ORLANDO, Fla. – Oct. 8, 2012 – Low inventories of for-sale homes are becoming a problem for homebuyers. Almost every major market in the U.S. has posted double-digit decreases in available listings.
“The buyers tend to become a little frustrated as they are seeing homes that they want to ‘think about’ – and before they can even get home to discuss it, there are already multiple offers on the property,” Sheri Moritz, a real estate broker with Keller Williams’ Wake Home Team in Raleigh, N.C., told Inman News. In Raleigh, inventories have fallen 21 percent in the past year, according to Realtor.com data.
“I counsel buyers to be patient and not get discouraged; that it may take extra time to find the suitable property,” says Tom Avent, broker-owner at Tom Avent Real Estate in Fresno, Calif., which has posted a 43.1 percent drop in inventories in the past year. “I have also seen some buyers give up looking, frustrated with low inventory and losing out in multiple-offer bidding.”
Multiple-bid situations are common in many markets. But surveys show that homebuyers lose their enthusiasm when faced with competition for a property, according to a recent survey by Redfin. Seven in 10 of homebuyers reported that they’ve faced competition on at least one of their offers recently, but 31 percent say they would back off when faced with a multiple-offer situation for a home.
Charles Roberts, a director at the Denver Board of Realtors® and co-owner of Your Castle Real Estate, says that “urgency” is the new landscape greeting homebuyers.
“Gone are the days of looking at 50 homes and taking months to make a decision,” Roberts says. “If there’s a good property on the market, buyers need to act quickly, and yes, sometimes bid above asking price. The educated, thoughtful clients are getting great deals with astoundingly low interest rates. The clients that are still insisting on putting offers at 80 cents on the dollar are getting shut out of the market. They either learn that that strategy doesn’t work anymore or they keep on renting. Our job as real estate agents is to teach them what the market looks like and guide them in their decision-making.”
Source: “Low Inventories Thwarting Buyers,” Inman News (Oct. 1, 2012)
© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688
Monday, October 8, 2012
Thursday, September 20, 2012
Well, well, well.....Florida home prices bottomed earlier than previously thought.
WEST PALM BEACH, Fla. – Sept. 20, 2012 – A new home sales measure says Florida prices hit a soft bottom in 2009, years earlier than what some experts have declared as the low point for real estate.
The measure, similar to the respected national Standard & Poor’s/Case-Shiller price index, was created by Florida Realtors Chief Economist John Tuccillo to be a more accurate reflection of sale prices in the state.
Tuccillo said he was surprised that the index pointed to 2009 as a bottom, but said that was also a time when investors began eyeing Florida for real estate deals.
“Since then we’ve been sort of rocking along on a bumpy road,” said Tuccillo, who developed the index over about a year’s time. “It’s essentially been flat – but in this context, flat is probably good news after the large run-up and drop.”
According to the index, Florida sales prices increased 152 percent from January 2000 to the peak of the market in November 2006. They fell 43 percent from the peak to mid-2009.
Realtors have long complained that the current method of reporting monthly median home sales prices doesn’t offer a true measure of increasing and decreasing values. The median, which means half of homes sold above the price and half below, can be greatly influenced if a large number of either distressed properties or luxury homes sell in one month.
Florida’s new index is considered a “repeat sales index.” It combines Florida Department of Revenue data with prices of the same individual properties sold over time. The index is expected to be released quarterly but because of a lag in some statewide data, the first index runs only through August 2011.
Like Case-Shiller, the Florida home price index measures sales as compared with January 2000 when the index was set at 100. Case-Shiller’s Florida data include Tampa and South Florida, which combines Palm Beach, Broward and Miami-Dade counties.
National Association of Realtors spokesman Walter Moloney said he’s not aware of another state that has its own price index. California releases an “affordability index” that measures the percentage of all households that can afford to purchase a single-family home, but its sale prices are reported as a median.
While the public may prefer a median sales price that reports an actual dollar figure over an index, the index is considered more accurate.
Still, Palm Beach County Realtors said a statewide index doesn’t always reflect regional specifics.
Kevin Kent, a broker-associate with Platinum Properties, which has offices in Jupiter, Juno Beach and Stuart, said South Florida’s home sale prices probably hit a bottom later than 2009.
“When you step back and look at the entire state, that’s probably accurate,” Kent said. “But when you break it down into pockets and certain areas that were hit the hardest, the numbers wouldn’t be the same.”
In April, analysts at the online real estate database Zillow said South Florida sale prices hit bottom at the end of 2011. Case-Shiller’s index shows a bottom in Palm Beach, Broward and Miami-Dade counties in April 2011, but that prices had stabilized some before that.
Florida International University real estate professor Ken H. Johnson agrees that 2011 marked the bottom.
“Back in November, I thought it was pretty clear we had bottomed and housing was as affordable as it’s been in 40 years,” he said. “I said that was the turn, and we’ve not seen prices go down.”
© 2012 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services
The measure, similar to the respected national Standard & Poor’s/Case-Shiller price index, was created by Florida Realtors Chief Economist John Tuccillo to be a more accurate reflection of sale prices in the state.
Tuccillo said he was surprised that the index pointed to 2009 as a bottom, but said that was also a time when investors began eyeing Florida for real estate deals.
“Since then we’ve been sort of rocking along on a bumpy road,” said Tuccillo, who developed the index over about a year’s time. “It’s essentially been flat – but in this context, flat is probably good news after the large run-up and drop.”
According to the index, Florida sales prices increased 152 percent from January 2000 to the peak of the market in November 2006. They fell 43 percent from the peak to mid-2009.
Realtors have long complained that the current method of reporting monthly median home sales prices doesn’t offer a true measure of increasing and decreasing values. The median, which means half of homes sold above the price and half below, can be greatly influenced if a large number of either distressed properties or luxury homes sell in one month.
Florida’s new index is considered a “repeat sales index.” It combines Florida Department of Revenue data with prices of the same individual properties sold over time. The index is expected to be released quarterly but because of a lag in some statewide data, the first index runs only through August 2011.
Like Case-Shiller, the Florida home price index measures sales as compared with January 2000 when the index was set at 100. Case-Shiller’s Florida data include Tampa and South Florida, which combines Palm Beach, Broward and Miami-Dade counties.
National Association of Realtors spokesman Walter Moloney said he’s not aware of another state that has its own price index. California releases an “affordability index” that measures the percentage of all households that can afford to purchase a single-family home, but its sale prices are reported as a median.
While the public may prefer a median sales price that reports an actual dollar figure over an index, the index is considered more accurate.
Still, Palm Beach County Realtors said a statewide index doesn’t always reflect regional specifics.
Kevin Kent, a broker-associate with Platinum Properties, which has offices in Jupiter, Juno Beach and Stuart, said South Florida’s home sale prices probably hit a bottom later than 2009.
“When you step back and look at the entire state, that’s probably accurate,” Kent said. “But when you break it down into pockets and certain areas that were hit the hardest, the numbers wouldn’t be the same.”
In April, analysts at the online real estate database Zillow said South Florida sale prices hit bottom at the end of 2011. Case-Shiller’s index shows a bottom in Palm Beach, Broward and Miami-Dade counties in April 2011, but that prices had stabilized some before that.
Florida International University real estate professor Ken H. Johnson agrees that 2011 marked the bottom.
“Back in November, I thought it was pretty clear we had bottomed and housing was as affordable as it’s been in 40 years,” he said. “I said that was the turn, and we’ve not seen prices go down.”
© 2012 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services
Tuesday, September 11, 2012
Where'd all the REO's go?
FHFA sells 699 Fla. REOs to investor
WASHINGTON – Sept. 11, 2012 – A controversial move to sell 699 Fannie Mae- and Freddie Mac-owned homes in bulk to an investor was closed last week, according to the Federal Housing Finance Agency (FHFA). Pacifica Companies LLC purchased the homes as part of a real estate owned (REO) pilot initiative.
Pacifica has not released details on how it will oversee the properties. Based in San Diego, the company’s website claims it has an office in Tampa, as well as Austin, Texas; Riverside, Calif.; and four cities in India.
Pacifica paid $12.3 million upfront in a joint venture agreement. It will pay an additional $49.3 million by sending Fannie Mae 90 percent of future proceeds. After that, Pacifica will collect a 20 percent management fee and pay Fannie Mae 50 percent of future proceeds. FHFA projects the total value of all payments to be $78.1 million. The total price paid by Pacifica doesn’t represent a significant discount; however, the relatively low downpayment and profit-split deal would make it attractive to most investors.
“When FHFA proposed this program, the nation was worried about an onslaught of distressed home sales and too few buyers,” says Florida Realtors’ Senior Vice President of Public Policy John Sebree. “However, NAR and Florida Realtors have always taken the position that Realtors know their neighborhoods and are in the best position to move REOs into the hands of buyers.”
The Florida REO sales impacted homes throughout the state, including Central and Northwest Florida, Southeast Florida and the West Coast. It’s still unclear if Pacifica agreed to rules regarding a future sale. NAR says it’s setting up a meeting with FHFA to find out more details.
“Going forward, FHFA, Fannie Mae and Freddie Mac may decide that we no longer need bulk sales to investors,” Sebree adds. “Florida buyers are coming out in force and many say they now face multiple bids and a limited inventory of homes to consider. If we do discover any problems with the current deal, it will hopefully be an isolated incident.”
Alan Zibel, a writer for The Wall Street Journal, thinks Fannie Mae may focus now on sales to single buyers because it’s more profitable. “In the second quarter of this year, (Fannie Mae) recovered 59 percent of outstanding mortgage balances” when it sold a REO, Zibel says, “compared to 54 percent a year earlier.”
© 2012 Florida Realtors®
Pacifica has not released details on how it will oversee the properties. Based in San Diego, the company’s website claims it has an office in Tampa, as well as Austin, Texas; Riverside, Calif.; and four cities in India.
Pacifica paid $12.3 million upfront in a joint venture agreement. It will pay an additional $49.3 million by sending Fannie Mae 90 percent of future proceeds. After that, Pacifica will collect a 20 percent management fee and pay Fannie Mae 50 percent of future proceeds. FHFA projects the total value of all payments to be $78.1 million. The total price paid by Pacifica doesn’t represent a significant discount; however, the relatively low downpayment and profit-split deal would make it attractive to most investors.
“When FHFA proposed this program, the nation was worried about an onslaught of distressed home sales and too few buyers,” says Florida Realtors’ Senior Vice President of Public Policy John Sebree. “However, NAR and Florida Realtors have always taken the position that Realtors know their neighborhoods and are in the best position to move REOs into the hands of buyers.”
The Florida REO sales impacted homes throughout the state, including Central and Northwest Florida, Southeast Florida and the West Coast. It’s still unclear if Pacifica agreed to rules regarding a future sale. NAR says it’s setting up a meeting with FHFA to find out more details.
“Going forward, FHFA, Fannie Mae and Freddie Mac may decide that we no longer need bulk sales to investors,” Sebree adds. “Florida buyers are coming out in force and many say they now face multiple bids and a limited inventory of homes to consider. If we do discover any problems with the current deal, it will hopefully be an isolated incident.”
Alan Zibel, a writer for The Wall Street Journal, thinks Fannie Mae may focus now on sales to single buyers because it’s more profitable. “In the second quarter of this year, (Fannie Mae) recovered 59 percent of outstanding mortgage balances” when it sold a REO, Zibel says, “compared to 54 percent a year earlier.”
© 2012 Florida Realtors®
Tuesday, July 24, 2012
Zillow says it’s official: Market hit bottom
SEATTLE – July 24, 2012 – Experts still question Zillow’s forecasts, but their latest one could convince skittish buyers to jump into the market: The company says its Zillow Home Value Index (ZHVI) rose on an annual basis for the first time since 2007 in the second quarter, increasing 0.2 percent year-over-year to $149,300. Zillow execs say a pattern of price increases indicates that the real estate market has hit bottom.
“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” says Zillow Chief Economist Dr. Stan Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.
Nearly one-third of metros in the ZHVI – 53 out of 167 – posted an annual increase in home values. The largest increase came in Phoenix, where home values are up 12.1 percent compared to the second quarter of 2011.
In a separate report that forecasts future home values, Zillow expects 67 of 156 markets to see value increases over the next year, with the largest increases expected in the Phoenix (9.9 percent) and Miami areas (6.1 percent). U.S. home values are expected to rise 1.1 percent.
“Of course, there is still some risk as we look down the foreclosure pipeline and see foreclosure starts picking up,” says Humphries. “This will translate into more homes on the market by the end of the year, but we think demand will rise to absorb that, particularly in markets where there are acute inventory shortages now. Looking forward, we expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity.”
© 2012 Florida Realtors
“After four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values,” says Zillow Chief Economist Dr. Stan Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.
Nearly one-third of metros in the ZHVI – 53 out of 167 – posted an annual increase in home values. The largest increase came in Phoenix, where home values are up 12.1 percent compared to the second quarter of 2011.
In a separate report that forecasts future home values, Zillow expects 67 of 156 markets to see value increases over the next year, with the largest increases expected in the Phoenix (9.9 percent) and Miami areas (6.1 percent). U.S. home values are expected to rise 1.1 percent.
“Of course, there is still some risk as we look down the foreclosure pipeline and see foreclosure starts picking up,” says Humphries. “This will translate into more homes on the market by the end of the year, but we think demand will rise to absorb that, particularly in markets where there are acute inventory shortages now. Looking forward, we expect home values to remain relatively flat as the market works through a backlog of foreclosures and high rates of negative equity.”
© 2012 Florida Realtors
Wednesday, June 27, 2012
NAR: Pending sales at two-year high
WASHINGTON June 27, 2012 – Pending home sales bounced back in May, matching the highest level in the past two years and well above year-ago levels, according to the National Association of Realtors® (NAR). Every region saw monthly and annual gains.
NARs Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.9 percent to 101.1 in May from 95.5 in April; and it’s 13.3 percent above May 2011 when it was 89.2. The data reflect contracts but not closings.
The index also reached 101.1 in March, which is the highest level since April 2010, though at that time, buyers were rushing to beat the deadline for the homebuyer tax credit.
“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR chief economist. “The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year, and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”
The national median existing-home price is expected to rise 3.0 percent this year and another 5.7 percent in 2013.
The PHSI in the Northeast increased 4.8 percent to 82.9 in May and is 19.8 percent above May 2011. In the Midwest, the index rose 6.3 percent to 98.9 in May and is 22.1 percent higher than a year ago. Pending home sales in the South increased 1.1 percent to an index of 106.9 in May and are 11.9 percent above May 2011. In the West the index jumped 14.5 percent in May to 108.7 and is 4.8 percent stronger than a year ago.
Pending home sales could be even higher, but low inventory could be holding back sales in some areas – a relatively new challenge.
“If credit conditions returned to normal, and if we had more inventory, especially in the lower price ranges, more people would become successful buyers,” Yun said. “In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process.”
Low inventory results partly from underwater homeowners who are unwilling to list their homes, which would require a lengthy short sale process or additional cash to complete the transaction. NAR estimates 85 percent of homeowners have positive equity, with 15 percent underwater.
“Low inventory can be cured by increasing new home construction,” Yun says. He projects housing starts to rise by 26 percent this year and another 50 percent in 2013.
“If housing starts do not rise in a meaningful way over the next two years due to the difficulty in getting construction loans, and barring an unexpected shift in the economy, the steady shedding of inventory could lead to shortages where home prices could get bid up close to 10 percent in 2013,” Yun said.
© 2012 Florida Realtors®
Monday, June 25, 2012
New home sales up, fastest pace in two years
WASHINGTON (AP) – June 25, 2012 – Americans bought new homes in May at the fastest pace in more than two years. The increase suggests a modest recovery in the housing market continues, despite weaker job growth.
The Commerce Department said Monday that sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That’s the best pace since April 2010, the last month that buyers could qualify for a federal homebuying tax credit.
Even with the gains, the pace is less than half the 700,000 that economists consider to be healthy.
Still, the increase follows other signs that suggest the housing market is rebounding nearly five years after the bubble burst.
Builders are slowing gaining confidence in the market and starting to build more homes. Mortgage rates have plunged to the lowest levels on record, making home buying more affordable. And sales of previously occupied homes are much higher than the same time last year.
Though new homes represent less than 20 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
The gains in new homes sold were concentrated in two regions of the country last month. Sales surged 36.7 percent in the Northeast and 12.7 percent in the South. Sales fell 10.6 percent in the Midwest and were down 3.5 percent in the West.
The median price of a new home sold in May edged down 0.6 percent from April to $234,500. But the price was 5.6 percent higher than the same month one year ago.
Sales of new homes are increasing despite a sluggish job market, which has slowed retail spending and business investment in computers and machinery. Some economists warned that the weaker job market has also started to affect some home sales.
Sales of previously occupied homes fell in May to a seasonally adjusted sales rate of 4.55 million after nearly touching a two-year high in April.
Still, sales have risen 9.6 percent from the same month last year.
Hiring slowed sharply in April and May, raising concerns about the strength of the recovery. Employers have added an average of only 73,000 jobs a month in April and May. That’s much lower than the average of 226,000 added in the first three months of this year.
Copyright © 2012 The Associated Press, Martin Crutsinger, AP economics writer.
The Commerce Department said Monday that sales of new homes increased 7.6 percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That’s the best pace since April 2010, the last month that buyers could qualify for a federal homebuying tax credit.
Even with the gains, the pace is less than half the 700,000 that economists consider to be healthy.
Still, the increase follows other signs that suggest the housing market is rebounding nearly five years after the bubble burst.
Builders are slowing gaining confidence in the market and starting to build more homes. Mortgage rates have plunged to the lowest levels on record, making home buying more affordable. And sales of previously occupied homes are much higher than the same time last year.
Though new homes represent less than 20 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
The gains in new homes sold were concentrated in two regions of the country last month. Sales surged 36.7 percent in the Northeast and 12.7 percent in the South. Sales fell 10.6 percent in the Midwest and were down 3.5 percent in the West.
The median price of a new home sold in May edged down 0.6 percent from April to $234,500. But the price was 5.6 percent higher than the same month one year ago.
Sales of new homes are increasing despite a sluggish job market, which has slowed retail spending and business investment in computers and machinery. Some economists warned that the weaker job market has also started to affect some home sales.
Sales of previously occupied homes fell in May to a seasonally adjusted sales rate of 4.55 million after nearly touching a two-year high in April.
Still, sales have risen 9.6 percent from the same month last year.
Hiring slowed sharply in April and May, raising concerns about the strength of the recovery. Employers have added an average of only 73,000 jobs a month in April and May. That’s much lower than the average of 226,000 added in the first three months of this year.
Copyright © 2012 The Associated Press, Martin Crutsinger, AP economics writer.
Monday, May 21, 2012
Bank of America offers relo assistance to short-sellers
Delinquent
borrowers must obtain preapproved short-sale price from bank
Bank of
America says it will provide up to $30,000 in relocation assistance to
delinquent borrowers who work with the bank to obtain a preapproved short-sale
price before submitting purchase offers.
Short
sales must be initiated by the end of this year and close by Sept. 26, 2013, to
be eligible for the payments, which will range from $2,500 to $30,000 at the
completion of a qualifying short sale. Payments will be determined on a
case-by-case basis using a calculation that includes the value of the home, amount
owed and other considerations, Bank of America said in announcing the program.
The
program -- based on a similar incentive offer Bank of America tested last year
in Florida -- will be available nationally. But Bank of America anticipates the
greatest response will come from borrowers in California, Nevada, Arizona,
Florida, and other states hit hardest by the economic downturn and falling
property values.
Customers
who believe they may be eligible for Bank of America's short-sale relocation
assistance program may contact program specialists at (877) 459-2852.
Qualifying short sales that have already started but have not closed may be
eligible for the program.
Bank of
America says its short-sale initiatives have generated 200,000 short sales in
the last two years and another 30,000 in the first three months of this year.
Last
month, Bank of America announced it was shortening decision times on short-sale
offers to 20 days, down from 45 days or longer.
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