ESTATE


Pending Home Sales Increase
2009/06/02, 6:48 pm
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The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

Geographical Breakdown

  • Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago.
  • Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008.
  • South: The index slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago.
  • West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR President Charles McMillan said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment. Buyers who are wondering about their options should contact a REALTOR, who can advise consumers on the housing assistance programs and resources available in a given area.”

Affordable Housing
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, which makes it the second-highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Pending Vs. Existing Sales
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

Existing-home sales for May will be released June 23. The next Pending Home Sales Index will be on July 1.

Source: NAR (06/02/09)



Home sales tick upward in March Tri-cou…
2009/04/13, 7:07 pm
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Home sales tick upward in March

Tri-county home sales ticked upward in March, and a new batch of first-time homebuyers indicates “consumer confidence is on the rise,” said Gettys Glaze, president of the Charleston Trident Multiple Listing Service.

Last month, 568 homes closed in the region, compared with 363 in February, for a 37% increase.

The median sales price also increased 3% compared to February to $185,000 in March.

The Charleston Trident Association of Realtors released its monthly housing report Friday, saying the numbers have led to “cautious optimism among industry leaders.”

“People are realizing the incredible selection and value in this market and making the smart decision to invest in real property,” Glaze said.

But sales are still down considerably from the same period a year ago. In March 2008, 752 homes sold, compared with the 568 last month. And the median price of homes a year ago was $197,500.

Charleston County sales led the pack last Month, with 288 homes sold in March, compared with 180 sales in February. Most of the market activity was concentrated in the northern portion of Mount Pleasant, which includes the Park West development. The area saw 52 sales and a median price of $321,250.

In Dorchester County, 112 closings were recorded last month. Nearly half of the county’s activity was in the Ridgeville area, where a total of 50 sales closed with a median price of $171,300.

Sales increased 32% in Berkeley County in March, with 137 closings at a median price of $165,000. The majority of those sales were concentrated in the Goose Creek area near U.S. Highway 52 and Oakley Road.

http://charlestonbusiness.com/news/27166-homes-sales-tick-upward-in-march



Pending sales down, affordability at record
2009/03/03, 7:49 pm
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The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.7 percent to 80.4 from a downwardly revised reading of 87.1 in December, according to NAR’s latest report.

The index is 6.4 percent below January 2008 when it was 85.9.

The index is at the lowest level since tracking began in 2001, when the index value was set at 100.

Lawrence Yun, NAR chief economist, says the downturn in the economy weighed heavily on the data.

“Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales,” he says. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit.”

Breakdown By Region

Here’s how the PHSI fared across the country:

  • Northeast: dropped 12.7 percent to 57.8 in January and is 19.7 percent below a year ago.
  • Midwest: declined 9.2 percent to 72.6 and is 13.8 percent below January 2008.
  • South: fell 11.9 percent to 82.2 in January and is 9.1 percent below a year ago.
  • West: rose 2.4 percent to 103.6 and is 13.5 percent higher than January 2008.

Buying Power Rises Significantly

NAR President Charles McMillan says it’s ironic with the weak housing market that affordability conditions have improved dramatically.

“Housing affordability is at a record high – the buying power of a typical family has risen significantly,” McMillan says. “With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment. With the strong housing stimulus, we are hopeful inventory will get trimmed and help prices to stabilize in many areas by the end of this year.”

Indeed, NAR’s Housing Affordability Index rose 13.6 percentage points in January to 166.8, a new record high. The HAI, a broad index of affordability using consistent values and assumptions over time, shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

The HAI indicates a median-income family, earning $59,800, could afford a home costing $283,400 in January with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest; affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. A year ago, the typical family could afford a home costing $263,300.

Yun: Hopeful for Spring Turnaround

“Conditions have been aligning very favorably for home buyers with the exception of consumer confidence,” Yun says. “But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises.”

Source: NAR



Impact of distressed homes
2009/02/24, 7:01 pm
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“Distressed” Sales Impact Metro Area Home Prices

by NAR Research

Most metropolitan area median home prices trended down in the fourth quarter of 2008 compared to the same quarter in 2007. But a major factor impacting that downtrend is likely the share of “distressed” sales. The latest quarterly metropolitan area home price report from NAR indicates that 134 out of 153 metropolitan statistical areas experienced declines in median existing single-family home prices from the same period in 2007. One area was unchanged and 18 metros reported price gains. NAR’s quarterly survey on state-by-state existing home sales show that resales rose in only six states from the fourth quarter of 2007.

The largest single-family home price increase in the fourth quarter was in the Beaumont-Port Arthur area of Texas, where the median price of $132,600 rose 16.7 percent from a year ago. Next was the Bloomington-Normal IL area at $159,300, up 9.6 percent from the fourth quarter of 2007, followed by Dover DE where the median price increased 6.5 percent to $212,500.

Total state existing-home sales, including single-family and condominiums, were at a seasonally adjusted annual rate of 4.70 million units in the fourth quarter, down 6.4 percent from 5.02 million units in the third quarter, and were 5.9 percent below the 5.00 million-unit pace in the fourth quarter of 2007.

Behind the Numbers

Distressed sales – foreclosures and short sales – accounted for 45 percent of transactions in the fourth quarter of last year, compared to about 38 percent of transactions in the third. Such significant distressed sales activity dragged the national median existing single-family price down to $180,100. That is 12.4 percent below the median sales price in the fourth quarter of 2007 when conditions were more balanced.

Strong sales gains, particularly in lower price homes, were primarily in areas with price declines resulting from foreclosures. In California and Florida, where distressed sales accounted for roughly two-thirds of all sales, the median price fell by much more as lower priced home sales far outpaced higher priced sales. Areas with the steepest declines in single-family home prices, more than 30 percent below the fourth quarter of 2007, include Las Vegas-Paradise, seven metro areas in California, Phoenix-Mesa-Scottsdale, and three metros in Florida. These areas are attracting bargain hunters. Indeed, the largest sales gains in the fourth quarter (compared to a year earlier) were in Nevada (up 133.7 percent), followed by California (up 84.7 percent), Arizona (up 42.6 percent) and Florida (up 12.5 percent).

Regional Differences

The West experienced a sales gain. Existing-home sales in the West rose 2.6 percent in the fourth quarter to an annual rate of 1.17 million and were 26.5 percent above a year ago. But the region
also experienced the largest price decline. The median existing single-family home price in the West was $243,200 in the fourth quarter, 25.1 percent below the median price in the fourth quarter of 2007. With a strong prevalence of distressed homes selling at discounted prices in the West, there were no reported metro areas in the region showing median price gains from a year earlier.

Existing-home sales in the Northeast fell 11.9 percent in the fourth quarter to a pace of 760,000 units and were 13.9 percent below a year ago. Home price declines in the region were more moderate. The median existing single-family home price in the Northeast declined 4.7 percent to $248,800 in the fourth quarter from the same period in 2007. The best gain in the region was in Pittsfield MA where the median price of $206,000 rose 1.7 percent from the fourth quarter of 2007, followed by Reading PA at $155,100, up 1.0 percent, and Buffalo-Niagara Falls NY where the price rose 0.8 percent to $106,200.

In the South, existing-home sales declined 7.3 percent in the fourth quarter to an annual rate of 1.73 million and are 13.4 percent lower than the same period in 2007. Median home prices in the South also declined in single-digit territory. The median existing single-family home price in the South was $158,300 in the fourth quarter, down 7.5 percent from a year earlier. After Beaumont-Port Arthur and Dover, the strongest price increase in the region was in El Paso TX with a 5.3 percent gain to $140,700, followed by Jackson MS at $126,600, up 4.7 percent.

In the Midwest, existing-home sales dropped 9.3 percent in the fourth quarter to a pace of 1.04 million and were 12.4 percent below a year ago. The median existing single-family home price in the Midwest fell 10.6 percent to $139,500 in the fourth quarter from the same period in 2007. After Bloomington-Normal, the next strongest metro price increase in the region was in Bismarck ND where the median price of $164,300 was 6.0 percent higher than a year ago, followed by Decatur IL at $79,300, up 5.9 percent, and the Wichita KS area at $118,200, up 3.9 percent.

Condominium Prices

In the condo sector, metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $186,000 in the fourth quarter, down 15.8 percent from the fourth quarter of 2007. Eight metros showed annual increases in the median condo price and 48 areas had declines. The strongest condo price increases were in the Dallas-Fort Worth-Arlington area at $149,500, up 14.1 percent, followed by Toledo, where the median condo price of $153,900 rose 11.4 percent from the fourth quarter of 2007, and the Philadelphia-Camden-Wilmington area at $210,200, up 10.2 percent.

Looking Ahead

The market is clearly depressed from job losses and consumer concerns about the economy. But buyers are responding to discounted prices and are slowly absorbing the excess inventory. Even so, it is important that they work with local professionals to properly gauge local neighborhood conditions. Foreclosures can heavily skew the broader home price figures much lower. Big discounts are not occurring in neighborhoods with few foreclosures. Assuming housing provisions in the economic stimulus package are quickly enacted and provide enough encouragement for home buyers, we could see a quick lift in home sales for the critical spring home buying season. If that occurs, home prices could begin to stabilize in many metro areas later this year as supply and demand begin to return to balance, which would greatly benefit the overall economy.