Tag Archives: Prices

Home Prices Keep on Upswing in February

Source: RISMedia

Home prices nationally kept on the upswing in February, rising 1 percent month-over-month and 7 percent year-over-year, according to CoreLogic®’s recent Home Price Index (HPI™). The HPI Forecast™ projects prices to rise 0.4 percent in March and 4.7 percent by February 2018.

“Home prices continue to grow at a torrid pace so far in 2017 and these gains are likely to continue well into the future,” said Frank Martell, president and CEO of CoreLogic, in a statement on the Index. “Home prices are at peak levels in many major markets and the appreciation is being driven by a number of dynamics—high demand, stronger employment, lean supplies and affordability—that will continue to play out in the coming years. The CoreLogic Home Price Index is projecting an additional 5 percent rise in home prices nationally over the next 12 months.”

“Home prices and rents have risen the most in local markets with high demand and limited supply, such as Seattle, Portland and Denver,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The rise in housing costs has been largest for lower-tier-priced homes. For example, from December to February in Seattle, the CoreLogic Home Price Index rose 12 percent and our single-family rent index rose 6 percent for all price tiers compared with the same period a year earlier. However, when looking at only lower-cost homes in Seattle, the price increase was 13 percent and the rent increase was 7 percent.”

Source: CoreLogic

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Home Prices on a 31-Month Hot Streak

Source: RISMedia

Home prices are on a hot streak, reaching a 31-month high in January in the recently released S&P CoreLogic Case-Shiller Indices.

Prices fired up 5.9 percent year-over-year in the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, an increase from 5.7 percent the month prior. The Index’s 10-City Composite rose 5.1 percent, while its 20-City Composite rose 5.7 percent. The 10-City Composite eked out a 0.3 percent increase month-over-month; the 20-City Composite, 0.2 percent month-over-month.

Denver, Colo., Portland, Ore., and Seattle, Wash., once again led the tear, with Seattle showing the most gains at 11.3 percent year-over-year.

The trend could be disrupted if the Federal Reserve decides to raise the key interest rate three or four more times this year, which would result in a significant impact to mortgage rates, says S&P Dow Jones Indices Chairman and Managing Director David M. Blitzer. The Fed raised the rate in December 2015, December 2016, and, most recently, in March.

“Housing and home prices continue on a generally positive upward trend,” Blitzer said in a statement. “The recent action by the Federal Reserve raising the target for the Fed funds rate by a quarter percentage point is expected to add less than a quarter percentage point to mortgage rates in the near future,. Given the market’s current strength and the economy, the small increase in interest rates isn’t expected to dampen home-buying. If we see three or four additional increases this year, rising mortgage rates could become [a] concern.”

The story continues to center on inventory, which, according to Trulia, hit a new low at the beginning of the year, with starter home supply especially tight.

“Tight supplies and rising prices may be deterring some people from trading up to a larger house, further aggravating supplies because fewer people are selling their homes,” said Blitzer. “The prices also hurt affordability as higher prices and mortgage rates shrink the number of households that can afford to buy at current price levels. At some point, this process will force prices to level off and decline; however, we don’t appear to be there yet.”

What will end the upward spell? According to Bill Banfield, vice president at Quicken Loans, more new home construction is needed to release the pressure.

“Home prices continue to reach new heights, propelled by the lack of available housing,” said Banfield in a statement. “This is the narrative we have heard many times, and it is likely to continue until construction increases and provides more options both move-up and first-time buyers.”

Source: S&P Dow Jones Indices

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Housing Inventory Reaches Record Low, But Brokers Expect Spring Bounce

Source: NWMLS

KIRKLAND, March 6, 2017) – Home buyers are in a spring mood, but sellers are still hibernating,
suggested one broker while commenting about the latest statistics from Northwest Multiple Listing
Service. Figures for February and feedback from brokers indicate record-low inventory is spurring
multiple offers, rising prices, fewer sales, and frustrated house-hunters.

Year over-year pending sales (mutually accepted offers) declined for the first time since March 2016,
falling 8.9 percent. Eight counties, including King and Snohomish, reported double-digit drops in pending
sales as the volume of new listings couldn’t keep pace with demand.

During the past three months, brokers have added 17,572 new listings to inventory, down only 5.7 percent
when compared to the same three-month period of a year ago. During the latest December-to-February
timeframe, MLS members reported 22,393 pending sales, far outpacing the number of new listings.

“Our robust market has created extreme conditions, and we’re seeing frenzy hot activity on each new
listing coming on the market,” reported J. Lennox Scott, chairman and CEO of John L. Scott. “We’re also
experiencing some of the lowest inventory levels on record,” he noted.

In fact, a check of Northwest MLS records dating to 2004 shows no other month when the number of
active listings dipped below the 10,000 mark – until last month.

At the end of February, there were 9,091 active listings in the Northwest MLS system, which
encompasses 23 counties. That represents a drop of nearly 25 percent from the year-ago total of 12,107.
“Home sellers and buyers are complaining equally about the current market’s low inventory,” remarked
MLS director George Moorhead, designated broker at Bentley Properties. “Sellers are frustrated when
they cannot find another home to match their current needs, or when a home goes off market so fast that
the option of a contingent sale is not even considered,” he stated.

Buyers have been grumbling about the market for the past two years, Moorhead said. “That mood has
escalated into a panic as other buyers up the ante – at times to a level that even causes real estate
professionals to shake their heads,” he remarked.

Brokers believe seasonality is a factor, with several saying they are expecting an uptick in listings.
“For buyers, hope springs eternal, but the sellers are still hibernating,” suggested John Deely, the
principal managing broker at Coldwell Banker Bain. “We’ve been experiencing continued high buyer
demand as the spring market takes off early but sellers are on a more traditional schedule as listings
slowly ramp up,” he reported, adding, “Sellers that have come to market ahead of the traditional spring
market are reaping the benefits of less competition [from others who are selling] and a highly competitive
buyer pool.”

 

Housing Prices & Consumer Inflation Move Higher – Confidence Is High

Source: Michelle Wickett, Axia Home Loans

Housing prices posted strong gains through the end of 2016. The S&P/Case-Shiller 20-city Home Price Index saw a 5.6 percent annual gain from December 2015 to December 2016, as low housing inventory continued to fuel rising home prices. Within the index it showed that Seattle, Washington; Portland, Oregon; and Denver, Colorado had the largest year-over-year gains.

Pending Home Sales, which is a future-looking indicator based on contract signings, were down a disappointing -2.8 percent in January, below the 0.9 percent expected, per the National Association of REALTORS®. December Pending Home Sales also were revised lower to 0.8 percent from 1.9 percent.

In economic news, the second reading of fourth quarter 2016 Gross Domestic Product (GDP) matched the first reading of 1.9 percent, just below the 2.1 percent expected even though consumer spending surged. GDP is the value of goods and services produced by the nation’s economy and it’s considered one of the broadest measures of economic health.

Inflation data ticked up in January as Core Personal Consumption Expenditures (PCE), which strips out volatile food and energy prices, rose 0.3 percent from December. The headline PCE index (which includes food and energy) rose to 1.9 percent year over year, the biggest 12-month gain since October 2012.

Higher inflation can take a toll on Mortgage Backed Securities, reducing their value and negatively affecting the home loan rates tied to them. The record high Stock rallies experienced with the Dow, NASDAQ and S&P 500 also weigh down Bonds.

For those in the market for a new or existing home, home loan rates remain in historically low territory despite recent market volatility.

If you or someone you know has any questions about current home loan rates or products, please don’t hesitate to contact me.

Michelle Wickett

Senior Loan Originator

Axia Home Loans

(360) 791-0513

michelle.wickett@axiahomeloans.com

 

Case-Shiller: Pace of Home Price Growth ‘Not Alarming’

Source: RISMedia

Home prices in the U.S. hiked to their highest level in more than two years in December, posting a 5.8 percent annual gain, according to the recently released S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. Their pace, though substantial, is not “not alarming,” says David M. Blitzer, S&P Dow Jones Index Committee chairman and managing director.

“Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years,” Blitzer says. “With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural. In comparing current home price movements to history, it is necessary to adjust for inflation. Consumer prices are higher today than 20 or 30 years ago, while the inflation rate is lower. Looking at real or inflation-adjusted home prices based on the S&P CoreLogic Case-Shiller National Index and the Consumer Price Index, the annual increase in home prices is currently 3.8 percent. Since 1975, the average pace is 1.3 percent; about two-thirds of the time, the rate is between -4 percent and +7 percent. Home prices are rising, but the speed is not alarming.”

Home price growth in December was led by activity in Denver, Portland and Seattle, with annual gains of 8.9 percent, 10 percent and 10.8 percent, respectively. Prices for higher tier homes in Portland (more than $411,335) and Seattle (more than $532,716-plus) have been “stable” in the past five years, while prices for lower tier homes in Portland (less than $296,361) and Seattle (less than $335,111) have been “volatile”—movement that, according to Blitzer, signifies normality in the market.

“In the boom-bust of 2005-2009, prices of low, medium, and high tier homes moved together, while in other periods, including now, the tiers experienced different patterns,” says Blitzer.

The Index’s 10-City Composite posted a 4.8 percent annual gain and a 0.9 percent monthly gain, while the 20-City Composite posted a 5.6 percent annual gain and also a 0.9 percent monthly gain.

Home prices are continuing to be pressured by rising rates and supply shortages.

“One factor behind rising home prices is low inventory,” Blitzer says. “While sales of existing single-family homes passed 5 million units at annual rates in January, the highest since 2007, the inventory of homes for sales remains quite low with a 3.6 month supply. New-home sales at 555,000 in 2016 are up from recent years, but remain below the average pace of 700,000 per year since 1990.

“Another factor supporting rising home prices is mortgage rates. A 30-year fixed rate mortgage today is 4.2 percent, compared to the 6.4 percent average since 1990.”

Source: S&P Dow Jones Indices

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Home Prices Climb in Unseasonable Winter

Source: RISMedia

It has been an unseasonably hot winter in housing as home prices hike higher, according to Clear Capital’s recently released Home Data Index (HDI) report, showing national quarterly home price growth at 0.9 percent.

Regional quarterly price growth, per the report, was mixed: 0.7 percent in the Northeast, an increase; 0.8 percent in the Midwest, a decrease; and 1.0 percent in the South and West, unchanged. Home prices in 16 of the top 50 largest metropolitan areas—which contain one-third of the nation’s housing stock—have moved past bubble-era peaks. The result, according to Clear Capital Vice President of Research and Analytics Alex Villacorta, is a majority-shift toward positive equity.

“Following several rounds of healthy, peak-season summer growth, winter gains thus far this season have remained relatively healthy across much of the country,” says Villacorta. “As prices have continued to climb in the long term during the post-housing crash, the large portion of the housing market that has been frozen in negative equity has shrunk significantly—meaning that an increasingly large portion of previously underwater homeowners may now have the option of entering the market.”

The market in Portland, Ore., which saw the highest home price growth in the nation in 2016, continues to rank at the top of metropolitan areas measured in the report, growing 2 percent quarter-over-quarter. Another booming market, however—San Jose, Calif.—saw negative quarterly price growth, down 0.3 percent. Hartford, Conn., saw identical negative growth.

Forty percent of homeowners who bought a house during the bubble will regain equity by the end of this year, according to the report, provided prices mirror 2016 movement.

“While the expected spring housing boost is still months away, an influx of fresh new demand on the market could further boost growth potential later this year—as long as there are no other shocks to the market,” Villacorta says.

Source: Clear Capital

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Over Half of Housing Markets Hit Price Peaks

Source: RISMedia

More than half of housing markets saw home sale prices peak at the end of 2016, according to the National Association of REALTORS®’ (NAR) recently released quarterly report, contributing to the best quarterly sales pace of the year. Eighty-nine percent of markets saw home prices increase in the fourth quarter, compared to 87 percent in the third quarter, with 17 percent experiencing double-digital increases.

“Buyer interest stayed elevated in most areas thanks to mortgage rates under 4 percent for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” says Lawrence Yun, NAR chief economist. “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market.”

The median single-family home price nationally was $235,000 in the fourth quarter, up 5.7 percent from the fourth quarter of 2015. Fifty-two percent of the 150 markets analyzed by NAR now have a median price at or above prior all-time highs. The markets with the highest median prices in the fourth quarter were San Jose, Calif. ($1,005,000), San Francisco, Calif. ($837,500), and Anaheim-Santa Ana, Calif. ($745,200); those with the lowest were Youngstown-Warren-Boardman, Ohio ($87,600), Decatur, Ill. ($92,400) and Cumberland, Md. ($94,000).

The highest median home price regionally in the fourth quarter was in the West, at $348,800 (a 7.8 percent increase year-over-year), followed by the Northeast at $254,100 (a 0.2 percent decrease), the South at $210,500 (a 5.4 percent increase), and the Midwest at $181,000 (a 5.7 percent increase).

“Depressed new and existing inventory conditions led to several of the largest metro areas seeing near or above double-digit appreciation, which has pushed home values to record highs in a slight majority of markets,” Yun says. “The exception for the most part is in the Northeast, where price growth is flatter because of healthier supply conditions.”

Condo and co-op prices across the board also increased in the fourth quarter, up 6.1 percent year-over-year to $222,000.

Overall, housing affordability slid compared to the fourth quarter of 2015—according to NAR, buying a median-priced single-family home now would require an income of $51,017 for a 5 percent down payment, $48,332 for a 10 percent down payment, and $42,962 for a 20 percent down payment.

“Even a pick-up in wage growth may be insufficient to compensate the impact of higher mortgage rates and home prices,” says Yun. “Increased homebuilding will be crucial to alleviate supply shortages and stave off the affordability hit.”

“The prospect of higher mortgage rates and more home shoppers in coming months should be enough of an incentive for those serious about buying to start their search now,” says NAR President Bill Brown. “There are fewer listings on the market, but also a little less competition than what’s expected this spring. Buyers may find just the home they’re looking for at a good price and without the possibility of having to outbid others.”

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

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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

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Area Brokers Report “High Velocity” Market, But With Hope For Homebuyers

Source: NWMLS

KIRKLAND, Washington (Feb. 6, 2017) – Western Washington’s “high velocity” market continued
during January with the number of pending sales (7,745) outgaining the number of new listings (6,507),
according to new figures from Northwest Multiple Listing Service.

“Properties are moving through the market at an unusually fast pace,” remarked John Deely, chairman of
the board at Northwest MLS and the principal managing broker at Coldwell Banker Bain. “Although we
have a high number of new listings, they are moving into a pending or sold status within the typical 30-
day reporting period. This phenomenon causes a low active listing count,” he added.

Brokers added 6,507 new listings to inventory last month (163 fewer than during the same period a year
ago), while year-over-year pending sales jumped by 492 transactions for a gain of about 6.8 percent. New
listing volume was the highest monthly total since October when members added 7,591 properties.

At month-end, there were 9,752 active listings in the MLS service area, which encompasses 23 counties.
That total was 2,605 fewer than the year-ago volume of 12,357, a decline of 21 percent. Only three
counties (Ferry, Jefferson and Kitsap) reported improvements in the number of active listings compared
to the same month last year.

Measured by months of inventory, the selection is at historic lows in many counties. At month end, there
was just under 1.7 months of supply system-wide, which compares to the year-ago figure of about 2.5
months of supply. Both King and Snohomish counties have less than one month of supply.

“If home buyers were hoping that January would start to bring more balance to the housing market,
they’re going to be sorely disappointed. The number of homes for sale remains at record lows, and the
growth in pending sales tells us that sellers are still firmly in the driver’s seat,” said OB Jacobi, president
of Windermere Real Estate.

MLS director George Moorhead echoed Jacobi, pointing to five years ago when buyers could choose
from 5,378 listings of single family homes in King County versus last month’s selection of 1,569 listings.
“The real question is whether there will be relief in the near future, and the unfortunate answer is no,”
said Moorhead, the designated broker at Bentley Properties, citing the combination of new jobs, a
shortage of new homes, and a reluctance of sellers to list their home for fear of not being able to find their
next one.

Commenting on “typical seasonal and beginning of the year adjustments,” one company president said he
is encouraged by new listing activity. “There is no indication that the annualized trend of shrinking active
inventory will reverse itself anytime soon, but we’re seeing momentary bubbles of increased inventory for
buyers currently in the market” noted Mike Grady, president and COO of Coldwell Banker Bain.

“List it and they will come” is the new mantra as new listings come on the market, commented J. Lennox
Scott, chairman and CEO of John L. Scott. Despite having more sales than new listings over the past few
months, Scott said there is hope for homebuyers. “As the days start getting longer the future will look
brighter for the backlog of buyers waiting to find a home.” Describing February as the bridge month
between winter and spring markets, Scott expects to start seeing an increase in the number of new listings.

“Buyers who are properly positioned to make quick decisions, and who have the proper negotiation
tactics and guidance are finding success in this high velocity market,” Deely reported.

Not surprisingly given the imbalance in supply and demand, prices continue to rise. Last month’s median
price for the 5,874 completed sales of single family homes and condominiums was $327,175, up 9
percent from the year ago figure of $300,000. There were 889 more closed sales in January than for the
same month a year ago for a 17.8 percent increase.

Single family home prices (excluding condos) increased 9 percent, rising from $309,950 to $338,000. The
median price for single family homes that sold in King County last month was $525,000, up more than
6.9 percent from the year-ago sales price of $490,970. Several outlying counties reported double-digit
gains.

“The softening of single family home prices in King County over the last few months, combined with the
relatively large price increase in Snohomish County (8.2 percent) suggests buyers are migrating north in
order to find more affordable housing,” said Jacobi.

Brokers in Pierce and Kitsap counties also reported price hikes larger than King County’s. The median
price of a single family home in Pierce County jumped nearly 11.6 percent from a year ago while the
year-over-year price in Kitsap was up 9.4 percent.

Condo prices rose 5.5 percent in January compared to a year ago, increasing from $255,750 to $289,900.
King County condo prices surged more than 9.8 percent, from $282,250 to $310,000.

“For buyers, it is a good news/bad news scenario in Kitsap County,” reported MLS director Frank
Wilson. “More houses came on the market last month than a year ago, but pending sales surpassed that
number to keep the market tight. Brokers navigated these challenges and buyers endured, “but the
tightness will likely be magnified during 2017,” said Wilson, the branch managing broker at John L. Scott
in Poulsbo.

Wilson said open house traffic has “started off with a bang” as more buyers have decided now is the time
to buy, believing that prices will only continue to rise .” He expects escalation clauses, multiple offer
situations and backup offers to “be the norm during the first quarter. The hierarchy of purchasers: cash,
conventional loan, VA loan, and FHA financing will continue to be the pecking order,” he stated.

“We’re seeing the frenzy change to a fanatical desire to own a home as buyers scramble to beat increasing
interest rates,” reported Moorhead. He expects the Feds to increase rates two more times between now
and April, “and that will only increase buyers’ aggressive tactics to secure a home,” he suggested.
Moorhead also noted sellers are able to “get away with putting homes on the market in conditions that
historically would be rejected by buyers.” Now, however, Moorhead said buyers are willing to turn a
blind eye to repairs and future maintenance.

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service
MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real
estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.