Housing News
New home sales up in all regions, inventory at historic lows
New home sales
The new home sector has been hit extremely hard by the recession but the U.S. Commerce Department’s April data is finally good news after consistently negative reports on all fronts for many months.
Sales of new single family homes rose 7.3% in April which is the best pace in five months. All regions rose in April led by the West which is up 15.1% in sales, up 7.7% in the Northeaste, up 4.9% in the Midwest, and 4.3% in the South.
Sales, permits and inventory have hit historically bad levels in the past year yet this report shows the national inventory fell 2.8% to a new record low, indicating that the silver lining in the struggling sector is difficulty obtaining financing meaning no overbuilding.
NAHB welcomes the news
“The fact that new-home sales have now risen for two consecutive months is certainly welcome news following an all-time low sales number in February,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “That said, builders are still contending with a great deal of competition from foreclosed properties for sale in certain markets, and in places where this is not an issue, it remains extremely difficult to obtain credit to build new homes.”
“While more buyers are starting to show up at builder sales offices this season, the level of actual buying activity remains quite low,” said NAHB Chief Economist David Crowe. “The razor-thin inventory of new homes for sale is indicative of the caution that builders are exercising with regard to new projects as well as their inability to obtain financing for new-home production.”
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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.
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.
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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Joe Loomer
May 25, 2011 at 5:16 am
While new homes inventory has remained static around the 800 mark in our area, their portion of sales has increased sharply – drastically impacting owner-occupied (non-distressed) resales – which now only account for 40% of sales in the Greater Augusta-area. Good for the builders, but bad for re-sellers.
Navy Chief, Navy Pride
Dan Boyle
May 25, 2011 at 2:07 pm
I'm seeing all kinds of evidence that the bottom is solidifying. Here's a little more. Me likes it.
MH for Movoto
May 25, 2011 at 4:25 pm
Good stuff, of course. But it's relative.
Lucy
May 27, 2011 at 9:24 am
That's great that they're up 2 months in a row and that it's the highest they've been in 5 months, but isn't April historically higher than the preceding 5 months? Were April sales up year over year?
cha
May 28, 2011 at 9:00 am
A positive sign for the home builders. But we still have a very long way to go for them as they face tough competition from foreclosures.
Kevin Hughes
May 29, 2011 at 5:15 pm
We are experiencing multiple offers in almost every price range now. As distressed properties get cleared out of the inventory- who are our new sellers going to be? Most mom and pop homeowners cannot afford to sell so new construction is likely to be the beneficiary of pent up buyer demand.