Wednesday, May 22, 2013
“Buyer demand is rising, but the inventory of homes continues to be tight in many areas across Florida,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “That’s putting some upward pressure on prices. April is the 16th month in a row that we’ve seen the statewide median sales prices increase year-over-year for both single-family homes and for townhome-condo properties.
“In another positive sign for Florida’s housing market, sellers received over 93 percent of their original listing price in April, whether they were selling a single-family home or a condo. Now is a good time for sellers who have been waiting on the sidelines to enter the market.”
Statewide closed sales of existing single-family homes totaled 20,662 in April, up 17.4 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.
Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 31.9 percent over the previous April. The statewide median sales price for single-family existing homes last month was $165,000, up 14.2 percent from the previous year.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in March 2013 was $185,100, up 12.1 percent from the previous year. In California, the statewide median sales price for single-family existing homes in March was $378,960; in Massachusetts, it was $290,000; in Maryland, it was $241,413; and in New York, it was $220,000.
The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.
Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 11,183 units sold statewide last month, up 13.6 percent compared to April 2012. Meanwhile, pending sales for townhouse-condos last month increased 22.7 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $128,000, up 16.4 percent over the previous year. NAR reported that the national median existing condo price in March 2013 was $178,900.
The inventory for single-family homes stood at a 5.2-months’ supply in April; inventory for townhouse-condos was at a 5.6-months’ supply, according to Florida Realtors.
“To a certain extent, the real estate story remains the same: prices and sales are up and inventory is low,” said Florida Realtors Chief Economist Dr. John Tuccillo. “We are also seeing a continued stabilization of the distressed property market with short sales down, and foreclosure and REO (real estate owned) sales essentially unchanged. But there is also a bit more to the story.”
He explained, “Because the government is selling foreclosed properties in bulk and also using online auctions, our sales numbers actually understate the vigor of the market. The increased importance of government sales in this market is reflected in the continuing fall in inventory in MLS listings.” MLS stands for multiple listing service.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.45 percent in April 2013; lower than the 3.91 percent average during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors Media Center and look under Latest Releases, or download the April 2013 data report PDFs under Market Data.
© 2013 Florida Realtors®
Friday, May 10, 2013
According to the Zillow Mortgage Marketplace survey of first-time homebuyers, they answered one-third (32.5 percent) of the questions about basic mortgage information incorrectly.
For example, one-third (34 percent) of first-time homebuyers don’t realize it’s possible to get a home loan with a downpayment less than 5 percent.
Many first-time buyers also don’t understand how to secure the best possible interest rate and loan terms. One-quarter (26 percent) incorrectly believe they’re obligated to close their loan with the lender that pre-approved it; and, separately, 24 percent incorrectly believe that the best interest rates and fees can always be found through the bank they currently use.
Additionally, one-third of buyers (34 percent) believe all lenders are required by law to charge the same fees for credit reports and appraisals, even though it’s best to shop multiple lenders to compare rates and fees.
Confusion also reigns after the home sale. Almost half (47 percent) of current homeowners believe they must wait at least one year between refinancing.
“All too often buyers focus on negotiating a lower home price and ignore the importance of finding the right loan,” says Erin Lantz, director of mortgages for Zillow. “If a homebuyer can lower their interest rate by even half a percentage point, they can not only increase their purchasing power, but save thousands of dollars over the life of the loan.”
Additional survey findings
• One-third (34 percent) of polled prospective homebuyers do not know what the term “annual percentage rate” (APR) means. The annual percentage rate (APR) is a yearly rate that reflects the true cost of a mortgage and is inclusive of the interest rate, points, mortgage insurance (when applicable), and other fees, including origination and underwriting fees. The APR will typically be higher than the interest rate quoted by lenders, and should be used as a starting point when comparing loan quotes between lenders.
• Half (50 percent) of prospective homebuyers do not understand that mortgage rates change throughout the day. In reality, much like the stock market, mortgage rates can change rapidly. To get the optimum rate, it is important to monitor rates and shop around.
• Nearly one-third (31 percent) of current homeowners incorrectly believe that you must wait seven years after a short sale or foreclosure to purchase again. In most cases, homebuyers with a short sale history typically only need to wait 2-4 years depending on their downpayment and the loan type. The waiting period after a foreclosure is longer – typically, buyers need to wait 3-7 years before they can qualify for a new home loan.
• More than one-third (34 percent) of current homeowners incorrectly believe that you can only refinance your home every 12 months. In reality, homeowners can refinance as often as they want. However, homeowners should weigh the cost of the refinance against the time they will own the home and the monthly payment change to determine if refinancing makes sense.
© 2013 Florida Realtors®
Thursday, May 9, 2013
Panelists said they expected median U.S. home values to rise to $165,280, on average, by the end of 2013. The survey of 105 economists, real estate experts and investment and market strategists is conducted quarterly by Pulsenomics and sponsored by Zillow Inc.
In the previous survey conducted in late February and early March, respondents said they expected average home value growth of just 4.6 percent in 2013. Looking forward, respondents also increased their 2014 prediction – to 4.4 percent, up from prior expectations of 4.2 percent.
But while panelists were more bullish on home value appreciation through 2014, they dropped expectations for 2015, 2016 and 2017. On average, panelists said they expect annual home value growth between 3.5 percent and 3.7 percent from 2015 through 2017, down modestly from previously expressed expectations in the 3.6 percent to 3.8 percent range.
Still, the yearly increases led survey respondents to predict that home values will rise 22.3 percent, on average, through 2017.
The Federal Reserve
The U.S. Federal Reserve, however, controls one element of housing demand today – mortgage rates. It has programs in place to keep rates low to boost housing demand in a policy called quantitative easing.
Zillow Chief Economist Stan Humphries says mortgage rates will rise once the Fed backs off on quantitative easing, and higher interest rates will affect home values.
“Looking further out, that appreciation will have to moderate as interest rates rise, or else homes that seem affordable today – despite rapidly rising values – are going to look very expensive relative to people’s incomes as it gets more costly to finance a home,” Humphries says. “How the Federal Reserve handles the eventual winding down of its policy of quantitative easing will be critical in determining if the current period of rapid appreciation is a benign bounce off the bottom, or a more dangerous bubble being re-inflated.”
A housing bubble?
Most experts (52 percent) polled in the Zillow Home Price Expectations Survey see little or no risk of a housing bubble. The remaining 48 percent saw a moderate to high risk. However, some of the bubble risk also comes from federal policies rather than market conditions.
Under the Dodd-Frank financial reform legislation, banking regulators were asked to define a “qualified residential mortgage” (QRM) – a mortgage standard that would limit risk under rules also included in Dodd-Frank. The panel was also asked if this QRM definition should include a minimum downpayment. Among the survey respondents, most said the QRM should include a minimum downpayment requirement.
“Contrary to concerns expressed by certain policymakers, only a small minority of our expert panelists believe that including a minimum downpayment requirement in QRM would pose a threat to the housing recovery,” says Pulsenomics founder Terry Loebs. “The vast majority of respondents – 81 percent – believe that establishing a minimum downpayment is a good idea and would ultimately foster a healthier housing market.”
© 2013 Florida Realtors®
Wednesday, May 8, 2013
The share of respondents to Fannie Mae’s April 2013 National Housing Survey who expect home prices to go up rose another 3 percentage points in April to 51 percent. By comparison, only 32 percent had that optimistic outlook one year earlier.
“Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. In addition, the “share of Americans who think it’s a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again.”
The share of respondents who say think it’s a good time to sell remains low, but it increased 4 percentage points in April to 30 percent; one year earlier, it was 15 percent.
• The average 12-month home price change expectation held steady at 2.7 percent.
• The share of people who believe home prices will go down remained at the survey low of 10 percent for the fourth month in a row.
• The share of respondents who say mortgage rates will go up fell 3 percentage points to 43 percent, while those who say rates will go down increased slightly to 7 percent.
• The average 12-month rental price change expectation held steady at 4.1 percent.
• 48 percent of those surveyed say home rental prices will go up in the next year, a 2-percentage point decrease from last month’s survey high.
• The share of respondents who said they would buy if they were going to move increased slightly to 65 percent.
© 2013 Florida Realtors®
On a month-over-month basis home prices increased 1.9 percent in March.
CoreLogic breaks its home sales statistics into two categories: Sales prices that include distressed home sales, and sales prices after backing out distressed sales. Distressed sales include short sales and real estate owned (REO) transactions.
In Florida, home sales, including distressed, rose 8 percent year to year and 1.2 percent month to month. Compared to the state’s high point for home sale prices in September 2006, home prices are down 42.8 percent.
With distressed sales backed out of the calculation, Florida home prices rose 10.1 percent year to year, and 2 percent month to month. That’s slightly lower than the national non-distressed home price increases of 10.7 percent year to year, and 2.4 percent month to month.
According to CoreLogic’s analysis of pending home sales, it predicts prices will rise in April 9.6 percent year to year. Excluding distressed sales from the numbers, it predicts prices will rise 12 percent year to year and 2.7 percent month to month. Pending prices are based on Multiple Listing Service (MLS) data.
“For the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10 percent year over year,” says Dr. Mark Fleming, chief economist for CoreLogic. “The pace of appreciation has been accelerating throughout 2012 and so far in 2013.”
“Much of the price increases … are the result of rising demand among investors and homebuyers for a still-limited supply of homes for sale,” adds Anand Nallathambi, president and CEO of CoreLogic.
© 2013 Florida Realtors®
Friday, May 3, 2013
Thursday, May 2, 2013
In addition to five in the top 10, an additional city made it into the nation’s top 25 for flipping. Overall, Florida cities competed largely with California cities in the RealtyTrac rankings.
RealtyTrac based its cities list on total gross profit earned from a home flip in 2012.
Florida rank of top U.S. cities for home flipping
1. Orlando – 1,912 flips – 63% gross profit
4. Tampa – 3,033 flips – 43% gross profit
6. Miami – 4,299 flips – 37% gross profit
7. Lakeland – 660 flips – 37% gross profit
9. Sarasota – 999 flips – 34% gross profit
20. Cape Coral – 1,547 flips – 15% gross profit
The full report can be found on RealtyTrac’s website.
© 2013 Florida Realtors®