Sales, average and median prices highest in four years
San Antonio home shoppers went on a buying spree in June, sending sales volume and pricing up accounting for the highest sales, average and median price in four years. Average and median prices broke records while volume of sales reached the highest level since June 2008. Sales of single-family homes increased 4 percent compared to the same month last year according to the June 2012 Multiple Listing Service report by the San Antonio Board of REALTORS® (SABOR).
"Both buyers and sellers are reaping the benefits of an extremely healthy and robust real estate climate in San Antonio, driven largely by continued job gains that have been responsible for drawing many new consumers to this market," said Liza Reyes, Chairman of the Board. "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 even multiple offers."
Strong sales activity among homes from $200,000 and up pushed average and median pricing. The June single-family home median price —the figure at which half of the homes sold for more and half sold for less —rose 8 percent year-over-year to $168,800, the highest level since 2007 in San Antonio. The average price rose 9 percent to $209,820, the highest since 2007.
The number of available properties, or active listings, at the end of June declined nearly 15 percent from June 2011. The inventory of single-family homes dipped to 6.9 months compared to 8.3 months one year earlier. That means that it would take nearly 7 months to sell all the single-family homes on the market based on sales activity over the past year without any new homes being added. The figure is aligned with the national inventory of single-family homes of 6.6 months reported by the National Association of REALTORS® (NAR).
“We credit the strength of the housing market to San Antonio’s continued job growth, affordability and low interest rates” SABOR President and CEO Angela Shields said.
Source: San Antonio Board of REALTORS®
Seniors Role in the Housing Recovery
A new study by the Harvard Joint Center for Housing Studies
revealed that lender unwillingness to issue loans remains the biggest
chuckhole on the road to housing recovery. Some homebuyers -- many of them low-equity members of Gen X and Gen Y -- can't qualify for a loan.Many
lenders are requiring higher credit scores than what was needed to
qualify for a loan just a few years ago. Plus, some banks are also
requiring potential borrowers to come up with larger down payments.
As a result, the number of buyers on the sidelines unable to purchase a home is greater than expected.
So where's the smooth road to housing today? The Market Enhancement Group, a research team based in Southern California, recently broke down the latest data supplied by the U.S. Census Bureau.
It came as no surprise that not only do seniors have a ton of equity, but nearly 5 million of them plan to sell and buy in the next three years. Home ownership for seniors (65 and older) is as high, or higher, than any other age group.And, because many of them plan to pay cash, there's no need to provide a seller with a letter of preapproval from a lender. No worries about FICO scores. Questions about size of down payment are largely irrelevant.
"In all the hoopla over youth, we're forgetting a very important segment of the population: seniors," the MEG report found. "They're not flashy and they're not the ones creating new trends on social media or with the Internet. But senior homebuyers and sellers have one unique characteristic that sets them apart from other generations: stability."
Here are some key findings from the MEG study:
Only 1.6 percent of retirees between the ages of 55 and 65 moved across state lines in 2010, according to an analysis of Census Bureau data. Florida was once the retiree haven, attracting more than 1 in 4 retirees who did move. From 2005 to 2010, that number dropped to 1 in 7.
More retirees are opting to stay near where they once worked, moving out of the pricey real estate metro areas to places an hour or two outside of the city, where real estate prices and taxes tend to be cheaper.
While first-time homebuyers are absolutely critical to the housing industry, seniors should not be overlooked. They might not need as many loans, but they definitely are able to move.
Source: Inman News / Tom Kelly
As a result, the number of buyers on the sidelines unable to purchase a home is greater than expected.
So where's the smooth road to housing today? The Market Enhancement Group, a research team based in Southern California, recently broke down the latest data supplied by the U.S. Census Bureau.
It came as no surprise that not only do seniors have a ton of equity, but nearly 5 million of them plan to sell and buy in the next three years. Home ownership for seniors (65 and older) is as high, or higher, than any other age group.And, because many of them plan to pay cash, there's no need to provide a seller with a letter of preapproval from a lender. No worries about FICO scores. Questions about size of down payment are largely irrelevant.
"In all the hoopla over youth, we're forgetting a very important segment of the population: seniors," the MEG report found. "They're not flashy and they're not the ones creating new trends on social media or with the Internet. But senior homebuyers and sellers have one unique characteristic that sets them apart from other generations: stability."
Here are some key findings from the MEG study:
- Overall, only 31 percent of U.S. homeowners own their home free and clear.
- Sixty-eight percent of all seniors own their home free and clear. The remaining 32 percent will own their homes free and clear in six years or fewer.
- Fifteen percent of all senior homeowners plan to sell their home in the next three years and buy another home; this translates into 4.9 million families and 9.8 million transaction "sides" for real estate salespersons.
- Ninety-four percent of those 4.9 million families selling their home plan to pay cash for their next home.
Only 1.6 percent of retirees between the ages of 55 and 65 moved across state lines in 2010, according to an analysis of Census Bureau data. Florida was once the retiree haven, attracting more than 1 in 4 retirees who did move. From 2005 to 2010, that number dropped to 1 in 7.
More retirees are opting to stay near where they once worked, moving out of the pricey real estate metro areas to places an hour or two outside of the city, where real estate prices and taxes tend to be cheaper.
While first-time homebuyers are absolutely critical to the housing industry, seniors should not be overlooked. They might not need as many loans, but they definitely are able to move.
Source: Inman News / Tom Kelly
Facebook Founder gets mortgage rate of 1.05 percent
The rich are different -- they have cheaper mortgages. At least that's true for Facebook founder Mark Zuckerberg. The 28-year-old billionaire refinanced his Palo Alto home April 9 with a 1.05 percent adjustable rate mortgage on a loan of $5.95 million.
The average person getting an adjustable mortgage that month would be paying an interest rate of 2.68 percent on a loan that was fixed for one year, according to Freddie Mac.
So how did Zuckerberg swing such a sweet deal? As a billionaire, he's a client any bank would like to have.
And his mortgage adjusts monthly, subject to changes in a benchmark interest rate, exposing him to the risk that rates could soar, sending up his monthly payment. But for the moment, he has an interest rate below the level of inflation, which is currently 1.7 percent.
"Mark Zuckerberg didn't take this loan because he didn't have the money," said Greg McBride of the mortgage website bankrate.com. "He took it because he can borrow below the rate of inflation, which is borrowing for free. At the point which it no longer makes sense to borrow other people's money he can pay it off." McBride said loans like Zuckerberg's are "niche products" banks offer to wealthy clients.
Palo Alto area real estate agent Ken DeLeon said he recommends these kind of adjustable mortgages to clients who are thinking about paying cash for their home. The Federal Reserve "wants to keep rates low through 2014, so you're looking at 18 to 24 months of free money," he said. "I recommend this to a lot of my young clients from Facebook and LinkedIn and even some early Googlers."
Zuckerberg bought his home in March 2011 for $7.1 million, financing most of the purchase price with a 1.75 percent mortgage from Morgan Stanley, the investment bank that led Facebook's botched public offering in May. That loan also adjusted monthly. Zuckerberg's new loan is with First Republic Bank.
Source: San Jose Mercury News
The average person getting an adjustable mortgage that month would be paying an interest rate of 2.68 percent on a loan that was fixed for one year, according to Freddie Mac.
So how did Zuckerberg swing such a sweet deal? As a billionaire, he's a client any bank would like to have.
And his mortgage adjusts monthly, subject to changes in a benchmark interest rate, exposing him to the risk that rates could soar, sending up his monthly payment. But for the moment, he has an interest rate below the level of inflation, which is currently 1.7 percent.
"Mark Zuckerberg didn't take this loan because he didn't have the money," said Greg McBride of the mortgage website bankrate.com. "He took it because he can borrow below the rate of inflation, which is borrowing for free. At the point which it no longer makes sense to borrow other people's money he can pay it off." McBride said loans like Zuckerberg's are "niche products" banks offer to wealthy clients.
Palo Alto area real estate agent Ken DeLeon said he recommends these kind of adjustable mortgages to clients who are thinking about paying cash for their home. The Federal Reserve "wants to keep rates low through 2014, so you're looking at 18 to 24 months of free money," he said. "I recommend this to a lot of my young clients from Facebook and LinkedIn and even some early Googlers."
Zuckerberg bought his home in March 2011 for $7.1 million, financing most of the purchase price with a 1.75 percent mortgage from Morgan Stanley, the investment bank that led Facebook's botched public offering in May. That loan also adjusted monthly. Zuckerberg's new loan is with First Republic Bank.
Source: San Jose Mercury News
Tips for Better Money Management
7 Money Rules for Life: How to Take Control of Your Financial Future - A Book Review
Many feel like their debt and spending and even incomes are entirely out of their control; others feel like they are powerless over money; still others err on the other extreme of the spectrum, being so stingy and obsessive about cash that they experience no enjoyment from what they do have whatsoever.
Enter Mary Hunt, founder and publisher of Debt-Free Living, an organization specializing in personal finance education and tools. Hunt is a former spending addict whose fondness for "buy-now-pay-later" shopping and an encounter with a get-rich business scheme wound her family on the brink of bankruptcy. She and her husband toiled their way back from that brink, eventually processing their experiences and learning into Debt-Free Living.
Hunt explains that her two most daunting obstacles at the beginning of her financial recovery were (a) her utter financial ignorance, beyond how to kite checks and juggle credit card balances, and (b) the overwhelm she felt at the prospect of trying to unravel a financial catastrophe. Now, to help others who are facing down their own post-recession finance dramas eliminate their own financial illiteracy and overwhelm, Hunt has just published "7 Money Rules of Life: How to Take Control of Your Financial Future."
Here are three of those rules:
1. Spend less than you earn. You might be thinking, as my Millennial friends are wont to say: "Obvi!" (The -ous, apparently, is implied.) But the age-old (and unlikely to change anytime soon) personal finance adage about spending less than you earn is somewhat akin to its personal fitness cousin, eat less and move more: Everyone knows it's true, but many still fail to do it.
So, Hunt starts at the very beginning with this cardinal rule, and a number of specific strategies for people who are already living paycheck to paycheck, and debting to cover everything else. Nothing here is revolutionary -- Hunt's tips for what she calls "widening the gap between income and expenses" are uber-basics like staying away from the stores, limiting your exposure to ads, living on cash (i.e., no plastic allowed) and even getting a side job.
But that's very consistent with my own experience of getting into financial integrity: there are no tricks. Sometimes it's helpful, though, for someone who's been there to cut through all the financial wizardry and "guru"-dom out there and just spell it out, plain and simple. That's what Hunt does here.
2. Anticipate your irregular expenses. I know some money gurus advocate strongly for an emergency fund, but I also know that many financially stable people scoff at the notion on grounds that life is nothing but emergencies, so living on less than you make as a rule puts you in good stead. Hunt falls into the former camp, encouraging readers to save enough cash that they could cover all their living expenses for six months with no paycheck in the event of a layoff or medical problem -- separate and apart from their retirement savings.
In her discussion of this rule, Hunt exemplifies her general approach, deactivating the overwhelm and common objections at the daunting target dollar amount for this savings by acknowledging them, then tackling them head on with excuse-killing strategies and very clear instructions on how to execute this rule, motivationally and logistically speaking.
3. Tell your money where to go. Hunt confesses her own aversion to the concept of a restrictive budget and educates readers about how she replaced it with the concept of a directional spending plan, which she describes lovingly as being "like strapping on a pair of wings and learning how to fly."
Like every good money maven, Hunt encourages readers to lay out their income and expenses, on paper, and prods them with the power and the purpose of the spending plan they can create as a result. She then walks readers through the process of creating a spending plan in whatever way makes sense for them, on- or offline, and revisiting and tweaking it until it is accurate and functioning to serve its purpose: "not to force you into a life of deprivation but rather to prevent overspending, which will keep you from falling into debt."
Nothing about "7 Money Rules" involves surprising tricks or secret strategies. It's all basic. But it's all there. And if you're struggling with the overwhelm or simply don't even know where to begin the process of seizing control over your finances, "7 Money Rules" is an uber-approachable, clear and actionable place to begin.
Source: Inman News / Tara-Nicholle Nelson
Americans Confident about Homeownership
According to a survey recently done by Brookfield
Real Estate and Relocation Affiliates Inc., Americans confidence
in homeownership and real estate continues climbing from the first
quarter and a year earlier.
Signs of growing confidence are widespread, according to the national survey.
• 69 percent believe that real estate is a good investment despite the market volatility of the past few years, up 6 percentage points from the first-quarter 2012 survey and 17 percentage points from first quarter 2011.
• 72 percent expressed confidence that the real estate market and property values will improve during the next two years, including a 6-point jump among those “very confident” or “confident” vs. the first quarter 2012, and a 14-point gain in this subset over first quarter 2011.
• Nearly two-thirds (64 percent) of respondents have a favorable perception of the U.S. housing market, up from 60 percent in first quarter 2012 and 52 percent in first quarter 2011).
Factors driving homeownership
Homeownership remains the central component to the American Dream, as 78 percent of respondents said owning a home was still “very important” – the same percentage reported in the first-quarter 2012 study. A full 98 percent said homeownership was at least somewhat important.
In addition, with interest rates at historically low levels, 96 percent of respondents at least “somewhat agree” that now is a great time to buy a home – the same percentage reported in the first-quarter 2012 study.
More than the financial reasons to buy a home, respondents placed higher priority on the emotional reasons for homeownership. “Control over living space,” “more space for family,” “safer neighborhood” and “good place to raise a family” rated higher than “a good investment,” “financial security” and “tax benefits.”
“Normalcy is returning to the U.S. real estate market and more people are buying homes for traditional reasons – to raise a family, feel secure and build a future,” says Lee. “Every last emotion is rolled up into owning a home – it’s where life happens – so it’s no surprise that the emotional side outweighs financial reasons for owning a home among respondents.”
Caution remains
The survey also shows that consumers remain cautious about the real estate market and process, as a full 30 percent “strongly agree” that the housing crisis reminds them to be more careful about buying or selling a home; up two percentage points from the first-quarter 2012 survey. In addition:
Source: Rismedia
Signs of growing confidence are widespread, according to the national survey.
• 69 percent believe that real estate is a good investment despite the market volatility of the past few years, up 6 percentage points from the first-quarter 2012 survey and 17 percentage points from first quarter 2011.
• 72 percent expressed confidence that the real estate market and property values will improve during the next two years, including a 6-point jump among those “very confident” or “confident” vs. the first quarter 2012, and a 14-point gain in this subset over first quarter 2011.
• Nearly two-thirds (64 percent) of respondents have a favorable perception of the U.S. housing market, up from 60 percent in first quarter 2012 and 52 percent in first quarter 2011).
Factors driving homeownership
Homeownership remains the central component to the American Dream, as 78 percent of respondents said owning a home was still “very important” – the same percentage reported in the first-quarter 2012 study. A full 98 percent said homeownership was at least somewhat important.
In addition, with interest rates at historically low levels, 96 percent of respondents at least “somewhat agree” that now is a great time to buy a home – the same percentage reported in the first-quarter 2012 study.
More than the financial reasons to buy a home, respondents placed higher priority on the emotional reasons for homeownership. “Control over living space,” “more space for family,” “safer neighborhood” and “good place to raise a family” rated higher than “a good investment,” “financial security” and “tax benefits.”
“Normalcy is returning to the U.S. real estate market and more people are buying homes for traditional reasons – to raise a family, feel secure and build a future,” says Lee. “Every last emotion is rolled up into owning a home – it’s where life happens – so it’s no surprise that the emotional side outweighs financial reasons for owning a home among respondents.”
Caution remains
The survey also shows that consumers remain cautious about the real estate market and process, as a full 30 percent “strongly agree” that the housing crisis reminds them to be more careful about buying or selling a home; up two percentage points from the first-quarter 2012 survey. In addition:
• Nearly two-thirds (65 percent) of
respondents indicated that financing or getting a mortgage is more
challenging than it was before the market crisis, which is up from 58%
in the first-quarter 2012 survey.
• Among those considering a real estate
transaction, 39 percent expressed concern they won’t be able to sell
their current home, up 11 points from the first-quarter 2012 survey and
10 points from first quarter 2011.
• Given the dynamics and challenges of
today’s real estate market, nearly three out of four (74 percent)
respondents think it is more important than ever to work with a good
real estate agent for the best success in buying or selling a home (up
from 71 percent in first-quarter 2012 and 67 percent in first quarter
2011).
Source: Rismedia
Fannie Mae forecasts 'continued gradual healing' for housing
Despite signs of a slowdown in global economic growth, recent single-family housing data suggest the housing recovery is "on track" and is set for "continued gradual healing," according to a monthly economic outlook released this week by Fannie Mae's Economic & Strategic Research Group.
There are some favorable signs that a housing recovery is under way, Fannie Mae said. Homebuilder confidence reached its highest level in five years in May.
Mortgage rates are expected to remain around their current lows through this year to average 3.8 percent for a 30-year fixed-rate mortgage.Home prices are showing signs of finding a floor thanks to fewer distressed sales, though Fannie Mae doesn't expect them to reach a bottom until 2013. The mortgage giant expects prices to decline another 1.2 percent this year before regaining that same percentage in 2013.
Year to date through April, existing-home sales, new-home sales and single-family housing starts were above the levels posted during the same period last year, and Fannie Mae predicts each will rise 7.6 percent, 13.5 percent and 17.4 percent, respectively, in 2012 compared to 2011.
Despite these encouraging indicators, the housing market continues to face challenges, Fannie Mae said. These include drops in purchase mortgage applications and contract signings for existing homes in April, a persistently high share of loans in foreclosure, damaged household balance sheets, sluggish income growth, and historically tight lending standards.
The latter "help explain why record-high affordability conditions stemming from declining mortgage rates and home prices have not substantially boosted home sales. The tight relationship between affordability and home sales observed prior to the year 2000 has clearly broken down," the report said.
A spring lull in hiring and the European sovereign debt crisis are also weighing on the market. Though still gaining, employment growth has slowed each of the last five months, and in May the jobless rate rose to 8.2 percent, adding just 69,000 jobs.
"It is now less convincing to frame the weakness as just a payback to warm winter weather. Rather, it appears increasingly likely that labor market fundamentals have deteriorated amid the slowdown in the global economy and the intensified European sovereign debt crisis, which likely made businesses more cautious," the report said.
"In his testimony before Congress on the economic outlook in early June, Fed Chairman Ben Bernanke noted weather-related payback and seasonal adjustment issues, but reiterated his theory delivered earlier this year that strong gains in hiring late last year and early this year were 'catchup hiring.' That is, businesses may have aggressively laid off workers earlier in the cycle, prompting them to catch up later on -- a process that has largely been completed."
This is the third straight year to see a spring slowdown in economic activity, said Doug Duncan, Fannie Mae's chief economist, in a statement.
"Our view is that the underlying resilience of the economy and of consumers, in particular, that has been demonstrated during the past couple of years will persist," he said. "However, the magnitude of the uncertainties surrounding the European debt crisis and our fiscal condition here in the U.S. implies that the risks to the outlook are clearly tilted to the downside."
Nevertheless, the slowdown in the labor market and uncertainty about European solvency "should not derail the housing recovery if hiring picks up again as expected," the report said.
Fannie Mae anticipates an average 8.1 percent unemployment rate this year, followed by an average 7.8 percent rate in 2013. The mortgage giant also forecasts a moderate 2.2 percent increase in gross domestic product for all of 2012, up from 1.6 percent in 2011.
Source: Inman News
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