Housing News
Pending home sales up over the year, even more so than NAR reports
Signed contracts on homes
Pending home sales or signed contracts on homes are down 1.2 percent in August from July but up 7.7 percent from August 2010, according to the National Association of Realtors. Additionally, there was inconsistent performance by region with some performing well and others poorly.
The pending home sales index fell 5.8 percent in the Northeast for the month, but has risen a slight 1.3 percent over the year, with the volume of signed contracts (and interest in sales) remaining stable. Pending home sales also experienced a decline in the Midwest, dropping 3.7 percent from July but is up 8.2 percent over the year, a promising data point for the region.
The South region saw a rise in contracts signed of 2.6 percent and has risen a total of 7.6 percent over the year and although the West region dropped 2.4 percent for the month, it has seen a 10.5 percent over August 2010, the biggest jump of any region.
Lawrence Yun, NAR chief economist, said the decline reflects an uneven market. “The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”
Yun said the market is underperforming given a pent-up demand in household formation. “We continue to experience a pattern in which financially qualified home buyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” he said. “Based on the improving fundamentals of population growth, some job additions, rent increases and higher stock market wealth, we should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy.”
Is data better than NAR claims?
MarketWatch columnist, Lee Adler wrote, “It is clear that the collapse in prices is beginning to at least bring some buyers back into the market. While a high percentage of contracts are still falling through, this increase in demand over last year’s levels is not a one-month wonder. It has now persisted for four months. It is not yet up to 2009 levels when the market was false stimulated by government tax breaks to buyers, but it is 3.4% above 2008 levels.”
Adler notes, “As it turns out, the NAR is screwing its own pooch because the actual, not manipulated data is actually much better than the seasonally smoothed numbers imply. That’s not to say sales are great. They remain 25% below the peak levels reached during the bubble, but the fact is that sales were up in August, and not just by a little. They were up by 9.4% month to month, and were 13.1% above the level of last August.”
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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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Ruthmarie Hicks
September 29, 2011 at 12:41 pm
At some point there will be a realization that purchasing a home still makes financial sense. Real estate markets are notoriously cyclic. There are many with poor credit or just not qualified because of self-employment that would LOVE to take advantage of these insanely wonderful prices and literally gorgeous interest rates. The big problem that I see with qualified buyers is that many have a chip on their shoulders and feel they are entitled to a mansion for pennies on the dollar. If credit started opening up to let more buyers into the market – this group would shape up, the foot-dragging and unreasonable demands would end – and the market would start to gain its legs again.
In the meantime – we need jobs, jobs, JOBS! The middle class in our area is on life support and there are those who would turn off the respirator. The days when we can be casual about the outsourcing of America are OVER. We have to repair our infrastructure – which would put people to work immediately – to create a 21st century environment that business is attracted to. Stop the nonsense, pass the jobs bill and realize that if don't invest in ourselves no one else will.