SoCal Home Market “Normalizing”
Southern Calfornia’s housing
market continued a normalizing trend in August, prompting cheers from analysts
who said the market in on the path for long term sustainability. The figures, release on Wednesday by real
estate Corelogic, saw slowing price appreciation even as sales continued to
rise – a course that has been evident most of the year.
“The housing market is
normalizing,” said Esmael Adibi, drector of the A. Gary Anderson Center for
Economic Research at Chapman University. “It’s very good news”. Adibi said demand is now being driven by
fundamentals such as job creation – not investors flush with cash – and predicted
the market is on the path for sustainable growth. In July, California added 80,700 new jobs,
the largest monthly employment gain in the last year. Southern California home prices are likely to
climb 3% to 4% in 2016, buoyed by continued job growth, he said.
Stuart Garbriel, director of
UCLA’s Ziman Center for Real Estate, said that even if the Federal Reserves
decides Thursday to raise its short-term interest rate, there will be minimal
effect on housing demand, because any increases are likely to be small and made
slowly.
For now, the improving
economy has helped boost sales nationally too, as more families have confidence
to make what is often the biggest purchase of their lifetimes, economists
said. In July, sales of U.S. previously owned homes
reached an eight year high. And Wednesday,
the National Assn. of Home Builders reported single-family-home haven’t been this confident since before the housing
crash last decade.
Business Section, Los Angeles
Times
September 17, 2015
California median home price reaches highest level since December 2007; home sales register largest monthly gain since January 2011
LOS ANGELES (May 15)
–Showing true signs of improvement, California’s housing market continued to
perform better than expected in April with both the median home price and home
sales increasing month to month, the CALIFORNIA ASSOCIATION OF REALTORS®
(C.A.R.) said today. However, decreased home affordability remains a challenge
for buyers in many areas of the state.
Closed escrow sales of
existing, single-family detached homes in California totaled a seasonally
adjusted annualized rate of 394,070 units in April, according to information
collected by C.A.R. from more than 90 local REALTOR® associations and MLSs
statewide. April marked the sixth consecutive month that sales were below
the 400,000 level and the ninth straight decline on a year-over-year
basis. Sales in April increased 7.4 percent from a revised 367,020 in
March but were down 7 percent from a revised 423,690 in April 2013. The
statewide sales figure represents what would be the total number of homes sold
during 2014 if sales maintained the April pace throughout the year. It is
adjusted to account for seasonal factors that typically influence home sales.
“With home prices
increasing by double-digits in 2013, many investors have decided to leave the
market which is adversely affecting home sales as a whole,” said C.A.R.
President Kevin Brown. “While the number of homes sold continued to
decline from a year ago, the better-than normal surge in sales activities in
April is encouraging and could be an indication that we will see further
improvement in the housing market in the next few months.”
Housing Activity Loses Some Steam, But Positive Signs Crop Up Heading into Spring Home Buying SeasonConsumer Optimism Trending Upward Since Last Year
Pete Bakel
202-752-2034
WASHINGTON,
DC – Recent month-to-month volatility in the housing market has
softened the ongoing recovery. However, the majority of the Fannie Mae
National Housing Survey indicators on consumer attitudes have continued
to move in a positive direction during the past year, which may portend a
pickup in home buying and selling activity this spring. According to
Fannie Mae’s March 2014 National Housing Survey results, the share of
survey respondents who say it is a good time to sell a home climbed to
38 percent last month, compared to 26 percent at the same time last
year. In addition, the share who believe it would be easy to get a
mortgage today increased to 52 percent, compared to 47 a year ago, and
tying the all-time survey high. Americans'
attitudes regarding their personal finances also have improved – those
who expect their financial situation to worsen during the next 12 months
decreased to 12 percent, a significant drop from 21 percent at the same
time last year, and the share who say their personal financial
situation improved during the past year reached an all-time survey high
of 40 percent.
"The housing recovery continues to proceed in fits and starts. Rising mortgage rates
and a lack of supply have dampened housing market momentum," said Doug
Duncan, senior vice president and chief economist at Fannie
Mae. "However, we see several positive signs going into this year's
spring home buying season, compared with last year. For example,
consumers are less pessimistic about their personal finances, and more
optimistic about the current selling environment and their ability to
get a mortgage. Still, those who are pessimistic about buying or selling
a home today tend to point to economic conditions as the primary issue,
and most consumers continue to say the economy is on the wrong track.
Looking forward, we expect to see a pickup in economic growth later in
the year, and this may boost the confidence of prospective buyers and
sellers.
Which home improvement projects pay off?
Cleaning up on spring home improvement projects requires more effort than many homeowners anticipate.
Remodeling
tends to pick up as the weather improves, and this year is no
exception. During the second half of 2013, the National Association of
Home Builders' Remodeling Market Index, which measures how busy
contractors are, was at its highest level since the spring of 2004.
When the report was released in late January, remodelers were expecting an even busier spring, with more saying they had
been called to bid on a job or were already committed to a project.
If
you're updating your home with the aim of adding to its value, tread
carefully. Some improvements boost value more than others, and in most
cases, a project costs more than it adds in value.
According to Remodeling magazine's 2014 Cost
vs. Value report, the average portion of cost recouped is 66.1
percent. Of course, what buyers will think of—and might pay for—an
upgrade is less of a hurdle if you plan to enjoy your fancy new kitchen
or master bath for years to come.
How
much you can expect to spend varies not just by project, but also where
you live. Location will have an impact on materials, labor costs and
trends.
Diminished Investor Activity
Expected to Have Significant Impact on Home Shoppers in 2014
Buyers Could Benefit From Smoother Market as Investors
Withdraw; Home Values Expected to Normalize Through 2018, According to Zillow
Home Price Expectations Survey
SEATTLE, Feb.
12, 2014 /PRNewswire/ -- A majority of more than
100 forecasters said they expect large-scale investors to sell off the bulk of
homes in their portfolios in the next three to five years, boosting inventory
and potentially contributing to a smoother market ahead, according to the
latest Zillow® Home Price Expectations Survey. On average, panelists also said
they expected nationwide home value appreciation of 4.5 percent this year, with
a steady slowdown in appreciation rates each year through 2018.
The survey
of 110 economists, real estate experts and investment and market strategists
asked panelists to predict the path of the U.S. Zillow Home Value Indexi through
2018 and solicited opinions on investor activity and federal monetary policy.
The survey was sponsored by leading real estate information marketplace Zillow,
Inc. and is conducted quarterly by Pulsenomics LLC.
Throughout
the recovery, large-scale investors have purchased thousands of homes
nationwide, particularly lower-priced vacant and foreclosed homes, fixing them
up and keeping them in their portfolios as rental properties. This investor
activity helped put a floor under sales volumes during the depth of the housing
recession, but also created competition for many would-be buyers and
contributed to rapid price spikes in some areas.
Panelists
were asked to assess the impact to the market if these institutional investors
were to significantly curtail their activity this year. Among those panelists
expressing an opinion, 79 percent said the impact would be significant or
somewhat significant. Panelists were also asked when they thought these
investors will have sold the majority of homes in their portfolios. Among those
with an opinion, 57 percent said they expected this to occur in the next three
to five years.
"Real
estate investors, both large and small, played a crucial role in helping to
stabilize markets during the darkest days of the housing recession, but a
decline in investor activity now isn't necessarily a bad thing, and could have
real benefits for buyers," said Zillow Chief Economist Dr. Stan
Humphries. "Buyers entering the market in the next few months will not be
competing with cash-rich investors like they were last year which should be
some small solace given the higher prices and mortgage rates that they will
encounter. The gradual decline of investor activity should be viewed as another
sign of the market slowly returning to normal, and I agree with the panel's expectations
that there will not be a rush for the exit by institutional investors."
Metro Areas See Solid Home-Price Growth, Some Markets Facing Affordability Issues
WASHINGTON (February 11, 2014) – The
lion’s share of metropolitan areas continued to experience strong
year-over-year price growth in the fourth quarter, according to the latest quarterly report by
the National Association of Realtors®. A companion
metro area annual affordability report shows less favorable conditions,
particularly in the West.
The median existing single-family
home price increased in 73 percent of measured markets, with 119 out of 164
metropolitan statistical areas (MSAs) showing gains based on closings in the
fourth quarter compared with the fourth quarter of 2012. Forty-two areas, 26
percent, had double-digit increases, two were unchanged and 43 recorded lower
median prices.
There were fewer rising markets than
seen in the third quarter, when price increases were recorded in 88 percent of
metro areas from a year earlier, with 33 percent rising at double-digit rates,
reflecting a slowdown in price growth.
Lawrence Yun, NAR chief economist, said there are
two ways of looking at the price gains. “The vast majority of homeowners have
seen significant gains in equity over the past two years, which is helping the
economy through increased consumer spending,” he said. “At the same time, home
prices have been rising faster than incomes, while mortgage interest rates are
above the record lows of a year ago. This is beginning to hamper housing
affordability.”
The five most expensive housing
markets in the fourth quarter were the San Jose, Calif., metro area, where the
median existing single-family price was $775,000; San Francisco, $682,400;
Honolulu, $670,800; Anaheim-Santa Ana, Calif., $666,300; and San Diego, where
the median price was $476,800.
The five lowest-cost metro areas
were Toledo, Ohio, with a median single-family price of $80,500; Rockford,
Ill., $81,400; Cumberland, Md., at $89,500; Elmira, N.Y., $99,500; and South
Bend, Ind., with a median price of $101,100.
Home Improvements That Pay You Back
1. Remodeling the kitchen – You can expect to recoup 60%-120% of your investment on the
kitchen remodel, as long as you don’t go overboard. You should never make your kitchen
fancier than the rest of the house, or the neighborhood.
2. Bathroom addition – If your home only has one bathroom, you can recoup a large chunk
of your investment by adding another one. It is estimated that you can recoup 80%-130%
of whatever you spend adding a bathroom.
3. Adding square footage – Adding more square footage to your home with a new room can be
an incredibly expensive project. However, you can typically recoup between 50%-83% of your
initial investment. Just make sure you keep the cost under control.
4. Deck addition – If you make your deck and your backyard more appealing, your house will
be more appealing to prospective buyers when you decide to sell. Homeowners can
recoup 65%-90% of their investment by adding a deck.
(California Association of Realtors Newsletter dated 1/13/2014)
Mortgage rates began 2014 with a round of increases, kicking off a trend many experts believe will continue through the rest of the year.
"Freddie Mac's" weekly Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaging 4.53 percent (0.8 point) for the week ending January 2, up from the last week of 2013, when it averaged 4.48 percent. A year ago, the 30-year FRM was at 3.34 percent.
The 15-year FRM this week averaged 3.55 percent (0.7 point), climbing from 3.52 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also saw an increase, rising to 3.05 percent (0.4 point) from 3.00 percent. The 1-year ARM was flat at 2.56 percent (0.5 point).
Frank Nothaft, VP and chief economist for Freddie Mac, cited three major factors behind the week's increases: rising "Freddie Mac's" as reported by the Conference Board, a strong showing for home prices in the most recent "Freddie Mac's", and a slight gain in "Freddie Mac's" for November--all of which served as ""signs of a stronger economic recovery,"" he said.
Meanwhile, finance site "Freddie Mac's" reported on the findings in its weekly survey, putting the 30-year fixed at 4.69 percent--up 6 basis points--with the 15-year fixed at 3.73 percent--up 3 points. The 5/1 ARM was up to 3.52 percent, nearly 10 basis points up, Bankrate reported.
"Mortgage rates finished 2013 more than a full percentage point higher than where they began,"" Bankrate said in a release. ""While mortgage rates are still below September's high point of the year, they did finish 2013 near the upper end of this year's range.
