Tag Archives: Pound Ridge Luxury Real Estate

Home Prices are 3% Undervalued Nationally | Pound Ridge Real Estate

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Trulia’s Bubble Watch shows whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. The more prices are overvalued relative to fundamentals, the closer we are to a housing bubble – and the bigger the risk of a price crash. Sharply rising prices aren’t necessarily a sign of a bubble. By definition, a bubble develops when prices look high relative to fundamentals.

Bubble watching is as much an art as a science because there’s no definitive measure of fundamental value. To try to put numbers on it, we look at the price-to-income ratio, the price-to-rent ratio, and prices relative to their long-term trends. We use multiple data sources, including the Trulia Price Monitor, as leading indicators of where home prices are heading. We combine these various measures of fundamental value rather than relying on a single factor because no one measure is perfect. Trulia’s first Bubble Watch report, from May 2013, explains our methodology in detail. Here’s what we found this quarter. (This report contains larger-than-usual revisions of previous Bubble Watch estimates. See note.)

We estimate that home prices nationally are 3% undervalued in the third quarter of 2014 (2014 Q3). In 2006 Q1, during the past decade’s housing bubble, home prices soared to 34% overvalued before dropping to 13% undervalued in 2012 Q1. One quarter ago (2014 Q2), prices looked 5% undervalued; one year ago (2013 Q3), prices looked 6% undervalued. This chart shows how far current prices are from a bubble…

 

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http://seekingalpha.com/article/2533125-bubble-watch-home-prices-3-percent-undervalued-with-few-metros-bubbling-up?ifp=0

Housing starts nosedive 14.4% in August | Pound Ridge Real Estate

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Privately-owned housing starts plunged 14.4% in August, according to the U.S. Census Bureau.

Starts were expected to drop after a strong July but not by this much.

Housing starts for July jumped to an annualized pace of 1.093 million units-up from 0.945 million units the prior month. July was up a sharp 15.7%.

Housing starts printed at a seasonally adjusted annual rate of 956,000, well below analyst expectations, but 8% above the August 2013 rate of 885,000.

Single-family units remained largely flat as they have for the past 20 months, multifamily starts fell from 396,000 to 343,000, or 13.4% for permits, and an incredible 31.5% for starts.

Single-family housing starts in August were at a rate of 643,000; this is 2.4% below the revised July figure of 659,000. The August rate for units in buildings with five units or more was 304,000.

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 998,000. This is 5.6% below the revised July rate of 1,057,000, but is 5.3% above the August 2013 estimate of 948,000.

Single-family authorizations in August were at a rate of 626,000; this is 0.8% below the revised July figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 343,000 in August.

Privately-owned housing completions in August were at a seasonally adjusted annual rate of 892,000. This is 3.2% above the revised July estimate of 864,000 and is 16.9% above the August 2013 rate of 763,000.

Single-family housing completions in August were at a rate of 591,000; this is 8.2% below the revised July rate of 644,000. The August rate for units in buildings with five units or more was 292,000.

 

 

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http://www.housingwire.com/articles/31404-housing-starts-nosedive-144-in-august

Fresh mortgage price war breaks out | Pound Ridge Real Estate

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A fresh mortgage price war has broken out with a string of major lenders slashing their rates in recent days.

Metro Bank, Halifax, Barclays, Nationwide Building Society, HSBC, Virgin Money, Skipton Building Society and Norwich and Peterborough Building Society are among those who have sharpened up their ranges.

The tussle for homeowners’ business has seen several lenders once again drop their rates below 3% for people looking for a five-year fixed rate mortgage.

Meanwhile, Virgin Money has taken the unusual step of launching a new range which allows people to fix in for one year longer than the usual five-year deals and protect themselves against the prospect of interest rates rising for a prolonged period.

Virgin’s new six-year fixed rate deals, which are available at the same price as its five-year fixes, include a product available for people with a 30% deposit with a rate of 2.99% and a fee of £995. Alternatively, people can opt to go fee-free and pay a higher rate of 3.59%.

Metro Bank also slashed its five-year fixed rates today. The new products, which carry a fee of £999, include a five-year fix at 2.99% for someone with a 40% deposit and one at 3.79% for a borrower with a 15% deposit to put down.

The announcements came as Norwich and Peterborough Building Society unveiled a 0.20% interest rate reduction on first-time buyer deals.

The society has shaved a fee-free two-year fixed rate deal for people aspiring to get on the property ladder down from 5.19% to 4.99%, as well as chopping product rates for people with 25% and 35% deposits.

 

 

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https://uk.news.yahoo.com/fresh-mortgage-price-war-breaks-124034052.html#5iZUafw

 

China’s falling real-estate prices trigger protests, clashes | Pound Ridge Real Estate

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The sharp drop in China’s housing prices has led to an outburst of anger among property owners, leading to violent clashes in some cases, according to local media reports Tuesday.

In one case, scores of property owners surrounded a Shanghai sales office of Greentown China Holdings Ltd. 3900, +8.58% GTWCF, -33.19%  to protest the developer’s 25% cut to prices within a five-day period, according to a report on the NetEase NTES, +1.62%  news portal site 163.com.

Protesters held banners with slogans such as “You cheated us!” and “300,000 yuan [$48,750] worth of assets evaporate within five days — years of work in vain!” according to photographs of the demonstration posted on the site.

The report quoted a sales manager from Greentown as saying that the price-cut was aimed to boost sales and “cope with competition” from rival China Vanke Co. 2202, +1.48% the nation’s largest residential property developer.

In other Chinese cities, such confrontations between buyers and developers have turned violent.

In the eastern city of Jinan, banner-carrying owners blocked a street to protest another 25% price cut for a local housing development, this one conducted over the space of two weeks, according to the local-government-run Life Daily newspaper.

The protesters clashed with a group of counter-protestors suspected to have been hired by local developers, injuring some of the demonstrators and forcing the police to break up the fight, 163.com said in a separate report.

 

 

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http://www.marketwatch.com/story/chinas-falling-real-estate-prices-trigger-protests-clashes-2014-08-26

Good news for the housing market? | Pound Ridge Real Estate

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Home Depot (HD) recorded strong second-quarter earnings on the same day the U.S. Census Bureau and the Department of Housing and Urban Development reported multifamily housing starts soaring. Per Forbes:

Home Depot reported $23.8 billion in second quarter revenue, a 5.7% increase over the year-ago quarter and a figure that cleared the $23.5 billion Wall Street consensus.

“In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies,” Frank Blake, Home Depot chairman and CEO, said in a statement Tuesday morning. 

And as a result, homebuilder stocks on the HW 30, HousingWire’s exclusive list of mortgage related stocks, were up on the news Tuesday.

 

 

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Good news for the housing market?

 

 

Why mortgage rates haven’t risen as expected | Pound Ridge Real Estate

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By most estimates, mortgage rates were expected to climb this year, with rates on the 30-year fixed-rate mortgage predicted to exceed 5%. Instead, rates are now lower than they were this time in 2013 — much to the advantage of mortgage shoppers.

There are a few reasons why higher rates never came to pass.

Rates on the 30-year fixed-rate mortgage averaged 4.15% for the week ending July 10, according to Freddie Mac’s weekly survey of conforming mortgage rates. A year ago, rates averaged 4.51%.

“In January, we were projecting at the end of the year that the 30-year would be 5.1%,” said Leonard Kiefer, deputy chief economist with Freddie Mac. “We most recently revised that down to 4.4%.

Supply and demand

Economists had largely expected rates to rise once the Federal Reserve indicated it would taper its purchase of mortgage-backed securities through its quantitative easing program, Kiefer said. Rates did, in fact, rise spike upward due to that indication last summer.

But when the Fed actually began purchasing fewer of these securities, mortgage rates began to fall. That’s because the tapering ended up coinciding with a reduction in mortgage originations — which means fewer mortgage-backed securities were being issued, Kiefer said.

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http://finance.yahoo.com/news/why-mortgage-rates-haven-t-145257442.html

Consolidation Creates Megalandlords Dominating Single Family Rentals | Pound Ridge Real Estate

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“Now we’ll sweep up everybody over the next two years who got stuck, who says I have home price appreciation, which they do. They bought right, but now they are stuck.”

The chief executive officer of the second largest hedge fund landlord articulated in an interview with Bloomberg why a handful of megalords are the process of dominating the single family rental business.

Rising value, soaring rents, atmospheric demand and difficulties finding new properties at below market prices are providing smaller players, includng small investors and “accidental” investors who rent out a property or two an ideal opportunity to cash in.

Consolication is underway across America. American Homes 4 Rent, the second-biggest REIT in the industry, this month bought Beazer Pre-Owned Rental Homes Inc., gaining more than 1,300 houses. Barrack’s Colony American has made four bulk purchases this year, reported Bloomberg in the story by John Gittelsohn and Heather Perlberg.

Another factor for consolidation is the challenge of managing hundreds, thousands of single family homes. Bigger may not always be better for single-family rental operators. Institutional funds that have internalized property management have to be able to maintain thousands of properties that were initially serviced by local and regional groups, said J.D. Asbell, a landlord with about 175 houses in Kansas and Missouri who also renovates and sells homes to Wall Street-backed firms, according to the Bloomberg piece.

“This is a hard business to run,” said Asbell, who has been renting homes since 1993. “The management is always going to be an issue for the big funds. That’s the key to this long term, keeping the houses occupied and getting out bad tenants that aren’t paying.”

 

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http://www.realestateeconomywatch.com/2014/07/consolidation-creates-megalandlords-dominating-single-family-rentals/

Mortgage Defaults Sink Below 1 Percent | Pound Ridge Real Estate

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Mortgage default rates fell below one percent for the first time in years, providing further evidence that the foreclosure era is all but over.

Data through June 2014, released today by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed decline in default rates. After eight consecutive months of rate declines, the first mortgage default rate fell to 0.89.

“Consumer credit default rates continue to drift lower and have reached a historical low,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. “Recent economic reports are encouraging with the unemployment rate now at a six year low and strong job creation in recent months. The continued declines in consumer default rates confirm other indicators of an improving economy. Credit standards for mortgage loans continue to be somewhat restrictive and may be contributing to low first mortgage default rates.

 

 

 

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http://www.realestateeconomywatch.com/2014/07/mortgage-defaults-sink-below-1-percent/