Americans Believe Real Estate is Best Long-Term Investment

KCM Crew, July 27th, 2016

Americans Believe Real Estate is Best Long-Term Investment | Keeping Current MattersAccording to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.Bankrate asked Americans to answer the following question:

“Which would be the best way to invest money you did not need for more than 10 years?”

Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results: Americans Believe Real Estate is Best Long-Term Investment | Keeping Current MattersSterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.

“Houses are tangible. You can physically see and feel the product. So you know where your money is going.”

July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”

Bottom Line

We have often written about the financial and non-financial reason homeownership makes sense. It is nice to see that Americans have returned to a belief in homeownership as the best investment.

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First-Time Foreclosure Starts Lunge to Lowest Levels, Jly 27th, 2016

Foreclosure Keys BHDespite June’s increase, first-time foreclosure starts in Q2 of 2016 were at their lowest level in over 16 years, according to a report conducted by Black Knight Financial Services. The report, The First Look at June 2016 Mortgage Data, showed foreclosure starts increased for second consecutive Month while the monthly prepay rate rose on historically low rates.

The total U.S. foreclosure pre-sale inventory rate was 1.10 percent for June with a month-over-month decrease of 2.57 percent and a year-over-year decrease of 29.35 percent. Likewise, total U.S. foreclosure starts numbered 69,300 for June with an increase of 11.59 percent month-over-month change and a 11.27 percent decrease year-over-year change.

Prepayment speeds, which are historically a good indicator of refinance activity, jumped to a 12-month high. This mirrored an overall rise in refinance activity driven by historically low interest rates. The monthly prepayment rate (SMM) is 1.44 percent from a 10.30 percent increase from the previous month, and a total increase of 3.24 percent from the prior year.

Early-stage delinquencies saw a seasonal increase in June. In contrast, 90-day delinquencies and foreclosure inventories continued to decline. The number of properties 30 or more days past due, but not in foreclosure increased by 25,000 from May 2016 to 2,178,000, but saw an overall decrease from the previous year of 237,000 properties. Likewise, the number of properties 30 or more days past due or in foreclosure numbered 2,736,000 and saw an increase of 9,000 from May 2016, despite a year-over-year decrease of 468,000 properties. Additionally, the number of properties that are 90 or more days past due, but not in foreclosure fell by 27,000 properties from May to 692,000 in June with an overall year-over-year decrease of 161,000 properties.

The number of properties in foreclosure pre-sale inventory numbered 558,000 with a decrease of 16,000 properties from last month as well as a decrease from the previous year of 231,000 properties. Finally, the report noted that non-current rates have increased during the past six months for Wyoming, North Dakota and Alaska. This have been attributed to oil and gas woes impact to mortgage performance.

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May Home Prices Rise at Modest Rate

Shift in regional top markets

money chart

Home prices are still rising, but not as drastically as before. Some hot markets are even seeing a cooling. Could home prices be near the end of their upward trend, or are they simply changing gears?

National home prices increased by 5% annually in May, the same as the previous month, however the 10-City and 20-City Composite both slipped in annual increases, according to the S&P CoreLogic Case-Shiller Indices, formerly known as S&P/Case-Shiller Home Price Indices.

“Home prices continue to appreciate across the country,” said David Blitzer, S&P Dow Jones Indices index committee managing director and chairman. “Overall, housing is doing quite well.”

“In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains,” Blitzer said. “The SCE Housing Expectations Survey published by the New York Federal Reserve Bankshows that consumers expect home prices to continue rising, though at a somewhat slower pace.”

The 10-City Composite increased annually by 4.4%, however that’s slightly less than April’s 4.7% increase. Similarly, the 20-City Composite increased annually by 5.2%, a slight decrease from April’s 5.4%.

“Today’s Case-Shiller data paints a picture of a fairly calm and consistent market that looks much the same today as it has for the past few months,” Zillow Chief Economist Svenja Gudell said. “But while the market does look pretty stable from 10,000 feet, a closer look reveals a number of imbalances that are keeping the heat on the housing market this summer.”

“Sellers are in the driver’s seat, as buyers contend with fierce competition and very fast-moving markets,” Gudell said. “Demand is sky high and the number of homes sold is rising, even as inventory of homes for sale keeps falling.”

Portland, Seattle and Denver were among the cities with the highest annual gains among the top 20 cities over each of the last four months.

Readers of HousingWire will not find this surprising, as a deeper look into a report from Black Knight yesterday showed that home prices are increasing more in the mountainous areas of the West and in the Pacific Northwest.

“Regional patterns seen in home prices are shifting,” Blitzer said. “Over the last year, the Pacific Northwest has been quite strong while prices in the previously strong spots of San Diego, San Francisco and Los Angeles saw more modest increases.”

“The two hottest areas during the housing boom were Florida and the Southwest,” he said. “Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak. When home prices began to recover, New York and Washington saw steady price growth; now both are among the weakest areas in the country.”

In May, Portland increased the most 12.5% annually, followed by Seattle at 10.7% and Denver at 9.5%.

“Home buyers in coastal markets, particularly on the West Coast, are experiencing very different conditions than those in Middle America,” Gudell said. “The tough buyers’ market we’ve been experiencing shows few signs of letting up as we enter the dog days of August.”

Eight cities actually reported a greater home price increase for the year ending in May than for the year ending in April.

After seasonal adjustment, the National Index showed an increase of 0.2% monthly, while the 10-City composite and 20-City Composited posted losses of 0.2% and 0.1% respectively. Monthly, home prices in 12 cities increased, remained unchanged in two cities and decreased in six cities.

Unlike his fellow chief economist at Zillow, Trulia Chief Economist Ralph McLaughlin says this month’s Case-Shiller results show a stabilization in the housing market.

“The S&P CoreLogic Case-Shiller Home Price Indices Index suggests the US housing market is stabilizing as the rate of price gains flatten for the fourth straight month,” McLaughlin said. “Prices in San Francisco shows noticeable cooling, while the Pacific Northwest continues to lead the country in price appreciation.”

Click to Enlarge


(Source: S&P Dow Jones Indices & CoreLogic)

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Summer Heats Up Single-Family Markets, July 26th, 2016

Home Prices Two BHAs summer continues to heat up so do the nation’s top single-family housing markets, each demonstrating consistently strong demand, home price appreciation, and economic and demographic growth, according to a recent report from Ten-X.

The report lists the 50 largest housing markets based on their current and forecasted housing fundamentals and from that list, Palm Beach County, Orlando, Tampa, Fort Lauderdale, and Seattle make up the top five markets. Florida claims four out of five of these markets despite the fact that it was one of the states severely exposed to the housing bust. Seattle market highs are attributed to the tech-driven gains of the Pacific Northwest.

These rankings are quite different from Ten-X’s report for the spring single-family market rankings. Though Seattle fell from the number one spot to the 5th rankings, the other four markets rose up notably with Palm Beach rising from 4th place up to 1st, Orlando going from 6th to 2nd, Fort Lauderdale rising slightly from 5th to 4th, and Tampa leaping from 11th to 3rd.

“There are strong regional tendencies in our Summer housing market report, with cities in the Southeast, the Pacific Northwest, and California performing exceptionally well, while the Northeast and Midwest are lagging behind,” said Ten-X Executive Vice President Rick Sharga. “Cities like Orlando are receiving a boost from low oil prices, which in turn is leading to an increase in travel and tourism. And of all the states that were hit hard during the crash, Florida still has the most room to grow to get back to peak housing prices.”

Palm Beach County’s housing market’s seasonally adjusted home prices are up 16.8% year-over-year, the highest pace in the country. Orlando’s housing market’s seasonally adjusted home prices have increased for 19 consecutive quarters while prices up 10.4 percent year-over-year. Tampa’s single-family market has seen prices increase after hitting bottom in 2011 and are now up 12.1 percent year-over-year. Fort Lauderdale has felt a strong recovery from its fall after the crisis with seasonally adjusted home prices up 8.9 percent year-over-year. And finally, the single-family market in Seattle is still sitting strong with home prices surging 15.4 percent year-over-year.

“Despite the muddled economic environment, conditions remain generally supportive for the housing market,” said Ten-X Chief Economist Peter Muoio. “Home sales had some volatility early in the year, brought on by new regulations and harsh weather, but appear to be stabilizing even with tight inventory levels. More jobs are being added while unemployment continues to drop and low mortgage rates are enticing homebuyers, so solid demand should continue to fuel the housing market.”

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The Top Reason to List your House for Sale Now!

KCM Crew, July 26th, 2016

The Top Reason to List Your House For Sale Now! | Keeping Current MattersIf you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:

“With demand holding firm and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale. Realtors are acknowledging, with increasing frequency lately, that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”

The latest Existing Home Sales Report shows that there is currently a 4.6-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and 5.8% lower than June 2015. The chart below details the year-over-year inventory shortages experienced over the last 12 months: The Top Reason to List Your House For Sale Now! | Keeping Current MattersAnything less than a six-month supply is considered a “Seller’s Market”.

Bottom Line

Meet with a local real estate professional who can show you the supply conditions in your neighborhood and assist you in gaining access to the buyers who are ready, willing and able to buy now!

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3 Kitchen Cabinet and Hardware Pairings to Try

New This Week: 3 Kitchen Cabinet and Hardware Pairings to Try via @Houzz#KitchenCabinet #CabinetHardware, July 26th, 2016

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Four Ways to Improve the Housing Market, July 26th, 2016

American Money BHIn the wake of national presidential conventions and debates conducted over controversial topics to better inform voters as these candidates move closer to the election in November, one of the topics hardly touched in these discussions has been the housing market and its reform. Chief Economist for Redfin, Nela Richardson, believes that there are four things these candidates need to keep in mind to “make the housing market great again,” according to a report from Redfin.

Ignore Mortgage Finance Reform

Richardson says that reform of Fannie Mae and Freddie Mac and other such insurers has been controversial for “longer than millennials have been alive” but despite the agreement that government involvement should be reduced, Richardson says that there is nothing to replace them with as of right now. She suggests that whomever wins the presidency should focus on figuring out a solution for how private capital can be placed back into the mortgage market in order to have viable alternatives to Fannie Mae and Freddie Mac.

Connect affordability to mobility

“Too often a person’s zip code determines their economic mobility,” says Richardson. She states that almost half of the totality of renters are cost burdened and a quarter of those are classified as being “severely” cost burdened. In her report, Richardson says only one in four people who qualify for federal subsidies actually receives them. She feels that the next president can help better the market by increasing subsidies to households who need them and helping them move to better thriving communities near jobs and functional schools.

Increase Building

Richardson says that increasing building is important to the betterment of the market, but included in this equation must be more transit and infrastructure spending in order to make sure neighborhoods don’t suffer due to isolation or neglect. “Political dysfunction in Congress has prevented the federal government from making the infrastructure investment needed in America’s cities,” says Richardson. “Our families pay the price.”

Remembering the “Rust Belt”

This final point is shared as something personal to Richardson, who says that some towns facing decay do to foreclosure never came from the housing market boom or bust. Instead, she says they are due to something far more long lasting i.e. job loss and population decline. “It’s an open question whether foreclosure-choked neighborhoods will ever be a good investment for a new generation of homebuyers,” says Richardson. The answer she sees for these communities comes from jobs and reinvestment into local economies before “homeownership can become a great investment again.”

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