WASHINGTON – June 27, 2012 – Pending home sales bounced back in May, matching the highest level in the past two years and well above year-ago levels, according to the National Association of Realtors® (NAR). Every region saw monthly and annual gains.
NAR’s Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.9 percent to 101.1 in May from 95.5 in April; and it’s 13.3 percent above May 2011 when it was 89.2. The data reflect contracts but not closings.
The index also reached 101.1 in March, which is the highest level since April 2010, though at that time, buyers were rushing to beat the deadline for the homebuyer tax credit.
“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR chief economist. “The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year, and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”
The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013.
The PHSI in the Northeast increased 4.8 percent to 82.9 in May and is 19.8 percent above May 2011. In the Midwest, the index rose 6.3 percent to 98.9 in May and is 22.1 percent higher than a year ago. Pending home sales in the South increased 1.1 percent to an index of 106.9 in May and are 11.9 percent above May 2011. In the West the index jumped 14.5 percent in May to 108.7 and is 4.8 percent stronger than a year ago.
Pending home sales could be even higher, but low inventory could be holding back sales in some areas – a relatively new challenge.
“If credit conditions returned to normal, and if we had more inventory, especially in the lower price ranges, more people would become successful buyers,” Yun said. “In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process.”
Low inventory results partly from underwater homeowners who are unwilling to list their homes, which would require a lengthy short sale process or additional cash to complete the transaction. NAR estimates 85 percent of homeowners have positive equity, with 15 percent underwater.
“Low inventory can be cured by increasing new home construction,” Yun says. He projects housing starts to rise by 26 percent this year and another 50 percent in 2013.
“If housing starts do not rise in a meaningful way over the next two years due to the difficulty in getting construction loans, and barring an unexpected shift in the economy, the steady shedding of inventory could lead to shortages where home prices could get bid up close to 10 percent in 2013,” Yun said.
© 2012 Florida Realtors®
Wednesday, June 27, 2012
International Buyers of Residential Properties: Purchases by State
Most states have at least a few purchases of residential properties by foreign buyers. However, according to the 2012 Profile of International Home Buying Activity, foreign buyers of residential properties are concentrated in four states: Florida, California, Texas, and Arizona, accounting for 51 percent of international clients. Florida has been the fastest growing destination of choice, accounting for 26% of international clients.
What Does This Mean to Realtors®?
International clients have specific interests and needs. Information on addressing this market is available at http://www.realtor.org/global.
International clients have specific interests and needs. Information on addressing this market is available at http://www.realtor.org/global.
Florida housing market continues positive track in May
ORLANDO, Fla. – June 21, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in May, according to the latest housing data released by Florida Realtors®.
“The recovery in Florida’s housing market and economy continues to grow stronger and stronger,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Realtors across the state are reporting increased activity – in May, statewide pending sales were up 43.1 percent for existing single-family homes and up 33.4 percent for townhome-condo properties. In some areas, a shortage of for-sale inventory is resulting in multiple bids from buyers and rising price conditions.
“Now, more than ever, successful buyers and sellers are realizing the value of working with a Realtor who knows their local markets.”
Pending sales refer to contracts that are signed but not yet completed or closed; closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in May was $147,000, up 8.9 percent from the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The statewide median for townhome-condo properties was $112,000, up 14.3 percent over May 2011.
The national median sales price for existing single-family homes in May 2012 was $182,900, up 7.7 percent from the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in May was $312,110; in Maryland, it was $259,207; and in New York, it was $208,000.
The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Statewide sales of existing single-family homes totaled 18,723 in May, up 7.2 percent, compared to the year-ago figure. Looking at Florida’s year-to-year comparison for sales of townhomes/condos, a total of 9,995 units sold statewide last month, up 5.4 percent from those sold in May 2011. NAR reported the national median existing condo price in May 2012 was $180,000.
Last month, the inventory for both single-family homes and for townhome-condo properties stood at a 5.5-month supply, according to Florida Realtors.
“Some very positive trends have been developing in the Florida market, and the May numbers indicate those trends are continuing,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Closed sales, pending sales and prices – both average and median – are strongly above where they were a year ago. In fact, average prices have increased in 11 of the past 12 months.
“In addition, home sellers are receiving a higher percentage of their asking price, a trend we’ve seen for nine months. Perhaps the most striking characteristic of this market has been the dramatic drop in inventories. Now, Florida is in what is generally considered a balanced market – that is, one that favors neither buyers nor sellers.”
The interest rate for a 30-year fixed-rate mortgage averaged 3.80 percent in May 2012, down from the 4.64 percent average during the same month a year earlier, according to Freddie Mac.
To see the full statewide housing activity report, go to Florida Realtors website at www.floridarealtors.org, and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the May report. Or go to Florida Realtors Media Center at http://media.floridarealtors.org/ and download the May 2012 data report PDF under Market Data at: http://media.floridarealtors.org/market-data.
“The recovery in Florida’s housing market and economy continues to grow stronger and stronger,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “Realtors across the state are reporting increased activity – in May, statewide pending sales were up 43.1 percent for existing single-family homes and up 33.4 percent for townhome-condo properties. In some areas, a shortage of for-sale inventory is resulting in multiple bids from buyers and rising price conditions.
“Now, more than ever, successful buyers and sellers are realizing the value of working with a Realtor who knows their local markets.”
Pending sales refer to contracts that are signed but not yet completed or closed; closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in May was $147,000, up 8.9 percent from the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The statewide median for townhome-condo properties was $112,000, up 14.3 percent over May 2011.
The national median sales price for existing single-family homes in May 2012 was $182,900, up 7.7 percent from the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median sales price for single-family existing homes in May was $312,110; in Maryland, it was $259,207; and in New York, it was $208,000.
The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Statewide sales of existing single-family homes totaled 18,723 in May, up 7.2 percent, compared to the year-ago figure. Looking at Florida’s year-to-year comparison for sales of townhomes/condos, a total of 9,995 units sold statewide last month, up 5.4 percent from those sold in May 2011. NAR reported the national median existing condo price in May 2012 was $180,000.
Last month, the inventory for both single-family homes and for townhome-condo properties stood at a 5.5-month supply, according to Florida Realtors.
“Some very positive trends have been developing in the Florida market, and the May numbers indicate those trends are continuing,” said Florida Realtors Chief Economist Dr. John Tuccillo. “Closed sales, pending sales and prices – both average and median – are strongly above where they were a year ago. In fact, average prices have increased in 11 of the past 12 months.
“In addition, home sellers are receiving a higher percentage of their asking price, a trend we’ve seen for nine months. Perhaps the most striking characteristic of this market has been the dramatic drop in inventories. Now, Florida is in what is generally considered a balanced market – that is, one that favors neither buyers nor sellers.”
The interest rate for a 30-year fixed-rate mortgage averaged 3.80 percent in May 2012, down from the 4.64 percent average during the same month a year earlier, according to Freddie Mac.
To see the full statewide housing activity report, go to Florida Realtors website at www.floridarealtors.org, and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the May report. Or go to Florida Realtors Media Center at http://media.floridarealtors.org/ and download the May 2012 data report PDF under Market Data at: http://media.floridarealtors.org/market-data.
Confidence in Current Residential Markets Up
The REALTORS® Confidence Index is an indicator of housing market strength. Conditions are measured as “strong” (100 points), “moderate” (50 points), and “weak” (0 points). The overall ratings are the averages of responses. A score of 50 is the threshold between a “strong” and a “weak” condition. Realtor® confidence in the market outlook is presented in terms of the current market and the market outlook for the next six months for single family, townhouse, and condo markets.
Single Family Properties: Confidence is Rising—Well Above Moderate.
Townhouse Properties: Confidence Improving–Approaching Moderate.
Condominiums: Confidence Still Relatively Low, But Improving Substantially.
Single Family Properties: Confidence is Rising—Well Above Moderate.
Condominiums: Confidence Still Relatively Low, But Improving Substantially.
Are Banks ‘Hoarding Foreclosures’?
Recent housing surveys are showing an uptick in home prices, particularly in cities in warm-weather “sand states” that had been hard-hit during the housing slump, such as in Phoenix, Las Vegas, Miami, and Tampa. But some housing experts worry that the lift in prices may be temporary due to banks “hoarding foreclosures.”
Some real estate professionals allege that the “synthetically pumped prices” are being caused by “banks stockpiling foreclosed properties and purposely keeping them off the market until area prices truly soar.”
For example, in Phoenix, in the “sand state” of Arizona, home prices have been soaring the past six months.
But real estate professional Michelle Tremblay, with West USA Realty in Phoenix, tells MSNBC: “We can see on the street what’s vacant and what’s not. We’re watching these [foreclosed and non-listed] houses just sit and rot. The banks are letting these houses just deteriorate. They’re holding them and releasing them slowly to drive the value up.”
Some markets are seeing a decrease in inventory of for-sale homes, which has helped lift home prices in some areas due to an increase in demand but limited supply. But real estate professionals say they’re concerned what will be temporary when banks start releasing more foreclosures to the market. Some have accused banks of purposely holding onto foreclosures to wait for home prices to recover so that they can get higher returns for the homes, but real estate experts are concerned that could stall the housing recovery.
However, Mark Vitner, Wells Fargo senior economist, asserts that large banks are not hoarding foreclosures and waiting for prices to perk up.
"I don't think there's any concerted effort to hold properties back from the market," Vitner told MSNBC.com. "The process to [work through and re-sell] foreclosure inventory is lengthy and there just seems to be a lot of hurdles out there to getting these properties to market. A lot of the best properties have been in foreclosure and have already sold."
Backing up that assertion, CoreLogic, a market analytics service, reports that residential shadow inventory -- which includes foreclosures -- fell to 1.5 million units in April, a 14.8 percent drop from the same month one year earlier.
Source: “Home Prices Higher for Third Straight Month as ‘Sand States’ Drift Away From Crisis,” MSNBC.com (June 26, 2012)
Some real estate professionals allege that the “synthetically pumped prices” are being caused by “banks stockpiling foreclosed properties and purposely keeping them off the market until area prices truly soar.”
For example, in Phoenix, in the “sand state” of Arizona, home prices have been soaring the past six months.
But real estate professional Michelle Tremblay, with West USA Realty in Phoenix, tells MSNBC: “We can see on the street what’s vacant and what’s not. We’re watching these [foreclosed and non-listed] houses just sit and rot. The banks are letting these houses just deteriorate. They’re holding them and releasing them slowly to drive the value up.”
Some markets are seeing a decrease in inventory of for-sale homes, which has helped lift home prices in some areas due to an increase in demand but limited supply. But real estate professionals say they’re concerned what will be temporary when banks start releasing more foreclosures to the market. Some have accused banks of purposely holding onto foreclosures to wait for home prices to recover so that they can get higher returns for the homes, but real estate experts are concerned that could stall the housing recovery.
However, Mark Vitner, Wells Fargo senior economist, asserts that large banks are not hoarding foreclosures and waiting for prices to perk up.
"I don't think there's any concerted effort to hold properties back from the market," Vitner told MSNBC.com. "The process to [work through and re-sell] foreclosure inventory is lengthy and there just seems to be a lot of hurdles out there to getting these properties to market. A lot of the best properties have been in foreclosure and have already sold."
Backing up that assertion, CoreLogic, a market analytics service, reports that residential shadow inventory -- which includes foreclosures -- fell to 1.5 million units in April, a 14.8 percent drop from the same month one year earlier.
Source: “Home Prices Higher for Third Straight Month as ‘Sand States’ Drift Away From Crisis,” MSNBC.com (June 26, 2012)
Buying is Cheaper Than Renting in Nearly All Major Cities
Home buying is the smarter choice than renting, according to Trulia’s Winter 2012 Rent vs. Buy Index.
Buying a home is more affordable than renting in 98 of the nation’s 100 largest metro areas, according to the index, which tracks asking prices for rental units compared to for-sale homes in major metro areas.
The only two metros out of the 100 tracked where renting was found to be the better deal: Honolulu and San Francisco. Still, the index notes that if you plan to stay in those markets more than five years, you might still be better off owning than renting in those markets too.
Falling home values and low mortgage rates have made home ownership more affordable. Meanwhile, rents have been on the rise.
“As rents rise and prices stagnate, home ownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring home owners face.”
Top 10 Metros to Buy vs. Rent
1. Detroit
2. Oklahoma City, Okla.
3. Dayton, Ohio
4. Warren-Troy-Farmington Hills, Mich.
5. Toledo, Ohio
6. Grand Rapids, Mich.
7. Cleveland, Ohio
8. Atlanta
9. Gary, Ind.
10. Memphis, Tenn.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Buying a home is more affordable than renting in 98 of the nation’s 100 largest metro areas, according to the index, which tracks asking prices for rental units compared to for-sale homes in major metro areas.
The only two metros out of the 100 tracked where renting was found to be the better deal: Honolulu and San Francisco. Still, the index notes that if you plan to stay in those markets more than five years, you might still be better off owning than renting in those markets too.
Falling home values and low mortgage rates have made home ownership more affordable. Meanwhile, rents have been on the rise.
“As rents rise and prices stagnate, home ownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring home owners face.”
Top 10 Metros to Buy vs. Rent
1. Detroit
2. Oklahoma City, Okla.
3. Dayton, Ohio
4. Warren-Troy-Farmington Hills, Mich.
5. Toledo, Ohio
6. Grand Rapids, Mich.
7. Cleveland, Ohio
8. Atlanta
9. Gary, Ind.
10. Memphis, Tenn.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Survey Shows More Reason to Buy Than Rent
Thirty-three percent of Americans say they expect home prices to rise in the next 12 months, the highest level in more than a year, according to Fannie Mae’s March 2012 National Housing Survey of consumer attitudes about the housing market.
The number of people who say now is a good time to buy is also on the rise, increasing to 73 percent—also the highest level in more than a year. The percentage who said it's a good time to sell a home also increased one point to 14 percent in March.
Meanwhile, more Americans expect rental prices to rise and are projecting an increase by 4.1 percent over the next year, the highest number recorded to date.
“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, Fannie Mae’s chief economist. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that home ownership is more compelling house choice.”
Source: “Americans’ Expectations Align to Encourage Home Buying,” RISMedia (May 6, 2012)
The number of people who say now is a good time to buy is also on the rise, increasing to 73 percent—also the highest level in more than a year. The percentage who said it's a good time to sell a home also increased one point to 14 percent in March.
Meanwhile, more Americans expect rental prices to rise and are projecting an increase by 4.1 percent over the next year, the highest number recorded to date.
“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, Fannie Mae’s chief economist. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that home ownership is more compelling house choice.”
Source: “Americans’ Expectations Align to Encourage Home Buying,” RISMedia (May 6, 2012)
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