Tag Archives: value

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.

Homeowners Value Properties 2 Percent Higher Than Appraisers

Source: RISMedia

Home values assigned by appraisers were 1.93 percent lower than what homeowners estimated in June, according to the Quicken Loans’ national Home Price Perception Index (HPPI). The difference between value perceptions from appraisers and owners has slightly widened since May, when appraised values were 1.89 percent lower than expected.

Home valuations across the country rose in June, as reported by the Quicken Loans Home Value Index (HVI). The average home appraisal increased 0.84 percent since May and enjoyed a 4.47 percent boost since June 2015.

The June HPPI shows appraised values are 1.93 percent lower nationally than what homeowners estimated. While this isn’t a large discrepancy, the gap between expected and actual appraisal values grew slightly since May. The perception of home value varies widely across the country. Appraisals show home values higher than owner expectations by as much as 3 percent in Denver but, in contrast, were more than 3 percent lower in Baltimore, Detroit and Philadelphia.

“Perception is everything. It can make or break a home sale or mortgage refinance,” says Quicken Loans Chief Economist Bob Walters. “That’s why it’s so important for homeowners to realize how they perceive their home’s value could vary widely from how an appraiser views it. If the estimate is lower by just a few percentage points, the buyer could need to bring as much as another several thousand dollars to the table to avoid having to restructure the loan.”

Continuing the slow upward march, appraised values rose by 0.84 percent from May to June – as measured by the national HVI. Home values are making stronger annual gains, rising 4.47 percent since June 2015. The regional data shows equally robust growth. Each of the four regions measured displayed modest monthly gains and more meaningful year-over-year growth. The West remains the leader with a 5.84 percent annual increase in appraised value. The Northeast posted the smallest increase with a rise of 2.07 since last year.

“Nationally, home value increases are well within the healthy range,” says Walters. “Although, the variances across the country can influence owners’ perception. Owners in the West, where appraised values are rising more quickly, tend to underestimate their home’s value. The opposite is true for those in the Northeast, with appraised values showing slower growth.

For more information, visit www.QuickenLoans.com/Indexes.

2/3 of Homeowners Plan Renovations Within 6 Months: Survey

According to the latest Realtor.com survey, 67% of homeowners
nationally plan home renovations in the next six months.

The survey comprised over 1,500 respondents, and indicated that 2/3
of the responding homeowners plan to renovate a part of their home
immediately, and 20% plan to list their homes for sale before the
end of this year.

The survey indicated that the most common budget range for planned
improvements is between $2000-$5000. The most commmon type of renovations
are kitchens, bathrooms, or backyard/patios.

Considering the surge in home prices over the past few years, buyers should
give strong thought to the idea of purchasing a home that needs
some renovations and doing the work themselves to ultimately get more for their money

Latest Data Show 89 Housing Markets Reach Full Value Recovery

The Local Markets Index is a housing indicator compiled by Homes.com.
Utilizing home pricing data, the Index shows year-over-year price changes for
single-family housing markets in all 300 top U.S. markets.

The most recent data available for this index shows significant improvement.

On a broad scale, the index shows that 60 of the top 200 midsize markets have
fully recovered their decline in value in the recent recession. That brings
the total number of fully recovered markets to 89, which is 30% of all markets
tracked.

All of the 200 midsize markets continue to show gains year-over-year.

The number of top 100 markets achieving full price recovery increased to 29.

Other highlights of the latest report:

Year-over-year increases in all top 300 markets
Monthly increases in 82 of the top 100 markets and in 167 of the 200 midsize markets.