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Why the real estate sector needs a Black Friday of its own

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According to the National Association of Realtors, the number of home sold fell 2.2% in October from September and fell 25.9% from September 2009. Although median home prices remained level from September 2009, roughly a third of all sales were distressed homes. The U.S. Commerce Department reports that new home sales dropped 8.1% from September and nearly 30% from September 2009.

New home sales are down 80% from its peak in July 2005, making it the lowest reported sales month since the government began tracking in 1963.

According to CoreLogic, shadow inventory rose 10% over the past 12 months leaving an eight month supply. At the current rate of home sales, reported shadow inventory plus visible inventory, it would take nearly two years to sell it all.

Texas has the lowest ratio of distressed properties to sales while Michigan, Florida and California have the highest.

Given the bad news for the real estate sector, economists don’t agree on when a recovery will arise (although certain Associations are proclaiming the recovery already began).

As the entire team at AG has been screaming for years, there will be no real estate recovery without an employment recovery. Retailers will enjoy great sales today on Black Friday, but in real estate, we need our own Black Friday which will only come in the form of dramatically improved employment stats so that not only are people employed at 2005 levels but are no longer underemployed and hanging on by a thread.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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27 Comments

27 Comments

  1. Missy Caulk

    November 26, 2010 at 4:35 pm

    Aren’t we? Haven’t we? Been having one?
    We have in Mi.

  2. Brent Mitchell

    November 26, 2010 at 8:10 pm

    The tax credit gave the real estate industry its mini Black Friday. Now, if we can just get the same momentum behind these amazing interest rates, we can see some positive growth towards a permanent recovery.

    • Lani Rosales

      November 26, 2010 at 9:39 pm

      Brent, I would argue as the column above states that interest rates and loan packages can be as sexy as possible and Uncle Sam can throw any incentive possible but if people are underemployed or unemployed and can’t pay their light bill, homeownership is not realistic. Employment has to perform better or the real estate sector is in trouble indefinitely, in my opinion.

    • Matt Stigliano

      November 27, 2010 at 11:15 am

      Brent – The interest rates may be great, but until more people can be approved and make it to the closing table, they can be 0% and still have no real impact. I don’t advocate wholesale approval of anyone and everyone, but some of the people I’ve seen turned down by banks or had difficulty getting a loan shouldn’t have been put through the ringer or been denied (in my opinion). Until banks begin lending at a stronger pace, the interest rate talk is lost on a lot of people.

      The pendulum swung too far when the realization that the “we’ll give money to anyone” attitude of the housing boom wasn’t working out so well. Much like everything, we often over correct for the mistakes of the past.

  3. Brent Mitchell

    November 26, 2010 at 9:51 pm

    Lani,

    That is true, but look at the rush of sales by qualified buyers that hit because of the tax credit. They’re out there, it just seems like they need an incentive to pull the trigger. Black Friday isn’t exactly a huge, huge savings day on all levels; there are good deals, but there are plenty of full price items right next to the sale items. It’s all in the presentation…

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Austin

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?

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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.”

Click here to continue reading the list of the 12 best places to buy a home…

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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.

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aging housing inventory

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.

Click here to continue reading this story…

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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.

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zillow move

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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