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Existing home sales slip: tight inventory, dip in cash buyers

Existing home sales fell for the month as inventory levels remain tight, but this has led to improving home values and dramatically reduced days on market for American homes.

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Existing home sales slip in March

Existing homes sales fell 0.6 percent in March according to the National Association of Realtors (NAR) which noted continued tight inventory levels which “continued to pressure home prices,” and while the monthly data slipped, sales remain 10.3 percent above March 2012. For 21 consecutive months, sales have been above year-ago levels and for 13 consecutive months, home prices have been above year-ago levels.

Dr. Lawrence Yun, NAR chief economist, said there is more demand than supply in the current market. “Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity.”

Further, Dr. Yun noted, “In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.”

Inventory levels actually slightly up

Although the trade group and other real estate insiders cite tight inventory levels as holding back sales, inventory levels rose from a 4.6 month supply in February to a 4.7 month supply in March, so from the outside it may appear that this is good news, inventory remains tight and in many metro areas has led to bidding wars.

Inventory levels rose slightly in March, but remain 16.8 percent below just twelve months ago.

“The inventory improvement last month results from a seasonal gain, but conditions continue to broadly favor sellers. We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers, but it’s unlikely we’ll get there without greater increases in housing construction,” Dr. Yun said.

Median home price up 11.8 percent this year

Compared to March 2012, the national median existing-home price for all housing types rose 11.8 percent to $184,300. This represents the largest annual increase since November 2005.

Distressed homes accounted for 21.0 percent of sales in March, down 4.0 percent for the month and 8.0 percent for the year. Fully 13.0 percent of sales were foreclosures and 8.0 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in March, while short sales were discounted 13 percent.

Time on market fell dramatically

NAR reports that the median time on market for all homes fell from 74 days in February to only 62 days in March, a dramatic decrease since the median time on market of 91 days in March 2012.

Short sales were on the market for a median of 81 days, while foreclosures typically sold in 46 days and non-distressed homes took 66 days. Thirty-seven percent of all homes sold in March were on the market for less than a month.

Cash sales down for the month

Unchanged for the month, first time buyers remain at 30 percent of home purchases, but all-cash sales fell 2.0 percent from February to 30 percent of transactions, and individual investors, who account for most cash sales, purchased 19 percent of homes in March, down from 22 percent in February and 21 percent in March 2012.

Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 630,000 in March and are 6.8 percent above March 2012. The median price in the Northeast was $237,000, up 3.0 percent from a year ago.

Existing-home sales in the Midwest rose 1.8 percent in March to a pace of 1.16 million and are 14.9 percent above a year ago. The median price in the Midwest was $141,800, up 7.8 percent from March 2012.

In the South, existing-home sales slipped 1.5 percent to an annual level of 1.95 million in March but are 12.7 percent above March 2012. The median price in the South was $161,700, which is 10.4 percent above a year ago.

Existing-home sales in the West declined 1.7 percent to a pace of 1.18 million in March but are 4.4 percent above a year ago. With notably constrained inventory conditions, the median price in the West rose to $258,100, up 26.1 percent from March 2012.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you’d like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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