Real Estate 2012: Many Positive Outlooks

There is a growing belief among many experts that 2012 will be the year housing turns the corner and starts heading in a more positive direction. Whenever we write a post like this, we unleash the hordes of critics who say we are again wearing rose colored glasses or are puppets being controlled by the National Association of Realtors (NAR) and other industry groups.

It is for that reason we will not be covering the projections of those groups. Instead, we want to share the beliefs of other organizations.

Washington Post:

“Housing Market and Economy Showing Encouraging Signs.”

The Wall Street Journal:

“From Bottom Up, Signs of Housing Recovery”

USA Today:

“Housing Outlook is More Upbeat”

CoreLogic:

“CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.”

Freddie Mac:

“With the New Year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.”

Fannie Mae:

“The housing sector will likely take incremental steps forward in 2012 …according to economists at Fannie Mae.”

 

http://www.kcmblog.com/2012/01/24/real-estate-2012-many-positive-outlooks/

Home sales pace increases in December, third month in a row

WASHINGTON – Home sales in December reached the highest pace in nearly a year. The gain coincided with other signs that the troubled U.S. housing market improved at the end of2011.

Analysts caution that sales remain historically low and it will take years for the home market to return to full health.

Still, the third straight monthly sales increase was encouraging. And economists noted that conditions are in place for further gains this year:

Prices have declined. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might be open to buying this year. And home construction picked up in the final quarter last year.

Sales rose across the country in December. They rose on a seasonal basis more than 10% in the Northeast, 8.3% in the Midwest, 2.9% in the South and 2.6% in the West.

“There’s no denying that home sales are still very low and will remain low for a few years,” said Paul Dales, an economist with Capital Economics. “But after having risen in each of the last three months … it is clear that a housing recovery is now well under way.”

Sales of previously occupied homes rose 5% to a seasonally adjusted annual rate of 4.61 million in December, the National Association of Realtors said Friday. It’s the best level since January 2011.

For all 2011, sales totaled only 4.26 million. That’s up slightly from 4.19 million in the previous year. But it’s far below the 6 million that economists equate with healthy housing markets. In 2005, at the peak of the boom, 7.1 million homes were sold.

Hiring has improved, which is critical to a housing rebound. Fewer people sought unemployment benefits last week than at any time in nearly four years, evidence of far fewer layoffs. The unemployment rate fell in December to its lowest level in nearly three years.

“With layoffs slowing sharply, hiring rising and consumers’ confidence rebounding, the pre-conditions for a sustained recovery are falling into place,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics. “Sales and starts will keep rising; prices should stabilize, more or less.”

The median sale price of a previously occupied home ticked up 0.3% from November to December to $164,500.

The supply of homes has declined, though it’s still historically high at 2.38 million. At last month’s sales pace, it would take nearly seven months to clear that backlog.

If the supply continues to fall, prices could rise, more sellers would put homes on the market and more people would likely consider buying, said Pierre Ellis, an analyst at Decision Economics.

Still, the industry appears years away from fully recovering from its bust four years ago. Since the bubble burst, sales have slumped under the weight of foreclosures, tighter credit and falling prices.

Fewer first-time buyers, who are critical to a recovery, are in the market for a home. Purchases among that group fell last month to just 31% of sales from 35% in November. In healthy markets, first-time buyers make up at least 40%.

Homes at risk of foreclosure made up a third of sales last month. In strong markets, they make up only about 10% of sales.

And many deals are collapsing before they close. One-third of Realtors say they’ve had at least one contract scuttled in December, November or October. That’s up from 18% in September.

Among the reasons contracts have been canceled: Banks have declined mortgage applications. Home inspectors have found problems. Appraisals showed that a home was worth less than the bid. Or a buyer suffered a financial setback before the closing.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.usatoday.com/money/economy/housing/story/2012-01-20/home-sales-december/52694378/1

Housing outlook is more upbeat

Optimism is building that the housing industry is nearing a bottom — finally.

ome sales and home building are forecast to rise this year after sliding steeply the past five years in housing’s worst downturn since the Great Depression.

Recovery is expected to be slow, and home prices are widely expected to fall this year. But investors are betting on the start of an upturn, bidding up home builder stocks and causing them to outperform the broader stock market.

Chief executives are more positive. JPMorgan Chase’s Jamie Dimon said last week that housing is near its bottom but could stay there a year. Stuart Miller, CEO of home builder Lennar, said the market has started to stabilize because of low prices and record low interest rates.

Market researcher RBC Capital Markets has also turned from a “bearish” view on housing to saying that 2012 “will mark a step in the right direction.”

Many economists expect home prices to fall more this year because of foreclosures and other properties sold at very low prices.

As foreclosures pick up this year, “prices will drop,” says Stan Humphries, Zillow chief economist. He says home prices won’t bottom until later in 2012 or next year.

On average, prices have fallen by about a third since 2006.

“This year will feel a lot better to builders, investors and real estate agents than to consumers,” says Jed Kolko, economist for real estate website Trulia.

Housing’s outlook is brightening with signs of a better economy. Last month, U.S. employers added 200,000 jobs, and the unemployment rate fell to 8.5%, lowest in nearly three years.

While an economic shock could derail progress, “there’s now more evidence of improvement in the economy, and housing will follow the economy,” says David Crowe, chief economist at the National Association of Home Builders. More improvement is expected for:

•Sales. Existing home sales will rise 12% this year after a 2% increase last year, and new home sales, coming off a horrid year, will jump 74% this year, Moody’s Analytics predicts.

November’s existing home sales hit their highest mark in 10 months, and new home sales were the year’s second best, IHS Global Insight says.

•Construction. Single-family housing starts will rise 37% this year, Moody’s predicts, after falling 9% last year.

Home builder stocks are on a run. The S&P 1500 Homebuilding Index is up 38% since mid-October, vs. 7% for the S&P 500.

 

http://www.usatoday.com/money/economy/housing/story/2012-01-15/housing-outlook-2012/52584304/1

By Julie Schmit, USA TODAY

Has the Housing Market Finally Hit Bottom?

Has the U.S. housing market hit a bottom? Do we have further to go? When will a recovery start? These are the questions every homeowner and real estate investor are currently asking themselves — or should be.

Wall Street firms have optimistically been betting that the bottom’s here. Research firms like Zelman & Associates predict the sector will pick up this year and hedge funds have been jumping into real estate-related investments from brick-and-mortar building purchases to shares of home builders stocks. In December Goldman Sachs Group released a report stating that “The home price bottom [is] in sight,” according to my colleague Agustino Fontevecchia.

Indeed, national home price data indicates that the worst of the catastrophic home price implosion is behind us. Clear Capital, a Truckee, Calif.-based real estate research firm, reports that 2011 saw a national decrease of 2.1% in home prices when compared with 2010. While still a loss, it’s a measly drop compared to the double-digit plunges felt in the years before. For 2012, the firm’s Home Data Index (HDI) Market Report also predicts a humble 0.2% gain across all markets. “Overall, 2011 was a relatively quiet year for U.S. home prices compared to the last five years,” said Dr. Alex Villacorta, Clear Capital’s director of research and analytics, in the report. He further notes that “the current balance the market has found will continue through 2012.”

What does all of this mean? Housing from a national standpoint is flattening out; the macro level data suggests we could possibly be at the bottom or near it.

A Tuesday report from Zillow, a publicly listed Seattle, Wash.-based real estate data and listing site, shows that November home values “remained essentially flat” from October of 2011 through November, falling only 0.1%. The Zillow Real Estate Market Report, which analyzes home values in 165 metro areas, notes that the addition of 200,000 jobs in December, improving consumer confidence and stronger retail sales indicate that home sales may be more consistent and more frequent in 2012. “With stronger home sales, we’ll see a reduction in the amount of vacant housing inventory and an improved ability to absorb foreclosed homes. This increased demand will eventually start to put a floor under home values later this year,” the report says.

It sounds rather promising, doesn’t it? For Wall Street firms snapping up stocks and/or using the market as an indicator for economic activity, it is. For homeowners, however, a different story prevails.

If you are a prospective home buyer or seller wondering if now is the time to make a play, the decision should come down to something much more tangible than a “flat” national market number. It should come down to location.

Clear Capital warns that the relatively flat national average is composed of metro markets that have been anything but: “Individual markets reacting to their local economic conditions continued to exhibit a wide range of performance levels in 2011, with only 12 of the top 50 metro markets (24%), returning year-over-year price movement that can be considered stable,” the HDI report cautions. Stable price movement means price swings of less than 2.5%. The company believes only 40% of the country’s largest metro areas will be stable in 2012. Among them: Denver, Colo., San Jose, Calif., Boston, Mass., Oklahoma City, Okla., and San Francisco, Calif.

Bakersfield is expected to rebound with an 11.1% increase. Photo: ZUMA Press/Newscom

As for the areas where prices may actually appreciate the most this year, the firm expects Orlando, Fla. home prices to rise 11.7%, hard-hit Bakersfield, Calif. 11.1%, government jobs-driven Washington, D.C. 9.3%, foreclosure-riddled Phoenix, Ariz. 8.9%, and sales-heavy Miami, Fla. 8.8%.

Markets that will experience further price drops this year include Atlanta, Ga. (14.4% anticipated loss), Los Angeles, Calif. (10.3% anticipated loss), Seattle, Wash. (7.5% anticipated loss), Oxnard, Calif. (6.7% anticipated loss), and foreclosure capital Las Vegas, Nev. (6.4% anticipated loss).

Zillow’s November data shows price fluctuations from metro area to metro area, as well. It clocks 66 markets where home values depreciated in November, 66 markets where values rose and 33 where values simply remained flat. Zillow’s economists caution that elevated foreclosure rates and negative equity will continue to impact local markets in 2012, meaning still lower values yet to come in some markets. For that reason, the company doesn’t expect a true stabilization in home values to occur until the end of this year or early 2013.

I think they are right. Even if the worst of the price depreciation hemorrhage is over, we still face a wave of distressed inventory undergoing the tedious foreclosure process and an estimated shadow inventory of 1.6 million bank-owned or distressed homes that have not yet hit the sale block, according to CoreLogic. It will mean millions of discounted units flooding markets already saturated with more units than buyers, dragging overall home prices down in terms of both listing prices and property appraisals.

So whether a bottom in housing is here or not depends on the local market. Most foreclosure-riddled markets will likely have years to go before values meaningfully move upwards. Markets where employment is plodding back and/or where overbuilding didn’t occur in the mid-2000s will and are showing more promising, more stable prices. ”It will be very important for consumers to draw a distinction between the end of sustained home values declines, which are maybe a year away, and the return to normal market conditions with historically normal appreciation rates,” Zillow notes.

By Morgan Brennan, Forbes.com

January 10, 2012

Provided by:

 

Sellers: Letting Go

The decision to sell your home can come with a mixed bag of emotions. There is uncertainty and fear about how quickly your home will sell and for what dollar amount. There may be guilt about leaving behind family, friends, or neighbors. You may also feel anxiety about what is to come.

A less than stellar market has done little to ease these jitters. Many would-be sellers have even decided to forgo moves for fear that now isn’t the time to sell.

Many others who have made the leap are ruled by emotions of sadness or regret. How does one let go of a home where so many memories were made?

The answer is in the attitude. It’s not about letting go. It’s about moving forward.

In order to let go of the negative feelings you have about the selling process there are a few crucial steps to take.

First, be resolute about your decision. If we allow ourselves to go back and forth between “I should” and “I shouldn’t”, you’ll always have uncertainty. Decide once and for all what is best for your family. Many people make pro and con lists. Others simply go with what feels right.

Second, remember that memories aren’t housed in the walls of your home, they live inside your mind. Those last a lifetime! Plus, take lots of pictures and video to document what life was like in your old home.

Third, talk about your decision. Bottling or resisting emotions can simply make them more pronounced. If you feel anxiety, talk to your spouse, friends, and realtor about it. It helps having a sounding board for fears and questions. Bounce ideas off of them.

Next, be willing to compromise. Today’s sellers are finding tougher conditions. There are lots of homes on the market and that means more competition. Go into the selling process with the mindset that you may have to make certain concessions. Many sellers find they need to lower their price. They may need to pay the buyer’s closing costs. They may also need to move out sooner or later than they anticipated.

Finally, refocus your attention on the fact that you’re moving on to a new phase in life! Many of you will be experiencing moving-up to your dream home. No matter the reason you’re selling, get excited about the changes or opportunities in your life.

http://realtytimes.com/rtpages/20111025_letgo.htm

by Carla Hill

Real Estate is going green

According to Yahoo!

 

Home Sales Increase Across the Country

The National Association of Realtors recently released their 2011 3rd Quarter Housing Report. In the report, they showed that combined sales of single family homes, condos and co-ops increased in EVERY state as compared to the 3rd quarter of last year. Here are the state-by-state numbers.  

The next time someone says houses aren’t selling, ask them which state they live in and show them the chart.

 

http://www.kcmblog.com/2011/11/29/home-sales-increase-across-the-country/

‘Tis the time to be selling!

Should I Take My Home Off The Market During The Holidays?

When you look at your holiday calendars you may find the months already overloaded with seasonal obligations — shopping, entertaining, children’s pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in “showtime” condition. And that could be the last thing you need before the holiday spirit is broken.

It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded by enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Top-selling Realtor Jennie Ling says taking your home off the market during the Christmas season is a mistake. A vice president of Virginia Cook REALTORS® and the number one sales person in her company for almost every one of her more than 35 years in the real estate business, Ling exclaims, “The house sure isn’t going to sell off the market! What is the advantage of that? So you’re busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things.”

“The holidays are my best-selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. I showed homes on New Year’s Day last year. I like the holidays because the buyers have more time, and they can look at homes together.”

Before you take your home off the market, consider the following points:

• Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Ling believes the home market is no more affected at Christmas than during other “busy” period. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.
• Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn’t a consideration. Finding the right home at the right price, however, is.
• Relocating families often don’t have a choice in when they can leave for their new destination. Although 68 percent of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either before the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year’s Eve, the timing couldn’t be more perfect.
• At Christmastime, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.
• When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.
• With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if your marketed your home during a busier time of the year.
• If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn’t an option, you can put in the closing date of your choice. “Most people can close 30 to 60 days after a contract is written, so there is plenty of time,” Ling says. “Possession and closings are are very negotiable.”

Published: November 25, 2011

http://realtytimes.com/rtpages/20111125_holidays.htm

LI home prices and closings decline

Local home prices fell 4.2 percent last month from a year ago, and the number of closings declined, according to figures released Monday, as the economy pushed many house hunters to the sidelines.

The Multiple Listing Service of Long Island, which released the data, said the median closing price for local home sales in October was $345,000. The median is the midpoint in a series of numbers. Prices were down 5 percent from September. The data include house sales in Queens.

There were 2,047 closings last month, down 2 percent from a year earlier.

“I just feel there are less people in the marketplace,” said Peter Caputo, broker owner of ERA Caputo in New Hyde Park and a 32-year industry veteran.

Caputo Monday oversaw the downsizing of his office space, because prices and closings have fallen about 12 percent from a year ago. He’s gone from 40 employees two years ago to 20.

The broker blamed high unemployment and tight credit for countering low interest rates and home prices. He has seen an “amazing” number of prospective first-time buyers, he said, but many don’t qualify for mortgages. Repeat buyers often qualify, he said, but they can’t buy until they sell their homes.

The Multiple Listing Service noted a bright spot: 2,159 contracts were signed in October, up from 2,071 in September.

That number is down 1.6 percent from a year ago, but the trade group said the month-to-month jump bodes well for winter activity.

Still, many local agents said more contracts are being canceled for various reasons — house hunters losing jobs, for instance, or buyers tired of waiting months for lenders to approve sales of distressed properties.

On Sunday, the National Association of Realtors said 18 percent of members reported having contracts canceled in recent months, about double the level last fall.

Steven Pagano, a broker-owner in Huntington Station, blamed lenders for some contract cancellations.

“The failure of the banks to complete a timely transaction results in these people having a little more time to look at the market and maybe find something else that’s more appealing to them,” the head of Pagano Properties said. “They could go out one weekend and say, ‘Oh my gosh, look at this house. Not only is it $15,000 cheaper than the one we’re looking at, but it has one extra bedroom.’ “

http://www.newsday.com/share/li-home-prices-and-closings-decline-1.3321541

Five Great Things about Homeownership

If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!

Published: November 2, 2011

http://realtytimes.com/rtpages/20111102_great.htm