Tuesday, November 26, 2013
Although conditions were mixed across the country, pending home sales continued to move lower in October, marking the fifth consecutive monthly decline, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said weaker activity was expected. “The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors® reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” he said.
“We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions. Job creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors,” Yun said.
Commercial real estate leasing patterns are showing steady but modest growth, according to the National Association of Realtors® quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, projects only modest changes in the coming year. “Jobs are the key driver for commercial real estate, and the accumulation of 7 million net new jobs from the low point a few years ago is steadily showing up as demand for leasing and purchases of properties,” he said. “But the difficulty of accessing loans remains a hindrance to a faster recovery.”
Yun said there have been some shifts in commercial purchases. “Investors have been looking for better yields, and have found good potential in smaller commercial properties, notably in secondary and tertiary markets,” he said. “Sales of commercial properties costing less than $2.5 million in the third quarter were 11 percent above a year ago, while prices for smaller properties were 4 percent above the third quarter of 2012.”
For more information, view Modest Growth Seen in Commercial Real Estate Markets
Wednesday, November 20, 2013
Existing-home sales declined for the second consecutive month in October, while constrained inventory means home prices continue to see double-digit year-over-year gains, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September, but are 6.0 percent higher than the 4.83 million-unit level in October 2012. Sales have remained above year-ago levels for the past 28 months.
Lawrence Yun, NAR chief economist, said a flattening trend is expected. “The erosion in buying power is dampening home sales,” he said. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”
The national median existing-home price for all housing types was $199,500 in October, up 12.8 percent from October 2012, which is the 11th consecutive month of double-digit year-over-year increases.
Existing-Home Sales by Housing Type
Single-family home sales fell 4.1 percent to a seasonally adjusted annual rate of 4.49 million in October from 4.68 million in September, but are 5.2 percent above the 4.27 million-unit pace in October 2012. The median existing single-family home price was $199,500 in October, up 12.7 percent from a year ago.
Existing condominium and co-op sales rose 3.3 percent to an annual rate of 630,000 units in October from 610,000 in September, and are 12.5 percent above the 560,000-unit level a year ago. The median existing condo price was $199,200 in October, which is 13.1 percent above October 2012.
Existing-Home Sales by Region
Regionally, existing-home sales in the Northeast declined 2.9 percent to an annual rate of 670,000 in October, but are 11.7 percent higher than October 2012. The median price in the Northeast was $247,300, up 7.4 percent from a year ago.
Existing-home sales in the Midwest slipped 1.6 percent in October to a pace of 1.22 million, but are 8.0 percent above a year ago. The median price in the Midwest was $154,700, which is 9.3 percent higher than October 2012.
In the South, existing-home sales declined 1.9 percent to an annual level of 2.06 million in October, but are 7.3 percent above October 2012. The median price in the South was $171,500, up 12.9 percent from a year ago.
With constrained inventory, existing-home sales in the West fell 7.1 percent to a pace of 1.17 million in October, and are 0.8 percent below a year ago. The median price in the West was $284,800, up 17.2 percent from October 2012.
Wednesday, November 6, 2013
The majority of metropolitan areas in the third quarter experienced robust year-over-year price gains, with the national median price showing the strongest annual growth in nearly eight years, according to the latest quarterly report by the National Association of Realtors®.
The median existing single-family home price increased in 88 percent of measured markets, with 144 out of 163 metropolitan statistical areas(MSAs) showing gains based on closings in the third quarter compared with the third quarter of 2012. Fifty-four areas, 33 percent, had double-digit increases, while 19 had price declines.
In the second quarter, price gains were recorded in 87 percent of metro areas from a year earlier, while in the third quarter of last year, 81 percent of available areas showed annual increases, but only 18 percent of markets rose by double-digit amounts.
Lawrence Yun, NAR chief economist, said market momentum is changing. “Rising prices and higher interest rates have taken a bite out of housing affordability,” he said. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”
The five most expensive housing markets were the San Jose, Calif., metro area, where the median existing single-family price was $805,000; San Francisco, $705,000; Honolulu, $679,800; Anaheim-Santa Ana, Calif., $670,700; and San Diego, where the median price was $485,000.
The five most affordable metro areas were Toledo, Ohio, with a median single-family price of $87,500; Rockford, Ill., at $88,900; Decatur, Ill., $91,000; Ocala Fla., $103,600; and Topeka, Kan., with a median price of $106,900.
Tuesday, October 29, 2013
Data through August 2013, released by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that the 10-City and 20-City Composites increased 12.8% year-over-year. Compared to July 2013, the annual growth rates accelerated for both Composites and 14 cities.
On a monthly basis, the 10-City and 20-City Composites gained 1.3% in August. Las Vegas led the cities with an increase of 2.9%, its highest since August 2004. Detroit and Los Angeles followed with gains of 2.0%.
The chart above depicts the annual returns of the 10-City Composite and the 20-City Composite Home Price Indices. In August 2013, the 10- and 20-City Composites posted annual increases of 12.8%.
“The 10-City and 20-City Composites posted a 12.8% annual growth rate,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Both Composites showed their highest annual increases since February 2006. All 20 cities reported positive year-over-year returns. Thirteen cities posted double-digit annual gains. Las Vegas and California continue to impress with year-over- year increases of over 20%. Denver and Phoenix posted 20 consecutive annual increases; Miami and Minneapolis 19. Despite showing 26 consecutive annual gains, Detroit remains the only city below its January 2000 index level.
“The monthly percentage changes for the 20-City composite show the peak rate of gain in home prices was last April. Since then home prices continued to rise, but at a slower pace each month. This month 16 cities reported smaller gains in August compared to July. Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts.
“Denver and Dallas again set new highs. All the other cities remain below their peaks. Boston and Charlotte are the two MSAs closest to their peaks with only 8-9% left to go. Las Vegas is still down 47.1% from its peak level.”