Tag Archives: housing

Home Prices: Boom Continues, but Leveling Out Needed

Source: RISMedia

The boom is continuing for home prices, with a gain in March of 6.5 percent, according to the S&P CoreLogic/Case-Shiller Indices.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index’s 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), rose 6.5 percent year-over-year, an increase from 6.4 percent in February. The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 6.8 percent year-over-year, which is comparable to February. Month-over-month, both the 10-City Composite and the 20-City composite rose, 0.9 percent and 1 percent, respectively.

“The home price increases continue, with the National Index rising at 6.5 percent per year,” says David M. Blitzer, chairman and managing director of the S&P Dow Jones Indices Index Committee.

“Looking across various national statistics on sales of new or existing homes, permits for new construction, and financing terms, two figures that stand out are rapidly rising home prices and low inventories of existing homes for sale,” Blitzer says. “Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s before the housing boom and bust.

“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” says Blitzer. “Compared to the price gains of the last boom in the early 2000s, things are calmer today.”

“The solid gain in home prices of 6.5 percent in March added roughly $150 billion to housing wealth during the month,” said Lawrence Yun, chief economist at the National Association of REALTORS® (NAR), in a statement. “The continuing run-up in home prices above the pace of income growth is simply not sustainable. From the cyclical low point in home prices six years ago, a typical home price has increased by 48 percent, while the average wage rate has grown by only 14 percent. Rising interest rates also do not help with affordability; therefore, more supply is needed to level out home prices. Homebuilding will be the key as to how the housing market performs in the upcoming years.”

The complete data for the 20 markets measured by S&P:

Atlanta, Ga.
Month-Over-Month (MoM): 0.8%
Year-Over-Year (YoY): 6.2%

Boston, Mass.
MoM: 1.2%
YoY: 5.8%

Charlotte, N.C.
MoM: 1%
YoY: 6.2%

Chicago, Ill.
MoM: 1.1%
YoY: 2.8%

Cleveland, Ohio
MoM: 0.3%
YoY: 4.6%

Dallas, Texas
MoM: 0.7%
YoY: 5.8%

Denver, Colo.
MoM: 1.4%
YoY: 8.6%

Detroit, Mich.
MoM: 1.1%
YoY: 7.9%

Las Vegas, Nev.
MoM: 1.5%
YoY: 12.4%

Los Angeles, Calif.
MoM: 0.9%
YoY: 8.1%

Miami, Fla.
MoM: 0.7%
YoY: 5%

Minneapolis, Minn.
MoM: 1.7%
YoY: 6.1%

New York, N.Y.
MoM: 0.1%
YoY: 5.2%

Phoenix, Ariz.
MoM: 0.9%
YoY: 6.8%

Portland, Ore.
MoM: 1%
YoY: 6.7%

San Diego, Calif.
MoM: 1%
YoY: 7.7%

San Francisco, Calif.
MoM: 2.1%
YoY: 11.3%

Seattle, Wash.
MoM: 2.8%
YoY: 13%

Tampa, Fla.
MoM: 0.6%
YoY: 7.5%

Washington, D.C.
MoM: 1.1%
YoY: 3%

Confidence in Housing at New Peak

Source: Suzanne De Vita RISMedia

Confidence in housing is at a new peak, with enthusiasm among sellers soaring, according to the April Fannie Mae Home Purchase Sentiment Index® (HPSI). At 91.7, the Index plowed through its previous record, climbing 3.4 percentage points month-over-month and five points year-over-year.

“The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home-buying season,” says Doug Duncan, chief economist and senior vice president at Fannie Mae.

What is driving the lift? Americans are optimistic about their prospects for selling, with 45 percent believing now is ideal to list—a high point since the start of the survey. By the same token, almost half (49 percent) of Americans believe home prices will rise—conditions that, for sellers, translate to an upper hand.

Confidence can dissipate, however, if inventory remains sparse, according to Duncan.

“High home prices and good economic conditions helped push the share of Americans who think it’s a good time to sell to a fresh record-high; however, the upward trend in the good-time-to-sell share seen since last spring has done little to release more for-sale inventory,” Duncan says. “The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales.”

Despite constrained inventory, sales are strengthening, with both existing and pending sales squeezing out wins in March, the National Association of REALTORS® (NAR) reported—and, according to the Commerce Department, new-home sales tracked up.

The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).

Existing-Home Sales Strengthen

Source: RISMedia

Building on February’s gains—and for the second time this year—existing-home sales have strengthened, the National Association of REALTORS® (NAR) reports. March sales increased 1.1 percent to 5.6 million, but they were down 1.2 percent from the prior year. Inventory increased, as well: 5.7 percent to 1.67 million, but 7.2 percent lower than the prior year.

“Robust gains last month in the Northeast and Midwest—a reversal from the weather-impacted declines seen in February—helped overall sales activity rise to its strongest pace since last November at 5.72 million,” says Lawrence Yun, chief economist at NAR. “The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year-ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford.”

Currently, inventory is at a 3.6-month supply. Existing homes averaged a brisk 30 days on market in March, four days less than the prior year. All told, 50 percent of homes sold were on the market for less than one month.

“REALTORS® throughout the country are seeing the seasonal ramp-up in buyer demand this spring, but without the commensurate increase in new listings coming onto the market,” Yun says. “As a result, competition is swift and homes are going under contract in roughly a month, which is four days faster than last year and a remarkable 17 days faster than March 2016.”

The metropolitan areas with the fewest days on market and most realtor.com® views in March, according to realtor.com’s Market Hotness Index, were San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; Midland, Texas; and San Jose-Sunnyvale-Santa Clara, Calif.

The median existing-home price for all house types (single-family, condo, co-op and townhome) was $250,400, a 5.8 percent increase from the prior year. The median price of an existing single-family home was $252,100, while the median price for an existing condo was $236,100.

Existing-home sales in the single-family space came in at 4.99 million in March, a 0.6 percent increase from 4.96 million in February, but a 1 percent decrease from 5.04 million the prior year. Existing-condo and -co-op sales came in at 610,000, a 5.2 percent increase from February, but a 3.2 percent decrease from the prior year.

Twenty percent of existing-home sales in March were all-cash, with 15 percent by individual investors. Four percent were distressed.

Two of the country’s major regions had higher sales, rising 5.7 percent to 1.29 million in the Midwest, with a8 median price of $192,200, and 6.3 percent to 680,000 in the Northeast, with a median price of $270,600. The South and West had reduced sales, falling 0.4 percent to 2.4 million in the South, with a median price of $222,400, and 3.1 percent to 1.23 million in the West, with a median price of $377,100.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets, especially those out West,” says Yun.

First-time homebuyers comprised 30 percent of existing-home sales in March, up from 29 percent February.

“First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range,” says NAR President Elizabeth Mendenhall. “Supply conditions improve in higher-up price brackets, which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search.”

According to Keller Williams Chief Economist Ruben Gonzalez, existing-home sales are on a familiar track.

“We continue to forecast that existing-home sales in 2018 will be at or slightly below 2017 sales,” says Gonzalez. “If inventory conditions remain restrictive, we also expect to continue to see home price appreciation accelerate. Based on data and anecdotal evidence, the most restrictive inventory conditions currently exist for entry-level housing, and this is also where we anticipate the most acceleration in home price appreciation.”

For more information, please visit www.nar.realtor.

Housing in 2018: Where Are Home Values Headed?

Source: Suzanne DeVita/RISMedia

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Additionally, experts foresee increasing mortgage rates, with the 30-year, fixed rate ranging anywhere from 4.28 to 4.70 percent. Currently, the 30-year averages 3.90 percent, according to Freddie Mac.

“Higher mortgage rates will eat into buyers’ budgets, putting even more price pressure on the most affordable homes for sale,” Terrazas says. “Unless there is a fundamental shift in the number and type of homes for sale, this is the new normal of the American housing market.”

One factor in the health of the housing market is the homeownership rate; experts predict it, too, will rise, though slightly, to 64 percent. The homeownership rate has improved twice thus far this year, up to 63.9 percent in third quarter, according to the Census.

Beyond 2018, analysts are divided.

“Our most optimistic group of experts projects average annual home value appreciation of almost 5 percent annually through the five-year period ending in 2022, while the most pessimistic group expects an average annual rate of just 1.4 percent,” says Terry Loebs, founder of Pulsenomics, which conducted the survey in conjunction with Zillow. “I don’t foresee a stronger consensus emerging until we have greater clarity concerning tax reform and the pace of entry-level home building.”

The Profile: Thurston County Statistics & Data

Updated November 2017

First published in 1982, The Profile is a compilation of statistics, trends, analyses and comparisons for Thurston County and its jurisdictions. Since its inception, The Profile has developed a reputation as a comprehensive and reliable resource for a wide variety of users needing current, accurate data for the region. The Profile is updated each fall.

AcknowledgementsThurston Regional Planning Council wishes to thank the many public and private agencies, and their staff, that have provided data and information used in The Profile. Some of the agencies contributing to The Profile include:

  • Washington State Office of Financial Management
  • U.S. Census Bureau
  • U.S. Bureau of Labor Statistics
  • Washington Department of Employment Securities
  • Washington State Superintendent of Public Education
  • Northwest Multiple Listing Service

Complete data sources are included with each table. While TRPC strives to provide the most accurate and timely data available, it cannot guarantee, and is not responsible for, the reliability of data originating from other institutions.

Archives

Thurston Regional Planning Council published The Profile as a printed document between 1982 and 2013. During that time period, TRPC continued to use the latest technologies and information to make the document a leading resource for data on Thurston County. To see how The Profile — and the data included — have evolved during its 30-plus year history, explore The Profile archives.

Over 1 Million Properties Shed Underwater Status in 2016

Source: RISMedia

A just-released report reveals underwater properties are steadily declining, with more than one million shifting status in 2016—a possible turning point in the ongoing inventory crisis.

According to ATTOM Data Solutions’ Year-End 2016 U.S. Home Equity & Underwater Report, the amount of “seriously” underwater properties in the U.S. decreased by over one million last year, while the amount of “equity rich” properties increased by 1.3 million. Seriously underwater is defined as a property with a loan-to-value ratio 25 percent or more of its fair market value; equity rich is defined as a property with an LTV ratio 50 percent or less.

The opposing gap between the two is a signal of the overall health of the housing market, as well as the potential for short supply to, if marginally, improve.

“Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million, an average decrease of about 1.4 million each year,” says Daren Blomquist, senior vice president with ATTOM Data Solutions. “Meanwhile, the number of equity rich homeowners has increased by nearly 4.8 million over the past three years, a rate of about 1.6 million each year.

“Despite this upward trend over the past five years, the massive loss of home equity during the housing crisis forced many homeowners to stay in their homes longer before selling, effectively disrupting the historical domino effect of move-up buyers that feeds both demand for new homes and supply of inventory for first-time homebuyers,” Blomquist says.

Approximately 10 percent—5.4 million—of all properties with a mortgage are still seriously underwater, according to the report, marking the lowest level since 2012.

The top five states with the most seriously underwater properties in 2016 were Nevada (19.5 percent share), Illinois (16.6 percent), Ohio (16.3 percent), Missouri (14.6. percent) and Louisiana (14.5 percent). The majority of the top five metropolitan areas with the most seriously underwater properties was located in Ohio: Cleveland (21.5 percent), Akron (20.1 percent), Dayton (20.0 percent) and Toledo (19.9 percent).

The top five states with the most equity rich properties in 2016, by comparison, were Hawaii (37.8 percent), Vermont (36.9 percent), California (36.0 percent), New York (34.9 percent) and Oregon (32.0 percent). The majority of the top five metropolitan areas with the most equity rich properties was located in California: San Jose (51.6 percent), San Francisco (47.7 percent) and Los Angeles (39.2 percent).

With this substantial reversal of trend, how long will the inventory shortage last? The drop-off dynamic of shrinking underwater properties and expanding equity could indicate the answer is sooner than expected.

Source: ATTOM Data Solutions

For the latest real estate news and trends, bookmark RISMedia.com.

2017 to See Slight Slowing of Home Price Movement

Source: RISMedia

Home-Price Gains Continue

Source: RISMedia & Realtor.org

 

Home prices maintained their robust, upward trajectory in a vast majority of metro areas during the second quarter, causing affordability to slightly decline despite mortgage rates hovering at lows not seen in over three years, according to the latest quarterly report by the National Association of REALTORS. The report also revealed that for the first time ever, a metro area – San Jose, California – had a median single-family home price above $1 million.

The median existing single-family home price increased in 83 percent of measured markets, with 148 out of 178 metropolitan statistical areas (MSAs) showing gains based on closed sales in the second quarter compared with the second quarter of 2015. Twenty-nine areas (16 percent) recorded lower median prices from a year earlier.

There were slightly fewer rising markets in the second quarter compared to the first three months of this year, when price gains were recorded in 87 percent of metro areas. Twenty-five metro areas in the second quarter (14 percent) experienced double-digit increases – a small decrease from the 28 metro areas in the first quarter. A year ago, 34 metro areas (19 percent) experienced double-digit price gains.

Lawrence Yun, NAR chief economist, says a faster pace of home sales amidst languishing inventory levels pushed home prices higher in most metro areas during the second quarter. “Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities,” he says. “However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.”

The national median existing single-family home price in the second quarter was $240,700, up 4.9 percent from the second quarter of 2015 ($229,400), which was previously the peak quarterly median sales price. The median price during the first quarter of this year increased 6.1 percent from the first quarter of 2015.

Total existing-home sales,including single family and condos, rose 3.8 percent to a seasonally adjusted annual rate of 5.50 million in the second quarter from 5.30 million in the first quarter of this year, and are 4.2 percent higher than the 5.28 million pace during the second quarter of 2015.

“Primarily from repeat buyers moving up or trading down, existing sales increased each month last quarter and could’ve been even higher if not for a few speedbumps,” explains Yun. “Closings were slowed a bit by meager supply levels and home prices in many areas that are still rising too fast.”

At the end of the second quarter, there were 2.12 million existing homes available for sale, which was below the 2.25 million homes for sale at the end of the second quarter in 2015. The average supply during the second quarter was 4.7 months – down from 5.1 months a year ago.

According to Yun, without enough new construction being built, existing inventory seriously failed to keep up with the growing demand for buying. As a result, homes typically stayed on the market for around a month throughout the second quarter, and over 40 percent of listings sold at or above list price, with June being the highest share since NAR began tracking in December 2012 (43 percent).

“Many listings in a majority of markets – and especially those in lower price ranges – had multiple offers and went under contract quickly because of severely inadequate supply,” adds Yun. “This in turn dented affordability and without a doubt priced out a segment of buyers attempting to seek relief from fast-growing rents.”

Despite falling mortgage rates and a small increase in the national family median income ($68,774), swiftly rising home prices caused affordability to decline in the second quarter compared to a year ago. To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $52,255, a 10 percent down payment would require an income of $49,504, and $44,004 would be needed for a 20 percent down payment.

The five most expensive housing markets in the second quarter were the San Jose, California, metro area, where the median existing single-family price was $1,085,000; San Francisco, $885,600; Anaheim-Santa Ana, California, $742,200; urban Honolulu, $725,200; and San Diego, $589,900.

The five lowest-cost metro areas in the second quarter were Youngstown-Warren-Boardman, Ohio, $85,400; Cumberland, Maryland, $94,900; Decatur, Illinois, $95,600; Binghamton, New York, $105,500; and Rockford, Illinois, $109,000.

Metro area condominium and cooperative prices – covering changes in 59 metro areas – showed the national median existing-condo price was $227,200 in the second quarter, up 4.8 percent from the second quarter of 2015 ($216,700). Forty-four metro areas (75 percent) showed gains in their median condo price from a year ago; 14 areas had declines.

NAR President Tom Salomone says REALTORS® in most areas say market conditions have remained competitive well into the summer. “The further decline in mortgage rates in recent months is bringing new buyers into the mix on top of the pool of those who have yet to close on a home because of insufficient supply,” he says. “With the large number of homes selling at or above listing price, buyers should work with a REALTOR® to ensure they’re only searching for and making offers on a home that fits within their budget.”

Regional Breakdown

Total existing-home sales in the Northeast jumped 7.6 percent in the second quarter and are 11.3 percent above the second quarter of 2015. The median existing single-family home price in the Northeast was $273,600 in the second quarter, up 1.6 percent from a year ago.

In the Midwest, existing-home sales leaped 10.4 percent in the second quarter and are 6.6 percent higher than a year ago. The median existing single-family home price in the Midwest increased 5.1 percent to $191,300 in the second quarter from the same quarter a year ago.

Existing-home sales in the South inched forward 0.3 percent in the second quarter and are 4.2 percent higher than the second quarter of 2015. The median existing single-family home price in the South was $214,900 in the second quarter, 5.9 percent above a year earlier.

In the West, existing-home sales climbed 1.4 percent in the second quarter but are 2.2 percent below a year ago. The median existing single-family home price in the West increased 6.5 percent to $346,500 in the second quarter from the second quarter of 2015.

For more information, visit www.realtor.org.

Hottest Summer for Housing in 10 Years

Source: RISMedia

Confirming a record-breaking summer, the residential real estate market has kept the temperature up with the hottest July in a decade, according to new data on inventory and demand on realtor.com®. Homes for sale in July are moving two percent more quickly than last year as prices continue to hit new record highs.

“The best spring in a decade has transitioned into the decade’s hottest summer,” says Jonathan Smoke, chief economist of realtor.com. “Pent-up demand left over from two years of tight supply against the backdrop of mortgage rates near three year lows have encouraged buyer activity at a time when sales usually begin to decline. While prices are higher as a result of the strong demand and limited supply, the lower mortgage rates are neutralizing the impact on purchasing power.”

The median age of properties on realtor.com in July is expected to be 68 days, one day faster than last year but three days slower than last month, a normal seasonal shift. July typically sees inventory age increase as the level of inventory peaks for the year and sales begin to decline.

The median home was listed for $251,000, seven percent higher than one year ago and one percent lower than last month. While that is the first price decrease since January–typical for the seasonal shift–it is a record high for July.

For-sale housing inventory is still growing on a monthly basis, and will soon peak for the year. However, total inventory remains lower than one year ago and the estimated 500,000 new listings expected at the end of the month will once again fail to bring enough relief to buyers looking for the right home.

“The confluence of fast-moving inventory and high prices for sellers combined with strong purchasing power for buyers will be hard to repeat in future summers,” says Smoke.

Key Statistics:

  • Median age of inventory is estimated to end at 68 days, down two percent from last year and up five percent from last month.
  • Median listing price for July should reach a record high of $251,000, a seven percent increase year over year and a one percent decrease month over month.
  • Listing inventory in July is expected to show a one percent increase over June. However, inventory should still show a decrease of five percent year over year.
  • com’s Hottest Markets receive 1.4 to 2.7 times the number of views per listing compared to the national average. In terms of supply, these markets are seeing inventory move 17-37 days more quickly than the rest of the U.S. The hottest markets are seeing inventory movement slow down slightly as the median age increased by two days on average from June.

RDC_Hotness_Index_072916

For more information, visit www.realtor.com.

 

Housing Starts Bloom in June

Source: RISMedia

Homebuilding rates accelerated in June, surpassing expert forecasts for the month and further fortifying the idea that housing is indeed on the mend. According to the Commerce Department, housing starts rose 4.8 percent from a month earlier to a seasonally adjusted annual rate of 1.189 million in June.

However, while both permits and starts improved on a month-to-month basis, the total permits represented a decline of 15 percent compared to last June, and the total number of starts represented a decline of 1 percent compared to last year.

“While we often see volatility in the month-to-month data, June’s rise in housing starts shows a sturdy demand for new homes as we move into the second half of the year,” says Quicken Loans Vice President Bill Banfield. “The growing job market coupled with low mortgage rates continues to provide a boost to the housing market.”

Privately owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,153,000. This is 1.5 percent above the revised May rate of 1,136,000, but is 13.6 percent below the June 2015 estimate of 1,334,000.

Single-family authorizations in June were at a rate of 738,000; this is 1.0 percent above the revised May figure of 731,000. Authorizations of units in buildings with five units or more were at a rate of 384,000 in June.

Single-family housing starts in June were at a rate of 778,000; this is 4.4 percent above the revised May figure of 745,000. The June rate for units in buildings with five units or more was 392,000.

Privately owned housing completions in June were at a seasonally adjusted annual rate of 1,147,000. This is 12.3 percent above the revised May estimate of 1,021,000 and is 18.7 percent above the June 2015 rate of 966,000.

Single-family housing completions in June were at a rate of 752,000; this is 3.7 percent above the revised May rate of 725,000. The June rate for units in buildings with five units or more was 386,000.

“[These] headline numbers seem encouraging, with monthly increases in new construction, but the construction of multi-family housing is slowing and we are still not seeing the growth needed to address inventory challenges,” says REALTOR.com Chief Economist Jonathan Smoke. “The June data points on new construction show little change from what we have already observed during the spring and summer, and continues to indicate that builders are starting what they already permitted earlier this year but are not being bullish about demand for this fall and winter. We are continuing to see that new construction is failing to keep up with household formation, so the low vacancies in rentals and the dearth of homes for sale will continue to provide a solid foundation for rising rents and home prices.”

For more information visit http://www.census.gov/construction/nrc/index.html.