October 23, 2012

Housing Affordability Remains an Issue in Many US Markets

Author: admin - Categories: National Housing Report

The New York Times posted an article yesterday discussing how the U.S. housing sector in performing in regional real estate markets. The Times points out that although home prices have fallen since the housing crisis, many families are struggling with the inability to afford to buy a home in many major cities. Even with the lowest mortgage rates ever recorded, many renters simply can’t afford to make the transition to become a homeowner. Many lenders are enjoying a huge surge in applications as a result of falling interest rates. If you own a home and have a rate above 4%, take a minute and compare mortgage refinance loans now.

Despite lower prices, a median-income household can afford a median-priced home in just 14 of the country’s 25 largest metropolitan areas due to rising expenses and stagnant wages, research from Interest.com finds. The home affordability study finds that Detroit, Atlanta and Minneapolis are the most affordable markets, and San Diego, New York and San Francisco are the least affordable. “Even after years of decreasing house prices and record low rates for affordable home loan programs, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas that we looked at,” explained Mike Sante, the site’s managing editor, in a statement.

The least affordable city was San Francisco, where the median income falls 33% short of the income needed to buy a median-priced home.

The most-affordable and least-affordable markets and their paycheck power ratings are:

1. Detroit (+45.32%)

2. Atlanta (+40%)

3. Minneapolis (+32.2%)

4. Phoenix (+23.67%)

5. St. Louis (+23.49%)

Least Affordable Metropolitan Areas

21. Los Angeles (-12.52%)

22. Miami (-12.59%)

23. San Diego (-25.9%)

24. New York (-29.71%)

25. San Francisco (-32.76%)

Read the entire NY Times article.

February 10, 2011

US Home Sales Rise in 2010

Author: admin - Categories: National Housing Report, Real Estate News

Real estate sales are mixed nationally for the 4th quarter of 2010. The reality is that short-sales and foreclosures continue to pull the average home prices lower. Home foreclosures and tighter FHA loan requirements have not helped bolster property values. We suggest compare rates and terms with house lenders that have a reputation for affordable financing.

Lawrence Yun, NAR’s chief economist, said in a statement that he was encouraged by the quarterly rise in sales. “Home sales … are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they’ve been selling well and housing supplies have trended down,” Yun stated. “A recovery to normalcy requires steady trimming of the inventories.” Yun projected about 150,000 to 200,000 jobs will be added to the economy this year from an expected 300,000 additional home sales in 2011, the report said. “An improving housing market and job growth will go hand in hand. The housing recovery will mean faster job growth,” Yun added.

Virginia was the only state to see a quarterly drop in sales, down 5.4%, and Virginia mortgage rates also fell to record lows. Home sales in Washington, D.C., remained unchanged from the third quarter. Compared to fourth-quarter 2009, however, only Idaho saw a yearly rise in sales: up 7.3 %. Some foreclosure-ridden states — Florida, Arizona, Nevada and California home sales saw the smallest drops in sales during that time. Distressed sales made up 34% of all sales in the fourth quarter, up only slightly from 32 % in the fourth quarter of 2009.

The Midwest experienced the biggest estimated overall drop in sales in 2010 compared to 2009: 7.5%, to a rate of 1.08 million. The Northeast saw a drop of 4.8%, to 817,000. The West saw a decline of 4.7%, to 1.15 million. The South saw the smallest decrease, down 2.8%, to 1.86 million.

10 states to see biggest decreases in sales from 2009 to 2010:

State 2009 sales rate 2010 sales rate

% change

South Dakota 17.4 14.2


Minnesota 107.4 89.7


Delaware 12.6 10.9


Oklahoma 83.5 72.3


Rhode Island 15.4 13.6


Missouri 105.9 94.6


Michigan 167.1 149.6


Pennsylvania 176.5 160.3


Utah 31.1 28.5


Kansas 56.5 51.8


August 24, 2010

NAR Publishes Existing Home Sales Report for July 2010

Author: admin - Categories: California Real Estate News, National Housing Report, New Home Starts

California HomesThe National Association of Realtors today released Existing Home Sales data for July 2010. Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors®. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 % to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 % below the 5.14 million-unit level in July 2009.

Single-family home sales dropped 27.1 % to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 % below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. Existing condominium and co-op sales fell 28.1 % to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 % below the 605,000-unit level in July 2009. Single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

Northeast: -29.5 % to an annual pace of 620,000 in July and are 30.3 % lower than a year ago. The median price in the Northeast was $263,800, up 4.8 % from July 2009.
Midwest: -35.0 % in July to a level of 800,000 and are 33.3 % below July 2009. The median price in the Midwest was $151,600, down 2.8 % from a year ago.
South: -22.6 % to an annual pace of 1.54 million in July and are 19.8 % below a year ago. The median price in the South was $156,300, down 3.3 % from July 2009.
West: -25.0 % to an annual level of 870,000 in July and are 23.0 % below a year ago. The median price in the West was $224,800, up 3.3 % from July 2009.

California continues to post poor results for the housing sector. Once again California short sales and foreclosure figures rose. Ladera Ranch short sales and REO’s continued to spark interest in South Orange County housing.

A parallel NAR practitioner survey shows first-time buyers purchased 38 % of homes in July, down from 43 % in June. Investors accounted for 19 % of sales in July, up from 13 % in June; The balance were to repeat buyers. All-cash sales rose to 30 % in July from 24 % in June. Distressed home sales are unchanged from June, accounting for 32 % of transactions in July; They were 31 % in July 2009. The national median existing-home price for all housing types was $182,600 in July, up 0.7 % from a year ago. The median existing single-family home price was $183,400 in July, which is 0.9 % above a year ago. The median existing condo price was $176,800 in July, down 1.7 % from a year ago.

Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago. Raw unsold inventory is still 12.9 % below the record of 4.58 million in July 2008. Total housing inventory at the end of July increased 2.5 % to 3.98 million existing homes available for sale. This represents a 12.5-month supply at the current sales pace, up from an 8.9-month supply in June. This is a record amount in terms of months of supply (determined by pace of home sales).

Lawrence Yun, NAR chief economist says: “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs. “Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years” “Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”

HOUSING IS STAGNANT and will likely remain stagnant until mid-term elections pass and housing finance reform takes shape. With home inventory on the rise, the shadow inventory discussion should get more attention from the media now. Perhaps the Administration’s true intentions with HAMP were to slow up the foreclosure process and spread out the disposition of REO over a longer period.