Signs of stability
This month brings mostly good news with leading real estate indicators showing improvement and promise of recovery while there is still cause for concern, especially as the real estate tax credits come to an end.
While overall buyer and seller sentiment is trending positively, buyers fear financial instability in their home, citing it as the most common prohibitive factor in their home purchase.
First time buyers
Americans may not see homeownership as the American dream anymore, they still believe that homeownership is critical to the economy and in response, first time home buyer activity is on the rise.
New home sales
New construction is performing dramatically different than just 30 days before, experiencing a rebound. Last month, the U.S. Census Bureau reported that sales of new single-family homes were up 7.0% from February but down an alarming 13.0% from February 2009, making it look like tough times were ahead for builders.
This week, the Census Bureau reports that in March 2010, sales of new single-family homes is at 26.9% above February and a very impressive 23.8% above March 2009, leaving only a 6.7 month supply, despite February ending with a dismal 9.2 month supply.
While sales of new homes are skyrocketing, the prices of the homes sold is dipping a bit. The median sales price of new homes in February was $220,500 but only $214,000 in March, representing a 3.0% drop.
Existing home sales
Like new home sales, existing home sales were down last month but experiencing a rebound as well, according to recent data released by the National Association of Realtors. February existing home sales had slipped 0.6% but risen 7.0% from February 2009, and March home sales rose 6.8% from February and (like new home sales), a large rise from March 2009 with a 16.1% jump.
The NAR survey shows first time buyers account for 44% of purchases and 19% were investors. The national median existing home price was $170,700 in March, up from $165,100 dropping a bit along with new home sales.
Bargains across America
More signs of stabilization come with Trulia.com’s report that the number of homes listed on their site having experienced at least one price reduction is down 26% annually.
“With such a dramatic drop in home price reductions over the past year, we’re beginning to see early signs of stabilization in the housing market on a national level, as well as locally in certain markets,” said Pete Flint, Trulia co-founder and CEO.
ZipRealty reports that luxury housing markets experienced the largest price reductions, creating the biggest bargains for buyers in the first quarter of 2010.
Hope for the USDA program and rural buyers
For rural buyers, hope came this week in the form of HR 5017 passing, making USDA loans self funded through fees rather than the current method of using federal funding to backstop the guarantee.
The news couldn’t have come sooner, as supporters claim the funding will dry up literally over the next few days. HR 5017 next goes to vote and is expected to be approved.
According to NAR, in both February and March, distressed sales accounted for one in three existing home sales. Last fall, NAR began recognizing the Certified Distressed Property Expert designation in response to what has continued to be a rise in distressed sales.
First time buyer activity is on the rise along with existing home sales and the new home sector has improved greatly and lowered supply to a healthier number. The luxury home market is experiencing the greatest price reductions and overall, the number of price reductions are down from 2009. HR 5017 passed this week bringing hope that the USDA program won’t die. The downside is that distressed homes are still at elevated rates, so while the residential real estate sector is showing signs of stability, the weak point in the system is the distressed homeowner.
If programs like HAMP were to actually work, this sector would be stronger, but red tape and poor politics keep distressed homeowners in distress. We suspect that this summer, we’ll see a new program or a shift in how the government treats short sales and foreclosures. Benn and I were talking this week about the old $100 down HUD program moving inventory- maybe there will be a revitalization of the old system or emergence of a new form of helping distressed owners or shuffling foreclosed inventory.
CC Licensed image courtesy of annahape via Flickr.com.
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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