Home sales on the rise
As inventory of existing homes for sale remain tight and home prices continue to increase, it is a challenge for the industry to improve sales numbers, but according to the National Association of Realtors (NAR), completed transactions rose 6.5 percent in July, marking a 17.2 percent increase above July 2012. NAR reports that sales have now been above year-ago levels for 25 months.
Dr. Lawrence Yun, NAR chief economist, said, “Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines. The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers.”
Although interest rates are impacting sales, Dr. Yun said there are factors that can sustain a continued recovery. “Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall.”
Housing inventory rose in July
In some cities, inventory levels are much lower than other metro areas, frustrating real estate professionals who for years have reported to us that getting a buyer qualified is their top challenge, now telling us that a lack of inventory is their primary challenge.
Listed inventory is 5.0 percent below a year ago, according to NAR. There appears to be slight relief, however, as the total housing inventory at the end of July rose 5.6 percent, representing a 5.1 month supply at the current sales pace, unchanged from June.
Dr. Yun commented, “Tight inventory in many areas means above-normal price growth for the foreseeable future.”
Home prices continue to rise
Rising 13.7 percent in July compared to a year ago, the national median existing home price hit $213,500, which is only 7.3 percent below the all-time record of $230,400 in July 2006.
July marks the 17th consecutive month of year-over-year price increases, which hasn’t happened since January 2005 to May 2006.
Distressed home sales match the lowest share of sales since NAR began tracking in October 2008, now accounting for 15 percent of sales, unchanged from June, down from 24 percent in July 2012. NAR reports that some of the price gains can be accounted for due to fewer distressed sales on the market pulling prices down.
Time on market actually went up
The median time on market for all homes was 37 days in June, but rose to 42 days in July, but this is still a dramatic improvement from the 69 day average in July 2012.
Short sales were on the market for a median of 72 days, while foreclosures typically sold in 50 days and non-distressed homes took 40 days.
Fewer first time buyers, more all-cash sales
First-time buyers accounted for 29 percent of purchases in July, unchanged from June, but are down from 34 percent in July 2012.
All-cash sales comprised 31 percent of transactions in July, the same as in June; they were 27 percent in July 2012. Individual investors, who account for many cash sales, purchased 16 percent of homes in July, down from 17 percent in June; they reached a cyclical peak of 22 percent in February of this year.
Sales in all regions increased in July
Regionally, existing-home sales in the Northeast surged 12.7 percent to an annual rate of 710,000 in July and are 20.3 percent above July 2012. The median price in the Northeast was $271,200, up 6.7 percent from a year ago.
Existing-home sales in the Midwest rose 5.8 percent in July to a pace of 1.28 million, and are 20.8 percent higher than a year ago. The median price in the Midwest was $168,300, which is 9.5 percent above July 2012.
In the South, existing-home sales increased 5.0 percent to an annual level of 2.11 million in July and are 16.6 percent above July 2012. The median price in the South was $183,400, up 13.6 percent from a year ago.
Existing-home sales in the West rose 6.6 percent to a pace of 1.29 million in July and are 13.2 percent higher than a year ago. The median price in the West, driven the most by a supply imbalance, was $287,500, which is 19.2 percent above July 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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