WASHINGTON (MarketWatch) — Sales of existing homes climbed 2.3% to a seasonally adjusted annual rate of 4.47 million in July, the National Association of Realtors reported Wednesday, coming in roughly in line with the 4.5 million consensus. The median price of existing homes climbed 9.4% year-on-year to $187,300, and inventories rose 1.3% to 2.4 million units, representing 6.4 months of supply.
Posts Tagged National Association of Realtors
WASHINGTON (MarketWatch) — Existing-home sales rose in February to reach the highest rate in more than three years, another sign of a strengthening housing market, as inventories posted an unusually large gain in the month, a trade group said Thursday.
Economists polled by MarketWatch had expected a pace of 5.02 million for February, compared with an original estimate of a 4.92 million rate in January. See economic calendar. On Thursday, NAR upwardly revised January’s rate to 4.94 million.
While sales remain below prerecession and bubble levels, low mortgage rates and an improving jobs picture are supporting demand. Also, rising prices are encouraging activity, luring sellers to place homes on the market.
Inventories rose 9.6% in February to 1.94 million existing homes available for sale. The months’ supply of existing homes rose to 4.7 in February from 4.3 in January, the first increase since April, but still a relatively low figure. January’s months’ supply was the lowest since May 2005.
Compared with February 2012, the median sales price rose 11.6% to $173,600. Elsewhere Thursday, a federal agency reported that home prices in January climbed 6.5% from the same period in the prior year. Read more about the government’s estimate.
“The trend in home sales still looks up; with inventories down sharply, prices are rising as well,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, wrote in a research note. “While levels are still low, housing is now the strongest part of the economy in growth terms.”
Other housing data released this week indicated a housing market that is growing stronger over the long term, despite some mixed recent indicators. Construction on new U.S. homes recently nudged up, and confidence among home builders declined. Read more about construction.Read more about builder confidence.
Going forward, there’s concern that overly stringent lending standards and ongoing high unemployment could cut the housing market’s improvement.
Still, analysts expect the housing market to continue to add to economic growth this year given the Federal Reserve’s backing and an economy that is adding jobs. Indeed, a recent reading on building permits, which are a sign of future demand, hit the highest level since June 2008.
By Steve Goldstein
Welcome to my February Beaver Creek Real Estate Market Update. This issue contains a recap of 2011 and all related statistics. We were up slightly over 2010 but it will take a while to climb out of the deep hole we dropped into over the past few years.
The overall market was also up slightly in 2011, mainly due to the increase in the sale of distressed properties (bank owned and short sales).
On a different theme, I attended the National Association of Realtors (NAR) annual conference last fall in my role as VBR Board Member and MLS Director. I’ve included some comments from the NAR chief economist and his perspective on the housing market.
Click on the links below to view the market update and the current BC condo and town home listings and 2011 sales.
We continue to get snow although not to the extent of last season. Nevertheless, skiing is excellent.
Best Wishes to you and your family.
By Amy Hoak, Marketwatch
CHICAGO (MarketWatch) — Now may be a great time to buy a house, given that years of falling home prices and low mortgage rates have made buying a place to live more affordable than it has been in decades.
And that’s not just a pitch from the National Association of Realtors.
A recent report from J.P. Morgan Asset Management, titled “Housing: A time to buy,” written by David Kelly and David Lebovitz, made the case for why a home may be a wise purchase.
Where to invest in real estate
Investors can find opportunities in apartment and shopping-mall REITs, according to Marty Cohen of real-estate fund manager Cohen & Steers, who advises caution around single-family housing, commercial and retirement properties. Jonathan Burton reports.
“Although the U.S. housing market remains extremely depressed, we believe that given current valuations and demographic dynamics, now may be the time to consider an investment in housing,” the report said.
Investors may be tempted to play off that theme, positioning themselves for the moment when home buyers come back in droves.
But that’s a trickier proposition than it sounds.
This housing market has been anything but predictable. And the pain inflicted during the housing recession has left deep scars, making it difficult for many people to pin their money to the belief that housing could soon be on the mend.
Plus, any recovery may be slow.
That’s because while prices are down and financing is attractive, it’s harder for people to qualify for mortgages. The high unemployment rate has dealt a blow to household formation, and other would-be buyers simply can’t muster the confidence to buy a home.
Moreover, many homeowners are underwater on their mortgage and won’t be able to sell their home, let alone buy a new one, anytime soon.
“My own read of the tea leaves is [a housing recovery is] going to take awhile, and there isn’t an obvious place to invest to play that theme,” said Craig Leupold, president of Green Street Advisors, a real-estate and real-estate investment trust research firm.
Home, sweet home
Any brave souls willing to make a bet on the return of the residential real-estate market right now might first look at home builders and the home-improvement stores as places to invest.
Builders have slashed volume in recent years, and are on track to sell 313,000 new homes this year — far fewer than in 2005, when 1.28 million new homes were sold.
In fact, builders have pulled so far back on creating inventory during the downturn, it’s possible the market could run out of existing inventory faster than expected once housing gets back on track, said Eric Landry, director of industrial sector research for investment research firm Morningstar Inc.
“When the confidence does arise, there’s not going to be enough supply to satiate it,” he said. After all, he noted, the population keeps growing and our housing stock isn’t growing with it.
Plus, he said, new buyers will want houses that are near job centers and are built for modern lifestyles, and some currently available houses won’t fit that bill.
Rooms with a view
If you think that housing sales will remain low, your best bet might be to snap up rentals at low prices.
Those with wherewithal and patience might invest in a low-priced property and turn it into a rental, which can be a lucrative move at a time when rents are on the rise because fewer people have the means — or the desire — to buy a home.
Some firms help the novice investor buy an income-producing single-family home and offer property-management support. These companies buy single-family home foreclosures, update them to new construction standards, find quality tenants, and sell the income-producing properties to investors.
“It’s geared toward your business owners and professionals who want to diversify their portfolio of investments and want to get benefits that come along with owning real estate,” said Eric Workman, vice president of sales for MACK Companies, which is based in the Chicago area. “Owning real estate without having someone else manage it for you becomes a full-time job,” he said.
Another, more liquid, option is to invest in apartment REITs. They’ll suffer if there’s a strong return to homeownership, but the sector should be solid for at least another 18 months, said Wells Fargo’s Hunt.
One big reason to look at apartments: Supply is at a 30-year low, and for every percentage point that the homeownership rate drops, another 1.1 million renters enter the market, Hunt said.
Plus, many 18- to 32-year-olds may still be wary of homeownership, since for the past several years all they’ve seen is home prices going down, Hunt added. And this is a generation that isn’t as secure as they’d like to be in their jobs, he said, so not being tied down to a mortgage will likely be important to them.
Amy Hoak is a MarketWatch reporter based in Chicago.
By Steve Goldstein
WASHINGTON (MarketWatch) — Pending home sales rose 2.4% in June, driven by gains in the West and the South, according to an index released by the National Association of Realtors on Thursday. The pending home sales index rose to 90.9 in June from 88.8 in May and was 19.8% above June 2010 levels, which was the low point following the expiration of the home buyer tax credit. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Cancellations led to a decline in the June existing-home sales report despite the strength in the May pending home sales report. “Though a higher-than-normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations,” said Lawrence Yun, NAR chief economist.
Note from Terry – We are also seeing a similar trend in Eagle County. So far in July, we have 87 properties under contract. In July, 2010, we had a total of 67 properties go under contract. Let’s hope this increase in under contract properties continues and results in more sales.
By Rob Reuteman, CNBC.com
The buyers’ market for vacation homes is likely to continue for years, with activity largely limited to buyers with enough cash to circumvent a tighter, post-recession lending environment.
Thirty-six percent of all vacation-home buyers in 2010 did not use a mortgage — versus 29 percent the year before — while more than half of them financed less that 70 percent of the purchase price, according to the National Association of Realtors. Of those who bought a second home as a rental investment, 59 percent paid cash.
“Mortgage lending in the past three years has been pretty rough, with much higher underwriting standards,” says Paul Bishop, NAR’s vice president for research. “People drawn into the market at this point are buyers with substantial cash, or people not dealing with a mortgage. If your credit is strong and you put down a sizeable down payment, lenders are more interested.”
Vacation homes remain the hardest-hit sector of the U.S. real estate market. Sales fell 1.8 percent to 543,000 in 2010, according to the NAR’s 2011 Investment and Vacation Home Buyers Survey. The median price was $150,000 in 2010, down 11.2 percent from $169,000 in 2009.