“inventories are at their highest level in over a year, and price gains have slowed to much more welcoming levels in many parts of the country,” said NAR Chief Economist Lawrence Yun. “This bodes well for rising home sales in the upcoming months as consumers are provided with more choices.”
But supply shortages in certain areas, particularly the West, means that construction of new homes needs to increase before housing makes a full recovery, he said.
Plus, while the economy is adding jobs at a healthy clip, wage growth is stagnant. This “is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates,” Yun said.
Okay so even though June's existing home sales are up, they are still below where they were this time last year. The good news is that all signs point to a continuing rise. According to a study from NAR (National Association of Realtors), who counts single family, condo, town homes and Co-ops in the total numbers. Existing home sales are up over 2.5% for the month of June, topping an annual rate of 5 million for the first time since October of last year. According to Freddie Mac's primary mortgage market survey, mortgage rates have slowed, moving toward historic lows. In the past couple of weeks a 30 year FRM (Fixed Rate Mortgage) was hovering around 4.15%, compared to last weeks 4.13%. It might not seem like much, but trust me if you run the numbers it really can make a difference. These low interest rates are keeping the buyers happy in this competitive market. If you have the means of going with a 15 year FRM, you can really save some money. 15 year FMRs are about a point lower than the 30 year. Compare these numbers to the 2013 averages, the 30 year FMR was around 4.37%. Buy now to save money! Once Freddie and Fannie stop buying up secondary market loans the averages are going to go up! “Mortgage rates were little changed amid a week of light economic reports. Of the few releases, industrial production rose by 0.2% in June, below the market consensus forecast. Also, the producer price index for final demand rose 0.4% in June, rebounding from a 0.2% decline the prior month,” said Frank Nothaft, vice president and chief economist with Freddie Mac. The U.S. housing recovery is still happening and international buyers are giving a huge boost with the Chinese leading the charge. There is a lot of cash out there these days and much of it is coming from China. The Chinese are second only to Canadians in buying real estate in the US but the Chinese are spending a lot more than any other group, on average spending nearly 600,000 per property. Real estate prices in China are sky high making the US market much more safe and affordable. The other reasons can range from buying condos for the kids to live in while attending college; to buying homes to use a couple of times a year for vacations. Because of proximity to China the west coast is being bought up more rapidly than other states with California being the most popular. Chinese buying was up more than 70% to $22 billion -- nearly 1 in 4 dollars of all foreign purchases, according to the National Association of Realtors. The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on contracts signed last month, increased 6.1 percent to 103.9, the highest level since September of last year. The number of contracts went up in all regions of the country, with the Northeast and West experiencing the largest gains. "The housing market is likely to continue recovering lost ground following its weather-induced stumble earlier this year," said Gennadiy Goldberg, an economist at TD Securities in New York. "We look for the stronger pending home sales report to help put fears of 'flattening' housing market momentum to rest in the near-term." Different states and counties across the US are rated with classifications such as very high, high, medium, low and very low "Risks" of being hit by a natural disaster such as hurricanes, tornados, or earthquakes. With over half of the homes in the US located in a "very high risk" to "high risk" areas there seems to be no change in the pricing or appreciation in the most populous areas. This is according to reports done by Realty Trac. “The higher median home prices in many counties with a high risk for natural disaster indicates that other location-based factors such as weather and access to jobs override concerns about home damage as a result of earthquakes, tornadoes and hurricanes,” said Daren Blomquist, vice president at RealtyTrac, in a statement. After a tough first quarter, hit by increasing home prices and a slight jump in mortgage rates from 2013. Some of the latest reports Indicate that sales in new and existing homes rose in April. According to the US Commerce Department, furniture and home-furnishing stores have hit the highest monthly tally in the last several years. It seems consumers are not afraid to spend money on the big ticket items and the majority of these purchases are for new homes and upgrades. “The strength seen in the housing-related component of the retail sales report does offer some encouraging on the tone of the housing market recovery,” said Millan Mulraine, deputy head, U.S. research and strategy, at TD Securities. “It reinforces the current narrative of a rebound in housing market recovery.” The average home has grown by almost 1,000 square feet from the early 80's to now. Wow thats a pretty big jump. Homes in the early 80's were on average around 1,700 Square Feet, compared to todays average of about 2,600 Square feet. We certainly will have less children sharing rooms, bigger media and family rooms, and many more home offices. The average size of homes built last year hit 2,600 square feet, an all-time high that surpassed even the housing bubble years, when homes averaged around 2,400 square feet, according to the Census Bureau. When talking to people about the current real-estate market, everyone immediately thinks oh what a great time for sellers! While this may be true, its also a great time for buyers! We are in a very competitive market but buyers are still getting low interest rates and can purchase before the prices really go up. Spring and summer are the best times to buy, buying is still cheaper than renting in many areas, and credit score requirements are not as tough as they have been. Timing is everything in so many situations and this is one of them. Buyers should be taking advantage of these conditions, waiting could cost you! "It is a big deal to buy a house. But if you do your homework and have the right documentation ready, this could be a great time to buy a home for many reasons," says Jay Plum, executive vice president of Huntington National Bank, in Cincinnati, Ohio. This is a little something I'm putting out there for all first time buyers. Not just first timers but all buyers really need to be prepared these days. Make sure you have all your ducks in a row, whatever that means. In many cities supplies are tight, this means there is a real lack of inventory out there. Here in Seattle this is especially true, and lenders are being much more cautious than they have been in the past. We are fast approaching stats similar to those back in '07 before things went downhill, BUT... without the predatory lending! This is a good thing. Having or saving that down payment is tough for younger first time buyers, student debt is higher than it has been in years. These and many other factors are creating a very competitive market. The more qualified you make yourself as a buyer the more competitive your offer will be and more streamlined the process will be (having a good agent is also a must;). The really great thing for buyers is that the interest rates are still super low! The source link below is a great article I found on money.cnn.com, it has some great advice and a great checklist... buyers must read. "Interest rates remain the envy of even your grandparents," says Keith Gumbinger, vice president of mortgage publisher HSH.com. First, make your finances sparkle. We all know that real-estate on the high end and well known golf courses can be a bit spendy. I thought that with the British open coming up, and heading back to St. Andrews in 2015, this would be a perfect time to share with you an article I found on the wallstreetjournal.com. Buying property on the links at St. Andrews in Scotland, apparently not only takes mega bucks but mega patience and persistence as well. These properties don't just pop up, they are few and far between. "It is perhaps the most valuable 300 meters in the whole of Scotland," says Jamie Macnab, a director with Savills SVS.LN +0.74% in Edinburgh, who specializes in selling high-end homes in St. Andrews. "The price per square foot would be higher than anywhere else in the country." |
AuthorJason Moon Real Estate Broker with ColdWell Banker Bain. Seattle, WA Archives
November 2019
Categories |