Home prices see best gains in seven years
According to the National Association of Realtors’ (NAR’s) first quarter report, median home prices saw the best year-over-year gains in over seven years, rising to $176,000, with median single-family home prices rising in 87 percent of the 150 largest metropolitan statistical areas (MSAs) during the same period.
Dr. Lawrence Yun, NAR chief economist, said many areas are experiencing a seller’s market and real estate professionals tell us that they are resorting to extensive marketing campaigns nearly begging homeowners to list their homes, as inventory remains extremely tight in many areas.
Dr. Yun said, “The supply/demand balance is clearly tilted toward sellers in a good portion of the country. Inventory conditions are expected to remain fairly constrained this year, so overall price increases should be well above the historic gain of one-to-two percentage points above the rate of inflation. If home builders can continue to ramp up production, then home price growth is expected to moderate in 2014.”
16.8 percent drop in inventory
At the end of the first quarter there were 1.93 million existing homes available for sale, which is 16.8 percent below the close of the first quarter of 2012, when 2.32 million homes were on the market.
Total existing home sales rose 0.8 percent in the quarter, representing a 9.8 percent improvement compared to the first quarter of 2012. NAR reports that sales were at the highest level since the fourth quarter of 2009, when they reached 4.95 million as buyers responded to tax incentives.
Distressed homes generally sold at discounts of up to 20 percent and accounted for 23 percent of first quarter sales, down from 32 percent a year ago.
Regional performance varied
“Some of the previously hard-hit markets like Phoenix, Sacramento and Miami continue to experience a dramatic turnaround, while a new set of areas like Atlanta, Minneapolis and Seattle have begun to show strong signs of upward momentum,” Dr. Yun said.
According to NAR:
- Existing-home sales in the Northeast rose 4.4 percent in the first quarter and are 9.1 percent above the first quarter of 2012. The median existing single-family home price in the Northeast rose 2.9 percent to $234,000 in the first quarter from a year ago.
- In the Midwest, existing-home sales increased 1.2 percent in the first quarter and are 15.0 percent higher than a year ago. The median existing single-family home price in the Midwest increased 8.2 percent to $135,100 in the first quarter from the same quarter last year.
- Existing-home sales in the South edged up 0.7 percent in the first quarter and are 13.3 percent above the first quarter of 2012. The regional median existing single-family home price was $156,800 in the first quarter, up 9.3 percent from a year earlier.
- In the West, which is the region most impacted by limited housing supplies, existing-home sales slipped 1.1 percent in the first quarter but are 0.6 percent above a year ago. The median existing single-family home price in the West jumped 24.4 percent to $247,800 in the first quarter from the first quarter of 2012.
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.
2. Two major media brands emerge
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