/news/2013/07/03/seattle-area-realtors-desperate-for.html?ana=e_sea_rdup&s=newsletter&ed=2013-07-05&u=g3qEy5+PUIyH77YLguBBiC7bz23&t=1373382927
The recession may have permanently hit paychecks and the number of jobs available, but median prices for homes sold in the Seattle area are approaching the peak hit six years ago before the housing market tanked. The Northwest Multiple Listing Service reported Wednesday that the median sale price of a single-family home in King County in June was $427,500, up 12.5 percent from the same month a year ago and up 2.4 percent from May. That’s just $27,500 from the highest median price of $455,000, July 2007.Source: The Seattle Times, July 3, 2013 http://seattletimes.com/html/businesstechnology/2021322836_junehomesalesxml.html
After a bumpy 2011 and a slow-starting 2012, there is no disputing the residential real-estate market this year has pulled out of the depths of the mortgage crisis. For the last 18 months, the median home price in King County has gone up each month when compared to the same month a year ago. Since January, the median price also has gone up each month from the previous month. Median means half the homes sold for more, half for less. The high-water mark was set in July 2007, when the median price of a single-family home in King County was $481,000.Source: The Seattle Times, July 13, 2013 http://seattletimes.com/html/businesstechnology/2021376857_sundaybuzz14xml.htm
What’s the median monthly mortgage payment of home owners? $1,015, according to the newly released American Housing Survey, conducted by the U.S. Census Bureau. The survey reveals a range of data, from who is living in homes to characteristics of the homes themselves. The latest survey reflects 2011 data. The survey is conducted only on odd years.
Among the survey’s findings:
“The last five years remind us how central housing is to each of us personally, to the fiscal health of our cities and counties, and the national economy,” says Kurt Usowski, HUD’s deputy assistant secretary for economic affairs. “From the American Housing Survey, we can see why people chose to move, how often homes need repairs, and the extent to which housing costs are outpacing income growth. All this information can help inform policymaking around continued recovery in the U.S. and in metropolitan areas around the country.”
You can search the housing data from the American Housing Survey, including breakdowns by metro, at the U.S. Census Web site.
Source: HUD
Home prices are moving up at a quicker pace, rising in May by their largest annual amount in more than seven years with more to come, according to the latest report released by CoreLogic.
Home prices increased 2.6 percent in May over April and have shot up 12.2 percent compared to last year’s prices. CoreLogic economists are predicting that home prices will rise by another 2.9 percent in June, making the yearly price gain 13.2 percent year-over-year.
Tight inventories of homes for sale across the nation have pushed home prices higher, according to CoreLogic.
“Home price appreciation, particularly in much of the western half of the U.S., is increasing at a torrid pace,” says Anand Nallathambi, president and CEO of CoreLogic. “Across the country, pent-up demand and continued low interest rates are fueling strong demand for a limited inventory of properties. We expect that trend to continue to drive up prices throughout the balance of the summer months.”
When including distressed sales, the following five states have seen the highest home appreciation in the past year, according to CoreLogic:
Source: CoreLogic and “Home prices rise by most in seven years in May: CoreLogic,” Reuters
