There are three dominant trends in real estate that sellers should be aware of going into the new year. CNNMoney recently asked industry insiders to share what will be important when it comes to selling a home in 2016. Read the 3 trends…
Tag Archives: housing market
This Isn’t a Housing Bubble: Here’s Why
Home prices are rising rapidly, but economists are deflating concerns that another “housing bubble” is brewing.
A recent report from CoreLogic shows that twice as many metro markets are considered “overvalued” – prices are inflated relative to incomes — in the second quarter of this year compared to the first three months of the year. But economists say it’s not a housing bubble because bubbles eventually burst and home prices this time around aren’t likely to fall.
Foreclosures Down 68% From Peak
Foreclosures are falling fast. Since reaching a peak in September 2010, the number of foreclosures has plunged 68 percent – from 117,225 nationwide to 38,000 as of July, according to CoreLogic’s July 2015 National Foreclosure Report, released recently.
In the past year alone, foreclosure inventory has fallen by nearly 28 percent and completed foreclosures have dropped about 24 percent. Completed foreclosures are the total number of homes actually lost to foreclosure.
International Buyers Flow Into U.S. Housing Market, China Tops List
This year, for the first time since the National Association of Realtors has tracked foreign buyers of U.S. real estate, buyers from China have surpassed for the first time Canadians, Europeans, Mexicans and Middle Eastern home buyers as the top overseas purchasers of homes in the United States. Chinese investment in U.S. residential real estate has grown from a measly $50 million in 2000 to an eye-popping $28.6 billion in the year ending in March 2015, up 72 percent from a year earlier, double the amount spent a year earlier, surpassing all other foreign buyers. All told, overseas home buyers spent a record $104 billion buying U.S. homes in the 12 months ending in March 2015, with Chinese buyers leading the pack. In the 2014 survey, foreigners spent $92 billion on U.S. homes over a 12-month period, up 35 percent from a year earlier. Chinese buyers are now the biggest international buyers of U.S. real estate in terms of dollar volume, total units, and average price paid. Moreover, 76 percent of Chinese buyers pay cash.
MBA Forecasts Housing Demand Over Next 10 Years
The Mortgage Bankers Association (MBA) has just released a paper, Demographics and the Numbers Behind the Coming Multi-Million increase in Households, forecasting housing demand over the next ten years. Their study used date from 1975 – 2014 a period encompassing several market and housing cycles and the short version of its conclusion was the “By 2024, demographic and economic changes will bring what could be one of the largest expansions in the history of the U.S. housing market – 15.9 million additional households.” Even if household formation remains at 2014 low rates, demographic changes alone should account for 13.9 million new households by 2024.
Home Prices Rise in Nearly All Metro Areas in Second Quarter
The National Association of Realtors recently announced that home prices in the second quarter rose in 163 or 176 metro areas. The median existing single-family home price rose $229,400 in the second quarter, up 8.2% from a year earlier. That was a slightly faster rate of increase than the 7.1% price rise seen in the first quarter. In the second quarter, 34 metro areas reported double-digit annual price gains, compared with 51 that reported such gains in the first quarter. The average supply of homes in the second quarter was 5.1 months, down from 5.5 months a year ago. Total existing-home sales, including single family and condo, increased 6.6 percent to a seasonally adjusted annual rate of 5.30 million in the second quarter from 4.97 million in the first quarter, and are 8.5 percent higher than the 4.89 million pace during the second quarter of 2014. In the West, existing-home sales climbed 8.1 percent in the second quarter and are 8.1 percent above a year ago. The median existing single-family home price in the West increased 9.6 percent to $325,200 in the second quarter from the second quarter of 2014.
April Distressed Sales Drop to Lowest Level Since 2007
Distressed sales – real estate-owned (REO) and short sales – made up 11.1% of total home sales in April, down 3 percentage points from April 2014 and down 1.5 percentage points from March. While distressed sales typically decrease month over month in April due to seasonal factors, this distressed sales share was the lowest from the month of April since 2007. Broken up, REO sales accounted for 7.4% and short sales made up 3.7% of total home sales in April. Additionally, the short sales percentage fell below 4% in mid-2014 and has remained stable since then. At its peak in January 2009, distressed sales totaled 32.4% of all sales, with REO sales representing 27.9% of that share. There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%. If the current year-over-year decrease in distressed sales share continues, the distressed sales share would reach that ‘normal’ 2-percent mark in mid-2017.
Price Gains Accelerating Again
Nationally the Home Price Index (HPI) is now within 7.6 percent of the peak value it reached in July 2006 of $268,000. Several states have already established new high-water marks for prices including Colorado and Texas which have done so nearly monthly for over a year. Among the largest metropolitan areas Austin, Dallas, Houston, and San Antonio all hit new peaks along with Columbus, Ohio, Denver, Honolulu, Nashville, San Francisco and San Jose. Both Boston and Portland, Oregon are now less than 0.75 percent away from doing so as well. Prices as measured by the HPI went up in every state from March to April, led by Washington with a 2.0 percent gain. Michigan and Colorado followed, each at 1.7 percent, Oregon at 1.6 percent, and both Minnesota and the District of Columbia at 1.3 percent.
45 Percent of Properties Were on the Market for Less than a Month in May
Almost half of all properties sold were on the market for less than a month in May 2015, according to the National Association of REALTORS®.
Housing Bubble? Despite Rising Prices, Most Economists Still Say No
The S&P/Case-Shiller Home Price Index released recently was the latest report to show a relentless rise in housing prices, causing some economists to ask: Is another bubble forming?
According to Tuesday’s data housing prices have been climbing for 35 consecutive months, but economists pointed to several reasons why that isn’t a concern, namely that while prices keep rising the rate of growth has slowed. In the first three months of this year home prices gained 0.8%, according to the S&P Case-Shiller national index. That’s down from 2.8% in the first three months of 2013 and 1.2% during the same period of last year.
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