Archive for News
Real Estate Outlook: Modest Recovery
Posted by: | CommentsFrom RealtyTimes.com
By: Kenneth R. Harney
The Federal Reserve’s board of governors gave their current economic forecast a label last week: The label is “modest” – and it’s an important word to keep it in mind.
Yes, we’re still in recovery mode, the Fed governors said, but it’s a slow slog, and on any given day the news can sound discouraging.
Yes, the gross domestic product, or GDP, is still growing, and many corporations are sitting on big wads of cash, which is good.
But those same companies are not yet confident enough in the pace of the economic recovery to start hiring again … and that’s not good.
It all adds up, according to the Fed, to a mixed picture of where we are on the long pathway out of the Great Recession.
Given this tepid assessment by the government’s top economists, it’s useful to note that the real estate market racked up positive numbers in three quarterly sales and price reports issued last week.
Start with the National Association of Realtors’ second quarter results. Compared with the second quarter of 2009, this year’s numbers show how far housing has improved year-over year.
In two thirds of the major local markets tracked by the Realtors — that’s 100 out of 155 areas around the country — median prices were higher at the end of the second quarter (June 30th) than they were the same time the year before.
Nationwide the median price of houses was up by one and a half percent. But 14 local markets saw double digit increases, including San Bernadino and San Jose, California and Akron, Ohio.
Home sales were up 17 percent during the second quarter compared with 2009, and overall sales were higher in 47 states plus the District of Columbia.
Two other housing indexes released last week told similar stories: Zillow’s survey found prices up significantly in a number of large California markets, including San Diego, San Francisco and Los Angeles, all of whom had 6 percent or higher gains.
Read complete article here: http://realtytimes.com/rtpages/20100816_realestateoutlook.htm
Illinois Home Sales Up 10 Months in a Row, Chicago Region a Full Year
Posted by: | CommentsIllinois Association of REALTORS® News Release:
Home prices in Illinois are showing signs of stabilizing with continued positive year-over-year median price growth and 10 straight months of mostly double-digit sales increases; the Chicago region marked a year of positive sales activity in June. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in June 2010 were up 18.3 percent, totaling 13,072 homes sold compared to June 2009 sales of 11,048 homes. The median price in June 2010 was $170,000, up 2.5 percent from $165,825 in June 2009. The median is a typical market price where half the homes sold for more, half sold for less.
“The tax credit has proved to be a boost to the Illinois housing market with a tremendous level of buying and selling activity for the last 10 months which, importantly, has helped to stabilize home prices statewide,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS® and broker-owner of Onorato Real Estate in Coal City. “As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery. People need stable job prospects to feel secure in their purchasing decisions.”
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), year-over-year home sales were positive for 12 consecutive months, up 27.2 percent to 9,085 homes sold (single-family and condominiums) in June 2010 compared to 7,140 homes sold in June 2009. The median home sale price for the Chicagoland PMSA was $207,500 in June 2010, down 1.2 percent from $210,000 in June 2009.
“Continued strong annual sales growth characterized the months of April, May and June in Illinois in the Chicago region,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “Sales are forecast to remain positive in double digits in both markets through September. Once again price changes remain more stubborn with some slight upward movement in Illinois in July and August followed by little or no change in September; in the Chicago region, the changes continue to trend down in the 1 to 5 percent range.”
Adds Hewings: “The economy is certainly not helping the housing market; the loss of over 200,000 temporary census jobs overwhelmed the private sector gains of 83,000. The unemployment rate fell nationally to 9.5 percent (from 9.7 percent in May). Illinois’ seasonally adjusted unemployment rate followed the national decline, dropping -0.4 point to 10.4 percent in June.”
Read the complete news release here: http://www.illinoisrealtor.org/newsreleases/july2010
Real Estate Outlook: Federal Reserve Weighs In
Posted by: | CommentsFrom RealtyTimes.com
By: Kenneth R. Harney
The U.S. Congress asked Federal Reserve Board chairman Ben Bernanke a key question last week: Where do you and your colleagues believe we’re headed in terms of the national economy?
Bernanke’s reply: There are bumps and potholes on the road to recovery, but the Fed “expects continued moderate (economic) growth, a gradual decline in the unemployment rate (to about 7 percent) and subdued inflation” over the next couple of years.
No sooner had Bernanke delivered his testimony than some of those “bumps” in the road popped up: The Commerce Department reported new housing starts dropped by 5 percent in the latest month, and the National Association of Realtors reported existing home sales down by a similar percentage.
But keep in mind the central point Bernanke was making in his forecast: Troubled though it may look with any single statistical report, the fact is the national economy continues to grow – by about two and a half percent on an annual basis – and many elements of the economy are better off this year than the were the year before.
Take the Commerce Department’s housing starts number: That five percent decline was mainly the result of a big drop in starts of new rental apartment units – not a drop in starts of new single family houses, which were stable.
In fact, the Commerce Department survey found that permits pulled by builders for future construction on single family homes were actually up in three out four of the major regions of the country.
Analyzing the government’s data, Bernard Markstein, senior economist for the National Association of Home Builders, was encouraged – and predicted increases in both starts and sales over the coming several months.
The latest sales report for existing homes from the National Association of Realtors also had some bright spots: Sales in June were 10 percent higher than they were in the same month the year before.
Even median prices of all homes sold were up slightly, and that’s despite the fact that one third of sales were “distressed” in some way – REOs, foreclosures or short sales.
And remember: virtually all economists – including those at the Fed – had forecast lower home sales for the months immediately following the expiration of the tax credit programs.
Read complete article here: http://realtytimes.com/rtpages/20100726_realestateoutlook.htm
From RealtyTimes.com
by Phoebe Chongchua
It’s not a lot of time, but a three-month homebuyer limited tax-credit extension will help some. “I think it was one of relief by lots of homebuyers who had loans and real estate transactions in the pipeline and couldn’t close by the June 30th deadline. The extension gives them the opportunity to finish up their deals and close by September 30th,” says Lucien Salvant, National Association of Realtors spokesperson.
“We estimate up to 180,000″ will benefit from the extension. However, if you don’t currently have a loan application in, it’s too late to take advantage of this federal housing tax credit. “You had to have a valid contract by April 30th,” says Salvant.
But Salvant says that shouldn’t discourage interested buyers because the market is ripe with other opportunity. “The good news for people who didn’t take advantage of the tax credit is that the inventory is still plentiful, although it’s reduced significantly from what it was a year ago, prices are affordable, and the interest rates are the lowest they’ve been since the 1950s.” The low interest rates are, of course, a magnet for attracting buyers. However, Salvant says that while this is a good time to buy, he notes that the lending market isn’t operating the way it did before the housing crisis. This, he says, should make people understand that buying a house is a good option if you plan to stay in it a while—not play the flipping gamble, hoping for a quick profit.
“The average is about seven years. Homeownership is an investment in the future, not for a quick turnaround, which a lot of people abused in the earlier part of this decade,” says Salvant.
Salvant notes that the housing market’s recovery is being hampered by uncertain unemployment conditions which are causing some potential buyers to wait, possibly for more breaks.
But Salvant says don’t count on more tax incentives. “We have asked Congress now for three different tax credits and we’ve gotten them. The purpose of the tax credit was to give a quick start to the housing economy which was coming apart and sinking fast. We think it really helped. Now, it’s time for the housing market to stand on its own two feet,” says Salvant.
Read complete article here: http://realtytimes.com/rtpages/20100716_taxcredit.htm
Local home sales up for 12 straight months
Posted by: | CommentsFrom Crain’s Chicago Business
(Crain’s) — Chicago-area home sales have now increased every month for a full year, rising again in June compared with the same month in 2009.
In the nine-county Chicago region, sales of single-family homes and condominiums rose more than 27% to 9,085, compared to 7,140 homes sold in June 2009, according to a news release Thursday from the Illinois Assn. of Realtors.
In the city of Chicago, sales similarly jumped 27.5% to 2,526, compared to 1,981 homes sold in June 2009, the 10th consecutive month of higher year-over-year sales for the city.
A federal tax credit of up to $8,000 for first-time homebuyers and $6,500 for other buyers who signed contracts by April 30 helped the market, according to association President Mike Onorato. The deadline to close to get the credit recently was extended to Sept. 30.
“As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery,” Mr. Onorato, broker-owner of Onorato Real Estate in Coal City, said in the release.
The median price in the Chicago area — at which half the homes sell for more and half for less — dipped 1.2% in June to $207,500, compared to $210,000 in June 2009.
In Chicago, the median price dropped 3.2% to $234,250, compared to $242,050 in June 2009, according to the Realtors.
Statewide home sales increased for the 10th consecutive month, rising 18.3% to 13,072, compared to 11,048 in June 2009. The state’s median price rose 2.5% to $170,000, compared to $165,825 in June 2009.
The association’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.
Original article here: http://www.chicagobusiness.com/cgi-bin/news.pl?id=38960
Banks: We’re hiring so we can make more home loans
Posted by: | CommentsCNNMoney.com — Several banks are gearing up to do a whole lot more mortgage lending in the future.
Even though new homes sales were at a historical low in May and the housing market in general is in the doldrums, these banks are hiring hundreds of loan originators, getting ready for what they believe will be a significant pick-up in lending.
JPMorgan Chase (JPM, Fortune 500), one of the nation’s largest lenders, is in the midst of hiring 1,200 mortgage officers. “We may not be inundated with applications tomorrow, but we are confident the the need will be there,” said Christine Holevas, a spokeswoman for JPMorgan Chase.
Housing experts, however, warn that overall mortgage lending is expected to remain flat, largely due to a decline in refinancing.
Loans for home purchases should steadily increase over the next two years to $916 billion, up from an expected $725 billion this year, according to forecasts by the Mortgage Bankers Association. But refinancings should plummet to $474 billion in 2012, down from $717 billion this year.
“It’s pretty premature,” said Mark Dotzour, chief economist at Texas A&M’s Real Estate Center. “They are doing some long-range planning, with the emphasis on ‘long’.”
Chase expects to put its new mortgage lending army in the branches of the former Washington Mutual, which Chase acquired in 2008. It also plans to expand its mortgage lending operations to cities outside its footprint, including Boston, St. Louis and Washington, D.C.
The bank is also shifting to a branch-based lending strategy because it found that these mortgages are much less likely to default. And the bank sees a need in these markets.
“We wouldn’t be out there hiring if we thought these people would be sitting around,” said Holevas. “We don’t think they’ll be idle.”
Citizens Bank, meanwhile, is also growing its mortgage operations. The Providence, R.I.-based bank, which operates in a dozen states, increased its lending by 167% in 2009, compared to the year before.
Owned by the Royal Bank of Scotland, Citizens ranked as the 24th largest lender in the first quarter of this year, according to Inside Mortgage Finance, a trade publication.
Full article by Tami Luhby here: http://money.cnn.com/2010/06/24/news/economy/mortgage_lending/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29
Chicago home sales jump 32% in May
Posted by: | Comments(Crain’s) — More homes were sold in Chicago in May than a year earlier, marking the ninth month in a row of year-over-year gains.
The Illinois Assn. of Realtors reported Tuesday that last month’s sales of 2,057 single-family houses and condominiums represented a 32.1% increase from May 2009 sales. The median price also rose, up 2.2% to $230,000, from the same month last year.
The city’s May sales uptick was also seen in the greater Chicago area, where 33.6% more homes were sold. The median price for those homes, however, fell, down 4.8% to $190,500.
Illinois home sales were up 27.1%. The median price of the 11,638 homes sold statewide last month was $157,00, a slight increase from the $156,000 median of May 2009.
The National Assn. of Realtors said Midwest home sales remained strong in May as the homebuyers tax credit drove sales nearly 22% higher than in May 2009. The credit called for offers to be made by April 30.
The data released Tuesday show 130,000 sales in the 11-state Midwest region in May. The median home price increased more than 2%, to $150,700.
Midwest sales again rose more than national ones. Nonseasonally adjusted figures show May home sales nationwide increased about 18% over last year.
The Associated Press-Re/Max Monthly Housing Report, which also was released Tuesday, showed home sales increasing in all but one of 12 major Midwestern cities tracked. Fargo, N.D., led the region with a 66% sales jump. Detroit reported the only sales decrease, a 15% drop.
View original article here, from Crain’s Chicago Business: http://www.chicagobusiness.com/cgi-bin/news.pl?id=38644
Existing home sales slip 2% in May
Posted by: | CommentsNEW YORK (CNNMoney.com) — Existing home sales slipped in May and missed estimates but sustained a strong pace as homebuyers who qualified for the expired tax credit moved to close deals ahead of the June 30 deadline.
The National Association of Realtors reported that existing home sales dipped 2.2% last month to a seasonally adjusted annual rate of 5.66 million units, down from the upwardly revised rate of 5.79 million in April. Sales year-over-year were up 19.2%.
Analysts surveyed by Briefing.com were looking for resales in May to rise to an annual rate of 6.1 million units.
Although homebuyers had to sign contracts by the end of April to qualify for a tax credit up to $8,000, they have until the end of June to close deals. Existing home sales data is based on transaction closings, so figures still reflect strong interest in the credit.
So the tax credit, stabilizing home prices and low mortgage rates kept sales at elevated levels last month, said Lawrence Yun, NAR chief economist.
“We are witnessing the ongoing effects of the homebuyer tax credit, which we’ll also see in June real estate closings,” Yun said.
The Senate could pass an amendment to push the closing deadline back to Sept. 30 as part of a controversial job and tax bill.
Price and inventory: The NAR report showed that the median price of homes sold in May was $179,600, up 2.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
Total housing inventory fell 3.4% to 3.89 million existing homes for sale. That represents a 8.3-month supply at the current sales pace, down from a 8.4-month supply in April. A six month of supply is considered normal.
Sales by property and region: Sales of single-family homes declined 1.6% in May compared to the prior month, while condominium and co-op sales sank nearly 7%.
The Northeast fared the worst last month, with sales plunging 18.3% to an annual level of 890,000 units in May. That’s still 12.7% higher than a year earlier.
Resales in the Midwest were unchanged in May from the previous month at an annual pace of 1.33 million units. They rose by a modest 0.5% in the South and 4.9% in the West.
From CNNMoney.com – original article here: http://money.cnn.com/2010/06/22/news/economy/existing_home_sales/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29
Real Estate Outlook: Sales Promising
Posted by: | CommentsFrom RealtyTimes.com – Complete article by Kenneth R. Harney is here: http://realtytimes.com/rtpages/20100531_realestateoutlook.htm
If you look at the latest housing numbers released last week by the Commerce Department and the National Association of Realtors, you’d have to say, “Wow! We are on track for an amazing year in sales — and maybe even prices.”
Resales of houses and condos in April were up by almost 8 percent – and now are 23 percent higher than they were the year before.
Sales of newly-constructed homes also soared in April, up 15 percent. They’re 48 percent higher than April 2009.
Single family median home prices are even up by 4.5 percent for the year. In the Midwestern states, where the recession has been a lead weight on real estate longer than elsewhere , prices have jumped by 6 percent.
So what in these numbers is there not to like? Aren’t they proof positive that the gloom-and-doom crowd had it wrong – that housing and real estate are NOT doing a “double dip,” not taking a dive simply because foreclosures and unemployment are high?
Absolutely. No question the latest numbers are solid, even verging on extraordinary.
But here’s some perspective we need: They are a little extraordinary — for a reason.
Most economists agree that April sales totals, maybe even March, are distorted upwards because of the expiring federal tax credits.
Thousands of buyers rushed to complete their contracts in the past two months — we know that.
But to what extent are the latest sales being “borrowed” from the months ahead? How many people who were going to buy later in 2010 moved up their deals so they could qualify for an $8,000 or $6,500 tax credit?
There’s little question that some purchases were accelerated. Lawrence Yun, chief economist for the National Association of Realtors, says “the upswing in April sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback” ahead.
Mark Vitner, senior economist for Wells Fargo, predicts that “we may see sales fall to a record low” for a month or two following the end of the credit program.”
New home sales soar 15% in April
Posted by: | CommentsFrom CNNMoney.com – Original article here: http://money.cnn.com/2010/05/26/news/economy/new_home_sales/index.htm
New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.
New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%.
A consensus of economists surveyed by Briefing.com had expected April sales to rise to an annual rate of 425,000.
April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.
The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.
The credit also pushed existing home sales higher during the month, according to a real estate industry report released earlier this week.
“We got two solid increases in March and April,” said Mark Vitner, senior economist at Wells Fargo. “We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived.”
That’s because even with the jump, the current annual rate of new home sales is still historically low. Vitner said about 700,000 homes are sold annually in a stable economy.
“A true recovery in the housing market won’t get underway until we see solid gains in employment and income,” Vitner said.
Although last month employers added the most jobs since March 2006, Vitner said the labor market has a long way to go as it recovers the 8.4 million jobs that were lost in 2008 and 2009 and long-term unemployment sits at severe highs.
“The job market is getting a little bit better, but it’s still abysmal, he said.
Price and inventory: The government report showed that the median price of new homes sold in April was $198,400, down almost 10% from March from April 2009.
Vitner said the drop in price is because first-time home buyers, who typically spend less than repeat buyers, represented a larger portion of overall buyers last month.
An estimated 211,000 new homes were for sale at the end of April. At the current sales pace, the government expects it will take five months to sell through that inventory. That’s down from March, when there were 6.7 months of inventory on the market.
Sales by region: Sales rose the most in in the Midwest, where they spiked by more than 30%; the West welcomed a 21.7% climb. Sales in the South rose more than 10%, and they were flat in the Northeast.