Author Archives | Drew Wilson

Housing Starts Fall 8.5% in New Year: Analyst Disappointed, but Expected During Winter

New Home Construction Rebound

Home building fell in January after surging 15.7% the month before, even though the new permits for construction rose to third-highest since 2008. This disappointed many analysts who were expecting January to be evidence of a housing market rebound.

The Commerce Department said on Wednesday that building starts at sites for homes fell 8.5 percent last month to a 890,000-unit annual rate. Mostly due to a sharp decline in the multi-family unit category, which fell 24.1 percent.

Starts for single-family units, which makes up two thirds of the total, went up a whopping 0.8 percent to their highest level since July 2008.

Meanwhile, Permits for future home construction rose to a 925,000-unit rate, the quickest since June 2008. If this continues to rise, it will be the most home-building year in quite some time.

The National Association of Home Builders said Tuesday that confidence among U.S. homebuilders slipped in February from a 6 1/2-year high in January. Many builders reported less traffic by prospective customers before the critical spring home-buying season begins.

“Following solid gains over the past year, builder confidence has essentially leveled out and held in the same three-point range over the last four months,” noted NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.”

“Having risen strongly in 2012, the HMI hit a slight pause in the beginning of this year as builders adjusted their expectations to reflect the pace at which consumers are moving forward on new-home purchases,” observed NAHB Chief Economist David Crowe. “The index remains near its highest level since May of 2006, and we expect home building to continue on a modest rising trajectory this year.”

The housing market is on a very slow pace to a rebound, reports USA Today. Saying, “The U.S. housing market is slowly recovering after five years of markedly sub-par performance that followed the collapse of the residential real estate bubble in 2007. Ultra-low borrowing rates and the Federal Reserve’s aggressive bond-buying program aimed at stimulating job growth in the economy have helped the housing market to rebound.”

A good sign for an improving market is foreclosures. Foreclosures are slowly down on a national basis.

Even though new homes only make up a small percentage of the housing market, they still make an impact on the economy. According to statistics from the home builders, each new home built creates an average of three jobs for a year and generates about $90,000 in tax revenue.

Posted in Residential0 Comments

Sales of Preowned Houses Drop, Prices Go Up Due to Lack of Inventory

Lack of Housing Inventory

Sales of previously owned homes dropped in December from November, but the national median home prices rose to it’s highest best price in seven years.

With all that said, 4.65 million homes were sold for all of 2012, up from 9.2% in 2011, the most in five years and a sign that the housing market is slowly taking steps toward recovery.

“This isn’t worrisome at all,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, who projected a drop to a 4.95 million annual rate. “For the first time in a while, it looks like it’s a sellers’ market as much as it’s a buyers’ market. I suspect prices and sales will go up again in 2013.”

“We remain convinced that the housing recovery is well under way and should continue through 2013,” said Dan Greenhaus, chief global strategist at BTIG, an institutional brokerage.

Meanwhile, only 1.82 million homes were listed for sale in December, according to the National Association of Realtors. That is a 22 percent drop from a year ago and the lowest supply since May of 2005.

“The greatest concern in the market is the inventory situation,” said Lawrence Yun, chief economist for the NAR. “Even if we see an increase in the Spring and Summer, if home sales hold at the current level or even a 5 to 6-month supply, price increases are guaranteed. We don’t want to see rapid appreciation in prices faster than income.”

First-time home buyers, who are the crucial to the housing recovery, made up only 30 percent of sales in December. Banks have started to make tighter credit standards and also requiring larger down payments since the housing bust, six years ago. That means the buyers that are “would-be buyers” aren’t able to qualify for even the lowest mortgage rates.

The rate on the 30-year fixed mortgage averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac.

“Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,” the Realtors group’s chief economist, Lawrence Yun, said in a news release.

Sales for expensive houses priced at $1 million or more rose 62 percent in 2012. While the sales of homes below $100,000 fell 17 percent.

The median price of an existing home rose to $180,800 in December 2012, up 11.5 percent from $162,200 in December 2011. It was the biggest year-over-year gain since November 2005.

“The only concern going into 2013 is the inventory situation,” Lawrence Yun, NAR chief economist, said in a news conference as the figures were released. “Price increases are almost guaranteed going into 2013,” Yun said, adding that the group’s projection of a 4 percent to 5 percent increase this year may be exceeded.

How to play the 2013 housing market

2013 could bring on more home price appreciation and changes in the popular mortgage interest tax deduction.

Posted in Featured, Finance and Mortgage, Residential0 Comments

New Home Start Four Year High

New Home Starts Reach Four Year High in October

New Home Start Four Year High

New construction in housing hit the strongest for two months starting in October since four years ago. The Commerce Department said on Tuesday housing starts increased 3.6 percent to a seasonally adjusted annual rate of 894,000 units, the highest it’s been since July 2008.

The biggest increase was from multi-family construction, which was up 11.9 percent. Single-family construction went down only 0.2 percent compared to September but was back up 35.3 percent from October 2011. Despite Hurricane Sandy hitting the east coast during this survey period, outcome was still good and the drive for the housing market is starting to boom.

“Single-family housing starts and permits were above expectations for October, suggesting more residential investment in the fourth quarter,” Macroeconomic Advisers analysts wrote in a research note.

The rise in starts was mostly apartment buildings, which were up by 10 per cent, while new houses held steady. Foreclosures may have pushed many people into renting rather than owning a home. This is leading to a surge in apartment rental. Higher rents are making it especially profitable to build new apartments.

David Crowe, National Association of Home Builders chief economist, said in a statement, “Today’s report bears out similar changes in other economic indicators that housing continues to recover at a slow but steady place, and is right in line with our expectations of modest month-to-month growth. However, we still have a long way to go to get back to normal production as inaccurate appraisals, tight lending conditions for home buyers and policy uncertainties continue to impede the recovery.”

“The foundations for housing are getting better. Prices have stabilized, and people are feeling a bit more confident,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut.

With all the reports of recovery numbers, this could mean the the US and world economy could start to build in 2013. From the report, it showed confidence among builders that has reached its highest level since the last days of the housing boom in 2006.

Eric Green, chief economist at TD Securities in New York said, “The broad improvement in home prices, home equity, starts, and inventory clearing are key developments that position the economy for stronger growth next year, and beyond.”

Housing Starts Highest in Four Years

New economic data today as October housing starts hit their highest rate in more than four years. This is very good news for the housing market, a segment of the economy that has continued to struggle since the recession. Reports indicate that for the first time since 2005, homebuilding is expected to add to gross domestic product.

Posted in Featured, Finance and Mortgage, Residential0 Comments

Housing Market Recovering Slowly

Housing Market Recovering Slowly

The housing market may be on a rebound, at last. New data is showing that price declines entering big cities, sales of new homes improving nationally and foreclosures in California dropping to levels that haven’t been seen since before the start of the credit crunch almost five years ago.

Eric S. Belsky, managing director of Harvard’s Joint Center for Housing Studies said in a news release, “With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.”

Dan McCue, research manager for the Joint Center added, “We did want to highlight the differences we saw between this year and last year, and signs that seem to indicate that a recovery is beginning. In addition to the fact that it might be a long haul to get out of the deep hole we’re in. I do think that every time we talk about the return [of the housing market] we need to talk about how far the housing markets have gone. Never before has a downturn been so strong and a recovery so weak.”

The economy overall is starting to improve, but the housing market was the last one to stabilize. Good news, notices of default fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported. That was the fewest number of default notices filed since the second quarter of 2007.

Many homebuyers are young adults who have been sitting on the sidelines waiting for the job market to improve before jumping into a house loan. Finally, they feel comfortable to buy. “As markets tighten, these young adults may begin to take advantage of today’s lower home prices and unusually low mortgage rates. With rents up, home prices sharply down and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s,” Belsky said in the release.

The Standard & Poor’s/Case-Shiller index of 20 U.S. cities is the most watched measure for home values and it showed price declines in January to February.  With pricing falling 0.8% from January to February, and were down 3.5% from February 2011.  Economists are trying to take this data with a grain of salt because the sales of homes are typically slow during those months.  The index’s year-over-year decline in home values has also been steadily shrinking in recent months.

Posted in Finance and Mortgage, Residential0 Comments

Houston Home Prices Break Records

Houston Home Prices Break Records, Sales Highest in 4 Years

Houston Home Prices Break Records

 

There are certainly some really depressed markets in the real estate market right now. Las Vegas is dragging the entire US market into a gloomy state with low sales, high foreclosures and a lot of rough positions. Houston, Texas however is busting out of the gates and making Realtors across the country take notice.

If the Houston Real Estate market isn’t screaming at least a temporary recovery we just don’t know what else would do it. The Houston Association of Realtors (HAR) have announced with a report that home prices have now broken records and sales volume has reached the highest it has been in four years.

In interviews it was revealed that jobs are making a big impact on the real estate economy in Houston. “Both buyers and sellers are reaping the benefits of an extremely healthy and robust real estate climate in Houston, driven largely by continued job gains that have been responsible for drawing many new consumers to this market,” said Wayne A. Stroman, HAR chairman and CEO of Stroman Realty. “Buyers are able to take advantage of the lowest interest rates in history as they shop for homes, and we’re also hearing accounts of sellers receiving the asking price for their homes, and in some cases getting even more.”

A single-family home has seen price increases that have been pegged at about 8.5% from 2011 to 2012. The single-family home average price is now $237,083 which is the highest that Houston has ever seen.

So the prices of the Houston home values are on a steamy rise what about the sales volume? May 2012 saw sales volume in the Houston home market see gains of 10.5% from a comparison of last year to May in 2012. The total pending sales in the Houston area were 4,476.

HAR MLS Market Update Video for May 2012

Join David Mendel and HAR Chairman Wayne Stroman, as they discuss property sales for May 2012.

Posted in Featured, Investing, Residential0 Comments

Short Sale Tax Relief Set to Expire

Short Sale Tax Relief Set to Expire

If you are a person that wants to get in on the short sale tax relief, now is the time. Short sales will start to become even more popular by the end of 2012 because the tax relief law will be set to expire.

Homeowners who sold their home in a short sale or have had some other sort of mortgage debt forgiven or canceled, can take advantage of this short sale tax relief.  The completions of short sales in order to qualify for the tax relief act is set for the deadline of Jan. 31, 2013. Since short sales can take an average of four to eight months to complete, homeowners are running out of time to take advantage of this offer.

Marge Peck, associate broker and co-owner of Discover Arizona Real Estate, a company that specializes in short sales in Mesa, Arizona says, “Everybody that is considering a short sale needs to talk to a CPA and see if now is the time for them to get off the Titanic and in a lifeboat before this law expires. I’ve just hired more staff. We’re prepared for the tsunami of people saying ‘I’ve waited long enough, nothing’s going to change.’”

Short sales are transactions where the borrower owes more than the home is currently worth, so the lender agrees to accept less than the full mortgage payoff at closing time.

If a bank forgives the amount the borrower is upside down with, such as a short sale, they would still have to pay taxes on that forgiven amount, since the Internal Revenue Service sees it as income.

Penny McLaughlin, owner of Penny’s Team based in Poulsbo and a certified distressed property expert (CDPE) says, “People who are underwater with their mortgage need to figure out if they’ll go into a short sale or let it foreclose.  It used to be ‘horrible’ to do a short sale … but it’s better on their credit. I’ve had people who’ve done a short sale and are now being able to buy, 18 to 20 months later.”

According to CoreLogic, a provider of consumer, financial and property information short sales made up 9.1% of home sales in March, that’s up from 7.39% in March 2011, 6.67% in March 2010 and 4.79% in March 2009.

Daren Blomquist, vice president of RealtyTrac estimates this pattern will continue. “I think we will continue to see them go up. It’s like the pattern you saw with the home buyer tax credit—the biggest spike is at the end of the deadline. I would expect to see a similar pattern with the pre-foreclosure sales.”

Short Sale Tax Implications

Short Sale Tax Implications expires in 2012. If you are looking to do a Short Sale you have less than 6 months left. 2012 is the last year so don’t take any chances.

Posted in Featured, Finance and Mortgage0 Comments

Marion Sandler Dies at 81-years Old

Marion Sandler Dies at 81-years Old

Marion Sandler died at age 81 in her San Francisco home on June 1, 2012.

Marion Sandler was a business executive who ran Golden West Financial Corp. with her husband for 43 years before they sold the mortgage lender in 2006 to Wachovia Corp. for $24 billion.

Sandler and her husband, Herb bought Golden West in 1963 and helped it grow from a two-branch savings-and-loan business with only 26 employees to a publicly-traded company with 11,000 employees and 285 branches.

Marion Sandler told The Chronicle in 2006 about her husband-and-wife CEO team, “We’ve almost never not worked together. We are extraordinarily compatible. I just can’t describe it.”

The sale of Golden West gave both Sandlers more time on their passion of philanthropy. They were committed to giving their wealth to philanthropically and contributed more than $1.3 billion to the Sandler Foundation. That included founding the first online news source called, ProPublica. ProPublica is a nonprofit that specializes in investigative reporting, which went on to win a Pulitzer Prize.

The editors of ProPublica said on the website that Marion Sandler played key roles from interviewing staffers to selecting its name and logo. “She participated in every ProPublica Board meeting until the most recent one; only her last illness could keep her away. Usually in such sessions, she was knitting except when speaking; always, she was listening carefully, and her points were as tightly focused as her stitches, ProPublica.org wrote. “It is our great good fortune — and yours as readers, we think — that she cared about this one. We mourn her loss.”

The American Civil Liberties Union put out a statement saying the Board of Directors and staff at ACLU are deeply saddened by the death of Marion Sandler. ACLU Executive Director Anthony D. Romero said in the statement, “Marion understood the struggle for justice from firsthand experience. She blasted through every gender barrier in the investment and banking world at a time when women were still being asked to fetch their male co-workers their morning coffee. Along with her devoted husband, Herb, she reached the pinnacle of the banking industry. But she never lost her sense of humanity, justice and fairness that infused her business and philanthropy. Her acumen, commitment and friendship meant an enormous amount to me personally. America lost a great woman, leader, humanist and philanthropist. But America is a more perfect union because Marion Osher Sandler graced our earth with her presence, power and love for improving the human condition.”

Marion Sandler is survived by her husband, daughter Susan Sandler, son James Sandler, brothers Bernard and Harold Osher, and two grandchildren.

Posted in Featured, Finance and Mortgage0 Comments

Illinois Mortgage Fund Helps Struggling Homeowners

For homeowners that are having a hard time paying their mortgage on time, there may be some relief available to you. The state of Illinois has roughly three hundred million dollars lined up in a program called Illinois Hardest Hit, which is designed to assist those at serious risk of foreclosure due to a job loss or sudden drop in income. The money stems from a federal program that has the same purpose.

Homeowners on the brink of foreclosure are eligible for a special free grant that will help them catch up on their mortgage payment. The program will pay up to twenty-five thousand dollars for up to eighteen months in order to prevent anybody from losing their home. That means that even after the program has helped embattled homeowners to pay their delinquent payments, but also the monthly amount owed for many months thereafter.

Illinois has been in deep need of a program like Hardest Hit. The state has one of the worst foreclosure rates, with an astounding 5.3% of all mortgage homes having been foreclosed. Banks in Chicago own nearly one hundred thousand homes. As such, prices have plummeted in the city.

There have been programs similar to Hardest Hit in the last eight years, though none have been particularly successful due to the number of hoops that homeowners had to jump through to secure even the slightest amount of help.

Chicago officials and economists have hope that Illinois Hardest Hit will help to turn around the mortgage crisis in the Windy City.

Posted in Commercial0 Comments

Mortgage Rates Fall To New Lows In US

The housing market continues to grow more affordable in the United States for those that are able to secure a mortgage loan. Rates for 15-year and 30-year fixed loans fell to all-time record lows once again in the last week. It was the fifth week in a row that the 30-year fixed-rate mortgage loans experienced a decline.

The rate for 15-year fixed loan fell to below three percent for the first time in history. Now that the three percent barrier has been broken, there is no telling as to how long mortgage loans will continue to drop in the near future. 30-year fixed-rate loans dropped to 3.75 percent.

When crunching the numbers, the new 30-year fixed-rate of 3.75 percent could potentially provide a savings of more than sixteen thousand dollars over the thirty years when compared to the average mortgage loan rate from the previous year. Those that opt to refinance with a new 15-year fixed-rate loan will enjoy a savings of at least thirty-seven dollars per month. Those that refinance will have a monthly payment of approximately $689 for every one hundred thousand dollars that is borrowed.

The drop in mortgage loan rates has little to do with the housing market here in the United States. Rather, it has much to do with the unstable European market.

Economists believe that there has never been a better time to buy a home, and many house flippers agree. Mortgage loan rates are half of what they were at the peak of the residential real estate bubble, and homes have never been more affordable.

Posted in Finance and Mortgage0 Comments

BGC Partners and UGL Ltd. Push Expansion Into US Commerical Real Estate

All signs are pointing to the strong possibility of real recovery in the United States commercial real estate market. Real estate brokerage and property management companies from around the globe are starting to expand their services into the United States. That indicates that investors around the globe are eyeing the United States market as being one that is quickly regaining its health.

While the real estate market as a whole is expected to stabilize and see very slow growth this year, it is expected to improve at a much faster rate in the next few years.

Companies like UGL Ltd. and BGC Partners Inc both announced plans to expand in the United States. BGC Partners Inc has already started the process by purchasing and then combining various small real estate brokerage companies.

A number of smaller upstarts are taking the same action as BGC, buying smaller competitors. While all signs are pointing to positive market growth, some economists believe that these companies may be getting too aggressive in their actions. Should the market stumble, they will be facing incredibly tough times from which they may not recover.

Running into stumbling blocks is always a possibility for new startup companies. In general, it is the manner in which business overcome those stumbles that determines whether or not they will be successful in the long term.

Nearly half of the most valued global commercial properties reside in the United States. In fact, the United States accounts for seven and a half trillion dollars in commercial properties. With the market expected to grow in the coming years, it may be worth getting into the market now as opposed to later.

Posted in Commercial0 Comments

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