WASHINGTON (July 22, 2014) – Existing-home sales increased in June and reached an annual pace of 5 million sales for the first time since October 2013, while rising inventory continues to push overall supply towards a more balanced market, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May. Sales are at the highest pace since October 2013 (5.13 million), but remain 2.3 percent below the 5.16 million-unit level a year ago.
Lawrence Yun, NAR chief economist, said housing fundamentals are moving in the right direction. “Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices,” he said. “On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages – particularly in the West – are still putting upward pressure on prices.”
Yun also noted that stagnant wage growth is holding back what should be a stronger pace of sales. “Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month,” he said. “However, the lack of wage increases is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability.”
Total housing inventory2 at the end of June rose 2.2 percent to 2.30 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5 percent higher than a year ago, when there were 2.16 million existing homes available for sale.
The median existing-home price3 for all housing types in June was $223,300, which is 4.3 percent above June 2013. This marks the 28th consecutive month of year-over-year price gains.
Distressed homes4 – foreclosures and short sales – accounted for 11 percent of June sales, down from 15 percent in June 2013. Eight percent of June sales were foreclosures and 3 percent were short sales.
Foreclosures sold for an average discount of 20 percent below market value in June, while short sales were discounted 11 percent.
The percent share of first-time buyers continues to underperform historically, rising slightly to 28 percent in June (27 percent in May), but remain at an overall average of 28 percent over the past year.
NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said Realtors® are reporting that some prospective buyers who have above average credit scores but low down payments are deterred from homeownership by the high cost of FHA mortgage insurance. “Access to affordable credit continues to hamper young, prospective first-time buyers,” added Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped for the second consecutive month to 4.16 percent in June from 4.19 percent in May, and is the lowest since last June (4.07 percent).
Properties sold faster for the sixth consecutive month in June; highlighting the fact that inventory is still lagging relative to demand. The median time on market for all homes was 44 days in June, down from 47 days in May; it was 37 days on market in June 2013. Short sales were on the market for a median of 120 days in June, while foreclosures sold in 54 days and non-distressed homes typically took 42 days. Forty-two percent of homes sold in June were on the market for less than a month.
For the third consecutive month – as well as the average of the previous 12 months – all-cash sales in June were 32 percent of transactions, up from 31 percent in June 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in June, unchanged from May; they were 17 percent in June 2013. Sixty-nine percent of investors paid cash in June.
Single-family home sales rose 2.5 percent to a seasonally adjusted annual rate of 4.43 million in June from 4.32 million in May, but remain 2.9 percent below the 4.56 million pace a year ago. The median existing single-family home price was $224,300 in June, up 4.5 percent from June 2013.
Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in June from 590,000 in May, and are 1.7 percent above the 600,000 unit pace a year ago. The median existing condo price was $215,700 in June, which is 3.2 percent higher than a year ago.
Regionally, existing-home sales in the Northeast rose 3.2 percent to an annual rate of 640,000 in June, but are 3.0 percent below a year ago. The median price in the Northeast was $269,800, slightly below (0.1 percent) June 2013.
In the Midwest, existing-home sales jumped 6.2 percent to an annual rate of 1.20 million in June, but remain 2.4 percent below June 2013. The median price in the Midwest was $177,900, up 4.6 percent from a year ago.
Existing-home sales in the South inched 0.5 percent higher to an annual level of 2.06 million in June, and are up 1.0 percent from June 2013. The median price in the South was $192,600, up 3.4 percent from a year ago.
Existing-home sales in the West rose 2.7 percent to an annual rate of 1.14 million in June, but remain 7.3 percent below a year ago. The median price in the West was $301,000, which is 7.2 percent above June 2013.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).
3The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.
4Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.
Realtor.com®, NAR’s listing site, posts metro area median listing price and inventory data at: www.realtor.com/data-portal/Real-Estate-Statistics.aspx.
The Pending Home Sales Index for June will be released July 28, and existing-home sales for July is scheduled for August 21; release times are 10:00 a.m. EDT.
RANCHO MIRAGE: Is Obama buying a home?
More than a month after President Barack Obama vacationed in the opulent desert community of Rancho Mirage, speculation is again swirling that the first family is in the process of buying a home there.
The possible purchase? A $4.25 million, 8,232-square-foot hilltop estate in the gated community of Thunderbird Heights.
The listing agent, Carl Blea of HOM Sotheby’s International, declined to comment Monday. The White House has denied the rumors via social media.
Meanwhile, local real estate agents with listings in the neighborhood, including Palm Springs Realtor Nelda Linsk, said they have heard the Obamas are in the process of buying the compound, but no one is confirming it.
THE (POSSIBLE) ESTATE
The home, which reportedly went into escrow June 16, sits on 3.29 acres with panoramic views of the Coachella Valley.
The main home, built in 1993, includes four bedrooms, 4.5 bathrooms and a gym. A 2,000-square-foot casita includes three bedrooms and three bathrooms, according to the listing.
There is a 20-foot waterfall, a “rock formed lagoon,” a misting system, plus elevators, a pool and two spas.
The property sold for $397,500 in 2004, records show. It was listed for $8 million as recently as 2011.
RANCHO MIRAGE RUNDOWN
Rancho Mirage, with a growing population of nearly 18,000, is well known for its high-end resorts, gated communities and year-round warmth, just down the road from Palm Springs.
About 44 percent of residents are over age 65 and the average household income is about $77,000, according to the U.S. census. Dealerships that sell Maseratis, Bentleys and Porsches are just down the road from the Obamas’ prospective home.
While Rancho Mirage has traditionally leaned Republican – residents voted for Mitt Romney in 2012 – the president would also have several Democratic allies in the city.
In 2012, Democrat Raul Ruiz upset Republican Mary Bono Mack to win the 36th Congressional District seat representing Rancho Mirage. Democratic Sen. Barbara Boxer also lives in the city.
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Article source: http://www.pe.com/articles/president-697822-mirage-home.html
Dear Dr. Don, We want to be eligible for another mortgage within a year. My husband’s credit is bad, but mine is very good. We’re working to raise his credit score with the hope that his income can be included in mortgage calculations for the new home. We’re looking at homes in the $300,000-$400,000 price range. Thank you, Dear Marsie, Of course, you’ll need to pay off the mortgage when you close the sale on the condo. You’ll also need to have money for a down payment on the new home. If you’re low on cash, you won’t have much of a down payment; $6,000 will have to help pay off the condo mortgage. You could get a Federal Housing Administration mortgage including a 3.5 percent down payment. FHA loan underwriting standards are more forgiving of people with low credit scores. FHA loan limits depend on where you live. For 2014, they range from $271,050 in low-cost areas to $625,500 for high-cost areas for one-unit properties. Alaska, Hawaii, Guam and the U.S. Virgin Islands have different FHA loan limits. The FHA mortgage will also have a mortgage insurance premium. Some of this is paid at closing and part is paid monthly. The borrower can finance the upfront mortgage insurance premium into the mortgage. One potential worry is the risk of higher interest rates coupled with rising home prices. While that could help what you get for your condo sale, you’re looking at homes that are twice as expensive as your condo. Since you need both incomes to qualify for the mortgage, you won’t be able to avoid the issue of your husband’s lower credit score. It is a good idea to work together to try to repair his credit.
I am currently underwater on my condo mortgage. The condo is worth about $163,000 with a mortgage balance of $169,000. In the next year or so, I want to sell this place and buy a new home with my husband. We would need a mortgage to finance the next home. I do have a little extra money each month to pay toward the principal on my current mortgage or to save for a down payment. I have about $500 to $1,000 monthly that I could budget for this. What should I do?
– Marsie Mortgage
Since you plan to sell the condo before buying your next home, you won’t have the negative equity issue on the condo when you apply for the new mortgage. Whether being underwater in the condo would affect underwriting a mortgage for the new home depends on the lender’s review of your credit history.
Dear Dr. Don,
We want to be eligible for another mortgage within a year. My husband’s credit is bad, but mine is very good. We’re working to raise his credit score with the hope that his income can be included in mortgage calculations for the new home. We’re looking at homes in the $300,000-$400,000 price range.
Of course, you’ll need to pay off the mortgage when you close the sale on the condo. You’ll also need to have money for a down payment on the new home.
If you’re low on cash, you won’t have much of a down payment; $6,000 will have to help pay off the condo mortgage.
You could get a Federal Housing Administration mortgage including a 3.5 percent down payment. FHA loan underwriting standards are more forgiving of people with low credit scores. FHA loan limits depend on where you live. For 2014, they range from $271,050 in low-cost areas to $625,500 for high-cost areas for one-unit properties. Alaska, Hawaii, Guam and the U.S. Virgin Islands have different FHA loan limits.
The FHA mortgage will also have a mortgage insurance premium. Some of this is paid at closing and part is paid monthly. The borrower can finance the upfront mortgage insurance premium into the mortgage.
One potential worry is the risk of higher interest rates coupled with rising home prices. While that could help what you get for your condo sale, you’re looking at homes that are twice as expensive as your condo.
Since you need both incomes to qualify for the mortgage, you won’t be able to avoid the issue of your husband’s lower credit score. It is a good idea to work together to try to repair his credit.
Celebrity house for sale: Photo courtesy of Redfin | Heidi Klum: Â© Debby Wong/Shutterstock.com
Price: $25 million
- 12,300 square feet
- 8 bedrooms
- 10 bathrooms
- 8-plus acres
Model, TV star and fashion designer Heidi Klum has listed her Los Angeles home for sale, according to Redfin.
Klum’s home features a 24-hour guard-gated entrance, temperature-controlled wine room, eat-in kitchen, media room, rose garden and an infinity pool and spa.
Commercial real estate investors and other industry professionals and trade groups are pleased that a bill to provide federal backing to properties in the event of a destructive terrorist attack was renewed by the U.S. Senate last week.
SB2244 was ratified by a 93-4 vote and reauthorizes a post-Sept. 11, 2001 law that was passed to help the property and insurance industries financially survive another catastrophic destruction of property. The Terrorism Risk Insurance Act obligates the U.S. Treasury to cover 80 percent of losses above the varying deductible levels and then seek repayment from insurers.
Any foreign or domestic attack that causes damage costing at least $100 million triggers this program. According to insurance industry calculations, the 9/11 attacks on the World Trade Center and the Pentagon cost insurers $40 billion.
The measure now goes to the House of Representatives and is expected to be taken up soon.
MURRIETA OFFICES SOLD
Two Class A office buildings in Murrieta, both mostly occupied and components of the larger Village Walk Corporate Center, have been sold for $7.75 million, according to a statement from Avison Young, which represented both sides in the deal.
The larger of the two buildings is a three-story property at 41391 Kalmia St. It’s more than 32,500 square feet and is currently 96 percent occupied by 11 tenants.
The smaller neighboring building, at slightly more than 5,000 square feet, is 100 percent occupied by Pacific Western Bank.
In a statement, an Avison Young representative said that the buyer acquired a property priced below its replacement cost and that the seller got the kind of price that the owner of a property that produces a stable revenue yield should expect.
Village Walk Murrieta is the buyer. Village Walk Square is the seller. The overall complex, with more than 400,000 square feet of space spread over 65 acres, is a mixed-use project that includes offices, shops, restaurants and senior housing.
APARTMENT COMPLEX BOUGHT
The Brentwood Apartments, a 44-unit apartment complex in San Bernardino, has been sold to an unnamed investor for $2.4 million, according to a statement from the Ontario office of Marcus Millichap.
The complex, located at 1415 E. Date St., contains units with two to three bedrooms. It is located less than one mile from I-210.
The seller, a private investor, was also not named in the statement.
Contact the writer: 951-368-9553 or firstname.lastname@example.org
Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.
Article source: http://www.bankrate.com/finance/mortgages/rate-roundup.aspx
REAL ESTATE: ‘Foreclosures no longer a widespread contagion,’ RealtyTrac executive says
Foreclosure activity across the nation in June dropped to its lowest level since the days before the housing bubble burst, catching up to hard-hit states like California which felt the pangs of foreclosure distress first.
The 107,194 filings in the U.S. — notices a mortgage was in default or that a property was scheduled for a trustee’s auction or about to be repossessed by a bank — fell 16 percent from June 2013 and dropped 2 percent from May, a level not seen since July 2006.
Total filings are half what they were in the spring of 2008 when more than 240,000 foreclosure-related notices were sent to homes around the country.
Daren Blomquist, vice president of RealtyTrac, said the June activity reflects an important milestone and can be taken as a precursor of more declines in foreclosure activity across the nation as a whole.
Foreclosure levels in California, and the hard-hit Inland region, have been in a wind-down for some time now.
Though banks and mortgage servicing companies are taking what what looks to be a final swipe at distressed property, the Southern California market in June continued to see total foreclosure filings fall from the year earlier, albeit at a slower pace than the state and nation as a whole.
The 12,804 total filings in California fell 14.5 percent from June 2013, but are up nearly 1 percent from May.
For the Inland region, there were 2,505 total filings.
The 1,324 total foreclosure filings in Riverside County were up 8 percent from May, but represented a 10.9 percent drop from June 2013. There were 1,181 total foreclosure-related notices sent to property owners in San Bernardino County, down 0.25 percent from May and down 6.3 percent from June 2013.
Of all the notices filed in the Inland region, 1,124 involved the initial notices of default. Banks or mortgage service companies repossessed 261 properties in Riverside County and another 271 properties in San Bernardino County in June, the RealtyTrac report said.
“There continue to be concerning trends in some states and local markets that clearly indicate those markets are not completely out of the woods when it comes to lingering foreclosure problems left over from the housing bust,” Blomquist said. “While it’s important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market’s return to full health.”
Just before the housing bubble burst in August 2006, Blomquist said roughly 2,200 foreclosure filings were reported in the Inland region each month. Getting back to these levels has been a long, slow and painful slog: In the housing bust, it was not uncommon for each of the counties to record tens of thousands of filings a month.
Over the next six to nine months, Blomquist predicted foreclosure numbers should start to flat-line across the U.S. at what might be considered to be consistently normal levels.
Chris Pollinger, senior vice president of sales at First Team Real Estate, said in a statement that distressed properties continue to wane in the Southern California market as more traditional sellers find their way into the housing market, and as home prices continue to rise.
Contact the writer: 951-368-9423 or email@example.com
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Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.
Article source: http://www.bankrate.com/finance/mortgages/mortgage-analysis.aspx
Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.