Existing home sales take a dip
According to the National Association of Realtors (NAR), existing home sales dipped 5.1 percent in January from December’s revised sales numbers. This places sales at their lowest level since July 2012, which they blame squarely on the perpetual inventory shortages, which also serves to continue lifting prices, which is good news to some (homeowners) and bad news to others (buyers).
Dr. Lawrence Yun, NAR chief economist, also stated that unusual weather is playing a role. “Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception. Some housing activity will be delayed until spring.”
“At the same time,” Dr. Yun added, “we can’t ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates. These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts begin to make an impact.”
Median existing home price
NAR reports that the median existing home price for all housing types was $188,900 in January, up a whopping 10.7 percent from January 2013.
Distressed homes accounted for 15 percent of sales (11 percent were foreclosures, and only 4 percent were short sales), down from 24 percent in January 2013. Foreclosures sold for an average discount of 16 percent below market value and short sales were discounted 13 percent.
Housing inventory levels
Although NAR cites ongoing inventory problems, housing inventory did rise 2.2 percent for the month, and rose 7.3 percent compared to January 2013. Inventory now represents a 4.9-month supply at the current sales pace.
The median time on market was 67 days in January, down from 72 days in December and 71 days on market in December 2013. Non-distressed homes sold in 66 days, foreclosures typically sold in 58 days, and short sales spent 150 days on the market. NAR reports that nearly one in three homes sold in January were on the market for less than a month.
Who’s buying right now?
The number of first time buyers are slowly dwindling, hitting 26 percent of all sales in January, down from 27 percent in December and 30 percent in January 2013.
The trade group said in a statement, “This is the lowest market share for first-time buyers since NAR began monthly measurement in October 2008; normally, they should be closer to 40 percent.”
Fully 33 percent of sales were paid for with cash, up from 32 percent in December and 28 percent in January 2013. Individual investors, who account for many cash sales, purchased 20 percent of homes in January, compared with 21 percent in December and 19 percent in January 2013. Seven out of 10 investors paid cash in January.
Regional performance varies
Existing-home sales in the Northeast declined 3.1 percent to an annual rate of 620,000 in January, and are also 3.1 percent below January 2013. The median price in the Northeast was $241,100, up 6.6 percent from a year ago.
Existing-home sales in the Midwest dropped 7.1 percent in January to a pace of 1.04 million, and are 8.8 percent below a year ago. The median price in the Midwest was $140,300, which is 7.6 percent higher than January 2013.
In the South, existing-home sales declined 3.5 percent to an annual level of 1.95 million in January, but are 1.6 percent higher than January 2013. The median price in the South was $161,500, up 9.4 percent from a year ago.
Existing-home sales in the West dropped 7.3 percent to a pace of 1.01 million in January, and are 13.7 percent below a year ago. Sales in the West are attenuated by tight inventory in many areas, pushing the median price to $273,500, up 14.6 percent from January 2013.
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?
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.”
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.
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.
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.
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.
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