Tag Archives: single family

Holiday shoppers include homebuyers, but inventory is still a challenge

Source: NWMLS

KIRKLAND, Washington (December 6, 2017) – “Normal seasonal slowdowns” are reported by some
real estate leaders with Northwest Multiple Listing Service, but other brokers say this holiday season is
still drawing crowds at open houses along with competitive bidding in some neighborhoods.
Both inventory and pending sales dipped to their lowest levels since April, while prices still increased by
double-digits in most of the 23 counties served by Northwest MLS.

MLS members reported 8,304 pending sales of single family homes and condos, a slight (1.6 percent)
gain over the year-ago figure of 8,173. Last month’s mutually accepted offers surpassed the number of
new listings (6,098) by 2,206 properties to keep supply tight.

“Until we see a balanced rate of 4-to-5 months of supply, instead of hovering around one month, we’re
not likely to see much change,” remarked George Moorhead, designated broker at Bentley Properties.
“However,” he added, “since we have seen these low inventory levels since 2013, maybe this is going to
be the new normal.”
Moorhead, a member of the Northwest MLS board of directors, also said this time of year is actually one
of the best times to find a home. “There is less competition and sellers who list their homes at this time
are usually motivated to make their move. Some of the best pricing can be attained from December
through early February,” he indicated.

Buyers seem to be undeterred by winter weather, holiday festivities or other seasonal or – for the most
part — political distractions.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, said
December “may well provide an unexpected holiday reprieve for our local, weary real estate shoppers.
Combined with the seasonal pace change and real estate industry pundits’ consternation over the effect of
the federal income tax bill working its way through Congress, buyers could be getting some relief.” He
urged potential sellers to take note as “This could be the signal they’ve been waiting for as a good time to
sell before the pending tax laws that affect real estate ownership take effect.”

For those who are both prepared and patient, OB Jacobi, president of Windermere Real Estate, said the
holidays can actually be a great time to buy “because there is usually less competition and sellers are
motivated to close out the year with a sale.”

Should I Sell My Home Now or Wait Until the Spring?

Source: RISMedia/Kyle Hiscock

There are many questions homeowners ask themselves during the selling process. “How much will my home sell for?”  “How much should I list my home for?”  “Who should I select as a real estate agent to sell my home?”  “What if the real estate agent overprices my home?”  Last but not least, “Is this a good time to be selling a home?” is also a very common question that real estate agents are asked.

As with every decision in life, there are pros and cons, and choosing when to sell a home is no different. There are many factors that need to be taken into consideration before deciding when to sell a home. Many homeowners believe selling a home during the fall or winter months is not a good idea and that the spring is the only time a house should be sold. This is the furthest from the truth. Certainly most real estate markets across the United States experience a “spring market rush” every year. There is no doubt that the “spring market” is a great time to be selling and buying real estate, however, the fall and winter seasons may be the best fit for you for many reasons.

Here are several reasons why choosing to sell your home now may be a better decision than waiting until the spring:

Less Competition
One way that you can tell the spring real estate market has arrived is by driving down a street in your local community. In all likelihood there will be For Sale signs up all over the neighborhood! One great reason to sell your home now and not wait until the spring market is there is sure to be less competition.  The fewer number of comparable homes for sale, the greater the probability that a buyer will look at your home.

Simply put, it’s the supply and demand theory. If there are less homes for sale, there are less homes that a potential buyer can choose from, therefore increasing the demand for your home. Not only will less competition increase the probability for showings, but it will also increase the probability that an offer will be received and you will get the maximum amount of money for your home.

Serious Buyers Are Out There
Homes are sold and bought 365 days a year, period!  Many homeowners believe that buyers aren’t out there during the fall and winter months. This simply is not the case. Serious buyers are always out there!  Some buyers may stop their home search because it is the fall or winter, but serious buyers will continue to look at homes, no matter what time of year it is.

The fall and winter months are also a great time for a potential buyer to see what a specific neighborhood is like.  Do your neighbors have pumpkins on their front step?  Are there lots of Trick-or-Treaters wandering the neighborhood on Halloween?  Do any of your neighbors have any light displays for the holidays?  There are buyers out there who will look at these types of things when determining whether your home is in the right neighborhood for them or not.

The Best Agents Are Always Up To The Challenge
Any real estate agent who tells you that the fall or winter months are a bad time to sell is not someone you want selling your home! A great real estate agent will know how to adapt to the current season and market their listings to reflect that.  A great real estate agent can make suggestions and give some of their tips on how to sell a home during the fall or winter seasons. If a real estate agent doesn’t have any suggestions on making your home more desirable for the current season, you should be concerned about the creativity they are going to use when marketing your home.

Staging For The Holiday Season
Many sellers believe staging a home is the main reason a home sells.  While staging certainly helps sell homes, some buyers have a difficult time envisioning themselves in a home no matter what you do. However, there are some buyers who can easily be “sold” on a home because it is staged.  Simple “seasonal” staging such as adjusting the color of the decor or having an aroma in the air that is relative to the time of year can go a long way with some potential buyers and possibly be the difference between a home selling or not.

Mortgage Rates Are Low
If you’ve read about real estate in the past year, it’s likely you’ve read that the mortgage rates are very low.  You also probably read that there is an expectation that the rates will increase very soon. Since mortgage rates are so low right now, buyers are able to afford more expensive homes.  If mortgage rates increase over the fall and winter months while you’re waiting for the spring market, it could cost you thousands of dollars as it could eliminate many buyers from the real estate marketplace!  Less demand for your home will mean less money. Bottom line: take advantage of selling your home while the rates are this low.

Quicker Transactions
Right now, there are fewer real estate transactions than there will be in the spring.  The fewer number of transactions means the mortgage lenders have less loans to process, attorneys have less closings to do, and home inspectors have fewer inspections to do.  All of these factors should lead to a quicker transaction and closing for all the parties involved.  One of the most frustrating things for a seller to deal with while selling their home is not getting answers in a reasonable amount of time. A quicker transaction is going to be less stress for you.

By considering all of the reasons above, you will be able to determine whether now is a good time to sell or if you should wait until the spring.

Existing-Home Sales Slightly Stir in September

Source: RISMedia

Existing-home sales slightly stirred in September, posting higher than in August but lower than one year prior, the National Association of REALTORS® (NAR) reports.

Existing-home sales totaled 5.39 million, a 0.7 percent increase from August but a 1.5 percent decrease from one year prior. Inventory increased 1.6 percent to 1.90 million, 6.4 percent below one year prior.

“Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,” says Lawrence Yun, chief economist at NAR. “REALTORS® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings—especially at the lower end of the market—and fast-rising prices that are straining the budgets of prospective buyers.”

Inventory is currently at a 4.2-month supply. Existing homes averaged 34 days on market in September, five days less than one year prior. All told, 48 percent of homes sold in September were on the market for less than one month.

“Existing-home sales picked up momentum slightly in September compared to August, but were lower on a year-over-year basis for the first time since July 2016,” says Danielle Hale, chief economist for realtor.com®. “Inventories also continue to plunge, creating challenges for buyers across the country. On the bright side, we’re starting to see home price growth slow down, with sale prices up only 4.2 percent from a year ago.”

The metropolitan areas with the fewest days on market in September, according to data from realtor.com, were San Francisco-Oakland-Hayward, Calif. (30 days); San Jose-Sunnyvale-Santa Clara, Calif. (32 days); Salt Lake City, Utah (35 days); and Seattle-Tacoma-Bellevue, Wash., and Vallejo-Fairfield, Calif. (both 36 days).

The median existing-home price for all types of houses (single-family, condo, co-op and townhome) was $245,100, a 4.2 percent increase from one year prior. The median price for a single-family existing home was $246,800, while the median price for an existing condo was $231,300.

“A continuation of last month’s alleviating price growth, which was the slowest since last December (4.5 percent), would improve affordability conditions and be good news for the would-be buyers who have been held back by higher prices this year,” Yun says.

Single-family existing-home sales came in at 4.79 million in September, a 1.1 percent increase from 4.74 million in August, but a 1.2 percent decrease from 4.85 million one year prior. Existing-condo and -co-op sales came in at 600,000, a 1.6 percent decrease from August and a 3.2 percent decrease from one year prior.

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

The Midwest and West saw positive activity in September, with existing-home sales rising 1.6 percent to 1.30 million in the Midwest, with a median price of $195,800, and 3.3 percent to 1.24 million in the West, with a median price of $362,700. Existing-home sales in the South fell, 0.9 percent to 2.13 million, with a median price of $215,100. Existing-home sales in the Northeast were unmoved at 720,000, with a median price of $274,100.

“Home sales in the South continue to be hampered by post-hurricane weakness, while the Midwest and West regions show pretty strong pick-up in sales from August. It should be noted that the fires in California are not yet reflected in the data, so we’re likely to see more weakness on the horizon,” Hale says.

“Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida—hit by Hurricanes Harvey and Irma—saw temporary, but notable declines,” says Yun.

First-time homebuyers comprised 29 percent of existing-home sales in September, a decrease from 31 percent in August.

“Nearly two-thirds of renters currently believe now is a good time to buy a home, but weakening affordability and few choices in their price range have made it really difficult for more aspiring first-time buyers to reach the market,” Yun says.

Adds Hale, “Interestingly, the softening in prices has not yet affected home listing prices. According to realtor.com data, the number of homes for sale are down 9 percent from a year ago, while listing prices – which continue to soar – are up 10 percent.  The discrepancy between list price and sales price increases suggests that some buyers may have reached a limit on the price increases they can afford.”

NAR President Bill Brown is concerned first-time homebuyers, and homeowners in general, will be adversely impacted by proposed tax reform.

“There’s no way around the fact that any proposal that marginalizes the mortgage interest deduction and eliminates state and local tax deductions essentially disincentives homeownership and is a potential tax hike on millions of middle-class homeowners,” says Brown. “Reforming the tax code is a worthy goal, but it should not lead to the middle class, who primarily build wealth through owning a home, footing the bill. Instead, Congress should be looking at ways to ensure more creditworthy prospective buyers are able to achieve homeownership and enjoy its personal and wealth-building benefits.”

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

Equity Stacked: Homeowner Wealth on the Rise

Source: RISMedia

Homes in markets across the nation have regained value since the recession, affording homeowners the ability, once again, to accumulate wealth through equity—or become, as I like to call it, “equity stacked.”

Two recent reports confirm the trend: one, from S&P/CoreLogic; the other by ATTOM Data Solutions, owner of RealtyTrac.

Homeowner wealth, according to S&P, has more than doubled since 2011, expanding on a national scale to $12.7 trillion from $6.1 trillion, in tandem with the 40 percent boost in the value of single-family housing. For the Average Joe next door, $12.7 trillion breaks down to an average $11,000—or $30,000 if he lives in California, Oregon or Washington (West Coast…shocking!) The upward momentum in equity, S&P cites, has positive economic implications, as well: more than $100 billion in consumer spending, which includes dropping stacks (see what I did there?) on home improvements.

The distribution of homeowners who are “equity rich,” as ATTOM defines—those with a loan-to-value ratio of 50 percent or less—has grown, in addition, to 13.1 million, or roughly one-quarter of the homeowner population in the U.S. The distribution of homeowners who are “seriously underwater,” at the same time, has gone down to 6 million—a far cry from the 2012 peak of 12.8 million.

Why are more homeowners joining the “1 percent” of equity rich? They’re extending their stay, says Daren Blomquist, senior vice president at ATTOM.

“Close to one in every five U.S. homeowners with a mortgage is now equity rich thanks to a combination of rising home prices and lengthening homeownership tenures,” Blomquist says. “Median home prices increased on a year-over-year basis for the 18th consecutive quarter in Q3 2016, and homeowners who sold in the third quarter had owned their home an average of 7.94 years—a new high in our data and substantially higher than the average homeownership tenure of 4.26 years pre-recession. As homeowners stay in their homes longer before moving up, they are amassing more home equity wealth.”

The equity rich, according to ATTOM’s report, are concentrated on—hold your breath—the West Coast, in Honolulu (39.3 percent), San Francisco (49.8 percent) and San Jose (55.7 percent). In San Fran and San Jose, the amount of equity rich residents has gone up over 10 percent in the last year.

Dual forces, as indicated in both the S&P and ATTOM reports, are at work here. The ongoing trend toward recovering prices, and activity in the market to match, is turning more homeowners into equity stackers, flush with wealth for the future—and adding more to the “1 percent.” Stack on!

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas atsdevita@rismedia.com.

Thurston County Home Prices Rise 6.8 Percent in Past Year

Source: NWMLS

KIRKLAND, Washington (Nov. 4, 2016) – Home sales around Western Washington outgained new
listings again in October, fueling competition for scarce inventory and pushing prices higher. Some
seasonal slowdown is still expected – and the Nov. 8 elections may be in play as well, according to
brokers at Northwest Multiple Listing Service who commented on last month’s activity.

MLS members reported 9,950 pending sales during October, but they added only 7,591 new listings, the
lowest number since January. A year-over-year comparison of pending sales shows there were 633 more
mutually accepted offers last month than twelve months ago for a gain of 6.8 percent.

Closed sales improved even more, rising from the year-ago total of 7,769 completed transactions to last
month’s volume of 8,554 (up 10.1 percent).

“While the stock market remains somewhat skittish regarding the upcoming presidential election, this
feeling clearly has not transferred to the housing market,” remarked OB Jacobi, president of Windermere
Real Estate. “Unfortunately for buyers who were hoping to have more homes to choose from this fall,
listings in October fell to levels we haven’t seen since the 1990s – and at this point, we probably won’t
see any sizable increase in inventory until the spring at the earliest,” he added.

Active listings dropped more than 13 percent compared to a year ago, with further shrinkage expected. At
month end there were 15,690 single family homes and condominiums offered for sale in the MLS system,
which encompasses 23 counties. That’s 2,378 fewer than the year-ago total of 18,068, and 2,446 fewer
than September. All but two counties (Clallam and Ferry) reported year-over-year decreases in inventory.
Overall, there was only 1.8 months of supply. King County had slightly more than one month (1.1), with
several areas within that county reporting less than a month’s supply. In Snohomish County, where
inventory plunged more than 20 percent from a year ago, there was with 1.3 months.

“The further we move into November, the more we’ll start feeling the typical seasonal drop when new
listings coming on the market decline by 50 percent on a monthly basis compared to spring and summer
months,” suggested J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. Buyers are still out
there, he emphasized. “We’re heading into winter with a repeat of last year’s conditions: low inventory, a
backlog of buyers, and historically low interest rates.” On the heels of the “best October on record” Scott
predicts “a strong winter market where the inventory remains tight throughout the season.”

Not surprisingly given the large MLS territory, which includes both rural and urban areas, activity is
stronger in some sub-markets than others. Prices also reflect a wide spectrum. Of the four counties
comprising the Puget Sound region (King, Kitsap, Pierce and Snohomish), only Kitsap had an uptick in
new listings compared to a year ago, but that county’s robust pending sales (up 20.7 percent) helped
deplete its total inventory versus twelve months ago (down about 7 percent).

“The market in Kitsap is still very active,” according to Frank Wilson, the branch managing broker and
Kitsap district manager for John L. Scott Real Estate in Poulsbo. He noted Kitsap typically lags the
Seattle market by 6-to-9 months.

In South Sound, prices rose at a more moderate rate, around 9.6 percent in Pierce County and just over
6.8 percent in Thurston County. “Homes priced under $400,000 are looked at hard by buyers on ‘day one’
and often draw multiple offers,” said Northwest MLS director Dick Beeson, the principal managing
broker at RE/MAX Professionals in Tacoma. Above that figure, things slow down markedly, he noted,
adding that’s true in other areas, but the starting numbers and wait times might vary.

First-Time, Single Women Homebuyers Resurface in Real Estate

Source: RISMedia

First-time and single women homebuyers have resurfaced in the real estate market, contributing to a significant share of transactions in a year marked by full-steam-ahead sales, according to the National Association of REALTORS® (NAR) 2016 Profile of Home Buyers and Sellers survey. First-time homebuyer sales rose to a share of 35 percent, the survey found; single women homebuyer sales rose to 17 percent.

“Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession,” says Lawrence Yun, NAR chief economist. “Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise. These factors were why more first-time buyers (67 percent) said a desire to own a home of their own was the primary reason for their purchase (64 percent in 2015; 53 percent in 2014).

“Despite having a much lower income ($55,300) than single male buyers ($69,600), female buyers made up over double the amount of men (7 percent),” Yun adds. “Single women for years have indicated a strong desire to own a home of their own, as well as an inclination to live closer to friends and family. With job growth holding steady and credit conditions becoming somewhat less stringent than in past years, the willingness and opportunity to buy is becoming more feasible for many single women.”

Though the growth among new homeowners is encouraging, their overall share of the market is still subpar, according to Yun. The lack of affordable new and existing inventory, the outpacing of home prices to wages, and the difficulty in saving for a down payment is why the homeownership rate for 18- to 35-year-olds is currently hovering near its historical low.

“First-timers’ ability to enter the market more convincingly over the next year greatly depends on supply improvements at the lower end of the market and if wages can finally awaken from their sluggish pace of growth,” says Yun.

Notably, 90 percent of respondents to NAR’s survey worked with a real estate agent to buy or sell a home, compared to 8 percent of for-sale-by-owner listings (FSBOs)—an all-time low.

Single Women Buyers on the Mend, Age of First-Time Buyers on the Rise
As in years past, married couples once again made up the largest share of buyers (66 percent) and had the highest income ($99,200), according to the survey; however, single women made up more of the buyer pie than in recent years. After falling to 15 percent of buyers a year ago, single women represented 17 percent of total purchases (highest since 2011 at 18 percent).

The median age of first-time buyers in this year’s survey was 32, matching the all-time high last set back in 2006, and up from 31 the past five years. The typical first-time buyer had a higher household income ($72,000) than last year ($69,400) and purchased a slightly larger home (1,650 square feet; 1,620 square feet in 2015) that was more expensive ($182,500; $170,000 in 2015).

The typical repeat buyer was 52 years old (53 in 2015), earned $98,000 ($98,700 in 2015) and purchased a 2,000-square-foot home (2,020 square feet in 2015) costing $250,000 ($246,400 in 2015).

Buyers Carrying More Student Debt; Difficulty Obtaining Mortgage on the Decline
Down payment sizes have roughly stayed the same in recent years—in this year’s survey, it was 6 percent for first-time buyers and 14 percent for repeat buyers. Fifty-nine percent of buyers financed their purchase with a conventional mortgage, and 33 percent of first-time buyers took out a low down payment Federal Housing Administration (FHA)-backed mortgage.

“Fewer first-time buyers (40 percent) compared to a year ago (45 percent) indicated that the mortgage application and approval process was somewhat or much more difficult than they expected,” says NAR President Tom Salomone, broker/owner of Real Estate II Inc. in Coral Springs, Fla. “Those with healthy credit scores and manageable or little debt should talk to a lender to see if they qualify. They’ll likely discover that obtaining a mortgage isn’t quite the confusing and tiring inquisition it was in the years immediately after the downturn.”

Personal savings ranked first for both first-time buyers and repeat buyers as the primary source of their down payment. The second most popular source for first-timers was a gift from a friend or relative (24 percent; 27 percent in 2015), and for repeat buyers it was the sales proceeds from their previous residence.

Respondents reported that debt (all types) delayed saving for a down payment for a median of three years. For first-time buyers, 40 percent indicated they’re carrying student debt, with a typical amount of $26,000 ($25,000 in 2015). Furthermore, of the 26 percent of first-time buyers who said saving for a down payment was the most difficult task in the buying process, 55 percent said student debt delayed saving.

“As NAR survey findings discovered earlier this year, even those financially able to make on-time payments on their student loans are struggling to save for a down payment, and many expect to be delayed from buying a home by over five years,” says Yun. “Repaying student debt could slow the path to homeownership even more for those living in markets with steep rents and home prices.”

Buyers Rely on Internet and Agents; Single-Family Homes Top Choice
This year’s survey proved once again that the two most popular resources for homebuyers remain the internet (95 percent) and real estate agents (92 percent). Despite a record-high 51 percent of buyers saying they found the home they purchased online, most buyers who used the internet still ended up purchasing their home through an agent (90 percent).

Mobile devices and tablets are increasingly becoming a resource for buyers. Their usage lifted to 72 percent in this year’s survey, which is up from 61 percent a year ago. Furthermore, 58 percent of buyers indicated they found the home they purchased on a mobile app.

“Regardless of the plethora of online resources readily available at the click of a mouse or the swipe of a thumb, consumers serious about buying a home continue to seek the expertise and market insights that only a Realtor® can provide,” says Salomone. “Given the numerous competitive markets with minimal supply, it’s no surprise that both first-time and repeat buyers sought an agent for assistance finding the right home and negotiating the terms of the sale.”

The most common housing type continues to be a detached single-family home (83 percent for second straight year) and one in a suburban area (54 percent; 52 percent in 2015). Meanwhile, purchases of townhouses or row houses remained at 7 percent for the third straight year; only 4 percent of buyers purchased a condo.

Overall, the typical home bought was built in 1991 and had three bedrooms and two bathrooms. The share of buyers who purchased new home was at an all-time survey low of 14 percent.

Seller Use of Agent Remains High; Desire for Bigger House Primary Reason for Listing
For the second straight year, 89 percent of sellers sold their home with an agent. This in turn—also for the second year in a row—kept for-sale-by-owner sales to their lowest share (8 percent) since the survey’s 1981 inception and below 10 percent since 2012.

“Although the imbalance of supply in relation to demand in recent years continues to put many sellers in the driver’s seat, they’re still looking for a Realtor® now more than ever to price their home competitively, market their home to the widest number of eyes possible and ultimately help close the deal within a given timeframe,” says Salomone.

The typical seller over the past year was 54 years old (unchanged since 2014), had a household income of $100,700 ($104,100 in 2015), and was in the home for 10 years before selling—a year longer than 2015 and matching the all-time high in 2014. Fewer sellers indicated they wanted to sell earlier but were stalled because their home had been worth less than their mortgage (12 percent versus 14 percent a year ago); the figure was 17 percent in 2014.

Sellers realized a median equity gain of $43,100 ($40,000 in 2015)—a 24 percent increase (23 percent last year) over the original purchase price. Homes sold after 21 years of ownership had the largest equity gain (124 percent or $127,600); underlining the volatility during the downturn, equity gains fell to 3 percent for owners who bought between eight and 10 years ago.

With tight inventory conditions gripping most markets once again over the past year, sellers were considerably more successful finding a buyer in a shorter amount of time, with homes typically on the market for only a month.

A tad more sellers traded up (44 percent) compared to last year (42 percent) and slightly more, at 32 percent, traded down (31 percent in 2015). Sellers moved a median distance of 20 miles—72 percent stayed in the same state—and the most popular reason given for selling their home was it being too small (18 percent).

Feedback from sellers underscored once again that referrals and repeat business remain a large source of new opportunities for real estate agents. Nearly two-thirds of responding sellers either found their real estate agent through a referral by a friend, neighbor or relative, or used their agent from a previous transaction. Additionally, 85 percent of sellers indicated that they would definitely or probably use their agent again or recommend him or her to others.

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

Single-Family Starts Surge Ahead of Estimates

Source: RISMedia

Single-family housing starts came in above estimates in September, signaling sustained strength in the owner-occupied housing sector.

The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) reports single-family starts in September at a rate of 738,000, or 8.1 percent more than the estimate of 724,000. Units in buildings with five units or more were at a rate of 250,000 over the same period.

Privately-owned starts, however, stumbled, down 9 percent at 1,047,000 from an estimate of 1,150,000 and below last September’s rate of 1,189,000—an 11.9 percent decline. Single-family housing completions, in addition, fell 8.8 percent below estimates in September, at 687,000 from 753,000. Privately-owned completions also moved downward 8.4 percent, to a rate of 951,000 from the 1,038,000 estimate.

“[The September] data spawned some ominous headlines, but if you look closer this is actually a very encouraging report about new construction to come in the months ahead,” says realtor.com® Chief Economist Jonathan Smoke. “True, housing starts dropped—but we have to take that with a grain of salt because it came from such thin data. On the other hand, the permitting data released today blew by analysts’ expectations. It also showed that this year’s most troubling trend in new construction has clearly reversed: Permits are outpacing starts, which indicates that developers and builders are finally planning for more growth ahead. That’s great news for both the economy and the consumer.”

“The headline number in this month’s report doesn’t tell the full story,” says Bill Banfield, vice president at Quicken Loans, of the decline in privately-owned starts. “Single-family starts made significant gains in September, which is welcome news to a housing market that has continued to lack inventory, especially in entry-level sectors.”

“A persistent lack of growth in new construction has given us low vacancies in rentals and very low inventories of homes for sale,” Smoke adds. “That has produced above-average increases in rents and prices—but [the September] data is a good sign that we could be turning the page on this troubling scenario. Let’s hope this trend persists!”

For more information, visit www.hud.gov.

Existing-Home Sales Ease in August

Source: RISMedia

Existing-home sales eased up in August for the second consecutive month despite mortgage rates near record lows as higher home prices and not enough inventory for sale kept some would-be buyers at bay, according to the National Association of REALTORS®. Only the Northeast region saw a monthly increase in closings in August, where inventory is currently more adequate.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.9 percent to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July. After last month’s decline, sales are at their second-lowest pace of 2016, but are still slightly higher (0.8 percent) than a year ago (5.29 million).

Lawrence Yun, NAR chief economist, says recent job growth is not yielding higher home sales. “Healthy labor markets in most the country should be creating a sustained demand for home purchases,” he says. “However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold.”

“Tight inventory, rising prices and tepid economic conditions continue to hold back existing home sales, and housing progress overall,” says Quicken Loans Vice President Bill Banfield. “As interest rates are poised to rise in the near future, supply will need to increase to sustain significant growth in the market.”
Adds Yun, “Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines.”

The median existing-home price for all housing types in August was $240,200, up 5.1 percent from August 2015 ($228,500). August’s price increase marks the 54th consecutive month of year-over-year gains.

Total housing inventory at the end of August fell 3.3 percent to 2.04 million existing homes available for sale, and is now 10.1 percent lower than a year ago (2.27 million) and has declined year-over-year for 15 straight months. Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in July.

The share of first-time buyers was 31 percent in August, which is down from 32 percent both in July and a year ago. First-time buyers represented 30 percent of sales in all of 2015.

“It’s very concerning to see that inventory conditions not only show no signs of improving but have actually worsened in recent months from their already suppressed levels a year ago,” adds Yun. “While recent data from the U.S. Census Bureau shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale. Without more supply, the U.S. homeownership rate will remain near 50-year lows.”

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.44 percent in August for the second consecutive month and remained at its lowest rate since January 2013 (3.41 percent). The average commitment rate for all of 2015 was 3.85 percent.

Properties typically stayed on the market for 36 days in August, unchanged from July and down considerably from a year ago (47 days). Short sales were on the market the longest at a median of 144 days in August, while foreclosures sold in 42 days and non-distressed homes took 35 days. Forty-six percent of homes sold in August were on the market for less than a month.

NAR President Tom Salomon says in today’s fast-moving market, a Realtor® who knows about down payment options and their target area is essential to a successful buying experience. “Given the inventory shortages in most markets, new listings at affordable prices are receiving multiple offers and going under contract almost immediately upon becoming available,” he says. “Home shoppers serious about buying need to be ready with a pre-approval. This allows a Realtor® to hone in only on homes within the buyer’s price range and ensures any offer presented to the seller is taken seriously.”

Inventory data from Realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in August were San Francisco-Oakland-Hayward, Calif., San Jose-Sunnyvale-Santa Clara, Calif., and Seattle-Tacoma-Bellevue, Wash., all at a median of 33 days; Denver-Aurora-Lakewood, Colo., 36 days; and Vallejo-Fairfield, Calif., at a median of 37 days.

All-cash sales were 22 percent of transactions in August, up from 21 percent in July and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in August, up from 11 percent in July and 12 percent a year ago. Sixty-two percent of investors paid in cash in August.

Distressed sales – foreclosures and short sales – were 5 percent of sales in August (lowest since NAR began tracking in October 2008), unchanged from last month and down from 7 percent a year ago. Four percent of August sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 12 percent below market value in August (18 percent in July), while short sales were discounted 14 percent (16 percent in July).

Single-family and Condo/Co-op Sales

Single-family home sales declined 2.3 percent to a seasonally adjusted annual rate of 4.70 million in August from 4.81 million in July, but are still 0.6 percent above the 4.67 million pace a year ago. The median existing single-family home price was $242,200 in August, up 5.3 percent from August 2015.

Existing condominium and co-op sales leaped 10.5 percent to a seasonally adjusted annual rate of 630,000 units in August from 570,000 in July, and are now 1.6 percent above August 2015 (620,000 units). The median existing condo price was $225,100 in August, which is 3.7 percent above a year ago.

Regional Breakdown

August existing-home sales in the Northeast jumped 6.1 percent to an annual rate of 700,000, which is unchanged from a year ago. The median price in the Northeast was $274,100, which is 0.8 percent above August 2015.

In the Midwest, existing-home sales decreased 0.8 percent to an annual rate of 1.27 million in August, but are still 0.8 percent above a year ago. The median price in the Midwest was $190,700, up 5.5 percent from a year ago.

Existing-home sales in the South in August fell 2.7 percent to an annual rate of 2.16 million, but are still 0.9 percent above August 2015. The median price in the South was $209,700, up 6.7 percent from a year ago.

Existing-home sales in the West lessened 1.6 percent to an annual rate of 1.20 million in August, but are still 0.8 percent higher than a year ago. The median price in the West was $347,400, which is 9.2 percent above August 2015.

For more information, visit www.realtor.org. 

NWMLS: Housing Market Still Active, With Overall Direction “Positive”

Source: NWMLS

KIRKLAND, Washington (Sept. 7, 2016) – Home sales in Western Washington continued to outpace
year-ago activity, but member-brokers at Northwest Multiple Listing Service say persistent inventory
shortages are constraining activity.

Despite a sparse selection in many areas, an expected summer slowdown, and “appraisal conundrums,”
Northwest MLS members notched 11,898 pending sales during August, eclipsing the same month a year
ago by 1,295 transactions for a 12.2 percent gain. There were 8,628 pending sales in the four-county
Puget Sound region — the best August for mutually accepted offers since 2005 when members tallied
8,874 sales.

Brokers added 11,411 new listings to the Northwest MLS database during August, but they presented
offers for even more buyers (11,898) to keep inventory below two months of supply. At month-end, there
were 18,336 active listings in the MLS system, a decrease of 11.6 percent from a year ago, resulting in
only 1.9 months of supply. (Four to six months is generally considered to be a “neutral” or balanced
market for buyers and sellers.)

“The market remains just as intense as July,” observed J. Lennox Scott, chairman and CEO at John L. Scott,
Inc. “The best opportunity for homebuyers to find a home will be in the next 60 days,” he suggested,
explaining the number of new listings coming on the market is likely to drop by 50 percent each month
between November and February. “We expect a repeat of conditions from last winter when every available
home that came on the market in areas with a shortage of inventory received quick action.”

“Buyers in the Seattle area are plentiful in all price ranges, but the entry-level housing demand continues
to be the highest,” reported John Deely, principal managing broker at Coldwell Banker Bain. As an
example, he said a recent open house for a condo listing in the South Lake Union area drew more than
100 visitors in a single day. Tech workers continue to dominate the primary buyer demographic, he said,
adding that a significant number of their parents are relocating here to purchase properties close to their
children.

Buyers in most of the 23 counties served by Northwest MLS can expect to pay more than they would
have twelve months ago, with most areas showing double-digit year-over-year price increases. System-
wide, the median price for last month’s 9,767 closed sales of single family homes and condominiums was
$350,000, up more than 11 percent from the year-ago figure of $315,000.

Home Price Gains Strong in South and West

Source: RISMedia

Data released for June 2016 shows that home prices continued their rise across the country over the last 12 months.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.1 percent annual gain in June, unchanged from last month. The 10-City Composite posted a 4.3 percent annual increase, down from 4.4 percent the previous month. The 20-City Composite reported a year-over-year gain of 5.1 percent, down from 5.3 percent in May.

Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities over each of the last five months. In June, Portland led the way with a 12.6 percent year-over-year price increase, followed by Seattle at 11.0 percent, and Denver with a 9.2 percent increase. Six cities reported greater price increases in the year ending June 2016 versus the year ending May 2016.

Before seasonal adjustment, the National Index posted a month-over-month gain of 1.0 percent while both the 10-City Composite and the 20-City Composite posted a 0.8 percent increase in June. After seasonal adjustment, the National Index recorded a 0.2 percent month-over-month increase, and both the 10-City Composite and 20-City Composite posted 0.1 percent month-over-month decreases. After seasonal adjustment, nine cities saw prices rise, two cities were unchanged, and nine cities experienced negative monthly prices changes.

“Home prices continued to rise across the country led by the west and the south,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “In the strongest region, the Pacific Northwest, prices are rising at more than 10 percent; in the slower Northeast, prices are climbing a bit faster than inflation. Nationally, home prices have risen at a consistent 4.8 percent annual pace over the last two years without showing any signs of slowing.

“Overall, residential real estate and housing is in good shape,” he continued. “Sales of existing homes are running at about 5.5 million units annually with inventory levels under five months, indicating a fairly tight market. Sales of new single family homes were at a 654,000 seasonally adjusted annual rate in July, the highest rate since November 2007. Housing starts in July topped an annual rate of 1.2 million units. While the real estate sector and consumer spending are contributing to economic growth, business capital spending continues to show weakness.”

Quicken Loans vice president Bill Banfield offered the following comments on the report:

“The strong home price growth in much of the country, and meteoric rise in the West, is led by a continued lack of homes available for sale. While homeowners welcome rising prices, it could begin to hinder new buyers if affordability comes into question – especially with home prices rising twice the speed of inflation in much of the country.”

For more information, visit www.spglobal.com.