Category Archives: National Housing Market

Are Sunnier Skies on the Way for Real Estate?

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OBX Sunrise

OBX Sunrise

It’s exciting to see all the news of better market conditions. Are sunnier skies on the horizon? A recent article on Realtor.org attempted to answer this burning question.

With home ownership rates at a sustainable 66 percent and a projected growth rate of 340 million by 2020, real estate’s long-term prospects remain bright.

Manufacturing output has been rising. The stock market has recovered nicely. Many companies are flush with cash. Consumer confidence has rebounded from very low levels, and jobs are being created.

Against this improving picture, we can expect to see some release of the demand that’s been building up for the last three years. Rising rental costs will also likely tip more renters into home ownership.

Putting these and other factors together, existing-home sales are projected to rise 8 percent to nearly 5.3 million units nationwide this year and possibly to 5.5 million in 2012.

At this level, home ownership is solid, and it’s also sustainable given our level of population growth.

Skies seem to be brightening.

Increased Confidence in a Real Estate Market Recovery-Where do we go from here?

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The economy has always been, and will always be, cyclical. What goes up must come down, and visa versa. This goes for the real estate market as well. Recent reports have continued to show gains in existing and new home sales, increasing investor activity and an overall improvement in the market. These growth may not be substantial, but we continue to be moving in the right direction for restoring confidence among consumers and industry experts.

What’s Ahead

As the busy time in the real estate cycle approaches, RIS Media is predicting that we can expect 2011 to be better than 2010, with healthier trends compared to the abnormal boom times we saw in the early 2000’s. The market ahead will be driven by hopeful buyers who are regaining their financial footing and building their savings, as well as a generational wave of consumers just reaching their prime home-buying years.

With the damage caused by default payments and foreclosures subsiding, homeowners will be managing responsible mortgage terms, affordable payments and the ability to sell their home with equity.

Could this be the faint glow of the light at the end of the tunnel?

Light at the end of the tunnel?

Light at the end of the tunnel?

February Housing Scorecard Shows Increase in Existing Home Sales as Home Affordability Remains High

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Sold

Sold

Although the real estate market remains rocky, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the February 2011 edition of the Obama Administration’s Housing Scorecard. The newest figures show an increase in existing home sales as home affordability remains high.

In the face of the deepest economic recession and housing crisis since the Great Depression, these statistics show signs of a slow but favorable recovery. The Obama Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.

With good news coming in, we must keep in mind that the market remains extremely fragile. HUD recognizes they cannot stop every foreclosure but is confident that responsible homeowners are still fighting to make ends meet, and with multiple government programs in place, they plan to put help in reach of those homeowners as early as possible.

Since April 2009, record low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings. These rates are also allowing potential homebuyers to finally be able to afford a new home. With mortgage delinquencies on a downward trend and confidence up, financing may be available to candidates who may not have qualified before.

Decent news for a housing market treading water right now.

Will Real Estate Turn Around in 2011?

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Is relief finally on the way in 2011? The Wall St. Journal recently published an article indicating that 2011 could be the year real estate turns around. It’s hard to be sure, but there may be some good news in 2011 about the nation’s struggling housing market…or at least, the bad news could come to an end.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst.

Last week we learned from the widely watched S&P/Case-Shiller that the home-price index fell 1% in December; its fifth straight decline. But what’s new? In this case, what goes down must come up. If forecasters are correct it might make sense to jump into real estate. The trick is avoiding getting burned again, and it doesn’t necessarily mean owning a home.

Let’s recap a few economic signs that seem to support the belief that a bottom is close.

Houses Are a Good Deal

Housing is the most affordable it has been in decades – analysts consider not only home prices but average family incomes. Nationally, the cost of a house is the equivalent of about 19 months of total pay, the lowest level in 35 years.

“Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own,” says Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla.

In the end, it will be affordability that will drive people to buy homes. But what about timing?

Consider this: In some markets, home prices have fallen by half or more since 2006. Even if prices fall another 5%, it’s a small margin in the grand scheme.

Investors Stepping Up

One of the best indicators that the market is nearing a bottom is when investors are buying up houses and condos, in some instances paying entirely in cash.

Take Miami again. Last year, more than half of all transactions were made entirely in cash, according to a recent report in The Wall Street Journal. That compares with 13% of deals in the last quarter of 2006, the height of the bubble. Similarly, in Phoenix 42% of sales in 2010 went to all-cash buyers, up threefold since 2008. It seems like these investors are betting on a rebound in the near future.

Plan to Stay Put

Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won’t be back any time soon. To avoid heavy losses and driving down neighborhood values, plan to own for the long-term…10+ years is a good bet.

Below is a graph from AOL Real Estate showing home prices in the Kitty Hawk, NC real estate market. With Kitty Hawk home prices being sold far above state and national averages, the OBX may be more fortunate than we assume.

The OBX – a strong real estate market getting stronger in 2011?! The magic 8-ball seems to be pointing to yes.

AOL Real Estate - Kitty Hawk - 3.2.11

AOL Real Estate - Kitty Hawk - 3.2.11

Two Leading Mortgage Lenders Loosen Lending Requirements

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There was no public announcement, but Inman News is reporting that two of the largest Federal Housing Administration (FHA) approved lenders have loosened their “overlay” requirements credit scores and down payments (lender overlays are lending qualification requirements that are more strict than FHA’s requirements).

Wells Fargo and Quicken Loans have confirmed that they will now lend to applicants with 580 credit scores and 3.5 percent down payments. This is a significant adjustment, and the new requirements offer opportunities for buyers who may have been left out of the market up to this point.

Although, the newly revised policy also sets strict underwriting hoops and snares to weed out unqualified applicants.

New Home Sales Surge in December

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Reuters is reporting that sales of new U.S. single-family homes jumped in December.  This increase raises new home sales to their highest level in eight months and prices were the highest since April 2008.

Sales jumped 17.5 percent to a seasonally adjusted 329,000 unit annual rate after a downwardly revised 280,000-unit pace in November.

This surge comes on the heels of last week’s announcement that previously owned homes also jumped in December.

Cautious optimism is definitely spreading in the housing market.

Existing Home Sales Surge 12% in December

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CNNMoney is reporting that sales of existing homes jumped in December, marking the fifth month of gains in the past six months.  Previously-owned home sales climbed 12.3% in December to an annual rate of 5.28 million, from 4.70 million in November, according to the National Association of Realtors.

That puts sales at the highest level since the homebuyer tax credit expired in June.

Existing Home Sales Rise in November

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Sales of existing homes increased by 5.6% in November to a seasonally adjusted annual rate of 4.68 million, the National Association of Realtors reported today.

The increase was a bit shy of expectations; economists expected home sales in November to increase by 6.5%, to an annual rate of 4.72 million, but the silver lining is that the price for an existing home edged up for the first time since August, to $170,600 in November. That’s up 0.4% from the year-ago median price of $170,000 and an improvement from a downwardly revised $170,400 in October.

Pending Home Sales Unexpectedly Jump 10 Percent in October

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Pending sales of existing homes  jumped by 10 percent in October.

This increase followed a 1.8 percent drop in September and was unexpected based on economists’ estimates for October.   Pending home sales were projected to decrease 1 percent based on the median of 40 forecasts in the Bloomberg survey. Estimates ranged from a drop of 4.8 percent to a gain of 3 percent.

Cheaper borrowing costs, lower prices and more jobs may entice homebuyers in coming months, helping the real-estate market regain its footing after the end of the tax credit caused demand to slump.

Three of four U.S. regions saw an increase, today’s report showed, including gains of 27 percent in the Midwest, 20 percent in the Northeast and 7.1 percent in the South. Purchases fell 0.4 percent in the West.