Friday, May 22, 2015

Market Matters


Housing Waits–and Waits–on Millennials

Source: Wall St. Journal

Prior to a major plunge in housing starts in February, single-family housing starts were running less than half the levels seen during the housing boom and are 37 percent below their average of the 1990s. A major factor being blamed is the absence of younger home buyers. Research has found that the share of households headed up by someone 25 to 34 years old has fallen far more than other age groups since 2006. Overall, housing markets will depend on the labor markets, especially the hiring and paychecks of millennials.
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Southern California housing market is poised for a stronger spring
Source: L.A. Times
 
Market watchers and real estate agents say they're starting to see more sellers as prices remain relatively high, interest rates stay low and fewer borrowers owe more on their houses than they're worth. Selma Hepp, senior economist at the CALIFORNIA ASSOCIATION OF REALTORS®, says measures of buyer interest — online real estate searches and open-house traffic — have jumped in recent weeks. If that activity translates into sales, it could put a new round of pressure on pricing, she said. “The fundamentals are good," Hepp said. "But affordability is going to stare us right in the face again."
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The U.S. Cities Where It Takes the Longest to Be Able to Afford to Buy a Home
Source: The Atlantic
 
Americans are set to spend nearly $10 trillion on housing over the next five years but the question remains: Where are we spending the most, especially when compared to our incomes, to purchase homes? According to a new metric evaluating housing costs, the metros where households have to devote the most years of income to housing are mostly on the West and East Coasts, in California, Washington State, Oregon and Arizona, and across the Boston-Washington corridor. Nine of the ten most expensive areas are in California. In these locations, the price of a home is equivalent to about seven years of income. In the top three metros, the price of a home equals roughly nine years of income.
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Housing starts see biggest collapse since January 2007
Source: HousingWire
 
Harsh winter weather has a big impact on housing starts, as a devastating 17 percent drop hit the industry in February. Overall, privately owned housing starts in February plummeted to an annualized 897,000 from the revised January estimate of 1,081,000, with drops in the Northeast, Midwest and West leading the collapse. Single-family housing starts in February were at a rate of 593,000; this is 14.9 percent below the revised January figure of 697,000. Notably, weather was not to blame in the west but starts still dropped 18.2 percent.
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Worst Case Housing Needs: 2015 Report to Congress
Source: Housing and Urban DevelopmentIn a report to Congress, the U.S. Department of Housing and Urban Development (HUD) finds that worst case housing needs decreased during the 2011-to-2013 period but persist at high levels across demographic groups, household types, and regions. Substantial unmet needs for affordable rental housing remain even as economic conditions are improving. The unmet need for decent, safe, and affordable rental housing continues to outpace the ability of federal, state, and local governments to supply housing assistance. Worst case needs are defined as renters with very low incomes—below 50 percent of the Area Median Income (AMI)—who do not receive government housing assistance and who pay more than one-half of their income for rent.
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California’s Housing Costs Hurt Economy, Increase Poverty, Report Finds
Source: Wall St. Journal
 A new state report finds that California’s high housing costs decrease economic productivity, increase poverty rates, lower homeownership, increase crowding, and lengthen commute times. The report states, “The state’s high housing costs make California a less attractive place to call home, making it more difficult for companies to hire and retain qualified employees, likely preventing the state’s economy from meeting its full potential.” It urges the legislature to pass laws that would promote more density in urban areas. It also advises the legislature to consider changes to the state’s environmental review process for new development.
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Friday, April 24, 2015

Buyers' Remorse

Buyers' Remorse

California Home Sales Not Drying Up

March Sales Jump 33.1 Percent From February,
Median Price Gains 4.8 Percent


For the first time in 16 months, sales were higher than a year earlier,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “Pent-up demand, mild winter weather and attractive interest rates have created a wellspring of California housing market sales. Despite the California drought dominating headlines, we aren’t seeing data that suggests the drought is having a negative impact on the market. Obviously we’ll continue to monitor that closely.”

VIEW THE ENTIRE REPORT. ELEVEN VISUAL CHARTS & GRAPHS COVERING:
Home Sales, Year-over-Year Home Sales, Median Sales Price vs. Sales Volume, California Home Owner Equity, Cash Sales, Flipping, Market Purchases by LLCs and LPs, Market Sales by LLCs and LPs, Trustee Sale Purchases by LLCs and LPs, Foreclosure Notices and Sales, Foreclosure Inventory

Friday, April 17, 2015

Market Matters

3 ways to make your home worth more
Source: Yahoo! Finance

In the new book "Zillow Talk: The New Rules of Real Estate," Zillow’s CEO Spencer Rascoff and Chief Economist Stan Humphries put data from the online portal to use by sharing ways to get the most value out of a home. They crunched the data and found that a bathroom remodel adds the most value to a house—not a kitchen remodel. According to Zillow's data, a mid-range $3,000 bathroom remodel results in a $1.71 increase in home value for every $1.00 spent on renovation. They also argue that ending your home price in a ‘9’ is incredibly beneficial.
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It's Easier to Get a Mortgage in 2015
Source: Kiplinger
 
Thanks to rising home prices, less-stringent down-payment requirements, and new rules that limit lenders’ liability when loans that meet certain criteria go bad, it is expected that borrowers should encounter fewer obstacles when getting a mortgage in 2015.  Mortgage rates are still hovering at levels unimaginable a generation ago, but many buyers have been unable to capitalize on such low-rate loans due to tight lending standards after the recession. 
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More Young Adults Are Living With Their Parents, and It’s Probably Because of Student Debt
Source: Wall St. Journal
 
A $10,000 increase in student debt per graduate in a U.S. state is associated with an additional 2.9 percentage point rise in the rate of 25-year-olds living with parents, according to an analysis of young Americans with credit reports by the New York Federal Reserve. This is the latest study to show that young Americans are now much more likely to delay leaving home, or to “boomerang” back. “Parental co-residence rates” were as high as 50 percent in 12 U.S. states during 2012. 
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We must boost homeownership
Source: Sacramento Bee
 
Chris Kutzkey, President of the CALIFORNIA ASSOCIATION OF REALTORS®, stresses the importance of homeownership to families, communities, and the economy. Kutzkey writes, “Somewhere, somehow over the last six years, too many decision-makers have come to believe homeownership isn’t important. Their inability to create a clear path forward in the mortgage finance arena has led to uncertainty and restricted credit for qualified homebuyers. This has hurt not only families, but the nation as a whole.”
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Castro grilled over lowering mortgage insurance premiums
Source: The Hill
Republicans grilled Housing and Urban Development Department Secretary Julian Castro during a House hearing about his recent decision to lower mortgage insurance premiums despite the Federal Housing Administration falling short of its capital reserve requirement. But Castro argued that the FHA is delicately balancing its mission of meeting the needs of U.S. homeowners of more modest incomes while trying, at the same time, to reach the statutory 2 percent capital reserve requirement.
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New home purchases jump 29%
Source: HousingWire
 Mortgage applications for new home purchases jumped by 29 percent compared to the previous month, according to the January Mortgage Bankers Association Builder Application Survey. The average loan size of new homes dropped from $311,398 in December to $304,364 in January. The MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 530,000 units in January 2015.
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