Rising gas prices will likely push more post-housing bubble home seekers in search of smaller homes closer to urban areas, according to speakers at the “What’s Next: Real Estate in the New Economy” conference sponsored by the Urban Land Institute of North Texas.
More home buyers may be looking for shorter commutes, cheaper mortgages, and to decrease car expenses, which living closer to the city may offer.
“For every car you do not own, you save $8,000 to $10,000 a year,” says keynote speaker Maureen McAvey, ULI’s executive vice president of policy & practice. “That can often increase the mortgage you can afford by $100,000.”
Urban and smaller homes may be most appealing to the twenty-something generation and young married couples, she notes.
McAvey predicts the size of homes will shrink about 20 percent in the future, bringing the home prices more in line with home purchaser’s smaller budgets.
Source: “Smaller Homes, Urban Lifestyles Attractive to New Home Buyers: ULI,” HousingWire (March 21, 2012)
Monday, March 26, 2012
More Real Estate Pros Optimistic About Home Prices
The number of real estate professionals who say home prices will rise in the next six months has more than doubled in one quarter, according to a new survey by HomeGain.
Indeed, 37 percent of those surveyed in 2012 by HomeGain say prices will rise in the next six months--compared to 15 percent who said they expected a rise in the fourth quarter of 2011.
A growing confidence among real estate professionals is emerging, housing experts say. The growing confidence coincides with the nationwide housing inventory falling to its lowest level since March 2005 and home sales steadily rising over the last few months.
"What is consistently being represented out there today is that there is a sense of optimism in the real estate business that has not been seen in the last five to six years," Budge Huskey, chief operating officer of Coldwell Banker Real Estate, told AOL Real Estate.
Even in particularly hard-hit housing markets, real estate pros are expressing more optimism. For example, 80 percent of Arizona real estate professionals and home owners and 75 percent in Nevada say home prices will rise in the next six months, according to the survey. However, many caution that any price increases will be gradual.
Source: “Home Value Survey Sees Sharp Rise in REALTOR Optimism,” AOL Real Estate (March 21, 2012)
Indeed, 37 percent of those surveyed in 2012 by HomeGain say prices will rise in the next six months--compared to 15 percent who said they expected a rise in the fourth quarter of 2011.
A growing confidence among real estate professionals is emerging, housing experts say. The growing confidence coincides with the nationwide housing inventory falling to its lowest level since March 2005 and home sales steadily rising over the last few months.
"What is consistently being represented out there today is that there is a sense of optimism in the real estate business that has not been seen in the last five to six years," Budge Huskey, chief operating officer of Coldwell Banker Real Estate, told AOL Real Estate.
Even in particularly hard-hit housing markets, real estate pros are expressing more optimism. For example, 80 percent of Arizona real estate professionals and home owners and 75 percent in Nevada say home prices will rise in the next six months, according to the survey. However, many caution that any price increases will be gradual.
Source: “Home Value Survey Sees Sharp Rise in REALTOR Optimism,” AOL Real Estate (March 21, 2012)
Home Builder Stocks Soar, Reaching 2-Year Highs
An increase in housing construction and sales has been helping home builder stocks grow the last six months, reaching the highest levels in two years, The New York Times reports. In fact, 11 home builder stocks have increased 80 percent since October alone, according to a Standard & Poor’s index.
It’s been a rough road for the home building industry in recent years: Home builder stock shares lost about half of their value when the market dramatically slowed in 2007, and stocks dropped even more during 2008 and 2009.
Stock shares for home builders typically rise before spring and summer, which are viewed as the busiest seasons for home buying.
But “if you were looking for a home run kind of move, you needed to have bought when the stocks were significantly undervalued six months ago,” says Philip J. Orlando, Federated’s chief equities market strategist. “But we are starting to see fundamental improvement. So you may have a situation where instead of stocks falling, maybe they drift sideways. We are not looking for a collapse. We are just not looking for a move up.”
Source: “Home Builder Stocks at Highest Point in 2 Years After 6-Month Rise,” The New York Times (March 22, 2012)
It’s been a rough road for the home building industry in recent years: Home builder stock shares lost about half of their value when the market dramatically slowed in 2007, and stocks dropped even more during 2008 and 2009.
Stock shares for home builders typically rise before spring and summer, which are viewed as the busiest seasons for home buying.
But “if you were looking for a home run kind of move, you needed to have bought when the stocks were significantly undervalued six months ago,” says Philip J. Orlando, Federated’s chief equities market strategist. “But we are starting to see fundamental improvement. So you may have a situation where instead of stocks falling, maybe they drift sideways. We are not looking for a collapse. We are just not looking for a move up.”
Source: “Home Builder Stocks at Highest Point in 2 Years After 6-Month Rise,” The New York Times (March 22, 2012)
Shadow Inventory Falls 10%, Threat Remains
Shadow inventory--distressed properties not yet listed for sale--has decreased about 10 percent compared to a year earlier, according to CoreLogic.
While the decrease has been viewed as a welcome sign to housing experts, shadow inventory still remains a threat to a housing recovery, even at a time when the housing market has shown other signs of improvement in recent weeks.
For every two homes available for sale in the country, one home awaits in the “shadows,” HousingWire reports about the data.
In January, shadow inventory accounted for 1.6 million units, which is a six-month supply. In January 2011, that number stood at 1.8 million units, an eight-month supply.
“Almost half of the shadow inventory is not yet in the foreclosure process,” says Mark Fleming, CoreLogic’s chief economist. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”
The top six states that account for most of the nation’s shadow inventory:
•Florida
•California
•Illinois
•New York
•Texas
•New Jersey
Source: “U.S. Shadow Inventory Levels Down From Year Ago,” HousingWire (March 21, 2012)
While the decrease has been viewed as a welcome sign to housing experts, shadow inventory still remains a threat to a housing recovery, even at a time when the housing market has shown other signs of improvement in recent weeks.
For every two homes available for sale in the country, one home awaits in the “shadows,” HousingWire reports about the data.
In January, shadow inventory accounted for 1.6 million units, which is a six-month supply. In January 2011, that number stood at 1.8 million units, an eight-month supply.
“Almost half of the shadow inventory is not yet in the foreclosure process,” says Mark Fleming, CoreLogic’s chief economist. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.”
The top six states that account for most of the nation’s shadow inventory:
•Florida
•California
•Illinois
•New York
•Texas
•New Jersey
Source: “U.S. Shadow Inventory Levels Down From Year Ago,” HousingWire (March 21, 2012)
Buying is Cheaper Than Renting in Nearly All Major Cities
Home buying is the smarter choice than renting, according to Trulia’s Winter 2012 Rent vs. Buy Index.
Buying a home is more affordable than renting in 98 of the nation’s 100 largest metro areas, according to the index, which tracks asking prices for rental units compared to for-sale homes in major metro areas.
The only two metros out of the 100 tracked where renting was found to be the better deal: Honolulu and San Francisco. Still, the index notes that if you plan to stay in those markets more than five years, you might still be better off owning than renting in those markets too.
Falling home values and low mortgage rates have made home ownership more affordable. Meanwhile, rents have been on the rise.
“As rents rise and prices stagnate, home ownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring home owners face.”
Top 10 Metros to Buy vs. Rent
1. Detroit
2. Oklahoma City, Okla.
3. Dayton, Ohio
4. Warren-Troy-Farmington Hills, Mich.
5. Toledo, Ohio
6. Grand Rapids, Mich.
7. Cleveland, Ohio
8. Atlanta
9. Gary, Ind.
10. Memphis, Tenn.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Buying a home is more affordable than renting in 98 of the nation’s 100 largest metro areas, according to the index, which tracks asking prices for rental units compared to for-sale homes in major metro areas.
The only two metros out of the 100 tracked where renting was found to be the better deal: Honolulu and San Francisco. Still, the index notes that if you plan to stay in those markets more than five years, you might still be better off owning than renting in those markets too.
Falling home values and low mortgage rates have made home ownership more affordable. Meanwhile, rents have been on the rise.
“As rents rise and prices stagnate, home ownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring home owners face.”
Top 10 Metros to Buy vs. Rent
1. Detroit
2. Oklahoma City, Okla.
3. Dayton, Ohio
4. Warren-Troy-Farmington Hills, Mich.
5. Toledo, Ohio
6. Grand Rapids, Mich.
7. Cleveland, Ohio
8. Atlanta
9. Gary, Ind.
10. Memphis, Tenn.
By Melissa Dittmann Tracey, REALTOR® Magazine Daily News
Supreme Court Sides with Property Owners in EPA Appeals Case
The U.S. Supreme Court handed private property owners a victory yesterday with a decision allowing a couple to appeal an EPA ruling that their property contains a wetlands.
The court's decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.
The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA's wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities, as EPA directed them to. Noncompliance with the directive can subject violators to fines of up to $75,000 a day.
Lower courts have sided with the EPA, saying the agency's compliance orders aren't subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it's appropriate to allow parties to contest agency decisions before having to first comply with the order.
NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.
In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.
The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn't be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.
With the Supreme Court decision, the Sacketts can now get their day in court.
By Robert Freedman, REALTOR® Magazine
The court's decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.
The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA's wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities, as EPA directed them to. Noncompliance with the directive can subject violators to fines of up to $75,000 a day.
Lower courts have sided with the EPA, saying the agency's compliance orders aren't subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it's appropriate to allow parties to contest agency decisions before having to first comply with the order.
NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.
In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.
The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn't be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.
With the Supreme Court decision, the Sacketts can now get their day in court.
By Robert Freedman, REALTOR® Magazine
Wednesday, March 21, 2012
FHFA: Local Laws to Blame for Slow Foreclosures
Federal Housing Finance Agency general counsel Alfred Pollard warned thatstate and local laws meant to aid home owners at risk of foreclosure actually delay the process, hurting the housing finance system and neighborhoods.
He cited such laws as in Washington, D.C., where mediation can prolong the foreclosure process by as many as 132 days, and in Worcester, Mass., where a $5,000 bond must be posted at the time of foreclosure to ensure the home will be maintained.
Pollard said states and localities must "review the balance between home owner protections and the movement to efficient and professionally undertaken foreclosures."
Source: "FHFA Blames Local Laws for Slow Foreclosure Process," American Banker (March 20, 2012)
He cited such laws as in Washington, D.C., where mediation can prolong the foreclosure process by as many as 132 days, and in Worcester, Mass., where a $5,000 bond must be posted at the time of foreclosure to ensure the home will be maintained.
Pollard said states and localities must "review the balance between home owner protections and the movement to efficient and professionally undertaken foreclosures."
Source: "FHFA Blames Local Laws for Slow Foreclosure Process," American Banker (March 20, 2012)
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