6 States With Soaring Home Prices
Several states are posting year-over-year gains in home values, according to a newly released index for August by CoreLogic, which tracks price changes in repeat sales of homes.
According to CoreLogic, here are the states with the largest year-over-year gains in single-family home prices:
West Virginia: 8.6%
Wyoming: 3.6%
North Dakota: 3.5%
New York: 3.2%
Alaska: 2.2%
South Dakota: 1.5%
Nationally, single-family home prices were down 4.4 percent year-over-year in August, according to the index. Nevada posted the largest drop, falling 12.4 percent year-over-year.
Source: “Top 10 U.S. Areas With Rising Real Estate Prices,” Inman News (Oct. 7, 2011)
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Owners, Practitioners Think Prices Will Fall
About 48 percent of real estate professionals and 33 percent of homeowners believe home prices will decline over the next six months, according to a survey by HomeGain.
Only 10 percent of real estate professionals and 18 percent of homeowners believe home prices will increase in the next six months.
Sellers continue to doubt the accuracy of prices recommended by practitioners, with 79 percent believing that their homes are worth more than professional appraisals.
On the other side of the fence, 69 percent of practitioners say that their home-buying clients think homes for sale are overpriced.
Source: Real Estate Economy Watch, Steve Cook (09/21/2010)
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NAR: Home Prices Are Firming
The trend in firming home prices solidified in the second quarter with more metropolitan areas showing increases from a year ago, aided by a surge in home sales driven by the home buyer tax credit, according to the latest survey by the National Association of REALTORS®.
In the second quarter, 100 out of 155 metropolitan statistical areas (MSAs) had higher median existing single-family home prices in comparison with the second quarter of 2009, including 14 with double-digit increases; two were unchanged and 53 metros showed price declines. In the first quarter of this year 91 areas had higher prices, while only 26 MSAs experienced annual price gains in second quarter of 2009.
The national median existing single-family price was $176,900 in the second quarter, up 1.5 percent from $174,200 in the same period of 2009. The median is where half sold for more and half sold for less. Distressed homes accounted for 32 percent of second quarter sales, down from 36 percent a year ago.
Lawrence Yun, NAR chief economist, says the correction in home prices appears to have ended in 2009. “All year we’ve been seeing relatively flat national home prices, which appear to be supported by market fundamentals,” he said. “Prices in some areas remain below replacement construction costs, so even with an elevated supply of existing homes on the market we don’t expect any consequential movement in home prices for the foreseeable future. Very low inventory of newly built homes also will help to support home values.”
Yun urged caution on interpreting price data. “The median price is influenced by the mix of homes that were sold and do not reflect pure appreciation or depreciation,” he says. “The recorded home prices in many markets were significantly depressed last year because of a large percentage of distressed homes sold at discount. Now as more normal, non-distressed home sales are occurring, the median price in many areas is showing higher values.”
Total state existing-home sales, including single-family and condo, rose 9.1 percent to a seasonally adjusted annual rate of 5.61 million in the second quarter from 5.14 million in the first quarter, and were 17.3 percent above the 4.78 million-unit pace in the second quarter of 2009.
Sales increased from the first quarter in 44 states and the District of Columbia; 47 states and D.C. had increases over year-ago sales levels.
NAR President Vicki Cox Golder says record low mortgage interest rates will help cushion a summer slowdown. “As expected, sales are slowing down now that the home buyer tax credit has expired, but record-low mortgage interest rates, along with stable and affordable home prices in most areas, provide opportunities for buyers who weren’t able to take advantage of the credit,” she said.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was a record low 4.91 percent in the second quarter, down from 5.00 percent in the first quarter; it was 5.03 percent in the second quarter of 2009.
“Job creation will give home buyers more confidence, but the market over the next few months is likely to be below what we would expect for the size of our growing population,” Golder says. “With improving bank balance sheets, credit restrictions should gradually improve .”
In the condo sector, metro area condominium and cooperative prices – covering changes in 55 metro areas – showed the national median existing-condo price was relatively flat at $175,700 in the second quarter, down 0.5 percent from the second quarter of 2009. Twenty-six metros showed increases in the median condo price from a year ago and 29 areas had declines; the first quarter of 2010 showed 24 metros up, while only four metros saw annual price gains in second quarter of 2009.
* Northeast: Regionally, the median existing single-family home price in the Northeast declined 3.2 percent to $238,000 in the second quarter from a year earlier. Existing-home sales in the Northeast jumped 14.9 percent in the second quarter to a level of 980,000 and are 23.6 percent above the second quarter of 2009.
* Midwest: In the Midwest, the median existing single-family home price increased 1.4 percent to $148,500 in the second quarter from the second quarter of last year. Existing-home sales in the Midwest rose 14.5 percent in the second quarter to a pace of 1.30 million and are 20.9 percent above the same period in 2009.
* South: In the South, the median existing single-family home price slipped 2.0 percent to $155,500 in the second quarter from the second quarter of 2009. Existing-home sales in the South increased 10.9 percent in the second quarter to an annual rate of 2.10 million and are 18.8 percent above a year ago.
* West: The median existing single-family home price in the West rose 2.6 percent to $219,700 in the second quarter from a year ago. Existing-home sales in the West fell 2.6 percent in the second quarter to an annual rate of 1.23 million but are 7.6 percent higher than the second quarter of 2009.
— NAR
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S&P Predicts Housing Prices Will Fall Further
The oversupply of homes on the market in many regions is likely to reduce home prices still further, rating agency Standard & Poor’s said in a statement Friday.
“While home prices have been trending up since spring 2009, existing, new and pending home sales are waning, which suggests that lower prices are on the horizon,” said S&P in the statement.
The S&P predicted that declining prices will increase the inventory of distressed U.S. housing further and prevent the market from stabilizing.
Source: Reuters News (01/29/2010)
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Home Prices May Still Be Too High
Adjusted for inflation, housing prices are still 15 percent to 20 percent higher than they were in the mid-1990s, calculates housing economist Dean Baker, co-director of the nonpartisan Center for Economic and Policy Research.
“There’s no plausible fundamental explanation for that,” he says.
Baker believes economic fundamentals translate to a weak recovery at best. “People who say this is a temporary story, there’s no real reason to believe anything like that,” he says. “If anything, I expect housing to be weaker than normal rather than stronger over the next decade.”
Baker is opposed to the housing tax credit.
“As a matter of policy I can’t see that we want people to buy a house in 2009 that’s 10-20 percent higher than it would sell for in 2011,” he says. “In so far as the FHA was encouraging people to buy homes in bubble markets that were not deflated, that’s not good for the FHA and you didn’t help the home owner. We didn’t do those people a favor.”
Source: Bloomberg News, Nick Timiraos (01/26/2010)
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Middle-Market Sector to Improve
Executives from some of the largest brokerages in the country expect to see their sales grow 6-8 percent in 2010 and home prices to start heading up about 3 percent, REALTORS® heard in a state of the real estate industry discussion Saturday at the 2009 NAR Conference & Expo.
J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, said expansion of the tax credit to include repeat buyers will help boost middle-market sales next year, although mortgage financing above the $417,000 non-jumbo conforming loan limit will remain a challenge. “The repeat tax credit will at least start a conversation about buying” among existing home owners, Scott said.
Congress recently extended temporary high-cost loan limits of $729,750 for 2010, but the lion’s share of markets don’t qualify for those so-called jumbo-conforming loans. As a result, repeat buyers face tougher underwriting challenges. “People applying for a $419,000 mortgage are not wealthy—they’re two teachers,” said Helen Hanna Casey, president of Howard Hanna Real Estate Services, which operates in Pennsylvania, New York, and other states in that region.
The improvement in the middle market will help tighten inventories, helping to shore up prices, but the upper-end market will continue to underperform until companies start hiring again. That’s when the industry will see more relocation business among transferees, a critical component of the upper-end market, said Scott.
Merle Whitehead, president and CEO of RealtyUSA said a key job of brokers next year is making sure their sales associates understand FHA, because federally-backed mortgages will remain the principal provider of mortgage financing for most borrowers. Too many sales associates still think of FHA as financing for people who can’t qualify for conventional mortgages, but in fact FHA is the main source of mortgage capital today. “We have to change the thoughts and beliefs of our agents,” he said.
—Robert Freedman, REALTOR® magazine
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Half of States Avoid Big Housing Drop
Parts of the U.S. with plenty of open space and moderate prices have mostly escaped the housing meltdown.
Over the past three years, home prices have risen in most of the metro areas of 23 states, according to analytics firm Fiserv. States mostly likely to escape the housing meltdown were in the South, the Plains states, and most of the non-coastal West.
The state that is the best example of this phenomenon is Texas, where home prices rose in all 26 metro areas over the last three years.
The 16 states hardest hit by the decline were in New England and the Northeast, plus California, Florida, Nevada, and Arizona.
The seven cities that are the best bets for a quick recovery are San Francisco, Seattle, Pittsburgh, Rochester, N.Y., Memphis, Tenn., Oakland, Calif., and Birmingham, Ala.
Source: CNNMoney.com, Les Christie (10/21/2009)
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Home Sellers become More Realistic on Home Prices
Home Sellers become More Realistic on Home Prices while Realtors Express Greater Optimism about Housing Market
RISMEDIA, May 23, 2009-HomeGain, one of the first websites to provide free instant home values, announced the results of an extensive nationwide survey on home prices based on the responses of over 1,150 Realtors.
The survey shows that 36% of homeowners think their homes should be listed 10 to 20% higher than what their Realtors’ recommend, down from 45% in the first quarter.
Conversely, 64% of homebuyers think that homes are overpriced versus 59% who believed the same in the first quarter.
“Realtors are in a unique position as they get to hear both sides of the home price story – the buyers’ and the sellers’. They then apply their own home valuation analysis based on their understanding of the market which often meets resistance from buyers and sellers,” said Louis Cammarosano, General Manager of HomeGain. “The results of our second quarter Realtor home prices survey indicates that home sellers seem to be getting the message that perhaps their homes are not worth as much as they thought they were, while buyers are expecting to find a bargain on every corner.”
The Realtors surveyed expressed more optimism in the second quarter survey on the direction of home prices than in the first quarter, with 22% of them believing that home values will increase in the next six months versus 11% who believed the same in the first quarter. Twenty-nine percent of survey respondents believe that home prices will fall in the next six months versus 53% who believed the same in the first quarter survey.
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State Existing Home Sales and Metro-Area Home Prices in First Quarter 2009.
The good news: close to 455,000 buyers purchased their first home during the first quarter of 2009. First-time home buyers are taking advantage of improved affordability, as well as lower prices of existing homes in foreclosure and short sales. But distressed sales – foreclosures and short sales – accounted for nearly half of all transactions in the first quarter of 2009. That contributed to a decline in the median home prices in most of the metropolitan area markets monitored by NAR.
The latest NAR quarterly survey of metropolitan area home prices showed the majority of markets — 134 out of 152 metropolitan statistical areas – experiencing declines in home prices compared to the first quarter of 2008. Eighteen metro areas showed price gains over the same period. The national median existing single-family price was $169,000, 13.8 percent below that registered in the first quarter of 2008. Metro area condominium and cooperative prices – covering changes in 56 metro areas – showed the national median existing-condo price was $172,800 in the first quarter, down 20.2 percent from the first quarter of 2008. Five metros showed annual increases in the median condo price and 51 areas had declines.
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Practitioners Say Homes Prices Have Hit Bottom
Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.
About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.
More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.
Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.
Source: Inman News (05/18/2009)
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Homes May Be Undervalued Today
After dropping for two years, home prices appear to be bottoming out, and any further declines would be an overcorrection, NAR Chief Economist Lawrence Yun told thousands of practitioners at the REALTORS® Midyear Legislative Meetings in Washington, D.C., on Thursday.
The median national home price today is about $169,000, down almost 14 percent from a year ago and an estimated 30 percent from its peak. Today’s prices are justified by the fundamentals of the economy and may even represent an undervaluation, Yun said.
Lender Policies Hinder Recovery
Distressed sales, which today comprise about 50 percent of transactions nationwide, are creating market distortions in otherwise stable neighborhoods. “We’re only capturing transaction prices,” he said, and those prices might be 20 percent to 25 percent below actual values. For that reason, it’s possible that widely cited projections that a third or more of homeowners are underwater might be off the mark, he said.
The consequences of these missed projections could be huge. Lenders, shying away from refinancing mortgages of troubled owners, exacerbate the downward spiral of homeowners’ financial position and that, by extension, hurts the broader economy.
Contributing to the problem is the lack of reasonably priced financing for higher-cost homes at a time when declining prices, low rates, and the home buyer tax credit are helping the entry-level market.
Indeed, while housing overall is at a 9.5 month supply, down from double digits not that long ago, homes above $729,750—the threshold for jumbo loans—face a 40-month supply.
Key Test
By summer, all of the incentives that have been put into place by the government will have had several months to work, Yun said. If sales start picking up significantly, then prices should stabilize and trigger a broader economic recovery.
If sales don’t show a significant response, then the federal government might have to look at another big injection of funds into the economy, something no one has an appetite for.
Yun’s forecast reflects the brighter scenario: “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010,” he said.
—Robert Freedman, REALTOR® Magazine
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Median home prices fell in first quarter
WASHINGTON, D.C. — Home prices fell in nearly nine out of every 10 U.S. cities in the first quarter of this year as first-time buyers looking for bargains dominated the market.
The National Association of Realtors said Tuesday that median sales prices of existing homes declined in 134 out of 152 metropolitan areas compared with the same period a year ago. Prices rose in the other 18 cities.
Nationwide, sales of foreclosures and other distressed properties made up about half of the market. Overall, sales dipped 3.2 percent from the year-ago period.
“I think we’re near a bottom, but we’re not there yet,” said David Resler, chief economist at Nomura Securities. While prices could hit bottom as soon as this summer, he said, they are likely to remain stable and start edging higher slowly.
But the nascent signs of recovery in the housing market could be short-lived if employers continue to lay off workers in bulk.
At the Realtors’ midyear conference in Washington, talks focused of how to turn around the beleaguered housing market. Real estate agents hope the $8,000 tax credit for first-time buyers included in the economic stimulus package signed by President Barack Obama earlier this year will boost sales.
But in high-priced areas such as New York City, it doesn’t make much of a difference for buyers. “It’s not really a major motivator for people,” said Robert Oppenheimer, a Re/Max broker in nearby Englewood Cliffs, N.J. “It’s almost an afterthought.”
Many in the real estate industry say that Congress should do more to stimulate housing demand.
“They need to go further,” said Robert Sibcy, president of Sibcy Cline Inc., a Cincinnati real estate agency, drawing applause from a crowd of real estate agents. “They need to do it for all buyers.”
Speaking at the conference, Housing and Urban Development Secretary Shaun Donovan said the Federal Housing Administration soon will allow its borrowers to get short-term loans and turn the $8,000 tax credit into a down payment.
The tax credit, “is not only a tremendous opportunity for first-time home buyers, but also an enormous benefit for communities struggling to deal with an oversupply of housing,” Donovan said, according to prepared remarks.
In the Realtors’ first-quarter report, home sales fell in all but six states — Nevada, California, Arizona, Florida, Virginia and Minnesota — where buyers have been able to snap up foreclosures at a deep discount. Sales more than doubled in Nevada, rose 81 percent in California and grew 50 percent in Arizona — signaling that the worst may be over for those distressed states. Full Story.
Housing Analysts Predict the Bottom Is Near
The bottom of the housing decline is near, predicted analysts and home builders attending the National Association of Home Builders’ semiannual Construction Forecast Conference last week.
Mark Zandi, chief economist of Moody’s Economy.com, facetiously picked a date when home prices would stop falling: Dec. 15, 2009. Other observers weren’t so precise, but they did generally agree that the federal government’s efforts to shore up the market would take effect by the end of 2009 or early in 2010.
Analysts also predicted that consumers will spend less on remodeling. Eric Belsky, executive director at Harvard University’s Joint Center for Housing Studies, predicted that spending on remodeling would fall 12.3 percent by the end of this year compared to last.
Analysts project that the credit crisis will loosen, although people with blemished credit records may continue to have trouble getting mortgage loans.
Source: The Wall Street Journal, June Fletcher (04/24/2009)
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Home prices see sharp dip.
A new government report reveals declines that are steeper than usual – even for this market.By Les Christie, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) — Home prices continued to plunge in November, according to a new government report released Thursday. Full story.
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