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Pending home sales in the United States increased in November for the third straight month and reached the highest level in two and a half years, according to the latest data from the National Association of Realtors.
Its Pending Home Sales Index, a forward looking indicator based on contract signings, rose 1.7% to 106.4 in November and is 9.8% above November 2011.
The index is at the highest level since April 2010 when it hit 111.3 as buyers were rushing to beat the deadline for the home buyer tax credit. With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9.
NAR chief economist Lawrence Yun said that home sales are on a sustained uptrend. Even with market frictions related to the mortgage process, home contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favourable affordability conditions,ђ he explained.
On a year on year basis, pending home sales have risen for 19 consecutive months and the upward momentum means existing home sales should rise 8 to 9% in 2013 to approximately 5.1 million, following a 10% gain expected for all of 2012.
The report from the NAR also said that median existing home price is projected to rise just over 4% in 2013, after rising more than 7% in 2012.
The index in the Northeast of the US rose 5.2% to 83.3 in November and is 15.2% above a year ago. In the Midwest the index edged up 0.1% to 103.8 in November and is 15.2% above November 2011.
Pending home sales in the South were unchanged at an index of 117.2 in November and are 13.9% higher than a year ago.
US set for 5% growth in residential property market in 2013 says RICS - 21 DEC 2012 from http://www.propertywire.com
There have been noteworthy improvements in the housing market in the United States in 2012, with homebuilding, prices and sales trending upwards, according to the Royal Institution of Chartered Surveyors.
It is predicting a rise in home values of 5% in 2013 but warns that downside risks remain, such as the shadow inventory and more generally the strength of the economic recovery.
‘A robust and sustainable US economic recovery hinges on the health of the housing market, which seems to be on the mend going into 2013, with some solid gains in prices and transactions of late,’ it says.
However, significant headwinds still persist such as the large amount of homes being held off market and weak labour conditions, it adds.
Home values are still almost a third below their pre-recession peak, according the S&P/Case-Shiller house price index, which measures repeat home sales in the 20 largest metropolitan areas. Indeed, the dramatic fall in prices after 2008 has seen nearly $7 trillion wiped of households’ balance sheet.
This has led to the number of households whose mortgage is greater in value then their home, known as being underwater, to stand at 10.8 million according to Corelogic. Home sales, existing and new, remain 30% and 70% below their pre-recession peaks respectively.
‘Clearly, the market has yet to recover fully but there have been indications that it is on the right path. Home building is sitting at its highest level since the middle of 2008. Similarly, housing permits, which are a good lead indicator of starts, are also at a multi year high, pointing to the current strength in residential construction continuing in the short term,’ says the RICS market report.
It also points out that home builders are more optimistic, new home sales have risen 17% over the past year, and existing home sales have also been trending upwards heading into 2013.
‘In the short term at least, continued gains can be expected according to the pending home sales index, which leads existing home sales by two to three months. Another positive is the composition of home sales, with distressed sales now accounting for only 24% of total sales, as compared to above 30% a year ago,’ the report says.
Home prices recorded 3% annual growth in the 12 months till October according to the S&P/Case-Shiller 20 city composite index. ‘This is a significant development, as this is the first annual gain post recession.
One further point is that during the boom, the market was much more cohesive in the sense of price movements, will all cities recording rising home values. In contrast, the present recovery is seeing the national market becoming fragmented, with some cities seeing rising prices whilst others continue to see declines,’ the report explains.
The recovery is fragmented. Phoenix, which was one of the hardest hit cities in terms of price falls, has recorded 20% gains, and cities that saw less extreme price declines such as New York and Chicago are, as yet, struggling to record any price growth.
‘We are cautiously optimistic about the state of the housing market. Indeed, encouraging signs are emerging such as rising home values, construction activity and sales. Demand is being supported by sustained, albeit modest, job growth and record affordability, and reflects increasing consumer confidence and household spending,’ the report says.
‘Also, once the fiscal cliff is dealt with, confidence should improve, and hopefully release some pent up demand. However downside risks remain, such has the number of properties being held off the market and the foreclosure pipeline that could bring hundreds of thousands of distressed properties onto the market,’ it points out.
‘Additionally, weak credit growth and the fragile labour market remain the largest obstacles to a sustainable recovery. Although the housing market has ploughed along in spite of the weak macro environment, this can only be sustained for so long without support from stronger job growth and improved lending conditions,’ it adds.
Finally, a housing market collapse of the magnitude witnessed by the US will take many years to recoup fully all the losses. Indeed, it may well be that prices and activity levels will remain below their pre-recession peaks for sometime ahead,’ it concludes.
Pending home sales in Miami are continuing at record high levels, up 15% year on year during the month of August, according to the latest data from the Miami Association of Realtors.
The number of single family and condominium listings that pended in August increased 26.3% and 6.28 percent respectively compared to August 2011.
‘Pending sales in the Miami real estate market remain at historically strong levels, particularly when considering the current shortage of local housing inventory,’ said Martha Pomares, chairman of the board of the Miami Association of Realtors.
‘Pending sales continue to reflect strong demand compared to record sales levels in 2011. This activity is driving home prices to rise sooner and stronger than expected,’ she added.
She also explained that increased pending sales are an indication of increased future sales. A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Total cumulative pending home sales, including single family homes and condominiums, in Miami-Dade County currently are 1% above what they were a year ago, up from 11,915 to 12,222, but 1.5% below what they were the previous month, down from 12,210.
Pending sales of single family homes were 10% above what they were a year earlier, up from 4,941 to 5,435, and 0.5% above the previous month, when pending single family homes sales totalled 5,407.
Pending sales of condominiums were 5.5% lower than they were a year earlier, down from 6,974, and 3.1% below what they were the previous month, down from 6,803 to 6,587.
‘The Miami real estate market has experienced rising demand from international buyers over the last year,’ said Patricia Delinois, residential president of the Miami Association of Realtors.
‘Foreign buyers have been and continue to be an instrumental factor in strengthening the Miami real estate market unlike any other in the nation. As a global city, Miami will continue to draw demand from international buyers and investors long into the future,’ she explained.
Nationally, the Pending Home Sales Index, a forward looking indicator based on contract signings, rose 2.6% to 99.2 in August from 101.9 in July, according to the National Association of Realtors. The index is 10.7% higher than the 89.6 index reported in August 2011.
US residential property price recovery expected to continue - 4 Oct 2012 from http://www.propertywire.com
The recovery in US residential real estate prices should carry on through the winter months but the government’s last minute wrangles over fiscal issues for the annual budget could affect the housing market, it is claimed.
The October housing market report from analysts Clear Capital highlights the toll uncertainty may take on consumer confidence and its threat to the housing recovery.
It points out that fiscal cliff uncertainty threatens to kill housing's momentum and consumer sentiment is the key to housing market progress.
It also says that national yearly home price growth of 3.6% picked up in September, with additional gains of 2.2% forecasted through winter.
It predicts that Las Vegas is the next Phoenix with yearly home price growth of 8% and 9.5% forecasted over the next six months.
]While housing continued to make progress in September, we've turned our focus to the impending fiscal cliff. With forecasted gains of 2.2% over the next six months, the threat of the fiscal cliff could throw a wrench into the recovery,’ said Alex Villacorta, director of research and analytics at Clear Capital.
‘If the cliff is avoided, we still run the risk of damaging confidence with a resolution pushed against year-end deadlines. Confidence is the key to turning the recovery's near term sprint into a marathon. The sooner businesses and consumers are reassured, the more likely they are to build, purchase, or loan on a house,’ he explained.
He pointed out that the good news is that far more markets are improving than declining even if economic uncertainty keeps some buyers on the sidelines.
In September there was 1.8% quarterly house price growth at the national level, driven in part by gains in the West. The West posted notable quarterly gains of 3.7%, the fifth consecutive month it's led regional gains. The Midwest and South regions had quarterly home price gains of 1.9% and 1.3%, respectively. The Northeast posted the weakest quarterly gains of 0.2%.
Yearly growth is forecasted to shake off winter's chill and continue through the first quarter of 2013. National prices closed out the third quarter 3.6% higher than the previous year. If the looming fiscal cliff is averted, the national home price forecast through to the first quarter of 2013 is predicted to be 2.2%.
In annual terms the West continued to dominate with 9.4% in yearly gains, the highest yearly gain the region has recorded since the second quarter in 2006. Forecasted gains of 5.3% over the next six months in the West are projected to drive a sustained recovery at the national level through winter.
The South and Midwest also saw yearly gains of 3.2% and 1.5%, respectively. The South should see further price advances of 1.9% through March 2013 and the Midwest 0.8%. The Northeast continued to see yearly gains soften, with prices rising just 0.9% over the previous year. Home prices in the Northeast are expected to do more of the same and remain relatively flat, growing 0.9% over the next six months.
The top 50 metro markets generally improved over the last quarter, with average price gains of 2.4%. More significant progress was made over the last year, with average growth of 4.7% for the group.
Phoenix held its ground in September as the strongest metro with 27.7% yearly growth. The metro has become a benchmark for recovering markets, with low price points on distressed sales attracting buyers. Over the next two quarters, Phoenix prices are projected to expand another 10.7%.
Meanwhile, Las Vegas is shaping up to be the next Phoenix. Yearly home price gains of 8% should see additional growth of 9.5% over the next six months. Like Phoenix, Las Vegas is seeing gains now concentrated in the discounted price segments.
At the opposite end of the scale Memphis looks more like the next Atlanta. Home prices in Memphis are down 48.3% from the peak, with further declines expected. Over the next six months, Memphis home prices are forecasted to fall another 2.1%.
US housing market growing stronger despite difficult mortgage sector, says NAR - 26 Sept 2012 from http://www.propertywire.com
Existing home sales in the United States continued to improve in August and the national median price rose on a year on year basis for the sixth straight month, according to the latest data from the National Association of Realtors.
Prices and sales are rising despite difficult mortgage market conditions with the national median house price now 9.5% up from a year ago but sales could be 10% stronger if loans were easier to come buy, says the US’s largest real estate trade organisation.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 7.8% to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July, and are 9.3% higher than the 4.41 million unit level in August 2011.
Lawrence Yun, NAR chief economist, said favourable buying conditions get the credit. ‘The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions,’ he said.
‘Inventories in many parts of the country are broadly balanced, favouring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices,’ he added.
According to Freddie Mac, the national average commitment rate for a 30 year, conventional, fixed rate mortgage rose to 3.6% in August from a record low 3.55% in July. The rate was 4.27% a year ago.
‘The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years,’ said Yun.
The national median existing home price for all housing types was $187,400 in August, up 9.5% from a year ago. The last time there were six back to back monthly price increases from a year earlier was from December 2005 to May 2006. The August increase was the strongest since January 2006 when the median price rose 10.2% from a year earlier.
Distressed homes, that is foreclosures and short sales sold at deep discounts, accounted for 22% of August sales of which 12% were foreclosures and 10% were short sales, down from 24% in July and 31% in August 2011. Foreclosures sold for an average discount of 19% below market value in August, while short sales were discounted 13%.
Total housing inventory at the end August rose 2.9% to 2.47 million existing homes available for sale, which represents a 6.1 month supply at the current sales pace, down from a 6.4 month supply in July. Listed inventory is 18.2% below a year ago when there was an 8.2 month supply.
The median time on market was 70 days in August, consistent with 69 days in July but down 23.9% from 92 days in August 2011. Some 32% of homes sold in August were on the market for less than a month, while 19% were on the market for six months or longer
‘Total sales this year will be 8 to 10% above 2011, but some buyers are frustrated with mortgage availability. If most of the financially qualified buyers could obtain financing, home sales would be about 10 to 15% stronger, and the related economic activity would create several hundred thousand jobs over the period of a year,’ said NAR president Moe Veissi.
First time buyers accounted for 31% of purchasers in August, down from 34% in July and 32% in August 2011.
All cash sales were unchanged at 27% of transactions in August, lower than the 29% in August 2011. Investors, who account for most cash sales, purchased 18% of homes in August, up from 16% in July but less than the 22% in August 2011.
Single amily home sales rose 8% to a seasonally adjusted annual rate of 4.30 million in August from 3.98 million in July, and are 10% above the 3.91 million unit pace in August 2011. The median existing single family home price was $188,700 in August, up 10.2% from a year ago.
Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000 in August from 490,000 in July, and are 4% above the 500,000 unit level a year ago. The median existing condo price was $176,700 in August, which is 3.3% higher than August 2011.
Regionally, existing home sales in the Northeast rose 8.6% to an annual pace of 630,000 in August and are also 8.6% above August 2011. The median price in the Northeast was $245,200, up 0.6% from a year ago.
Existing home sales in the Midwest increased 7.7% in August to a level of 1.12 million and are 17.9% higher than a year ago. The median price in the Midwest was $152,400, up 7.8% from August 2011.
In the South, existing-home sales rose 7.3% to an annual pace of 1.90 million in August and are 11.1% above August 2011. The median price in the region was $160,100, up 6.5% from a year ago.
Canadian residential property market broadly stable in July, latest data shows - 28 Aug 2012 from http://www.propertywire.com
National resale housing activity in Canada remained stable from June to July 2012, according to the latest figures from the Canadian Real Estate Association.
Prices are off their recent peaks in Greater Vancouver and Greater Toronto, but remain above year ago levels in most markets. The number of local housing markets was roughly evenly split between those that saw month on month gains and those that posted monthly declines. Activity was up from the previous month in Kingston, Chilliwack, and Calgary, offset by fewer sales in Toronto, Newfoundland and Labrador, and Edmonton. Actual, not seasonally adjusted, activity was up 3.3% year on year in July 2012, with gains in Calgary and slower sales in Vancouver. One and two storey single family homes posted the strongest year on year growth in July, with two storey single family home prices up 5.8% and one storey single family prices up 5.6%.
Prices for townhouse and apartment units continue to see more modest gains, rising 2.5% and 2.2% respectively on a year on year basis in July 2012. The MLS HPI posted the largest year on year increase in Greater Toronto at 7.1%, followed by Calgary at 6%, the Fraser Valley at 2.5%, Montreal at 2.1%, and Greater Vancouver at 0.6%. Price gains in July were smaller than they were the previous month in all of these markets except Calgary.
Recent changes to mortgage regulations were widely expected to temper sales and prices in Greater Toronto and Greater Vancouver, and the data released today confirms that, said Wayne Moen, CREA president. Some first time home buyers may have difficulty qualifying for mortgage financing due to shortened amortization periods included in recent changes to mortgage regulations, according to Gregory Klump, CREAҒs chief economist.
As the lynchpin of the housing market, lower first time buying activity will have knock-on effects over the rest of the market. It will likely take more time for move-up buyers to sell their current home,ђ he explained. The number of newly listed homes fell 3.3% in July compared to June, with declines in more than half of all local markets including Montreal, Toronto, Vancouver, the Fraser Valley, Calgary, and Edmonton. CREA said that the national housing market remains firmly entrenched in balanced market territory, supported by stable sales activity and fewer new listings.
The national sales-to-new listings ratio, a measure of market balance, stood at 53.4% in July 2012, up from 51.6% in June. Based on a sales-to-new listings ratio of between 40 to 60%, two thirds of all local housing markets were in balanced market territory in July. The national number of months of inventory is another measure of market balance. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It stood at 6.1 months at the end of July, unchanged from the June reading.
The months of inventory measure has been hovering around six months since the end of 2010. Average sale prices in July were up from levels one year ago in about seven of every 10 local markets, but declining sales activity in Greater Vancouver continues to impact the national average price.
The actual, not seasonally adjusted, national average price for homes sold in July 2012 was $353,147, down 2% from the same month last year. Excluding Greater Vancouver from the national average price calculation yields a year on year increase of 1.1%. Unlike average price, the MLS Home Price Index (MLSή HPI) is not affected by changes in the mix of sales, so it provides a better gauge of Canadian home price trends.
The index tracks home price trends in five of Canadas most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five markets comprise approximately 45 per cent of all home sales activity in Canada. The MLSҮ HPI rose 4.5% year on year in July 2012. This was the third time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase in over a year.
Home sales and prices in the US well above a year ago, latest NAR figures show - 26 Aug 2012 from http://www.propertywire.com
Sales of existing homes in the United States increased last month the national median price showing five consecutive months of year on year increases, according to the latest data from the National Association of Realtors.
Monthly sales rose in every region but the West, where inventory is very tight and total existing home sales increased 2.3% to a seasonally adjusted annual rate of 4.47 million in July from 4.37 million in June, and are 10.4% above the 4.05 million-unit pace in July 2011.
NAR chief economist Lawrence Yun said that housing affordability conditions are very good. Single family home sales increased 2.1% to a seasonally adjusted annual rate of 3.98 million in July from 3.90 million in June, and are 9.9% above the 3.62 million unit level in July 2011.
The median existing single family home price was $188,100 in July, up 9.6% from a year ago. Existing condominium and co-op sales rose 4.3% to a seasonally adjusted annual rate of 490,000 in July from 470,000 in June, and are 14% higher than the 430,000 unit pace a year ago. The median existing condo price was $180,700 in July, which is 7.7% above July 2011. Regionally, existing home sales in the Northeast rose 7.4% to an annual level of 580,000 in July and are 13.7% above July 2011. The median price in the Northeast was $254,200, up 3.5% from a year ago.
Existing home sales in the Midwest increased 2% in July to a pace of 1.04 million and are 16.9% higher than a year ago. The median price in the Midwest was $154,100, up 5.8% from July 2011. In the South, existing home sales rose 2.3% to an annual level of 1.77 million in July and are 8.6% above July 2011. The median price in the region was $162,600, up 6.6% from a year ago. Existing home sales in the West were unchanged at an annual pace of 1.08 million in July but are 5.9% higher than a year ago. With pronounced inventory shortages, the median price in the West was $238,600, a jump of 24.5% from July 2011.
Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand,ђ he explained. However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions, he added.
NAR is asking the government to expeditiously release the foreclosed properties it owns in inventory constrained markets. Given population and demographic demand, Yun said existing home sales could be in a normal range of five to 5.5 million if all conditions were optimal. Sales may reach five million next year, but it will require more sensible lending standards and stronger job creation to push beyond that.
Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market. Furthermore, the higher median price naturally means more housing contribution to economic growth, Yun said.
The national median existing home price for all housing types was $187,300 in July, up 9.4% from a year ago. The last time there were five back to back monthly price increases from a year earlier was in January to May of 2006. The July gain was the strongest since January 2006 when the median price rose 10.2% from a year earlier.
Distressed homes, that is foreclosures and short sales sold at deep discounts, accounted for 24% of July sales of which 12% were foreclosures and 12% were short sales, down from 25% in June and 29% in July 2011. Foreclosures sold for an average discount of 17% below market value in July, while short sales were discounted by 15%.
The primary factor in determining how long homes stay on the market is price, according to NAR president Moe Veissi. 'Correctly priced homes, regardless of price range, are selling quickly these days. A third of homes purchased in July were on the market for less than a month, and only 21% were on the market for six months or longer, he explained.
Total housing inventory at the end July increased 1.3% 2.4 million existing homes available for sale, which represents a 6.4 month supply at the current sales pace, down from a 6.5 month supply in June. Listed inventory is 23.8% below a year ago when there was a 9.3 month supply. Yun said there are distortions in housing inventory. The total supply of housing inventory appears to be balanced in historic terms, but there are notable shortages in the lower price ranges which are limiting opportunities for first time buyers.
The low price ranges also are popular with investors, so entry level buyers are at a disadvantage because many investors are making all cash offers, he explained. First time buyers accounted for 34% of purchasers in July, up from 32% in June and they were also 32% in July 2011. Under normal conditions, entry level buyers account for four out of 10 purchases. All cash sales slipped to 27% of transactions in July from 29% in June, the same as July 2011. Investors, who account for the bulk of cash sales, purchased 16% of homes in July, down from 19% in June and 18% in July 2011.
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