Existing-Home Sales Resume Uptrend with Stable Prices

Existing-Home Sales Resume Uptrend with Stable Prices

Existing-home sales got back on an upward path in November, resuming a growth trend since bottoming in July, according to the National Association of REALTORS®.


Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November from 4.43 million in October, but are 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit.


Lawrence Yun, NAR chief economist, is hopeful for 2011. "Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," he said.


Yun added that home buyers are responding to improved affordability conditions. "The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970," he said. "Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011."


The national median existing-home price for all housing types was $170,600 in November, up 0.4 percent from November 2009. Distressed homes have been a fairly stable market share, accounting for 33 percent of sales in November; they were 34 percent in October and 33 percent in November 2009.


Foreclosures, which accounted for two-thirds of the distressed sales share, sold at a median discount of 15 percent in November, while short sales were discounted 10 percent in comparison with traditional home sales.

Total housing inventory at the end of November fell 4.0 percent to 3.71 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October.


NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said good buying opportunities will continue. "Traditionally there are far fewer buyers competing for properties at this time of the year, so serious buyers have a lot of opportunities during the winter months," he said. "Buyers will enjoy favorable affordability conditions into the new year, although mortgage rates are expected to gradually rise as 2011 progresses."


According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.30 percent in November from a record low 4.23 percent in October; the rate was 4.88 percent in November 2009.


"In the short term, mortgage interest rates should hover just above recent record lows, while home prices have generally stabilized following declines from 2007 through 2009," Yun said. "Although mortgage interest rates have ticked up in recent weeks, overall conditions remain extremely favorable for buyers who can obtain credit."


A parallel NAR practitioner survey shows first-time buyers purchased 32 percent of homes in November, the same as in October, but are below a 51 percent share in November 2009 from the surge to beat the initial deadline for the first-time buyer tax credit.


Investors accounted for 19 percent of transactions in November, also unchanged from October, but are up from 12 percent in November 2009; the balance of sales were to repeat buyers. All-cash sales were at 31 percent in November, up from 29 percent in October and 19 percent a year ago. "The elevated level of all-cash transactions continues to reflect tight credit market conditions," Yun said.


Single-family home sales rose 6.7 percent to a seasonally adjusted annual rate of 4.15 million in November from 3.89 million in October, but are 27.3 percent below a surge to a 5.71 million cyclical peak in November 2009. The median existing single-family home price was $171,300 in November, which is 1.2 percent above a year ago.


Existing condominium and co-op sales declined 1.9 percent to a seasonally adjusted annual rate of 530,000 in November from 540,000 in October, and are 32.2 percent below the 782,000-unit tax credit rush one year ago. The median existing condo price5 was $165,300 in November, down 5.5 percent from November 2009. "At the current stage of the housing cycle, condos are offering better deals for bargain hunters," Yun said.


Regionally, existing-home sales in the Northeast rose 2.7 percent to an annual pace of 770,000 in November but are 33.0 percent below the cyclical peak in November 2009. The median price in the Northeast was $242,500, which is 9.2 percent higher than a year ago.


Existing-home sales in the Midwest increased 6.4 percent in November to a level of 1.00 million but are 35.1 percent below the year-ago surge. The median price in the Midwest was $138,900, down 1.1 percent from November 2009.


In the South, existing-home sales rose 2.9 percent to an annual pace of 1.76 million in November but are 26.1 percent below the tax credit surge in November 2009. The median price in the South was $148,000, down 2.6 percent from a year ago.


Existing-home sales in the West jumped 11.7 percent to an annual level of 1.15 million in November but are 19.0 percent below the sales peak in November 2009. The median price in the West was $212,500, up 0.4 percent from a year ago.


The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Miami NO# 1 Cities Where It's Cheaper to Buy Than Rent

Cities Where It's Cheaper to Buy Than Rent
It’s cheaper to buy a home rather than rent one in 72 percent of the 50 largest U.S. cities, according to Trulia’s rent vs. buy index, which compares the total cost of home ownership to the cost of renting.

"Since the start of the 'Great Recession,' many former home owners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”

The index compares the median sales price of homes with the median rent on two bedroom apartments, condos, and townhomes that were listed on Trulia as of Jan. 10, 2011.

Here are the top 10 cities where it’s best to buy than rent, according to the index:
1. Miami
2. Las Vegas
3. Arlington, Texas
4. Mesa, Ariz.
5. Phoenix, Ariz.
6. Jacksonville, Fla.
7. Sacramento, Calif.
8. San Antonio, Texas
9. Fresno, Calif.
10. El Paso, Texas

Source: “Cheaper to Buy Than to Rent in 72% of Largest U.S. Cities,” Inman News (Jan. 24, 2011)

5 Ways to Make Facebook Smarter for Business

5 Ways to Make Facebook Smarter for Business
Facebook has been touted as a great tool for real estate professionals to connect with customers. But having a Facebook profile page alone is not enough.

Charlie Engel, vice president of sales at the online classified ad company Oodle Inc., and Nicole Nicolay of Agent Evolution recently spoke at an Agent Reboot conference in New York City by Inman News about how real estate pros can broaden their reach on Facebook.

Here are a few of the strategies they addressed:

1. Create lists to organize your contacts. You can have separate lists of your contacts by geographic location, topic, or type (e.g. first-time home buyers and move-up buyers) to better organize your contacts on Facebook. But be careful what you call your lists--some friend lists can be made public and even notify your contacts about it. However, the benefit is that once you have friends designated in groups, you can select your lists to sort your news feeds and target your communications.

2. Get a vanity URL. You need at least 25 people to “Like” your Facebook business page until you can get a vanity URL for it (such as facebook.com/username). The benefit of a vanity URL is it is easier to add to your marketing materials so you can promote your Facebook presence.

3. Have a landing tab with extra info. You can create a customized, branded landing tab on your Facebook page so that you can include newsletter information or your listings. You’ll need to have a tab developer who is savvy in Facebook Markup Language (FBML).

4. Start your own group. You can create a Facebook group to get other Facebook users to gather over shared interests, with options to make the group public or private. Start your group here: http://www.facebook.com/groups/

5. Details, details. Allow others to get to know you better and connect with you in other ways. Include photos, basic personal information, friend lists under “Featured People,” education, your philosophy, arts, entertainment preferences, activities, interests, and work credentials. And take advantage of a new tool that allows you to add “info” links that will appear under your username.


Source: “15 Ways to Optimize Facebook for Business,” Inman News (Jan. 12, 2011)

Broward Condominium Sales Rise Seven Percent

Broward Condominium Sales Rise Seven Percent

In Broward County, condominium sales increased seven percent, from 947 to 1,011, last month compared to December 2009 and 70 percent compared to December 2008, according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).

Miami, FL (Vocus/PRWEB) January 20, 2011

In Broward County, condominium sales increased seven percent, from 947 to 1,011, last month compared to December 2009 and 70 percent compared to December 2008, according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).

Single-family home sales dropped 14 percent in December, but were seven percent higher than they were two years ago. Statewide sales increased four percent to 6,673 for condominiums and four percent for single-family homes to 15,550.

Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops rose 12.3 percent from November but were 2.9 percent below December 2009, according to the National Association of Realtors (NAR).

“Increasing condominium sales in December and last year compared to 2009 is a positive sign for the Broward County market,” said Terri Bersach, 2010 president of the Broward County Board of Governors of the MIAMI Association of REALTORS. “Increased condo sales in Broward especially in December could be an indicator that the second home market is showing signs of strengthening. As we experience job growth and a strengthening economy, we expect the Broward market to further improve.”

Year End 2010
Total closed sales of condominiums rose nine percent, from 9,894 in 2009 to 10,773 in 2010. Compared to 2008, condominium sales increased 65 percent last year. Total single-family home sales dropped nine percent from 8,816 in 2009 to 7,997 in 2010 but were 25 percent higher compared to 2008.

The year-end median sales price remained the same at $206,100 for single-family homes and dropped 11 percent for condominiums when comparing 2010 to 2009. Statewide the year-end median sales price dropped four percent for single-family homes and 15 percent for condominiums.

Median and Average Sales Price
The median sales price of condominiums in the Fort Lauderdale Metropolitan Statistical Area (MSA) decreased 12 percent to $70,700 compared to December 2009. The median sales price for single-family homes was $203,700, down four percent from a year prior.

The average sales price for total single-family homes decreased three percent, from $251,556 in 2009 to $244,638 in 2010. The average sales prices for condominiums dropped seven percent, from $128,394 to $119,644.

Statewide median sales prices decreased 17 percent to $88,100 for condominiums and five percent to $133,100 for single-family homes. The national median existing-home price for all housing types was $168,800 in December, a one percent drop from December 2009.

Inventory Levels Decrease
The inventory of residential listings in Broward County decreased 5.8 percent from 21,133 to 19,899 since January 2010, according to the SEFMLS. Compared to last month, the total inventory of homes decreased 1.3 percent.

“Short sales and foreclosures continue to affect home values and the Broward real estate market, particularly in some areas of the county,” said Natascha Tello, president-elect of the Broward County Board of Governors of the MIAMI Association of REALTORS. “Still compared to the state of the market two years ago, when sales began to rebound, we are seeing vast improvements.”

Total housing inventory nationally fell 4.2 percent at the end of December.

About the MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 25,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website is http://www.miamire.com.

CONTACT: Lynda Fernandez, 305-468-7040 Office or 305.903.7922 Cell

What is Shadow Inventory

The “shadow inventory” of unlisted bank-owned homes and potential foreclosures increased to 2.1 million units in August, up 10% from one year earlier, according to new estimates from CoreLogic, a real-estate research firm.

That’s around eight months of supply, compared to a five-months’ supply one year ago.

By contrast, the inventory of all unsold homes listed for sale totaled 4.2 million units in August, unchanged from one year ago. Together, that means the visible and shadow supply of homes stood at around 6.3 million in August, or around 23 months of supply at the current sales pace.

Mark Fleming, chief economist at CoreLogic, says that weak housing demand “is significantly increasing the risk of further price declines in the housing market.” Delays in the foreclosure process, including those brought on by banks’ inability to file the proper legal paperwork, threaten to exacerbate that trend.

CoreLogic estimates that the shadow inventory is highest in the Miami metro area, at 33.5 months, followed by Long Island’s Nassau and Suffolk counties and the Chicago and Atlanta metro areas, with around 30 months. Florida, New York and Illinois require banks to process foreclosures through courts.

Some analysts have said the CoreLogic estimates look rather low. Laurie Goodman, senior managing director at Amherst Securities Group, has warned that as many as seven million homes could end up in banks hands unless more aggressive modification regimes are put in place.

Analysts at Barclays Capital, meanwhile, estimate that bank owned inventory stood at around 600,000 at the end of September (the figures don’t specify what share of that inventory is unlisted versus listed).

Barclays estimates that another 3.76 million homes are either in the foreclosure process or are at least 90 days delinquent but not yet in foreclosure. That’s up from 3.66 million one year ago, though it’s down from a peak of 4.22 million at the end of February. Some of those homes could still sell before going through foreclosure, including through a short sale, where banks approve a sale for less than the amount owed, while other loans could be modified, avoiding (or delaying) foreclosure.

Nearly 356,000 homes have sold through short sales during the first nine months of 2010, according to Barclays analysts, double the amount two years ago. By contrast, banks have sold around 700,000 foreclosures during that period, down 25% from last year and up 10% from two years ago.

Dollar Drops - Why and What Does it Mean?

In This Issue...



Last Week in Review: The US Dollar has dropped. Find out why and what it could mean to home loan rates!
Forecast for the Week: A full load of economic reports hits the markets. Read what they are and why they matter.
View: How much can you deduct for driving? Discover what’s changed...and how you can benefit!
Last Week in Review



"Bet your bottom Dollar?" These days the more appropriate question is: Where is the bottom of the Dollar? That’s because the US Dollar is starting 2011 in very poor fashion, with its value dropping relative to other currencies.
Let’s take a look at why... and what this could mean for home loan rates!
1. Some of the Dollar’s drop is attributed to the recent strength in the Euro, which has gotten a boost from some positive stories of late, like Spain and Portugal's ability to sell debt in the Bond market without crisis. But the question is...have Europe's problems gone away? No - there will be more problems ahead for the region and as they emerge, we should see a reversal in the Euro's strength along with improvement in the US Dollar.
2. Another reason for the Dollar's weakness is the Fed’s Quantitative Easing (known as QE2). Remember, while it would never be officially stated, one of the implicit aims of QE2 is to devalue the US Dollar in order to boost our exports and thus GDP.
At this point, the weakening US Dollar hasn't had a big negative effect on the US Bond market, but should the Dollar materially weaken, it could make US denominated assets like US Bonds less valuable and desirable amongst global investors...and it has been these foreign investors, like China, who have supported the US Bond market for years by purchasing our debt. Remember, home loan rates are tied to Mortgage Backed Securities, which are a type of Bond. So negative news for Bonds would also be bad news for home loan rates.
In housing news last week, Existing Home Sales for December were reported much better than expected. The jump in sales is likely attributed in part to the recent trend of rising home loan rates, which has prompted many homebuyers to take advantage of the still low home loan rates. Building Permits - which signal future construction - also came in better than expected last week, surging 17% in December.
Relatively speaking, 2011 looks to be a good year for the housing industry. There will still be some areas that suffer price declines and those will be where foreclosure backlogs overhang and where unemployment rates are even higher than the national average. But housing has bottomed out in many areas and should see more of a pick up in the second half of 2011. And although home loan rates will likely rise slightly as the year progresses, they are still near all-time lows right now. That means homebuyers still have a tremendous opportunity in front of them.
If you or someone you know is considering purchasing a home, the combination of low home loan rates and affordable home prices make this an ideal time. Call or email today to discuss how you can benefit from the current situation.
Forecast for the Week



This week includes a full load of economic reports ranging from housing and the economy - but the big event will be the Fed Meeting.
• We’ll start the week with a read on consumer attitudes with the Consumer Confidence report on Tuesday. That report will be followed by the Consumer Sentiment Index on Friday.
• We’ll also see additional housing news this week, with a report on New Home Sales in December due out Wednesday and the Pending Home Sales report for December due out Thursday.
• The Federal Reserve will also hold its FOMC meeting this Tuesday and Wednesday, with the Fed’s Policy Statement due for release Wednesday afternoon. There’s no chance for an interest rate hike at this meeting - but what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on rates.
• Thursday’s weekly Initial and Continuing Jobless Claims Report will be important, as always. Last week Initial Jobless Claims came in below expectations and the 4-week moving average fell from the previous week. Those readings tell us the trend in the labor market is continuing to improve...albeit at a slower pace than historically seen at this stage within an economic recovery.
• We’ll also get a read on the economic recovery with Durable Good Orders on Thursday. This report gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time, like furniture, televisions, appliances, vehicles, copy machines, and so on. It’s an interesting report, as people tend to hold back on these types of purchases when they are feeling a need to be extra conservative with their finances or feel insecure about their employment.
• The GDP report will be followed on Friday with reports on Gross Domestic Product (GDP) - which is the broadest measure of economic activity - and the Employment Cost Index (ECI). The ECI is one way to evaluate wage trends and the risk of wage inflation, as well as possible price pressures. This is important to the housing industry because if wage inflation threatens, it is possible home loan rates will rise through Bond prices dropping.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
As you can see in the chart below, Bonds and home loan rates continued their negative trend to end the week worse than where they started.
Chart: Fannie Mae 4.0% Mortgage Bond (Friday Jan 21, 2011)


The Mortgage Market Guide View...



Mileage Rates for 2011
If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2011. These mileage rates are used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes.
New for 2011
As of January 1, 2011, the standard mileage rates are as follows:
• Businesses = 51 cents per mile driven
• Medical or moving = 19 cents per mile driven
• Charitable organizations = 14 cents per mile driven
You’ll notice that the 2011 rates for medical, moving, and business driving went up slightly, while miles driven for charitable organizations remained the same.
For-Hire Now Qualifies!
Beginning in 2011, taxpayers are allowed to use the business standard mileage rate for vehicles used for hire, such as taxicabs.
Make Sure You Qualify
Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.
In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. However, the IRS is accepting public comments on this policy.
Additional Option
Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.
Remember, if you have questions are concerns, talk to a tax consultant or accountant to discuss your options and unique situation.

--------------------------
Economic Calendar for the Week of January 24-28, 2011
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of January 24 - January 28
Date ET Economic Report For Estimate Actual Prior Impact
Tue. January 25 10:00 Consumer Confidence Jan NA 52.5 Moderate
Wed. January 26 10:00 New Home Sales Dec 300K 290K Moderate
Wed. January 26 02:15 FOMC Meeting Jan unch 0.25% HIGH
Thu. January 27 10:00 Pending Home Sales Dec NA 3.5% Moderate
Thu. January 27 08:30 Durable Goods Orders Dec 1.9% -1.3% Moderate
Thu. January 27 08:30 Jobless Claims (Initial) 1/22 NA 404K Moderate
Fri. January 28 08:30 Gross Domestic Product (GDP) Q4 3.8% 2.6% Moderate
Fri. January 28 08:30 GDP Chain Deflator Q4 NA 2.1% HIGH
Fri. January 28 08:30 Employment Cost Index (ECI) Q4 0.4% 0.4% HIGH
Fri. January 28 10:00 Consumer Sentiment Index (UoM) Jan NA 72.7 Moderate

LAST WEEKS ECONOMIC NEWS

According to the Federal Reserve, consumer credit debt rose in April by $954.8 million. Economists had forecast that consumer debt would fall by $1 billion in April. Consumer credit debt fell in March by $5.44 billion.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending June 4 declined 12.2%. Refinancing applications fell 14.3%. Purchase volume decreased 5.7%.

Wholesalers increased their inventories by 0.4% in April, following an upwardly revised 0.7% rise in March. Sales at the wholesale level rose 0.7% in April, marking the 13th straight monthly gain.

The trade deficit increased 0.6% to $40.3 billion in April. It was the highest level since December 2008 and follows a $40 billion gap in March.

Retail sales fell 1.2% in May, after gaining 0.6% in April. Economists had anticipated retail sales to rise 0.4% in May. The decline — the largest since a 2.2% drop in September — was led by a 9.3% drop in building materials.

The Reuters/University of Michigan consumer sentiment index for June's preliminary reading rose to 75.5, the highest since January 2008. The index hit a 30-year low of 55.3 in November 2008.

Total business inventories rose 0.4% in April, following an upwardly revised 0.7% increase in March. Total business sales rose 0.6% in April.

Initial claims for unemployment benefits fell by 3,000 to 456,000 for the week ending June 5. Continuing claims for the week ending May 29 fell by 255,000 to 4.46 million, the lowest level since December 2008.

Upcoming on the economic calendar are reports on the housing market index on June 15, housing starts on June 16 and the index of leading economic indicators on June 17.