Existing-Home Sales and Prices Continue to Rise

February existing-home sales and prices affirm a healthy recovery is underway in the housing sector, according to the National Association of REALTORD®. Sales have been above year-ago levels for 20 consecutive months, while prices show 12 consecutive months of year-over-year price increases.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January, and are 10.2 percent above the 4.52 million-unit level seen in February 2012. February sales were at the highest level since the tax credit period of November 2009.

Lawrence Yun, NAR chief economist, says conditions for continued housing improvement are at play. “Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable,” he says. “The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive.”

Total housing inventory at the end of February rose 9.6 percent to 1.94 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace, up from 4.3 months in January, which was the lowest supply since May 2005. Listed inventory is 19.2 percent below a year ago when there was a 6.4-month supply.

The national median existing-home price for all housing types was $173,600 in February, up 11.6 percent from February 2012. The last time there were 12 consecutive months of year-over-year price increases was from June 2005 to May 2006. The February gain is the strongest since November 2005 when it was 12.9 percent above a year earlier.

“A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year,” Yun says. “The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year.”

Distressed homes–foreclosures and short sales–accounted for 25 percent of February sales, up from 23 percent in January but down from 34 percent in February 2012. Fifteen percent of February sales were foreclosures, and 10 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in February, while short sales were discounted 15 percent.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.53 percent in February from 3.41 percent in January; it was 3.89 percent in February 2012.

NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., says interest rates remain extraordinarily low. “In the history of mortgage interest rates since 1971, the 30-year fixed rate has been below 4 percent in only 15 months, and those have all been in the past 15 months,” he says. “Even with rising home prices, affordability remains historically favorable because home prices over-corrected during the downturn. This means there is still great value for buyers in the current market.”

The median time on market for all homes was 74 days in February, which is 24 percent below 97 days in February 2012. Short sales were on the market for a median of 101 days, while foreclosures typically sold in 52 days and non-distressed homes took 77 days. One out of three homes sold in February was on the market for less than a month.

“There was an upward bump in the shares of investor and all-cash closed purchases in February. These sales result from purchase offers during the holidays when shopping activity by traditional home buyers slows, but investors, who typically pay cash, remained active,” Yun says. “This is a seasonal pattern, but we’re now seeing a general increase in buyer traffic, which is 25 percent above a year ago.”

For more information, visit www.realtor.org

Spring Home Buying Season Starts Early

Realtor.com®, a leader in online real estate operated by Move, Inc., recently released its February data on the U.S. housing market, offering valuable insight into the latest real estate trends. Realtor.com®’s February 2013 national housing data indicates that listing inventories increased 1.15 percent month-over-month; median age of inventory was at 98 days, a 9.26 percent decrease month-over-month; and median list prices were slightly higher month-over-month at $189,900. These numbers show that home buyers are getting an early start on the spring season despite the fact that inventories recently hit record lows.

“As we enter the busiest time of the year for home buyers and sellers, our latest housing trend data shows just how competitive the market is with a significant national housing recovery well underway,” said Steve Berkowitz, chief executive officer of Move, Inc. “Looking ahead, we can expect the amount of inventory to increase this spring along with higher list prices as sellers become more comfortable with the market conditions.”

The median age of inventory was down by 9.26 percent month over month and total listings are up 1.15 percent month over month, suggesting that many reluctant home sellers are starting to take an early advantage of the recent improvements in housing prices. Annual inventory decreases of -15.97 percent are consistent with a gradual, yet persistent downward trend that has been occurring over the last two years. From January 2013 to February 2013, the median age of inventory decreased in 145 of the 146 markets tracked by realtor.com®. The national median list price also reversed its downward trend, rising by 1.55 percent over the month of February and 1.01 percent on an annual basis. In addition, the number of markets experiencing a decline in home prices is shrinking, implying more good news for the housing market and U.S. economy at large.

There continue to be pronounced regional differences in the strength of the housing market. Several areas in California are experiencing the highest increases in list prices coupled with the largest inventory declines. Phoenix, Seattle and Denver are also among the top performers across the U.S. However, many smaller industrialized markets in the Midwest and the Northeast registered year-over-year price declines, as did Philadelphia, Chicago and New York City. While the number of markets experiencing year-over-year list price declines had been increasing, this pattern appears to be turning around as home list prices increased in 78 markets last month on a year-over-year basis and declined in 39.

National Data
• In February, the total number of single-family homes, condos, townhomes and co-ops for sale in the U.S. (1,494,218) increased by 1.15 percent month-over-month. On an annual basis, however, inventory was down by 15.97 percent.
• The national median list price for single-family homes, condos, townhomes and co-ops ($189,900) increased by 1.01 percent year-over-year and 1.55 percent month-over-month in February.
• The median age of inventory of for sale listings fell to 98 days in February, down 9.26 percent from January and 11.71 percent below the median age one year ago (February 2012).

Regional Data
• Nearly all of the markets with the largest year-over-year declines in their for sale inventories in February were in California, where declines averaged 48 percent. The list includes Sacramento, Stockton, Oakland, San Jose, Orange County, Los Angeles, Seattle, San Francisco, Riverside and Ventura. These markets also experienced a dramatic decline in the median age of inventory, falling to an average of just 31 days, or 53 percent lower than it was one year ago.

• On an annual basis, February median list prices were up by 5 percent or more in 51 markets while they were down by more than 5 percent in 11 markets. The number of markets experiencing a year-over-year list price decline in February (39) is significantly below the number of declines observed in January (50). California markets continue to dominate the list of areas experiencing the largest year-over-year increases in their median list prices, representing nine out of the top ten best performers.

• The ten markets with the longest time on the market continued to include the coastal areas of the Carolinas and the resort communities of Santa Fe, NM and Ashville, NC. In addition, five older industrialized areas also appear on the list: Reading, PA; Portland, ME; Albany, NY; Philadelphia and Trenton, NJ. California markets continued to dominate the list of top ten areas with the shortest time on the market, although the median age of inventory was also at record lows in Denver and Seattle. Median time on market in these areas averaged just 28 days, 51 percent lower compared to one year ago.

Realtor.com® regularly tracks real estate data and develops monthly reports featuring the number of listings, median age of inventory and median list price across the U.S. and in specific markets, as well as provides year-over-year and month-over-month changes. These reports are the only ones pulled directly from the realtor.com® database that updates every 15 minutes from more than 800 multiple listing services.

Energy Efficiency Credits Reinstated

If you’re thinking about replacing your windows this year with more energy efficient options, Washington just upped the incentive to actually get the job done. As part of the “fiscal cliff” agreement earlier this year, federal lawmakers agreed to reinstate the energy efficiency home improvement tax credits that had expired with 2011.

Homeowners who did not claim the full credit from 2006-11 can now receive 10 percent of the cost, up to a $200 tax credit, for Energy Star qualifying replacement windows purchased between Jan. 1, 2012 through the end of this year. Homeowners can also claim up to a $500 tax credit for other energy efficient home improvements from heating and cooling systems to insulation. More information on the program eligibility can be found at www.energystar.gov.

High-performance, low-emissivity vinyl windows are the top choice for homeowners looking for maximum energy efficiency. They help keep the heat out during the summer and the warm air in during the winter.
“They’ve come so far,” says Dennis Ewton, owner of King County Window & Glass, LLC in Federal Way, Wash. “The standard (vinyl window) is two coats of the low-E (glaze), but now they have three coats of low-E, so that’s a real plus. The low-E is what really works as far as the performance of the window. During the summer, the high performance low-E, the max, will reflect 94 percent of those ultraviolet rays that come in and fade the furniture, carpet and floors, and really heat the place up. It slows that heat transfer down in the winter. A standard low-E reflects about 84 percent.”

Thought the lure of tax savings can be appealing, replacement windows are a significant investment. Don’t neglect your due diligence and rush into this or any other home improvement project. To start, take time to find a reputable and qualified company that is going to explain your options and provide information on which windows do qualify for the tax credit. There are a variety of sales tactics companies use, the most notorious is the high-pressure sales job in which they offer a “discount” on inflated prices in exchange for an immediate decision.

“I don’t like people to do high-pressure sales on me,” says Jamie Schaffer with Superior Replacement Window & Door, Inc. in Cutler Bay, Fla. “It really turns me off. In my business, we operate on a consultative approach. We try to give our customers as much information as possible, so they can make an educated decision. We don’t ever want them to feel pressured to make a decision right there on the spot.”
Another approach is to offer a super-low price quote only to start tacking on extra charges once they get in the house.

“Don’t go by price alone,” says Jeff Wright of Atlas Window & Siding Co. of Lexington, Ky. “There are companies out there that advertise really low prices. Those really low prices are gimmicks to get their foot in the door, then once they’re in there, people find out it’s a really low-end product. It’s like a bait and switch almost.”

Get bids from at least three different window companies and ask the salesperson to provide the pricing and the ratings for each window type in writing. Also, if your home was built before 1978, be sure the window installers can provide proof of EPA certification for lead paint renovation.
If you plan to claim the credit, consult your tax professional to be sure you’re due the credit, buy the correct materials and have the documentation you need to claim your savings.
Source: AngiesList

Housing to See 'Sustained Growth' According to Fannie Mae

The housing market is “on a sustained growth path,” according to the latest economic outlook by Fannie Mae’s Economic & Strategic Research Group. The report shows "One of the key developments for the housing market last year was the general consensus that home prices, on a national basis, bottomed earlier in the year and continued to build momentum, exhibiting robust year-over-year gains unseen since the housing boom."

Housing inventories are at the lowest since December 1994 and fewer distressed homes have helped to lift home prices, according to Fannie Mae economists.

Among some of Fannie Mae economists projections for this year:

Home prices: Fannie Mae economists predict that the median price of existing homes will increase 2.3 percent on an annual basis this year, reaching $181,000. The median price of a new home will likely increase 1.6 percent to $248,000. For 2014, economists predict that home prices will increase an extra 2.8 percent.  

Home sales: Existing-home sales will likely rise 11.5 percent in 2013, and new-home sales will rise 12.5 percent, economists predict.   

Mortgage rates: Rates will likely edge up slightly this year with 30-year fixed-rate mortgages projected to average 3.8 percent this year and rise to 4.4 percent in 2014.

Source: “Fannie Mae: Housing is 'on a Sustained Growth Path

Freddie Mac Update: Mortgage Rates Steady

Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates largely holding steady from the previous week, remaining near their 65-year record lows, and continuing to provide support for the housing recovery.
Results showed that the 30-year fixed-rate mortgage (FRM) averaged 3.52 percent with an average 0.7 point for the week ending March 7, 2013, up from last week when it averaged 3.51 percent.

Last year at this time, the 30-year FRM averaged 3.88 percent. Additionally, the 15-year FRM this week averaged 2.76 percent with an average 0.7 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.13 percent. The survey shows that the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.63 percent this week with an average 0.5 point, up from last week when it averaged 2.61 percent. A year ago, the 5-year ARM averaged 2.81 percent.

The 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.3 point, down from last week when it averaged 2.64 percent. At this time last year, the 1-year ARM averaged 2.73 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

“With gross domestic product growing only 0.1 percent in the fourth quarter of 2012, inflation remains at bay and consequently mortgage rates low,” says Frank Nothaft, vice president and chief economist, Freddie Mac. In fact, the price index of personal consumption expenditures rose only 0.1 percent in January which was below the market consensus forecast. Moreover, these low mortgage rates are helping to revive the housing market. For instance the CoreLogic® home price index rose 9.7 percent between January 2012 and 2013, marking the largest annual increase since April 2006.”

For more information, visit www.FreddieMac.com

Thinking of Selling? How Does Your Home Fit What Buyers Want

Many homeowners and Realtors are wondering not only what today’s home buyers really want, but also what they are ready to leave behind in light of current economic realities. A new study recently released by NAHB, What Home Buyers Really Want [2], was designed to answer these questions, and more specifically, to provide the most current and accurate information on buyer preferences.
So what do home buyers really want? The first answer is energy efficiency. Four of the top most wanted features involve saving energy: 94 percent of home buyers want energy-star rated appliances, 91 percent want an energy-star rating for the whole home, 89 percent want energy-star rated windows, and 88 percent want ceiling fans.

The second message buyers are sending is they want help keeping their home organized. The laundry room is wanted by 93 percent of buyers; in fact, 57 percent consider it essential and would be unlikely to buy a home without it. This shows that most buyers want to keep the dirty laundry contained in a room and away from plain view. Moreover, nine out of ten buyers want a linen closet in the bathroom to help keep towels and toiletries organized. Space in the garage to store bikes, sports equipment, or gardening tools also ranks high on the buyers’ wish list: 86 percent want it. And a walk-in pantry in the kitchen is something most buyers care a lot about as well (85 percent).

What is even more interesting is what buyers are not interested in buying. For example, 66 percent of buyers do not want to live in a golf course community, 56 percent reject the idea of living in a high density community, 48 percent do not want a gated community, and 44 percent would not buy a home in a mixed use community.

More than half of all buyers also discard the option of having only a shower stall in the master bathroom with no tub (51 percent), and many are saying ‘no’ to two-story spaces as well. About 43 percent of buyers do not want a two-story family room and 38 percent feel the same way about a two-story entry foyer. Many buyers now consider these large, open spaces as energy-inefficient – the last thing they want for their homes.

A complete outdoor kitchen is not an important priority to many buyers either, as 31 percent flat out discard the possibility of washing dishes, cooking, and keeping food refrigerated outdoors. For most buyers (62 percent), an outdoor grill will suffice.
For more information, visit www.nahb.org

Is it a Good Time to Buy or Sell Real Estate?

Rarely does a day go by that I don’t get asked if this is a good time to buy and/or sell a home. Some people might think that my response is always an emphatic “YES!” because I work in real estate. But in truth, there is no right or wrong answer. Every person’s circumstances are unique, so in some cases the answer might be yes, but for others it might make more sense to wait.

The good news is that we’re finally coming out of the housing slump of the past five-plus years. Housing is a major driving factor of the U.S. economy, so regardless of whether or not one owns a home, a stronger housing market is good for everyone. For some would-be home sellers, this positive momentum, combined with a rise in home prices and buyer activity, is enough to compel them to list their home. And right now the statistics appear to be on their side.

According to the most recent findings from the National Association of REALTORS®, total housing inventory has fallen for the past several months, settling at just under two million existing homes on the market that are available to buyers. This represents about a four-month-supply of homes throughout the U.S. This is the lowest housing supply the nation has seen since May of 2005 – during the peak of the housing boom.

“Months supply” basically means that if existing homes were to continue selling at the current rate, the inventory of homes would be sold by that many months. A “normal” market usually has around six months of supply; therefore lower numbers mean a shortage of inventory. If demand is greater than supply, this often leads to competition amongst buyers and rising prices. 

The following graph demonstrates the downward trend in the overall U.S. month’s supply of homes which is currently at about 4.4 months:
Existing-Homes-Chart [1]
As long as inventory levels remain low, competition amongst buyers will remain high, and home prices should continue to rise – albeit at a healthy rate – not like what we saw during the housing boom in some areas. As evidence of this, in the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1 percent increase in home values by the end of 2013. And in a recent report by the National Association of REALTORS®, median home prices last quarter showed the strongest year-over-year increase in seven years.

Another thing that buyers and sellers need to keep their eye on is interest rates and their impact on affordability. Interest rates have been at such historical lows for so long that it’s easy to take them for granted. But the truth is that several lending institutions, including Freddie Mac and the Mortgage Bankers Association, project that interest rates will rise from 3.4 to 4.4 percent by the end of 2013. A full point increase can have a significant impact on the amount of your mortgage over the long term.

With these types of projections, one might wonder why there isn’t a flood of homes coming on the market. The biggest concern I hear from many would-be sellers is that they’re going to lose money because their home is worth less today than when they bought it. A valid concern, to be sure, but not necessarily the case for many folks. Remember, you’re buying and selling in the same market conditions, so if your home has lost value in recent years, it is highly likely that the next home you buy has as well.

Source: Ob Jacobi / Rismedia

Comparing the Cost of Living from one State to Another

Here's a great link to review...

 When you're offered a job transfer, there is a lot to consider. Most importantly you'll want to know if it is economically feasible. Will the increase in pay really be an increase based on the local economy. Here's a link to analyze the differences in the cost of living. Unfortunately it only covers the major metropolitan areas, but it will definitely give you an idea of what the average costs will be.