Buyers Will Pay Extra for These Features

Daily Real Estate News | Monday, April 29, 2013

Some home shoppers say they are willing to spend thousands of dollars above the price of the home in order to have certain interior features.
The most coveted home features tend to center around the kitchen, such as stainless steel appliances and a kitchen island, says Errol Samuelson, president of realtor.com.
24/7 Wall St. used data from the National Association of REALTORS® to determine some of the most desired home features. Here are eight features that made the list and how much extra, on average, buyers say they’re willing to pay for having that feature in a home:

• Central air conditioning: $2,520
• New kitchen appliances: $1,840
• Walk-in closet in master bedroom: $1,350
• Granite countertops: $1,620
• Hardwood floors: $2,080
• Ensuite master bath: $2,030
• Kitchen island: $1,370
• Stainless steel appliances: $1,850

Source: “11 Home Features Will Pay Extra For,” 24/7 Wall St. (April 28, 2013)

Best Time to Sell? More Americans Say 'Yes'

 

Daily Real Estate News | Friday, April 26, 2013

Seller confidence is surging: The number of home sellers who say now is a good time to sell doubled in the second quarter, according to a new survey of nearly 2,000 owners conducted by real estate brokerage Redfin. In the first quarter of 2013, 22 percent surveyed said it was a good time to sell compared to 45 percent in the second quarter.
The percentage of respondents who say now is a good time to buy dropped by 10 percent in that time frame. Forty-four percent of home owners say it's a good time to buy, compared to 54 percent in the first quarter.
"More folks who bought before the bubble burst are now above water and listing their homes," says Chad Dierickx, a real estate practitioner with Redfin. "When sellers see their neighbors' homes selling quickly and for prices they never would have imagined a couple of years ago, they can't help but be optimistic about the market."
Nearly 32 percent of home owners surveyed said they have no concerns about selling right now. Eighty-five percent of sellers say they believe home prices will rise in their area for the next year — up from 81 percent in the first quarter, according to the survey.

Source: Redfin

Barclays: Home Prices to Rise 10% This Year

 

Daily Real Estate News | Thursday, April 25, 2013

Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive.
Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets.
About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes. “But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”

Source: “The Housing Market: Not Your Analyst’s Oldsmobile?” The Wall Street Journal (April 23, 2013)

March Existing-Home Sales Slip Due to Limited Inventory, Prices Maintain Uptrend

 

Daily Real Estate News | Tuesday, April 23, 2013

Existing-home sales eased in March from inventory constraints, which continued to pressure home prices, according to the National Association of REALTORS®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.6 percent to a seasonally adjusted annual rate of 4.92 million in March from a downwardly revised 4.95 million in February, but remain 10.3 percent higher than the 4.46 million-unit pace in March 2012.
Sales have been above year-ago levels for 21 consecutive months, while prices show 13 consecutive months of year-over-year price increases.
Lawrence Yun, NAR chief economist, said there is more demand than supply in the current market. “Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity,” he said. “In the same timeframe housing inventories have trended much lower, which is continuing to pressure home prices. The good news is home construction is rising and low mortgage rates are continuing to keep affordability conditions at historically favorable levels. The bad news is that underwriting standards remain excessively tight, while renters are getting squeezed by higher rents.”
Total housing inventory at the end of March increased 1.6 percent to 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace, up from 4.6 months in February. Listed inventory remains 16.8 percent below a year ago when there was a 6.2-month supply.
“The inventory improvement last month results from a seasonal gain, but conditions continue to broadly favor sellers. We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers, but it’s unlikely we’ll get there without greater increases in housing construction,” Yun said.
The national median existing-home price for all housing types was $184,300 in March, which is 11.8 percent higher than March 2012. The March increase is the strongest since November 2005 when it rose 12.9 percent from a year earlier, and the last time there were 13 consecutive months of year-over-year price increases was from May 2005 to May 2006.
Distressed homes – foreclosures and short sales – accounted for 21 percent of March sales, down from 25 percent in February and 29 percent in March 2012. Thirteen percent of March sales were foreclosures, and 8 percent were short sales. Foreclosures sold for an average discount of 15 percent below market value in March, while short sales were discounted 13 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.57 percent in March from 3.53 percent in February; it was 3.95 percent in March 2012.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said homes are selling much faster. “The typical home sold in March was on the market for one month less than it took to sell a year ago,” he said. “Multiple bidding is becoming more common, and more homes are selling above the asking price, so buyers need to move quickly and follow their REALTOR®’s advice for contingencies when making contract offers.”
The median time on market for all homes was 62 days in March, down from 74 days in February and is 32 percent below 91 days in March 2012. Short sales were on the market for a median of 81 days, while foreclosures typically sold in 46 days and non-distressed homes took 66 days. Thirty-seven percent of all homes sold in March were on the market for less than a month.
First-time buyers accounted for 30 percent of purchases in March, unchanged from February; they were 33 percent in March 2012.
All-cash sales were at 30 percent of transactions in March, down from 32 percent in February; they were 32 percent in March 2012. Individual investors, who account for most cash sales, purchased 19 percent of homes in March, down from 22 percent in February; they were 21 percent in March 2012.
Single-family home sales slipped 0.2 percent to a seasonally adjusted annual rate of 4.32 million in March from 4.33 million in February, but are 9.1 percent above the 3.96 million-unit level in March 2012. The median existing single-family home price was $185,100 in March, up 12.1 percent from a year ago.
Existing condominium and co-op sales fell 3.2 percent to an annualized rate of 600,000 units in March from 620,000 in February, but are 20.0 percent higher than the 500,000-unit pace a year ago. The median existing condo price was $178,900 in March, which is 10.4 percent above March 2012.
Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 630,000 in March and are 6.8 percent above March 2012. The median price in the Northeast was $237,000, up 3.0 percent from a year ago.
Existing-home sales in the Midwest rose 1.8 percent in March to a pace of 1.16 million and are 14.9 percent above a year ago. The median price in the Midwest was $141,800, up 7.8 percent from March 2012.
In the South, existing-home sales slipped 1.5 percent to an annual level of 1.95 million in March but are 12.7 percent above March 2012. The median price in the South was $161,700, which is 10.4 percent above a year ago.
Existing-home sales in the West declined 1.7 percent to a pace of 1.18 million in March but are 4.4 percent above a year ago. With notably constrained inventory conditions, the median price in the West rose to $258,100, up 26.1 percent from March 2012.

Source: National Association of REALTORS®

New-Home Sales Show 'Resilience'

Daily Real Estate News | Wednesday, April 24, 2013

New-home sales rose 1.5 percent in March, and economists predict more increases ahead as housing likely remains a consistent driver of economic growth this year, The Associated Press reports.
"With increasing signs of a softer U.S. economy springing up in the spring, we can take comfort in the resilience of the housing recovery," Jennifer Lee, senior economist at BMO Capital Markets, told The Associated Press. Record low mortgage rates and steady job creation are attributed to helping lifting home sales.
The Commerce Department reported Tuesday that sales of new homes reached a seasonally adjusted annual pace of 417,000 in March. The pace marks an 18.5 percent gain compared to last year, but the numbers are still far below the 700,000 pace that most economists consider healthy for the sector.
"At this point, we are about halfway back to what would be considered a 'normal' level of sales activity as challenges related to supplies of credit, building materials, lots, and labor are slowing the pace at which builders can build and sell new homes,” says David Crowe, chief economist for the National Association of Home Builders.
Regionally, new-home sales rose the most in the Northeast by 20.6 percent in March, followed by a 19.4 percent gain in the South. Sales dropped 20.9 percent in the West and fell by 12.1 percent in Midwest, the Commerce Department reported.
Inventories of new homes remain tight, but did rise 2 percent in March, marking a second consecutive monthly gain. Inventories are at about a 4.4 month supply at the current sales pace.
The tight inventories are causing home prices to rise. The median price of a new-home increased to $247,000 in March -- 3 percent higher than a year ago.
The low inventories are spurring more construction of homes, with homebuilders having started work on more than 1 million new homes and apartments in March.

Source: “New-Homes Sales Rose in March,” The Associated Press (April 23, 2013) and the National Association of Home Builders

Supply of Homes Keeping Pace With Sales

Daily Real Estate News | Monday, April 22, 2013

In 21 of the 24 major metro markets, new listings are outnumbering new sales contracts, according to the real estate brokerage ZipRealty in its latest market report.
The supply of homes may “finally start to keep pace with frenzied buyer activity,” says Lanny Baker, ZipRealty CEO.
In Los Angeles, for example, there were 16,170 homes for-sale from mid-February to mid-March. During that same time period, there were 9,533 homes under sales contract.
However, new pending sales continue to outnumber new listings in Las Vegas, Raleigh, N.C., and Washington, D.C., according to ZipRealty’s report.
The supply of homes for sale was at 4.7 months in February, according to National Association of REALTORS® data. A 6-month to 7-month supply is considered more balanced.
The tight supply is leading to higher home prices and homes that are selling faster. About a quarter of the homes listed for sale in the following markets are selling in less than seven days: Las Vegas; Orange County, Calif.; Sacramento, Calif.; Denver; Washington, D.C.; Seattle; and Austin, Texas.
Source: “Supply of homes starts to catch up with sales,” USA Today (April 20, 2013)

Spring Home Improvements: Repair, Replace, Enjoy!

Spring Home Improvements: Repair, Replace, Enjoy!

With memories of snow and cold fading, it’s time to remind home owners to take stock of important work to be done for themselves and potential buyers down the road. Keeping on track with seasonal maintenance will lower costs and raise value.

April 2013 | By Barbara Ballinger

Besides cleaning closets and planting flowers and cool-weather vegetables, spring should involve scrutinizing the condition of a house following the rough winter. Repairs and replacements won’t just help owners enjoy their properties more; they’ll also keep energy costs down as hot weather rolls in and attract more buyers, many of whom have become meticulous about inspecting roofs, appliances, and HVAC bills.

While most home owners need to prioritize costs, these 10 improvements are at the top of many contractors’ lists. Some of them are even more affordable than ever before, thanks to rebates from local communities, utility companies, and the federal government.

1. Replace windows

If home owners’ houses felt drafty this past winter and they have single-pane windows, there’s a good chance those were one of the culprits. But replacing them all can be costly — $400 to $500 per window, plus $100 to $150 for installation, according to home improvement expert Tom Kraeutler of The Money Pit. Whether that’s the place to spend dollars should depend on how long home owners plan to stay put or what houses listed in their neighborhood offer if they’re selling. “If they’re the last ones with old, rotting-wood windows, that negative may affect buyer attention,” Kraeutler says. This year’s “Cost vs. Value” report from Remodeling magazine pegs the payback for vinyl windows at 71.2 percent and for wood windows at a similar 73.3 percent. A less costly alternative can be to add storms, caulk, weather strip, or rim joists in a basement. Contractor Paul Eric Morse of Morse Constructions Inc. in Somerville, Mass., suggests gradually replacing windows in any room that owners remodel to make the cost less prohibitive.
2. Install a new heating system and change filters

If a seller’s furnace and boiler were on their last legs this past winter, it may be time to install a new one, or at least provide sellers with a credit toward new equipment. Any choice should carry an EnergyStar label for best results. Existing systems still in good condition should have filters checked monthly and replaced when dark and clogged, a DIY project. For great energy efficiency, Morse is installing more heat exchanges that provide both heat and air conditioning and can be less costly than a new central air system with new ducting and a new furnace.

3. Clean air conditioning units

Before summer temperatures rise and HVAC pros are swamped, advise home owners to clean coils and change filters so their system doesn’t have to work as hard. They should also have drain lines cleaned, so moisture is eliminated, says Douglas Tompkins, with Pro-Air Heating and Cooling in Newburgh, N.Y. If they haven’t had air conditioning, now’s the time to weigh choices of a central system, heat exchange, or room units.

4. Install more insulation

A home’s first line of defense to stop cold or hot air — depending on the season — should be the attic, according to most contractors. An energy audit can determine how much more is needed, if they already have some. Seattle-based contractor Ron Rice, of Your House Matters, suggests adding more than the minimum 8 inches required by most local codes — up to 16 inches. For cold climates, installing electric or hydronic radiant heat under bathroom and kitchen floors will provide comfort next season.

5. Switch out inefficient appliances

Sometimes appliances are no longer smart to repair. The determining factors for that should be their age and the cost of repair versus replacement. Here, too, top choices carry an EnergyStar label. If home owners need to replace most of their kitchen equipment and have a limited budget or plan to move, Rice suggests they prioritize and first switch out the range, followed by the refrigerator, dishwasher, and microwave — in that order.

6. Repair or replace roofs, gutters, and downspouts

Because of the tough hurricane season last fall and the winter blizzards, roofing contractors in many parts of the country have been busy. Morse recommends that those needing new roofs consider architectural asphalt shingles because of their long warranties (often 50 years), affordable prices, and attractive appearances that work with many house styles. In addition, many contractors have the equipment and experience to install roofs of this material, as opposed to metal. He also recommends that home owners have gutters and downspouts cleaned come spring so that water can flow through them; gutters should be angled away from a house to stop water pooling around a foundation and seeping into the basement. Gutter covers can be helpful but often don’t eliminate all debris.

7. Paint

Damage often shows up at this time of year, especially in climates where there’s been a lot of snow melting or winter rains, Morse says. Use the time to reassess your color choice for better curb appeal. Even changing the front door’s color can make a difference.

8. Prune trees

Cutting limbs that may have been damaged during winter and that might fall on a roof or allow squirrels to enter a house is smart, and it can be a cost savings later on. Called “thinning out,” this method gets excess foliage trimmed to allow more natural light into a house—and cut down on artificial illumination, says Sacramento, Calif.-based landscape designer Michael Glassman. “It opens the tree so you don’t have dead spots in the interior and lets the tree take advantage of air flow rather than chop off the top,” he says. A certified arborist will know the best ways to do this without removing too much of a canopy, which is useful for privacy and shade.

9. Mulch plantings

Along with fall, spring is a key mulch time. Mulch helps plants thrive by holding back weeds, retaining moisture so soil doesn’t dry out, and adding a tidy look, Glassman says. Use bark, shredded fir, leaves, straw, or grass clippings.

10. Replace lightbulbs

When it comes to artificial light, most contractors recommend switching burned-out bulbs to LEDs, which last longer than incandescents, consume less energy, and have come down in price — now often just $10. Quality has improved, too, and they’re dimmable and available in colors.

One more thing: Before you hire anybody to take on work, get a written estimate. Better to be safe than sorry.

Nationwide Open House Happening This Weekend

 

Daily Real Estate News | Friday, April 19, 2013

With the housing recovery heating up and spring selling season in full swing, housing experts are expecting big crowds at open houses that will be held coast to coast this weekend.
The Nationwide Open House, April 20-21, sponsored by the National Association of REALTORS® (NAR), will feature open houses across the country.
Forty-five percent of recent home buyers report they’ve used open houses in their home search as a way to narrow down their choices, according to data from NAR.
Top Producer and realtor.com® have teamed up to help real estate agents get more potential buyers to their open house as well as providing materials to help with follow-up after the open house. Realtor.com® announced that it would post any REALTOR® open house for free on its site and mobile applications. The companies also offer an Open House Productivity package for brokers and agents at topproducer.com/openhouse.

To help prepare for your open house, read 6 Ways to Capture Clients at Open Houses.


By REALTOR® Magazine Daily News

10 Most Popular Relocation Destinations

 

Daily Real Estate News | Thursday, April 18, 2013

Houston seems to be the place that the largest number of people want to be, according to a new data by the moving company U-Haul that shows relocation trends of the most popular moving destinations. It was the fourth year in a row that Houston has topped the list.
U-Haul based its rankings on one-way truck rentals from January 2012 to December 2012. The study revealed the following top 10 destination cities for moves in 2012:

1. Houston

2. Orlando

3. Chicago

4. Las Vegas

5. San Antonio

6. Austin, Texas

7. Brooklyn, N.Y.

8. Philadelphia

9. Kansas City, Mo.

10. Sacramento, Calif.

Source: “Houston Is U-Haul's Most Popular Relocation Destination,” AOL Real Estate (April 17, 2013)

Builders Step Up Construction Due to Rising Demand

Daily Real Estate News | Wednesday, April 17, 2013

Homebuilders broke ground on homes in March at the fastest pace since June 2008, mostly fueled by a surge in apartment construction, the Commerce Department reports. Housing starts rose 7 percent in March from February, reaching the seasonally adjusted rate of 1.04 million.
Homebuilders have ramped up production as buyers rush to take advantage of continued housing affordability due to low mortgage rates.
The pace of homebuilding in March was nearly 46 percent higher compared to the same time last year.
Apartment construction led housing starts in March, soaring 31.1 percent, while single-family home construction dropped 4.8 percent.
The recent data “is a reflection of the solid demand that many areas are seeing for rental apartments as young people take that first step into the housing market, which is a very positive development," says Rick Judson, chairman of the National Association of Home Builders. "The numbers are also in keeping with our latest surveys that show single-family builders are experiencing some difficulties in keeping up with rising demand for new homes due to increasing construction costs and other factors."
Regionally, housing starts dropped 5.8 percent in the Northeast. However, the rest of the country showed strong gains, including a 10.9 percent increase in the South, 9.6 percent gain in the Midwest, and a 2.7 percent rise in the West.
Building permits -- a gauge for future home construction -- fell 3.9 percent in March, after having reached a five-year high in February.
Source: “U.S. Housing Starts Surpass 1 Million in March,” The Associated Press (April 16, 2013) and the National Association of Home Builders

Downsizing Baby Boomers Head to Urban Areas

 

Daily Real Estate News | Tuesday, April 16, 2013

Home prices in urban areas have not fallen by as much the last few years as they have in the suburbs. And prices in urban areas are recovering much faster too, according to John McLain of the Urban Land Institute. Why? Some say it’s because of new moving patterns among the baby-boomer generation.
An increasing number of baby boomers are reportedly leaving their big homes in the suburbs and heading to urban areas for retirement, drawn by walkability, proximity to public transportation, diversity, and being closer to their children.
"[Boomers] want to buy something that's secure, and it's been pretty well demonstrated that suburban housing is not as secure an asset as anyone thought it was or that it used to be," McClain said.
Developers are taking note of the trend and beefing up construction in urban centers. Condos and apartments near downtown areas are popping up to accommodate more baby boomers.
The nation’s largest home builders are still investing in active-adult communities in the suburbs but confidence in the sector has been recovering at a much slower rate than the overall housing market, according to the National Association of Home Builders.
"The idea of living out in the suburbs, just with older people, has really disappeared," McClain says.

Source: “Boomers to Blame for Rising Urban Home Prices,” CNBC (April 13, 2013)

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Are Home Prices Rising Too Fast?

Daily Real Estate News | Monday, April 15, 2013

Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordable again if the price increases outpace income growth, The Wall Street Journal reports.
Average housing costs for home buyers who took out a mortgage were around 22.5 percent of average incomes, according to John Burns Real Estate Consulting. That is down from 38.5 percent in 2006, the peak of the housing bubble. The historical average is about 33 percent.
But with home prices rising in many markets and, in some, rising at a faster pace than income levels, will more people soon be priced out of the market?
Housing analysts say that, for now at least, lower mortgage rates are offsetting the higher prices of homes.
Borrowers have seen their purchasing power rise by around 33 percent over the past four years due to the low interest rates, The Wall Street Journal reports. For example, a borrower can make a $1,000 monthly mortgage payment and qualify for a $222,000 mortgage at today’s low interest rates, compared to 2008 when they’d likely qualify for $165,000 when mortgage rates were around 6.1 percent -- nearly double what they are today.
Borrowers are able to withstand home-price increases because of the low rates, not because household incomes are growing, The Wall Street Journal reports. If mortgage rates tick back up to the 6 percent or 8 percent range, homes may look overpriced relative to incomes, according to housing analysts.
Source: “Why Rising Interest Rates Could Eventually Curb Price Gains,” The Wall Street Journal (April 10, 2013)

How to Sell More Homes This Spring

Daily Real Estate News | Friday, April 12, 2013

With bidding wars on the rise, interest rates expected to slip, and home sales increasing this spring, real estate professionals need to position themselves to succeed in the current market.
To secure more listings, they should engage in strategic networking, focusing on their farm area, and attending community meetings and events. They also should call past clients for referrals, cold call to secure new clients, ensure that the message they deliver to their target audience creates an urgency to sell, and revamp their seller presentations to take current market conditions into account.
Meanwhile, buyer’s agents need to inform clients about what to expect in a market where sellers have numerous offers from which to choose, stress the need for them to be flexible with higher down payments or a willingness to deal with sellers’ preferences, and ensure that clients are pre-approved to give them an edge in the seller’s market. Additionally, they should create a buyer presentation with a customizable guide to help house hunters compete for properties.
Source: “How to Sell More Homes This Spring,” Housing Wire (April 10, 2013)

Survey: Lenders More Upbeat About Housing Recovery

Daily Real Estate News | Wednesday, April 10, 2013

Lenders are more optimistic about the direction of the housing recovery, with 71 percent recently surveyed saying home prices are “rising at a sustainable pace,” according to a quarterly survey of U.S. bank professionals conducted by FICO.
Nearly 60 percent of the bankers surveyed say they expect the supply of credit for residential mortgages to meet demand over the next six months.
What’s more, 39 percent say they expect mortgage delinquencies to fall in the next six months, while 45 percent of those surveyed say they expect delinquencies to remain flat. According to FICO, that represents the most optimistic data on delinquencies in the 12 quarters since the survey began.
"The latest survey results, combined with data that indicates the real estate market is improving in many regions, paint a positive picture for a sector of the economy that has been slow to join the recovery," says Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. "Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn't be surprised to see lenders cautiously expanding their mortgage and home-equity lending businesses."
Source: FICO

Rising Student Loan Debt Keeps Buyers Out

Daily Real Estate News | Tuesday, April 09, 2013

Between 2004 and 2012, student loan balances nearly tripled, according to a new survey from the Federal Reserve Bank of New York. What’s more, one-third of student loan borrowers are delinquent on their debt, according to the Federal Reserve report. This will impact their credit rating and possibly keep them out of the mortgage market much longer.
"Short term, you see a decrease in the number of first-time home buyers," Brian Coester of Coester Valuation Management told CNBC. "You're going to see somebody who would have been able to afford a more expensive house maybe go for the lower version or the downgraded version."
Potential buyers with heavy student debt burden have been forced to rent or even move back in with their parents as they chip away at their debt.
"Long term it's going to really affect especially the upper end, because people aren't going to have the excess income to buy the jumbo property or buy that high end property," says Coester. "It' s going to affect home prices as a negative, as more of a cap, because it's really debt that they are servicing."
Source: “Student Debt Is Housing’s $1 Trillion Challenge,” CNBC.com (April 8, 2013)

Buyers of Foreclosures Need to Act Fast

Daily Real Estate News | Monday, April 08, 2013

Foreclosures are being listed at far less than what they likely eventually will sell for -- a marketing strategy that generates high interest and multiple bids, some say. As such, buyers of foreclosures need to be prepared to move quickly and come up with a lot more money.
For example, Liz Sidorowicz, a real estate professional with RE/MAX Signature, says she helped her client submit an offer for a foreclosure in Mount Prospect, Ill., for $421,000. The home was listed for $350,000, but her client still lost out to a higher bid.
"I managed to win one out of five last week, but we overbid significantly," Sidorowicz told The Chicago Tribune. "We got the unit and then it didn't appraise. So we have to come up with more money down to make the deal fly."
Some home buyers who bid on foreclosures have to learn the hard way just how competitive snagging a foreclosure bargain can be.
"The consumer gets burned on a house they really like once or twice," Michael Goodwin, an agent at Exit Real Estate Partners, told The Chicago Tribune. "After that happens, they get war-hardened. The next time they are ready to pounce. Not very often does it wind up being the first house. It takes them getting slapped in the face."
Source: “Buying foreclosures requires patience, and a little more money,” The Chicago Tribune (April 5, 2013)

Get Ready for Big Bidding Wars This Spring

Daily Real Estate News | Friday, April 05, 2013

With tighter inventories of homes for sale, buyers are finding increased competition through bidding wars. But the bidding may not be between only one or two other buyers -- more bidding wars are popping up where dozens or even hundreds of other buyers are all competing for the same property.
"The only question is not whether a new listing will get multiple bids but how many it will get," Kris Vogt, who manages Coldwell Banker offices in the Sacramento area, told CNNMoney.
For example, a home in Elk Grove, Calif., reportedly received 62 separate bids, with the final sales price more than $150,000 above its $129,000 asking price. In Cambridge, Mass., real estate brokers stopped accepting bids after the tally reached 250 bids for two condos listed at $800,000 each. The two condos ended up selling together for $2 million.
Seventy-five percent of real estate agents with the brokerage Redfin surveyed in March say their clients have faced multiple bid situations for properties -- up from 56 percent in late 2011.
Bidding wars appear to be most prevalent in California. Ninety percent of homes sold in San Francisco, Sacramento, and throughout Southern California saw multiple bids during the month, CNNMoney reports. What’s more, at least two-thirds of listings in Boston, Washington, D.C., Seattle, and New York had bidding wars for homes too.
Meanwhile, inventories of for-sale homes continues to be low. The National Association of REALTORS® reported a 19.2 percent drop in inventories year-over-year in February.
Source: “The home bidding wars are back!” CNNMoney (April 4, 2013)

Home Prices Pick Up at Fastest Pace in 7 Years

Daily Real Estate News | Thursday, April 04, 2013

Home prices nationwide, which includes distressed sales, soared 10.2 percent year-over-year, according to CoreLogic’s February report. It’s the largest year-over-year increase in home prices since March 2006. It also marks the twelfth consecutive monthly increase in national home prices, according to CoreLogic’s report.
When excluding distressed sales, home prices rose 10.1 percent year-over-year in February, according to CoreLogic.
“Nationally, home prices improved at the best rate since mid-2006, marking a full year of annual increases and underscoring the ongoing strengthening of market fundamentals,” says Anand Nallathambi, president and CEO of CoreLogic.
CoreLogic predicts that home prices -- excluding distressed sales -- will likely rise 11.4 percent year-over-year from March 2012.
“The rebound in prices is heavily driven by western states,” says Mark Fleming, CoreLogic’s chief economist. “Eight of the top ten highest appreciating large markets are in California, with Phoenix and Las Vegas rounding out the list.”
The five states with the highest price appreciation as of February 2013, according to CoreLogic, were:

• Nevada (+19.3%)
• Arizona (+18.6%)
• California (+15.3%)
• Hawaii (+14.6%)
• Idaho (+13.5%)

Source: CoreLogic

First-Time Home Buyers: This Spring's 'Wild Card'?

Daily Real Estate News | Wednesday, April 03, 2013

First-time home buyers represented the fastest growing segment of home purchasers for January and February, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
Meanwhile, current home owners looking to move up posted the largest drop in market share in the month, dropping to the lowest market share recorded of current home owners since last June.
Current home owners make up 42.5 percent of the market share, while first-time home buyers share climbed to 34.5 percent of home purchase transactions in February, based on a three-month moving average. First-time home buyers posted its second monthly increase, after reaching a four-year survey low of 32.9 percent in December.
The survey showed that first-time home buyer traffic reached a four-year high in February.
“First-time home buyers are the wildcard in the upcoming spring-summer home buying season,” says Thomas Popik, research director for Campbell Surveys. “We see strong first-time homebuyer traffic, but it’s still not clear that the traffic will translate into increased purchases, because first-time home buyers are dependent on low-down-payment financing, such as FHA mortgages, and announced FHA program changes will take effect this spring.”
Current home owners are expected to increase their home purchases this spring, with the survey measuring a big jump in home buyer traffic among this group of buyers too.
Also, investors’ share of home purchases climbed to a four-month high in February, accounting for 34.5 percent of transactions.
Source: Campbell/Inside Mortgage Finance HousingPulse Tracking Survey

Vacation-Home Sales Up in 2012

Daily Real Estate News | Tuesday, April 02, 2013

Vacation-home sales improved in 2012, while investment purchases remained elevated for a second consecutive year, according to the National Association of REALTORS®.
The association’s 2013 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2012, shows vacation-home sales rose 10.1 percent to 553,000 from 502,000 in 2011. Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011.
Vacation-home sales accounted for 11 percent of all transactions last year, unchanged from 2011, while the portion of investment sales was 24 percent in 2012, down from 27 percent in 2011, marking the second-highest share since 2005.

What’s Driving the Recovery?

NAR Chief EconomistLawrence Yunsaid favorable conditions are driving second-home sales. “We had a strong stock market recovery, which helps more people in the prime ages for buying vacation homes. Attractively priced recreational property is also a big draw,” he said.
Yun also noted an ongoing investor presence. “Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” he said. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”
The median investment-home price was $115,000 in 2012, up 15.0 percent from $100,000 in 2011, while the median vacation-home price was $150,000, compared with $121,300 in 2011, reflecting a greater number of more expensive recreational property sales in 2012.
All-cash purchases remain common in the investment- and vacation-home market: Half of investment buyers paid cash in 2012, as did 46 percent of vacation-home buyers. Forty-seven percent of investment homes purchased in 2012 were distressed homes, as were 35 percent of vacation homes.
Of buyers who financed their purchase with a mortgage in 2012, large down payments remain typical. The median down payment for both investment- and vacation-home buyers was 27 percent, the same as in 2011.

Buyer Info

Investment-home buyers in 2012 had a median age of 45, earned $85,700 and bought a home that was relatively close to their primary residence — a median distance of 21 miles, although 29 percent were more than 100 miles away. Thirty-five percent of investment buyers purchased more than one property.
“Property flipping modestly increased in in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.”
Six percent of homes purchased by investment buyers last year have already been resold, and another 8 percent are planned to be sold within a year. In the 2011 study, 5 percent of investment homes were already resold, and 8 percent were planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of eight years, up from five years in 2011.
Seventy-eight percent of all second-home buyers said it was a good time to buy, compared with 68 percent of primary-residence buyers. “This suggests that second-home buyers tend to be a step ahead of general buyers in sensing a market recovery,” Yun said.
The typical vacation-home buyer was 47 years old, had a median household income of $92,100 and purchased a property that was a median distance of 435 miles from their primary residence; 34 percent of vacation homes were within 100 miles and 46 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
Buyers listed many reasons buyers for purchasing a vacation home: 80 percent want to use the property for vacations or as a family retreat, 27 percent plan to use it as a primary residence in the future, 23 percent plan to rent to others and 23 percent wanted to diversify their investments or saw a good investment opportunity.
Fifty-five percent of investment buyers said they purchased for rental income, 30 percent wanted to diversify their investments or saw a good investment opportunity, and 20 percent wanted to use the home for vacations or as a family retreat.
Eleven percent of vacation buyers and 16 percent of investment buyers purchased the property for a family member, friend, or relative to use — often for a son or daughter who is attending school.

Nationwide Performance

Forty-five percent of vacation homes purchased last year were in the South, 25 percent were in the West, 17 percent were in the Northeast, and 12 percent were in the Midwest.
Thirty-six percent of investment properties purchased last year were in the South, 28 percent were in the West, 20 percent were in the Northeast, and 16 percent were in the Midwest.
Forty-seven percent of investment buyers said they were likely to purchase another investment property within two years, as did 37 percent of vacation-home buyers. Twenty-nine percent of vacation buyers said they were likely to purchase another vacation home within two years, as did 31 percent of investment buyers.
Approximately 42.8 million people in the U.S. are ages 50-59 — a group that dominated second-home sales in the middle part of the past decade and established records. An additional 43.1 million people are 40-49 years old, which is the prime age for current buyers, while another 40.1 million are 30-39.
NAR’s analysis of U.S. Census Bureau data shows there are 7.9 million vacation homes and 43.7 million investment units in the U.S., compared with 75.2 million owner-occupied homes.
Source: NAR

'Zombie' Foreclosures Haunt Housing Market

Daily Real Estate News | Monday, April 01, 2013

A new study finds that 301,874 “zombie” homes—properties where home owners receive foreclosure notices and move out, leaving the home vacant and deteriorating—exist in the U.S.
The state with the highest number of “zombie” properties is Florida, with 90,556 vacant homes in foreclosure, according to data by RealtyTrac, in their first analysis of “zombie” properties. Illinois ranks second with 31,668 “zombie” properties and California ranks third with 28,821.
However, Kentucky leads overall in percentage of zombie properties; abandoned homes represent 54 percent of Kentucky’s total foreclosure inventory. Abandoned foreclosures also represent 50 percent or more of the properties in foreclosure in Washington, Indiana, Nevada, and Oregon, according to RealtyTrac.
In January, Reuters reported a problem with “zombie” titles—home owners who received a foreclosure notice and walked away from their home but did not realize their names remained on the deed and they were still financially liable for the property. In some cases, the banks never ultimately pursued the foreclosure, but the home owners were unaware of that since they already had moved out.
RealtyTrac counted any property that had been in foreclosure longer than the state average and that showed no significant recent activity on it as a “zombie” property in its report.
"I think the empty foreclosures is less of a long-term threat but it certainly is affecting individual communities and neighborhoods," says Daren Blomquist, RealtyTrac’s vice president.
Source: “More than 300,000 homes are foreclosed ‘zombies,’ study says,” Reuters (March 28, 2013)