Existing-Home Sales Cool in January As Available Inventory Remains Subdued

WASHINGTON (February 23, 2015) – Existing-home sales declined in January to their lowest rate in nine months, but the pace was higher than a year ago for the fourth straight month, according to the National Association of Realtors®. All major regions experienced declines in January, with the Northeast and West seeing the largest.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 4.9 percent to a seasonally adjusted annual rate of 4.82 million in January (lowest since last April at 4.75 million) from an upwardly-revised 5.07 million in December. Despite January’s decline, sales are higher by 3.2 percent than a year ago. Read More…..

Home Staging Can Help Sell Home for More, Realtors® Say

Most homeowners know it is important to keep a home clean, bright and free from clutter while it is on the market for sale. But sometimes, Realtors® say, taking the extra step to stage a home can make a difference in how a buyer values it and the price a seller might get for it, according to the National Association of Realtors® 2015 Profile of Home Staging. Read more…

NAR Resource to Reduce Short Sale Stress

According to the most recent REALTORS® Confidence Index, buyers continue to be discouraged with the extended short sale process, which frequently results in foreclosures that could have been prevented.

New resources from the National Association of REALTORS® aim to help REALTORS® and consumers successfully navigate the short sale process to help more home owners avoid foreclosure.

“Our members report that short sales are often riddled with delays and red tape,” said NAR President Vicki Cox Golder. “NAR has worked tirelessly to provide REALTORS® with the resources they need to navigate short sale transactions, as well as provide guidance on helpful government programs designed for home owners facing the process.”

On April 5, 2010, the U.S. government will implement the Home Affordable Foreclosure Alternatives Program (HAFA). Part of the Home Affordable Modification Program, HAFA helps home owners who are unable to retain their home under HAMP by simplifying and streamlining the use of short sales and deeds-in-lieu of foreclosures. Home owners must meet certain requirements to participate, and incentive payments are provided to home owners and servicers.

To help REALTORS® understand HAFA and its guidelines, NAR has released a brochure about the Home Affordable Foreclosure Alternatives Program and additional resources online, including government forms and guidelines, a video explaining the new federal guidelines, and frequently asked questions.

Designed to help REALTORS® explain the new program to home owners, NAR’s HAFA resources explain how the program aims to streamline short sales and, in the process, save more families from foreclosure.

“The new guidelines and incentives as part of HAFA are a crucial step towards reducing problems with the short-sale process, and REALTORS® are ready to help make this new program a success,” said Golder.

In addition to its resources on HAFA, NAR launched a Short Sales and Foreclosures (SFR) Certification Program in August 2009. The SFR program is offered by the Real Estate Buyer’s Agent Council of NAR and includes training on how to manage short-sale, foreclosure, and real-estate owned transactions.


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NAR: Federal Regulatory Reform Needed

The National Association of REALTORS says it supports President Obama’s move to develop a comprehensive financial regulatory reform framework, which the president announced on Wednesday.

“As we have repeatedly noted, it is important to have strong supervision and regulation of the nation’s financial system to ensure we never again find ourselves in this current financial and housing turmoil,” says NAR President Charles McMillan. “Rebuilding consumer trust in the various markets is important to an economic recovery, and Obama’s proposed Consumer Financial Protection Agency offers the potential to regulate and protect consumers from fraud, predatory lending, and other deceptive practices.”

NAR also supports elements of the proposal that will strengthen the national policy against mixing banking and commercial activities.

“Regulatory reform will be a monumental undertaking,” McMillan says. “NAR looks forward to working with our members, Congress, and the administration to craft a final product that allows for efficient, competitive, and innovative markets while providing consumers the protection they need and deserve.”

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.

Construction spending, pending home sales up!

WASHINGTON – Hopes that the recession is easing got a boost Monday from reports that construction spending and pending home sales both fared better than expected in March. The news pushed stock prices higher.

The Commerce Department said construction spending increased 0.3 percent in March, the best showing since a similar rise last September. Economists surveyed by Thomson Reuters had expected spending to drop 1.5 percent for a sixth straight monthly decline.

Meanwhile, the National Association of Realtors said its index of pending home sales rose 3.2 percent to 84.6 in March, the second monthly increase after it hit a record low in January. The pending sales index also is 1.1 percent above last year’s levels. Typically, there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.
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Economists called the new data faint glimmers of hope that construction activity may be stabilizing, although at very low levels.

“Things certainly look a bit less bad than in the dark days at the turn of the year,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a research note. Full Story.

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Big Gains in Pending Home Sales, Affordability.

Increases in pending home sales suggest a possible upswing in sales activity in coming months, according to the National Association of REALTORS.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 2.1 percent to 82.1 from a reading of 80.4 in January, but is 1.4 percent below February 2008, when it was 83.3.

Lawrence Yun, NAR chief economist, said the market is continuing to underperform.

“Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we’ll see additional sales gains,” he says. “More buyers are getting into the market to take advantage of stimulus incentives and much improved housing affordability conditions, but it will take a few months before we could see this turn up in measurable sales contract activity.”

Additionally, NAR’s Housing Affordability Index rose to a new high in February.

The Regional Breakdown
The PHSI picture varied across U.S. regions, with increases everywhere except the West:

1. Northeast: rose 10.6 percent to 63.9 in February but is 11.2 percent below a year ago.
2. Midwest: jumped 14.5 percent to 83.1 and is 3.4 percent higher than February 2008.
3. South: rose 4.4 percent to 85.8 in February but is 0.1 percent below a year ago.
4. West: fell 13.5 percent to 89.6 and is 1.7 percent below February 2008.

NAR President Charles McMillan says home buyers are in an excellent position.

“The drop in mortgage interest rates and home prices mean the buying power of a typical family has never been better,” he explains. “If you have a good job and long-term plans, it’s unlikely that you’ll find a much better time to buy a home. This is especially true for first-time buyers who can qualify for an $8,000 tax credit this year, have a great selection of homes to choose from, and are in a favorable negotiating position.”

Affordability Improves
NAR’s Housing Affordability Index rose 0.9 percentage points to a record high of 173.5 in February from an upwardly revised index of 172.6 in January, and is 36.3 percentage points higher than a year ago. The HAI shows the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

A median-income family, earning $59,700, could afford a home costing $285,600 in February with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price is considerably higher the median existing single-family home price in February, which was only $164,600.

“Obviously, potential home buyers need to be managing their existing debt effectively,” McMillan says. “A REALTOR can counsel you on what you may be able to afford given your personal financial situation. In some cases, buyers who want to build their future through homeownership may need to start reducing their debt and improving their credit score before entering the housing market.”

Last year at this time, the typical family could afford a home costing $265,600, which is $20,000 less than the current affordable price.

“Homes in many areas are now selling for less than replacement construction costs — clearly, this is an abnormal situation that will change once inventory is drawn down and supply and demand come closer into balance,” McMillan says.

Yun expects housing inventories to rise through early summer from a normal seasonal pattern of more sellers appearing in the spring.

“But with the positive housing stimulus incentives now in place, we expect home sales to gain momentum in the second half of the year with first-time buyers absorbing a lot of the excess inventory,” he says. “Under these conditions, we should see price stabilization in most markets by the end of the year.”

Source: NAR (04/01/2009)

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