Category Archives: North Salem

New Home Sales Nudge Forward | North Salem Real Estate

The number of new homes sold in November increased by 4.3% from a downwardly revised October level to 490,000 on a seasonally adjusted annual basis. On a year to date level, sales are up 14.5% from the eleven month total in 2014. Inventories of new homes also increased to 232,000, the highest since January 2010 even as builders continue to seek workers and lots.

New Home Sales – Monthly and Annual
The increases in sales and inventories signifies continued builder optimism and customer demand growth. However, the levels remain disappointing given the amount of pent up demand and the low level of turnover in existing home sales. Most new home sales are to existing home sellers so the weak sales of existing homes and low inventories of existing homes produces fewer potential new home buyers. On the positive side, home equity is up, employment continues to increase and mortgage rates remain low by historic standards. On the negative side, few first time home buyers are in the market as credit standards remain restrictive and young individuals remain living with their parents. Existing home owners are reluctant to sell when the inventory of existing homes remains low, a double-edged retardant to a more robust new and existing home market.

Inventories
Regionally, Northeast sales dropped 29% but from a high October and within the smallest region. Midwest sales also fell 8.6%. The South and West increased 4.5% and 20.5% respectively. For the year, the same is true: the Northeast is behind last year’s total to date by 12.3% and the Midwest is virtually unchanged from the same 11 month period in 2014. The South and West are ahead of last year’s 11 month sum by 18.8% and 19.5% respectively.

 

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http://eyeonhousing.org/2015/12/new-home-sales-nudge-forward/

Mortgage rates average 3.95% | North Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the average 30-year fixed mortgage rate ticking slightly higher on a better than expected November employment report.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.6 point for the week ending December 10, 2015, up from last week when it averaged 3.93 percent. A year ago at this time, the 30-year FRM averaged 3.93 percent.
  • 15-year FRM this week averaged 3.19 percent with an average 0.5 point, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 3.20 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent this week with an average 0.5 point, up from last week when it averaged 2.99 percent. A year ago, the 5-year ARM averaged 2.98 percent.
  • 1-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.2 point, up from 2.61 percent last week. At this time last year, the 1-year ARM averaged 2.40 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 theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM. Additionally, the regional breakouts will not be provided for the 30-year and 15-year fixed rate mortgages, and the 5/1 Hybrid ARM.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“The economy added 211,000 new jobs in November exceeding analysts’ expectations, and the prior two months were revised higher as well. This momentum is likely to cement a decision by the Fed to begin raising interest rates this month. Following the release of the employment report, Treasuries rose 7 basis points and in response the 30-year mortgage rate ticked up two basis points to 3.95 percent.”

Time to break decorating rules | North Salem Real Estate

Go-to design rules can be a huge help when you feel lost with your decor. But sometimes they end up painting you into a corner. If you’re finding your decor a little on the dull side, or you just like shaking up the system, here are seven of the top design rules that you should consider bending, twisting or totally breaking.
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http://www.houzz.com/ideabooks/

Housing recovery based on age, race, place | North Salem Real Estate

It’s the most profitable time to sell a house since the Great Recession started in late 2007. But first-time buyers are increasingly scarce.

More Americans are qualifying for mortgages, yet minorities still get disproportionately rejected.

Three new industry analyses released Thursday show that the recovering economy has produced a divided U.S. housing market. Where people live, their age and the color of their skin have largely influenced who has benefited as real estate continues to heal from the bursting of a mortgage bubble that triggered the worst economic downturn in nearly 80 years.

Budding sales growth over the past year has overwhelmingly helped existing owners who are seeking an upgrade. But the millennials buying their first home are being priced out of the market because student debt has prevented them from saving. And a major gap exists among who qualifies for a mortgage even as the overall approval rate improves.

Seller’s market

Between July and September, sellers unloaded their homes for an average of $40,658 more than they paid for their properties, according to RealtyTrac, the California-based real estate information company. This was the largest profit recorded since the third quarter of 2007, although it remains below profits averaging in excess of $100,000 during the height of the boom in late 2005.

The financial gains might be enough to coax more people to list their properties for sale, ending a shortage of homes on the market.

The profits are “enough to say, yes, I can leverage this into moving up and buying a bigger home,” said Daren Blomquist, a vice president at RealtyTrac.

But not all markets are equal.

Sellers in San Francisco pocketed $463,505. Manhattanites reaped $385,909. Those in Washington, D.C. made $130,593, while sellers in Los Angeles came away with $115,573.

Meanwhile, housing in other major U.S. counties sold on average at a loss.

This includes the Chicago suburbs outside Cook County, with McHenry County sellers losing an average of $19,849. Sellers tended to unload properties for less than they paid in Baltimore, Cincinnati, Milwaukee and Tampa, Florida.

“In some cases, it may have to do with outlying areas that people were willing to buy into during the housing bubble,” Blomquist said. “They’re not close enough to jobs to make sense for buyers now.”

First-time troubles

Millennials, ages 18 to 34, face a less affordable housing market than their parents, forcing them to put off ownership.

The share of first-time homebuyers has fallen for the third consecutive year to its lowest level since 1987, according to a survey by the National Association of Realtors.

First-timers accounted for less than a third of sales that are expected to comfortably exceed 5 million this year. This group has traditionally represented 40 percent of sales.

The Realtors survey indicates that student loans and other debts have delayed down payment savings by a median of three years. A quarter of the first-time buyers identified saving for a down payment as their biggest challenge, with the majority of this group saying that education loans hurt their ability to set aside money.

This problem may only worsen as student debt burdens continue to expand.

College borrowers who graduated in 2014 finished on average with $28,950 in debt, a 31 percent increase over the past decade after adjusting for inflation, according to a report last week by The Institute for College Access and Success.

Mortgage approvals

It’s gotten easier to receive a mortgage, yet black and Hispanic homebuyers continue to lag substantially behind whites and Asians.

The mortgage rejection rate fell last year to 11.2 percent from 12.4 percent in 2013, according to Zillow, the real estate marketplace.

The rejection rate for blacks also fell over the past year, but it remains elevated at 23.5 percent. Just 2.5 percent of approvals for conventional mortgages went to blacks in 2014, even though they represent 12 percent of the U.S. population.

Hispanics face similar obstacles. They composed only 5.5 percent of mortgage approvals, despite being 17.3 percent of the population.

One of the issues is that home values in minority communities have been slower to rebound for the recession.

Zillow found that home prices in primarily white neighborhoods are 4.7 percent below their peak, compared to being 20.3 percent below in neighborhoods that are predominantly Hispanic neighborhoods and 16.7 percent in neighborhoods that are largely black.

 

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http://www.djc.com/news/bu/12083383.html

Build a Zero-Waste Homestead | North Salem Real Estate

In your permaculture design, you want to shoot for a near-zero-waste system. That doesn’t have to happen overnight, but it is definitely a primary goal. If the systems you design are wasteful, they will forever be reliant on large quantities of external inputs to keep them running. Most lawns are like this. Without chemical fertilizers, city water, and gasoline to run the mower, they would very quickly cease to look the way they do.

Many of the external resources we rely on every day are nonrenewable (at least in a human timescale). Once we use them, they’re gone. Relying heavily on these resources for day-to-day operations means we are more susceptible to market fluctuations and supply chains, and thus less resilient. In an emergency the lawn can just grow and become weedy, but what happens when we rely heavily on external inputs for our food, water, and heat?

This chapter focuses on where leaks often appear in systems and how we can minimize them, thus eliminating waste. The idea is to integrate those surpluses (another name for waste considered from a different perspective) back into our systems in some way. For instance, if we produce compost, apples that go bad can’t really go to waste. If we apply the principle of efficient energy planning and the concept of next highest use, we don’t really waste energy. Overall, the goal is to manage the inflows and outflows of our systems. We aren’t going to create completely closed-loop systems (where nothing enters or leaves), but we want to get a lot closer to that than where we are right now. Ultimately, we want to be very conscious of how the outflows of our systems can be used as inflows. Any outflows we do end up with should not harm the environment nor our neighbors.

Types of waste to address in your design include human waste, greywater, food and yard waste, and heat. We have already explored some ways to turn food and yard waste into compost in the earlier chapter on soil fertility. We’ll look more closely at the other topics here.

Human Waste

The topic of managing human waste, also known as humanure, is pretty much considered taboo in Western culture. You don’t talk about it in polite company. However, it is imperative that we begin to take responsibility for the humanure we produce. Unfortunately, the centralized systems upon which many of us rely and conventional home septic systems do not score that well on their ecological report card. In many parts of the world, waste collected by municipal sewer systems is dumped into the ocean or injected into the groundwater. Even the municipal systems that are ecologically kinder often have enormous energy inputs. The amount of fresh, clean water wasted by these systems is staggering. Consider, for example, that the Colorado River no longer reaches the Gulf of Mexico, thanks partly to all the flush toilets in huge desert metropolises like Las Vegas and Phoenix.

 

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http://www.motherearthnews.com/homesteading-and-livestock/self-reliance/zero-waste-homestead-ze0z1509zbay.aspx?newsletter=1&utm_source=Sailthru&utm_medium=email&utm_campaign=10.28.15%20MEN%20DIY%20eNews&utm_term=DIY%20eNews

TRID and Title: Is Shopping Really an Option? | North Salem Real Estate

In 2005 five companies controlled about 92 percent of the national market for title insurance.  Ten years later, only four title insurers now control 86.9 percent of the title insurance business.  In all but five states, only five companies account for 80 percent of more of premiums paid.

Despite the introduction of online insurerers a federal policies encouraging consumers to shop around, the $12 billion a year title industry looks pretty much the same as it did decades ago.

Will TRID centralize control of the title industry even more or will it initiate a disruption of the status quo?

A stinging 2007 study by the General Accountability Office led to an effort to encourage real shopping by consumers, but failed miserably.  Beginning in 2010, lenders were required to provide applicants estimates for all closing services costs, including title, when each loan application was received.  They were called Good Faith Estimates because lenders are required by law to be “within range” of the final settlement fees.

The idea was to give consumers time to shop for themselves to see if they could find a title company who do as well for less than the one the lender proposed.  Consumers got interested when a widely publicized February 2011 survey commissioned by Federal Title & Escrow Co. in Washington, D.C., showed homebuyers could save as much as $1,180 by shopping for title services.

Save 35 percent

About the same time, a new breed of title insurance company entered the market, promising discounts on a type of policy many home buyers don’t even realize they need: title insurance. When it launched its web platform for closing services in 2008, Entitle Direct took a page from the Geico model and offered savings of 35 percent by selling title insurance directly to the consumer and cutting out the commission-based title agent.  Other direct insurers include OneTitle is a New-York based company that offers savings of 10% on title insurance and Title Forward, a new entrant from Redfin.

“Many consumers are unaware that they have the right to shop around for a lower insurance premium rate and choose their title insurance company,” said Timothy O’Dwyer, CEO of Entitle Direct at the time. “The Internet provides a good starting point for shopping. Search for title insurance or go to one of the sites designed to help with the process.”

Yet seven years later, Entitle ranks only 14th among the industry’s 27 independent companies who collectively did only 12 percent as much business as the four “families” of companies that dominate the business—Fidelity, First American, Old Republic and Stewart.

After five years, GRE’s seemed to make little difference to the industry or consumers.  Why didn’t consumers shop for title services?

“I think it was simply too intimidating for consumers,” said Holden Lewis, assistant managing editor/mortgage analyst at Bankrate.  He tells the story of his wife doing the research to find a title insurer. “She actually called the title company and got a quote.  But you know, she was in the dark in just making that call and knowing who to ask for.  It’s hard.  She got it done but it wasn’t easy.  It was an intimidating process, so I think that just knowing how to shop is the main roadblock.  The consumer is going to say ‘the lender already did this for and whom I to think I can do any better.  I don’t know who to call anyway.”

Four days to shop

TRID changes the process.  It provides consumers with forms that are easier to understand and an accounting how their closing dollars were actually spent, but it also speeds up the timeline for consumers to act.

 

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http://www.realestateeconomywatch.com/2015/10/trid-and-title-is-shopping-an-really-an-option/

Construction spending up | North Salem Real Estate

United States Construction Spending 1964-2015 

Total construction activity in the United States increased by 0.7 percent month-over-month to $1,086.2 billion in August of 2015 from $1,079.1 billion in the previous month. It was the highest level since 2008, boosted by a surge in outlays for residential projects. Construction Spending in the United States averaged 0.45 percent from 1964 until 2015, reaching an all time high of 5.90 percent in April of 1978 and a record low of -4.80 percent in February of 1975. Construction Spending in the United States is reported by the U.S. Census Bureau.

United States Construction Spending

 

ActualPreviousHighestLowestDatesUnitFrequency
0.700.405.90-4.801964 – 2015percentMonthly
Current Prices, SA
Construction Spending refers to monthly estimates of the total dollar value of construction work done on new structures or improvements to existing structures for private and public sectors each month in the United States. This page provides the latest reported value for – United States Construction Spending – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. Content for – United States Construction Spending – was last refreshed on Thursday, October 1, 2015.
http://www.tradingeconomics.com/united-states/construction-spending

US Homebuilding slows in August | North Salem Real Estate

Builders broke ground on fewer houses and apartment complexes in August, a possible sign that the housing market may be levelling off after accelerating for much of the year.

Housing starts last month fell 3 percent to a seasonally adjusted annual rate of 1.13 million homes, the Commerce Department said Thursday. Construction activity slowed sharply in the Northeast and Midwest last month, edged downward in the West and climbed in the South.

Still, homebuilding appears much stronger than a year ago, despite figures that can be highly volatile on a monthly basis.

“This is a mere blip on the radar,” said Tom Wind, executive vice president of home lending at EverBank. “The housing market’s underlying fundamentals remain on pace for continued recovery.”

Housing starts have climbed a solid 11.3 percent this year to date. Steady job gains of 2.9 million in the past 12 months are contributing to increased demand from buyers and renters. And as the recovery from the Great Recession has entered its seventh year, residential construction has stated to both reflect and fuel broader economic growth.

Developers see favorable demographics helping to sustain demand, as approved permits rose 3.5 percent in August to an annual rate of 1.17 million.

Confidence among builders is also improving.

The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday rose this month to 62, up from 61 in August. The last time the reading was higher was October 2005 at 68.

New construction has yet to fully satisfy demand, a sign that further building will likely remain profitable.

Only 5.2 months’ supply of new homes is listed for sale, well below the standard level of six months usually seen in a healthy market. This shortage has led to rising prices for new and existing homes.

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http://hosted.ap.org/dynamic/stories/U/US_HOME_CONSTRUCTION?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-09-17-08-40-14

Underwater borrowers increased for two straight quarters | North Salem Real Estate

Home prices are still rising, and the economy is improving, but the ills of the housing crash are far from cured: 7.4 million borrowers were still “seriously” underwater on their mortgages at the end of June, according to RealtyTrac.

The real estate information company defines that as the loan amount being at least 25 percent higher than the property’s estimated market value.

Over 13 percent of all properties with a mortgage are in this predicament, and that is actually a slight increase from the first quarter of this year.

House underwater

Cherezoff | Getty Images

How can this be when home prices are still rising? It depends on how you read those prices. The National Association of Realtors reported that the median price of a home sold in June reached its highest level in history. The median, however, means half the homes sold for more and half sold for less, so if higher-priced homes are selling more, which they are, that skews the median higher. S&P/Case Shiller, which measures repeat sales of similarly priced homes, shows price gains have been shrinking in general but are still higher than a year ago.

Still, another report from Weiss Residential Research digs deeper in local areas and finds that nearly half the homes in the nation’s top markets are actually losing value.

“Don’t be fooled by averages,” said Allan Weiss, founder and CEO of Weiss Residential Research. “All of the largest metro indexes are rising more slowly than they were a year ago though market reports give the impression that values are rising across the board. However, people don’t own the entire market, they own one house.”

Larger, more expensive homes, are sitting on the market longer and seeing more price cuts than smaller homes with two bedrooms or less, according to Weiss. That is likely because there is so much less supply on the lower end of the market than on the high end.

Home prices are most often measured in terms of sale price, but RealtyTrac’s numbers are based on estimates of home all home values, not just the ones for sale.

 

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http://www.cnbc.com/2015/07/30/more-homeowners-drowning-in-debt.html

Under Jeb Bush, housing prices fueled Florida’s boom | North Salem Real Estate

On the campaign trail, Jeb Bush has repeatedly emphasized his record overseeing Florida’s boom economy as the state’s governor. He says it’s an example of an economy that created a huge number of jobs and benefited the middle class — an example of what he could do as president. “I know how to do this,” he said in Maitland, Fla., on Monday.

But according to interviews with economists and a review of data, Florida owed a substantial portion of its growth under Bush not to any state policies but to a massive and unsustainable housing bubble — one that ultimately benefited rich investors at the expense of middle-class families.

The bubble, one of the biggest in the nation, drove up home prices and had many short-term benefits for the state, spurring construction, spending and jobs. But the collapse of the housing bubble as Bush left office in 2007, after eight years of service, sent Florida into a recession deeper than that in the rest of the country, and hundreds of thousands lost their homes.

“Who got hammered? Lower- and middle-class America,” said Marshall Sklar, a real estate investor who, like other well-off financiers operating in the state, has benefited from the wreckage.

Sklar recently won an online auction for a small stucco condominium in Boca Raton that a married couple had bought in 2004 for no money down. They borrowed against it as the state’s housing bubble inflated and then, like so many others, had to walk away heavily in debt when it burst.

After buying their busted dream, Sklar flipped it to a wealthy investor, banking a commission. His investor will probably earn a 12 percent return by renting out the condo. The value of the condo was redistributed upward, like so much of Florida’s housing wealth in recent years. “You took it out of the sheep and gave it to the wolves,” Sklar said after touring several houses he recently bought at bargain prices.

The story of this house and its owners is in many ways emblematic of much of the experience of Florida’s economy in the 2000s — a story that contrasts sharply with the record Bush recounts.

 

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http://www.washingtonpost.com/business/economy/under-jeb-bush-housing-prices-fueled-floridas-boom-then-it-all-went-bust/2015/07/27/3cb40da2-2409-11e5-b72c-2b7d516e1e0e_story.html