Tag Archives: #waccabucrealestate

Southern California suffers its worst housing slump in over a decade | Waccabuc Real Estate

  • The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic.
  • That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting.
  • The median price of Southern California homes sold in September, $505,000, was still 3.6 percent higher than it was a year ago. That was the lowest annual gain for any month in more than three years.
GP: California real estate for sale Pasadena. 

A property for sale in Arcadia, California.Frederic J. Brown | AFP | Getty Images

Higher mortgage rates and overheated home prices hit Southern California home sales hard in September.

The number of new and existing houses and condominiums sold during the month plummeted nearly 18 percent compared with September 2017, according to CoreLogic. That was the slowest September pace since 2007, when the national housing and mortgage crisis was hitting.

Sales have been falling on an annual basis for much of this year, but this was the biggest annual drop for any month in almost eight years. It was also more than twice the annual drop seen in August.

“The double whammy of higher prices and rising mortgage rates has priced out some would-be buyers and prompted others to take a wait-and-see stance,” said Andrew LePage, a CoreLogic analyst, in the release. “There was one caveat to last month’s sharp annual sales decline — this September had one less business day for recording transactions. Adjusting for that, the year-over-year decline would be about 13 percent, still the largest in four years.”

On a monthly basis, sales fell 22 percent in September compared with August. Sales usually fall about 10 percent from August to September.

We cannot afford the monthly payment

Sales of newly built homes are suffering more than sales of existing homes, likely because fewer are being built compared with historical production levels. Newly built homes also come at a price premium. Sales of newly built homes were 47 percent below the September average dating back to 1988, while sales of existing homes were 22 percent below their long-term average.

The median price of Southern California homes sold in September, $505,000, was still 3.6 percent higher than it was a year ago. That was the lowest annual gain for any month in more than three years.

“Price growth is moderating amid slower sales and more listings in many markets,” LePage said. “This is welcome news for potential homebuyers, but many still face a daunting hurdle – the monthly mortgage payment, which has been pushed up sharply by rising mortgage rates.”

LePage noted that while the median sale price was up 3.6 percent year over year in September, the principal and interest mortgage payment on the median-priced home was up 14.2 percent because mortgage rates increased about 0.8 percentage point over that period.

read more…

https://www.cnbc.com/2018/10/30/southern-california-suffers-its-worst-housing-slump-in-over-a-decade.html?__source=newsletter%7Ceveningbrief

  

NYS median sales price rises 11.5% | Waccabuc Real Estate

Homebuyer activity remained strong in May, driving the New York State housing market to the second-highest sales total for the month with 10,348 closings, according to the housing market report released today by the New York State Association of REALTORS. May 2018 closed sales were 8.6 percent lower than the record of 11,322 set in May 2017. The median sales price growth trend continued, increasing by 11.5 percent compared to last May, ending the month at $262,000.

“Robust buyer demand continues to keep homes across the Empire State selling at a brisk pace, despite the lower number of homes listed for sale,” said Duncan R. MacKenzie, CEO of the New York State Association of REALTORS. “Newly listed homes are selling more quickly than a year ago as buyers faced with fewer options are eager to get to the closing table. We believe that without the headwind of lower inventory sales would be near the record-setting levels of a year ago.”

“While growing sales prices may entice current owners to bring greatly needed inventory to the market, the combination of higher prices and growing mortgage rates will begin to erode affordability, potentially dampening buyer enthusiasm,” said MacKenzie.

The May 2018 sales total of 10,348 represents a decrease of 8.6 percent from the May 2017 total of 11,322. Year-to-date (Jan. 1 – May 31) sales were 45,005, a decrease of 3 percent from the same period in 2017.

The May 2018 statewide median sales price was $262,000, an increase of 11.5 percent from the May 2017 median of $235,000. The year-to-date (Jan. 1 – May 31) median sales price was $259,000, an increase of 8.6 percent from the same period in 2017.

Pending sales decreased 4.3 percent in May compared to a year ago to reach 13,633.

The average days on market for home sales closed during May 2018 was 80, a decrease from 87 in May 2017. Year-to-date (Jan. 1 – May 31) days on market for closed sales was 85, down from 93 during the same period in 2017.

The months supply of homes for sale dropped 7.8 percent at the end of May to 5.9 months supply. It was at 6.4 months at the end of May 2017. A 6 month to 6.5 month supply is considered to be a balanced market. Inventory stood at 66,682, a decrease of 6.7 percent compared to May 2017.

Additional data is available at http://www.nysar.com/industry-resources/market-dataOpens a New Window.

Editor’s Note: All data is compiled from multiple listing services in the state of New York and the data include townhomes, condominiums and existing single-family homes.

New home sales fall again | Waccabuc Real Estate

Sales of new single-family houses in the United States shrank 0.6 percent month-over-month to a seasonally adjusted annual rate of 618 thousand in February of 2018 from an upwardly revised 622 thousand in January. It is the lowest reading in four months and compares with market forecasts of a 4.4 percent rise to 623 thousand. Sales fell in the West and the Midwest. New Home Sales in the United States averaged 650.65 Thousand from 1963 until 2018, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011.

 

US New Home Sales Fall for 3rd Month

Sales of new single-family houses in the United States shrank 0.6 percent month-over-month to a seasonally adjusted annual rate of 618 thousand in February of 2018 from an upwardly revised 622 thousand in January. It is the lowest reading in four months and compares with market forecasts of a 4.4 percent rise to 623 thousand. Sales fell in the West and the Midwest.

Sales fell in the West (-17.6 percent to 164 thousand) and the Midwest (-3.7 percent to 79 thousand) but rose in the South (9 percent to 338 thousand) and the Northeast (19.4 percent to 37 thousand).
The median sales price of new houses sold was $326,800, above $298,000 a year earlier. The average sales price was $376,700, also higher than $370,500 in February of 2017.
The stock of new houses for sale went up 2 percent from the previous month to 305 thousand, the highest level since March of 2009. This represents a supply of 5.9 months at the current sales rate.
Year-on-year, new home sales edged up 0.5 percent.
read more…
https://tradingeconomics.com/united-states/new-home-sales

Mortgage rates average 3.93% | Waccabuc Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates holding relatively flat across the board.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.93 percent with an average 0.5 point for the week ending December 14, 2017, down from last week when it averaged 3.94 percent. A year ago at this time, the 30-year FRM averaged 4.16 percent.
  • 15-year FRM this week averaged 3.36 percent with an average 0.5 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.37 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.36 percent this week with an average 0.3 point, up from last week when it averaged 3.35 percent. A year ago at this time, the 5-year ARM averaged 3.19 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Len Kiefer, Deputy Chief Economist.
“As widely expected, the Fed increased the federal funds target rate this week for the third time in 2017. The market had already priced in the rate hike so long term interest rates, including mortgage rates hardly moved. Mortgage rates held relatively flat across the board, with the 30-year fixed mortgage rate inching down 1 basis point to 3.93 percent in this week’s survey. Mortgage rates have been in a holding pattern for the fourth quarter, remaining within a 10 basis point range since October.”

Real state of housing market | Waccabuc Real Estate

On the third day of Mortgage Bankers Association National Secondary Market Conference and Expo in New York City, three economists took the stage to explain their view of the housing market, and their forecast for 2017.

Freddie Mac Chief Economist Sean Becketti, Fannie Mae Chief Economist Doug Duncan and MBA Chief Economist Mike Fratantoni gave their projections over the chance of a recession within the next 12 months.

Becketti emphasized that while the chance of a recession increased, it would need to be driven by a specific event.

“Recessions are event driven, the economy doesn’t just run out of gas and slow down,” Becketti said.

Fratantoni predicted a 15% to 20% chance of a recession over the next 12 months, while Duncan pushed it to a 30% chance. He listed several factors including a peak in consumer credit card usage, auto sales and corporate debt, which could point to a looming recession.

The three economists pointed out that while employment is rising, there are still gaps in the growth.

What we’ve seen has been a polarization of jobs, Becketti said. Jobs have left the mid-skill level and gone to the high-skill level, and low skill jobs have also seen growth. The reason for this shift is that mid-skilled jobs are easier to automate.

But even as jobs polarize, the growth between urban and suburban areas leveled out, becoming more equally distributed between the two areas, Duncan said. However, this leveling out in the location of jobs is creating more problems in the housing market.

“But now urban areas are the most difficult area to build entry-level housing due to cost of land,” he said.

As the year goes on, Fratantoni predicted the market will see two more rate hikes – one in June and one in September, saying the year would finish with a 30-year fixed-rate mortgage rate of 4.5%.

Becketti predicted slightly more, saying the Federal Open Markets Committee could raise rates from two to three times this year, but said the year will end with a 30-year FRM of about 4.4%.

Duncan, who predicted the highest chance of a recession in the next 12 months, agreed the Fed will raise rates twice more this year, however kept it’s rate for the end of 2017 more conservative at 4.2%.

“We’re not convinced that inflationary pressures are enough to make the Fed more aggressive,” he said.

Click to Enlarge

Economic Outlook

(Source: Freddie Mac)

But for now, the housing market continues to boom as home prices hit their previous peak nationally, and even significantly surpassed it in some states.

This map shows the states in relation to their former peak:

Click to Enlarge

Economic Outlook

(Source: MBA)

All three economists were puzzled by the substantial increase in Texas, saying they could only venture to guess that while there is plenty of land to spread out in the state, the jobs are more centered, driving home prices up in key areas, such as Dallas.

And what about the rumored housing bubble? Fratantoni asked: Is San Francisco in a housing bubble? Becketti’s answer, to put it simply, was no. He answered that the city is subject to a tech collapse, but said it will not collapse on account of affordability.

 

read more….

 

HereÕ the real state of the housing market

U.S. housing starts fall 9% | Waccabuc Real Estate

Leave a reply

Housing starts in the United States tumbled 9 percent to a seasonally adjusted annualized rate of 1047 thousand in September from August of 2016, below market expectations of 1175 thousand. It is the lowest figure since March of 2015, due to a fall in construction of multifamily homes. In contrast, building permits rose 6.3 percent to 1225 thousand, beating expectations of 1165 thousand. Housing Starts in the United States averaged 1439.56 Thousand from 1959 until 2016, reaching an all time high of 2494 Thousand in January of 1972 and a record low of 478 Thousand in April of 2009. Housing Starts in the United States is reported by the U.S. Census Bureau.

United States Housing Starts

 

 

read more…

 

http://www.tradingeconomics.com/united-states/housing-starts

 

Mortgage rates average 3.48% | Waccabuc Real Estate

Leave a reply

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates ticking down slightly from last week’s post-Brexit high.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.48 percent with an average 0.6 point for the week ending September 22, 2016, down from last week when it averaged 3.50 percent. A year ago at this time, the 30-year FRM averaged 3.86 percent.
  • 15-year FRM this week averaged 2.76 percent with an average 0.5 point, down from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 3.08 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent this week with an average 0.5 point, down from last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 2.91 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

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

“The 10-year Treasury yield declined after last week’s post-Brexit high in anticipation of the Fed’s September policy meeting. The 30-year fixed-rate mortgage followed Treasury yields, falling 2 basis points and settling at 3.48 percent. Despite the decrease in rates, the Refinance Index plunged 8 percent to its lowest level since June.

Used home sales | Waccabuc Real Estate

Leave a reply

Existing Home Sales in the United States is expected to be 5569.18 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Existing Home Sales in the United States to stand at 5438.60 in 12 months time. In the long-term, the United States Existing Home Sales is projected to trend around 5182.05 Thousand in 2020, according to our econometric models.

United States Existing Home Sales

 

ForecastActualQ2/16Q3/16Q4/16Q1/172020Unit
Existing Home Sales553055695472545354395182Thousand
United States Existing Home Sales Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States Existing Home Sales using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States Existing Home Sales – was last predicted on Wednesday, June 22, 2016.
United States HousingLastQ2/16Q3/16Q4/16Q1/172020
Building Permits113811401152116111711250
Housing Starts116411641175118411931213
New Home Sales619531475517510590
Pending Home Sales4.63.382.92.31.991.42
Existing Home Sales553055695472545354395182
Construction Spending-1.80.20.40.30.3-0.9
Housing Index0.20.450.430.410.40.31
Nahb Housing Market Index605859.7959.158.653.76
Mortgage Rate3.764.95.13.853.96.5
Mortgage Applications2.90.020.490.50.50.5
Home Ownership Rate63.563.5263.5363.5363.5363.53
Case Shiller Home Price Index184192195196196174

US home construction jumps | Waccabuc Real Estate

Leave a reply

Construction of new homes rose in February to the highest level in five months, but applications for new construction were weak for a third month.

Housing starts rose 5.2 percent last month to a seasonally adjusted annual rate of 1.18 million units, the Commerce Department reported Wednesday. Construction had fallen in January in December, declines that had been blamed in part on winter weather.

Applications for building permits, a gauge of future activity, fell 3.1 percent to an annual rate of 1.17 million units after a flat reading in January and a drop in December.

The decline in building permits, unless reversed, could signal future trouble in an industry that was a bright spot for the economy last year.

But Bricklin Dwyer, an economist with BNP Paribas, said the slump in building permit applications should only translate into a brief construction slowdown given the solid fundamentals supporting housing.

“We see a resilient labor market as supportive of a continued slow and steady housing recovery and low housing inventory should continue to bolster residential construction ahead,” Dwyer said.

For February, construction of single-family homes rose 7.2 percent to an annual rate of 822,000 units. Construction in the smaller apartment sector edged up a slight 0.8 percent to a rate of 356,000 units.

Regionally, construction activity plunged 51.3 percent in the Northeast but showed strength in all other regions. Construction rose 19.9 percent in the Midwest, 7.1 percent in the South and 26.1 percent in the West.

The National Association of Homebuilders/Wells Fargo builder sentiment index held steady at 58 for March. Readings above 50 indicate more builders view sales conditions as good rather than poor.

Sales of new homes surged 14.5 percent last year to 501,000, marking the strongest year for this segment of the housing market since 2007.

 

read more…

 

http://www.seattletimes.com/business/us-home-construction-jumps-in-february/

Why housing isn’t back in a bubble | Waccabuc Real Estate

Leave a reply

This is the third of three articles about the U.S. housing market. Ex-housing, the U.S. is in deflation currently at -1% YoY. So the only current “inflation risk” that might justify the Fed raising rates is the appreciation in house prices. In my previous two posts, I explained that both housing and apartment demand are supported by increased demographic demand, as the Millennial generation creates about the same affect on single and multi-unit housing as their Boomer parents and grandparents did 50 years ago. Further, there has been a marked increase in foreign buying of homes, skewed towards the upper end and disproportionately all-cash purchases. As a big part of this increase has come from Chinese nationals, the current problems hitting that county may ease demand, and therefore ease upward pressure, on U.S. house prices.

But some have argued that housing has entered a 2nd bubble. Some of this comes from the usual Doomer chorus Seriously, one guy actually claimed a couple of weeks ago that there was a bubble in rents! It must be the Underpants Gnomes theory of bubbles:
1. rent lots of vacant units
2. ???
3. Profit!

What’s the missing step 2? Sublet everything, because everyone knows that rents only go up?!?

But some is more serious analysis. The website Political Calculations, for example, believes there is a bubble based on the movement in prices vs. median household income. Here’s their relevant graph:

The point of view does have merit, since after all it is households buying houses! But I believe that misses the bigger picture.

To begin with, the big problem in assessing house prices is that, since housing is itself nearly 40% of the CPI, by what should house prices be deflated, for a “real” measure? Here is a graph created by Doug Short, the Case Shiller house index by median household income, by the entire CPI, and by owner’s equivalent rent:

Nominal house prices, and prices deflated by median household income, appear to show housing in a new bubble. But deflated by CPI and by owner’s equivalent rent, prices haven’t moved much off their bottom. Nor has there been much movement when house prices are deflated by average hourly wages:

To sort out how extreme (or not) house prices are, let’s consider three types of purchasers:
1. the entry level purchaser, likely young, likely buying a townhouse, condo, or small single family home perhaps in an inner ring suburb.
2. the move-up purchaser, trading in a smaller house for a bigger one.
3. the retirement purchaser, either downsizing or building the retirement home of their dreams.

Income is likely the main measure for the 1st purchaser. They probably don’t have a lot of savings with which to make a big downpayment, and may be getting help from family members. The most important thing for them is whether they will be able to make the monthly mortgage payment and other bills.

While household income constrains that ability, mortgage rates also loom large. And here is what happens when we calculate the monthly mortgage payment of a house, as measured by the Case Shiller Index, and then adjusted for mortgage rates:

Courtesy of lower mortgage rates, even though median household income has actually declined for all ages 25-64 since 2007, the typical monthly mortgage payment now is only about 50% of what it was at the peak of the housing bubble, even when we take median household income into account.

 

read more…

 

http://seekingalpha.com/article/3434566-why-there-is-no-second-housing-bubble?ifp=0