Real Estate Updates

Another Big Leap for Home Prices

March 6, 2013 By EmmanuelFonte Leave a Comment

Another home price index is showing home prices surging: CoreLogic’s home price index shows that home prices nationwide in January rose 9.7 percent year-over-year, posting their largest percentage increase since April 2006.

It was the 11th consecutive month of month-over-month increases in existing-home sales, according to CoreLogic’s index.

“Home prices continued to gather steam across a broad swath of the country in January, continuing the positive trend we saw during most of 2012,” says Anand Nallathambi, president and CEO of CoreLogic. “Many states across the western U.S. and along the East Coast saw average price gains of more than 6 percent, which is likely to boost home sale activity into the first half of 2013.”

The states seeing the biggest year-over-year rises in home prices in January were Arizona (20.1%), Nevada (17.4%), Idaho (14.9%), and California (14.1%), according to CoreLogic’s index. The only states not seeing year-over-year price increases were Delaware (-0.1%) and Illinois (-0.4%).

Source: “Home Prices Take Biggest Leap in 7 Years,” Inman News

Filed Under: Blog, Housing Market, real estate financing, Real Estate Updates Tagged With: bellevue homes, seattle homes

Future House Values? Simple as Supply and Demand

March 4, 2013 By EmmanuelFonte Leave a Comment

For some time now, we have attempted to shed light on the fact that pricing in today’s real estate market, as it is in the markets for every other saleable item, will be determined by the concept of ‘supply and demand’.

According to dictionary.com:

“The relationship between supply and demand determines the price of a commodity. This relationship is thought to be the driving force in a free market.”

In real estate, supply and demand is represented as the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

1-4 months supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.
5-6 months supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.
7-8 months supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, home values are rising. This is for two reasons:

According to NAR’s latest Existing Homes Sales Report, raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.
According to this month’s Pending Sales Report from NAR, houses going into contract reached levels last seen in April 2010 which was the month the Home Buyers’ Tax Credit expired.

This has resulted in a 4.2-month supply at the current sales pace which is the lowest housing supply since April 2005 when it was also 4.2 months.

Presently in King County, we are at 1.6 months of supply based on Pending sales.

Based on the table above, we can see that the supply/demand ratio is leaning toward a sellers’ market where prices will appreciate. That has created positive movement in housing values in most parts of the country.

by THE KCM CREW

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

Fewer Americans in ‘Underwater’ Situation

March 1, 2013 By EmmanuelFonte Leave a Comment

With home values falling dramatically from 2006 boom prices, many homeowners have found themselves in what is called a ‘negative equity’ or ‘underwater’ situation. This means the value of their home is currently less than the mortgage amount on that home.

Many of these homeowners have been ‘locked’ into their houses because they were unable to sell it without bringing cash to the closing table. The good news is this situation is improving as prices begin to rise.

We are not saying that this challenge is over. We just have to look at what the experts are saying to realize we still have a long way to go.

Zillow Chief Economist Dr. Stan Humphries recently stated:

“Negative equity is still very high, and millions of homeowners have a very long way to go to get back above water, even with current robust levels of home value appreciation in most areas. As a result, negative equity will remain a major factor in the market for the foreseeable future.”

Anand Nallathambi, CEO of CoreLogic, in their latest Negative Equity Report:

“With nearly one quarter of borrowers still underwater we have a long way to go.”

However, the situation is improving. The recent Zillow Negative Equity Report revealed:

Negative equity continued to fall in the fourth quarter of 2012, dropping to 27.5 percent of all homeowners with a mortgage, compared with 31.1 percent one year ago.
Almost 2 million American homeowners were freed from negative equity over the course of the year.
Approximately 13.8 million homeowners with a mortgage were in negative equity, or “underwater,” at the end of the fourth quarter, owing more on their mortgages than their homes are worth. That was down from 15.7 million in the fourth quarter of 2011.

What does the future hold?

Anand Nallathambi, president and CEO of CoreLogic, sees the situation improving:

“As we look ahead into 2013, we expect to continue to see more borrowers’ escape the negative equity trap and that will be a strong positive for the housing market specifically and the broader economy generally.”

Zillow Chief Economist Dr. Stan Humphries agrees:

“As home values continue to rise and more homeowners are pulled out of negative equity in 2013, the positive effects on the housing market will be numerous. Freed from negative equity, homeowners will have more flexibility, and some will likely choose to list their home for sale, helping to ease inventory constraints and moderating sometimes dramatic, demand-driven price increases in some markets.”

Negative equity is still a challenge to a full housing recovery in this country. However, things will continue to improve as prices appreciate.

source: KCM

Filed Under: Blog, Economy, real estate financing, Real Estate Updates

How did we rate: January’s housing scorecard

February 28, 2013 By EmmanuelFonte Leave a Comment

January home sales held steady and may indicate that a seller’s market is emerging, reports the National Association of Realtors. Total existing home sales went up 0.4 percent to a seasonally adjusted rate of 4.92 million, up 9.1 percent from the January 2012 level of 4.51 million units. Home prices continue to rise above last year’s levels, and sales are up in all regions except for the West, where inventory is tighter.

Total housing inventory at the end of January dropped 4.9 percent to 1.74 million existing homes on the market, or a 4.2-month supply. This marks the lowest supply rate since April 2005. NAR chief economist Lawrence Yun said that “buyer traffic is continuing to pick up, while seller traffic is holding steady.”

The number of available homes for sale is lower than the six-month supply considered to be typical of a balanced market, reports Forbes. But some experts like Stuart Hoffman, chief economist at PNC Financial Services Group, cautions against using the term “seller’s market” to sum up current housing activity. “I don’t think it is a seller’s market yet but I do think we are getting back to a more balanced market where it’s no longer simply a buyer’s market.” According to Business Insider, Bank of America economist Michelle Meyer sees a market opportunity for new construction and existing homes to add to inventories and offset undue pressure on home prices.

The national median existing-home price for all housing types was $173,600 in January, up 12.3 percent from January 2012, making the 11th consecutive month of year-over-year price increases. Distressed transactions comprised 23 percent of January sales, down from 24 percent in December and 35 percent in January 2012. And the national average commitment rate for a 30-year conventional, fixed-rate mortgage rose slightly to 3.41 percent in January from a record low 3.35 percent in December.

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

Is There a Window of Opportunity for Sellers Right Now?

February 27, 2013 By EmmanuelFonte Leave a Comment

One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Report is the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year. Here are some key points:

Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.
This represents the lowest housing supply since April 2005 when it was also 4.2 months.
Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.
Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.

What Does This Mean if You Are Selling a Home?

The price of anything is determined by supply and demand. According to NAR’s report, inventory is at its lowest level since the real estate boom eight years ago. At the same time, demand is up. Lawrence Yun, NAR chief economist, reveals:

“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”

Does that mean you should sell your house now? Or should you wait to see if prices increase? Nobody knows for sure. However, some feel that there may be a pent-up inventory about to come to the market because, as prices increase, it will free up some sellers who have been locked in a negative equity situation (where the house is worth less than the remaining mortgage).

The Zillow Negative Equity Forecast predicts:

“The negative equity rate among all homeowners with a mortgage will fall to at least 25.5 percent by the fourth quarter of 2013, freeing more than 999,000 additional homeowners nationwide.”

If these homes come to market, the supply/demand ratio will begin to balance out and lessen the opportunity a seller now has.

Calculated Risk, a well respected blog which analyzes the economy:

“With the low level of inventory, both in absolute numbers and as a month-of-supply, and the recent price increases in some areas, it would seem likely more inventory would come on the market.”

Lawrence Yun agrees:

“We expect a seasonal rise of inventory this spring.”

Yet, Yun is quick to add:

“It may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth.”

Probably the most interesting comment on this comes from Calculated Risk:

“I need to think about this…This will be an interesting issue all year.”

This is an issue that is important to every seller. Make sure that you are working with a true professional that is dedicated to keeping current on what matters in the real estate market so he/she may provide you with the best advice possible as this situation becomes clearer.

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

Three Reasons Why Housing Inventory is So Low

February 26, 2013 By EmmanuelFonte Leave a Comment

There’s no question about it, the operative theme of the 2013 housing market is restricted supply. Ever since the bubble burst in 2006, we’ve been hearing about the dangers of over supply, of the massive “shadow inventory” out there. Yet we’re living in a vastly different reality. There are 40% fewer homes on the market now than there have been during February in the last few years.

Inventory of actively for sale homes. Single Family Homes. Altos 20-city (national) composite. Data as of February 22, 2013. Source: Altos ResearchMid-January typically marks the seasonal low of available housing inventory. The fewest homes are on the market after the holidays. But pretty quickly they start coming on the market to prepare for spring. Inventory gets added until the first week of July, when people start looking forward to the Autumn.

Read the rest at http://blog.altosresearch.com/three-reasons-why-housing-inventory-is-so-low/

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

The Recession Changes Americans’ Moving Patterns

February 22, 2013 By EmmanuelFonte Leave a Comment

Moves across county and state lines are falling, with the 2007-2009 recession blamed for changing Americans’ moving patterns, according to an analysis of census data through 2010. The Great Recession caused more Americans to move because they could no longer afford to remain where they were. That’s a big change in what traditionally motivates Americans to move — a bigger home or higher paying job, USA Today reports about the analysis.

Nine percent of Americans stayed local with their moves during 2007-2009 period — the highest in a decade.

“Typically, over the last couple of decades, when Americans moved, they moved to improve their lives,” says Michael Stoll, author of the research and chairman of UCLA’s public policy department. “This is the shock: For the first time, Americans are moving for downward economic mobility. Either they lost their house or can’t afford where they’re renting currently or needed to save money.”

More than 23 percent moved for more affordable housing during the recession. Prior to the recession, that percentage stood at 20.8 percent.

Also, prior to the recession, 41.3 percent of Americans moved in order to own a home or settle into a better neighborhood. However, during the recession, that percentage dropped to 30.4 percent.

Source: “Americans on the Move Start Moving Down, Not Up; Setback in Upward Mobility Hits Blacks, Sun Belt Spots Hardest,” USA Today

Filed Under: Blog, Real Estate Updates

Working hard to protect the dream: video

February 19, 2013 By EmmanuelFonte Leave a Comment

It’s been said that your home is your castle, and sometimes you need help defending it. NAR’s newest campaign, “Dreams,” assures consumers that NAR and REALTORS® are working hard to protect the dream and reality of homeownership for our families and our future.

[pb_vidembed title=”” caption=”” url=”http://www.youtube.com/watch?v=_0j1OsS085g” type=”yt” w=”680″ h=”383″]

Filed Under: Blog, real estate financing, Real Estate Updates Tagged With: american dream, home-ownership

Home Prices in 2012: Best Year-on-Year Gain in Six Years

February 8, 2013 By EmmanuelFonte Leave a Comment

CoreLogic®, a leading residential property information, analytics and services provider, recently released its December CoreLogic HPI® report. Home prices nationwide, including distressed sales, increased on a year-over-year basis by 8.3 percent in December 2012 compared to December 2011. This change represents the biggest increase since May 2006 and the 10th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 0.4 percent in December 2012 compared to November 2012. The HPI analysis shows that all but four states are experiencing year-over-year price gains.

Excluding distressed sales, home prices increased on a year-over-year basis by 7.5 percent in December 2012 compared to December 2011. On a month-over-month basis, excluding distressed sales, home prices increased 0.9 percent in December 2012 compared to November 2012. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic Pending HPI indicates that January 2013 home prices, including distressed sales, are expected to rise by 7.9 percent on a year-over-year basis from January 2012 and fall by 1 percent on a month-over-month basis from December 2012, reflecting a seasonal winter slowdown. Excluding distressed sales, January 2013 house prices are poised to rise 8.6 percent year over year from January 2012 and by 0.7 percent month over month from December 2012. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

“December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom more than six years ago,” says Mark Fleming, chief economist for CoreLogic. “We expect price growth to continue in January as our Pending HPI shows strong year-over-year appreciation.”

“We are heading into 2013 with home prices on the rebound,” said Anand Nallathambi, president and CEO of CoreLogic. “The upward trend in home prices in 2012 was broad based with 46 of 50 states registering gains for the year. All signals point to a continued improvement in the fundamentals underpinning the U.S. housing market recovery.”.

Highlights as of December 2012:

• Including distressed sales, the five states with the highest home price appreciation were: Arizona (+20.2 percent), Nevada (+15.3 percent), Idaho (+14.6 percent), California (+12.6 percent) and Hawaii (+12.5 percent).

• Including distressed sales, this month only four states posted home price depreciation: Delaware (-3.4 percent), Illinois (-2.7 percent), New Jersey (-0.9 percent) and Pennsylvania (-0.5 percent).

• Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+16.4 percent), Nevada (+14.7 percent), California (+12.8 percent), Hawaii (+11.7 percent) and North Dakota (+10.8 percent).

• Excluding distressed sales, this month only three states posted home price depreciation: Delaware (-1.9 percent), Alabama (-1.0 percent) and New Jersey (-0.5 percent).

• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2012) was -26.9 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.8 percent.

• The five states with the largest peak-to-current declines, including distressed transactions, were Nevada (-52.4 percent), Florida (-43.5 percent), Arizona (-39.8 percent), Michigan (-36.5 percent) and California (-35.4 percent).

• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, only 16 are showing year-over-year declines in November, two fewer than in November.

For more information, visit www.corelogic.com

Filed Under: Blog, Housing Market, Real Estate Updates