A panel of 105 professional economic forecasters from all around the country expect home prices to increase 3.1 percent in 2013, according to the December 2012 Zillow Home Price Expectations Survey. Forecasters are more optimistic about home prices than they were just three months earlier when they predicted 2013 home prices would only increase by 2.4 percent. Continue Reading →
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Today, during a presentation addressing the impact of President Obama’s re-election on the housing market by leaders of the National Association of Home Builders (NAHB), David Crowe, PhD., Chief Economist of NAHB, said there is a “fragile” recovery occurring in the housing market and that it could be “affected both directions by the recent election results”. Crowe went on to say that (with regard to the new home market) there has been “no consistent national trend for some time” as the recovery has been from “relatively small and disparate” locations for about a year now and the reason the national numbers are now reflecting this activity is due to the number of these improving small markets increasing significantly. Continue Reading → I’m sure I’m not the only person in St. Louis that has thought about what it would be like to move to New York, Los Angeles or even Paris or Madrid. If you are another dreamer like me, you will enjoy the widget below that will let you see what your money will buy you in terms of housing (gas, a movie, McDonalds combo meal and a few other things as well) in 30+ international destinations. Continue Reading → According to a new report, The Shifting Nature of U.S. Housing Demand, by The Demand Institute, average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent. From 2015 to 2017, the study projects annual increases between 3 and 4 percent. This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years. Continue Reading → st-louis-realtor-dennis-norman-shadow-inventory-corelogicA report released this morning by CoreLogic shows that the current residential “shadow” inventory as of January 2012 was 1.6 million units, equivalent to a 6-months’ supply, and approximately the same level last reported in October 2011. The shadow inventory is down from a year ago though, when it was at 1.8 million units, or an 8-months’ supply. Currently, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been offset by the roughly equal flow of distressed sales (short and real estate owned), according to the report. “Almost half of the shadow inventory is not yet in the foreclosure process,” said Mark Fleming, chief economist for CoreLogic. “Shadow inventory also remains concentrated in states impacted by sharp price declines and states with long foreclosure timelines.” Continue Reading → Over the past few years many people that had never faced financial trouble found themselves in foreclosure, doing a short-sale or deed in lieu or filing bankruptcy as a result of the burst of the housing bubble, record unemployment and a weak economy in general. People in this situation, many of whom were homeowners for years, were forced to lived with relatives or friends, or rent until they were able to get through their financial crisis. Now, many of these folks have been able to get back on their feet and want to buy a home again but don’t know when, or if they will be able to get a home loan again due to their past. Continue Reading → National Association of REALTORS® (NAR) President, Ron Phipps, wrote a letter to Shaun Donovan, Secretary of the Department of Housing and Urban Development, Timothy Geithner, Secretary of the Treasury Department and Edward DeMarco, Acting Director of the Federal Housing Finance Agency with suggestions on how to improve the Real Estate Owned (REO) asset disposition programs for Fannie Mae, Freddie Mac and FHA. NAR, like many other housing related associations and organizations, submitted letters in response to the government’s request for information on how to deal with the REO problem. Last week, The Washington Post published an article by Kenneth Harney which said “if you take mortgage interest tax deductions, the next 100 days could have significant financial implications for you, thanks to Congress’s new federal debt ceiling plan……the compromise legislation created an unusual mechanism — an evenly split, 12-member bipartisan supercommittee — that could call for major cutbacks on real estate write-offs by Thanksgiving.” The question is, would doing away with the mortgage interest deduction put the final nail in the coffin for the housing industry? Read on to hear two opposing opinions on the topic. A report just released by Zillow.com shows that current home sellers who purchased their homes “after the bubble” (2007 or after) are overpricing their homes by more than sellers that bought during the bubble (2002-2006) or before the bubble (pre-2002). According to the report, current sellers that bought post-bubble are overpricing their homes by an average of 14.1 percent, compared with sellers that bought during the bubble that are overpricing their homes by an average of 9.3 percent and the sellers that purchased pre-bubble are overpricing by 11.6 percent. Hmm, notice a theme? On average, ALL sellers are overpricing their Continue Reading → A recent survey conducted on behalf of Money Management International (MMI), the largest nonprofit credit counseling agency in the U.S., showed that the majority of Americans still view home ownership as the “American Dream“. The survey found that 81 percent of people still put a lot of value in owning a home however the number of people who rent has increased from 34 percent to 38 percent since December. “FHA still could serve 95 percent of its historic targeted market even if the maximum FHA loan limits were reduced by nearly 50 percent.” Last week, George Washington University released a report, “FHA Assessment Report: The Role and Reform of the Federal Housing Administration in a Recovering U. S. Housing Market,” in which it revealed that the Federal Housing Administration’s (FHA) current loan limits are larger than necessary to serve its targeted market of first-time and low to moderate income borrowers. The study finds that the Obama Administration’s current proposal to reduce the higher end of FHA’s loan limits Continue Reading → Robert Shiller I’m doing this article as I attend a presentation by Robert Shiller, Yale Economics Professor and Co-Founder of the S&P/Case Shiller Home Price Indices at the S&P Housing Summit 2011, as he discussed “Unusual Factors Influencing the Outlook for the U.S. Housing Market. So it may be a little choppy, but here are the highlights of his presentation “live”: Dennis Norman The National Association of REALTORS Pending Home Sales Index for December shows an increase of 2.0 percent in the index from the month before (seasonally adjusted), and a 4.2 percent decrease from a year ago. Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for December 2010 showing an increase of 17.5 percent from the month before, but a decrease of 7.6 percent from a year ago. The seasonally-adjusted new home sales rate for December was 329,000 homes, a 17.5 percent increase from November’s revised rate of 280,000 homes. The supply of new homes on the market decreased from an adjusted 8.4 month supply in November to a 6.9 month supply in December. The median new home price increased for the month to $241,500 whopping 12.0 Continue Reading → Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for November 2010 showing an increase of 5.50 percent from the month before, but a decrease of 21.2 percent from a year ago. The seasonally-adjusted new home sales rate for November was 290,000 homes, a 5.5 percent increase from October’s revised rate of 275,000 homes. The supply of new homes on the market decreased from an adjusted 8.8 month supply in October to a 8.2 month supply in November. The median new home price increased for the month to $213,000 from $197,200 Continue Reading → Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for October 2010 showing a decrease of 8.1 percent from the month before, but a decrease of 28.5 percent from a year ago. The seasonally-adjusted new home sales rate for October was 283,000 homes, a 8.1 percent decrease from Septbmer’s rate of 308,000 homes. The supply of new homes on the market increase from an adjusted 7.9 month supply in September to a 8.6 month supply in October. The median new home price decreased for the month to $194,900 from $226,300 the Continue Reading → Dennis Norman Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for September 2010 showing an increase of 6.6 percent from the month before, but a decrease of 21.5 percent from a year ago. Dennis Norman Last month I reported that July’s new home sales rate of 276,000 homes was the lowest rate on record. Subsequently the Commerce Department revised July and changed the sales rate to 288,000 homes raising July to the second-lowest home sales rate on record. Today, the numbers for August came out and they are no better….the new home sales rate for August is being reported by the Commerce Department as 288,000 homes, the same as July. Dennis Norman Naturally, no sooner than I finish writing my post this morning about the Case-Shiller report on home prices in which I actually got to report somewhat “positive” news, my bubble is burst. RadarLogic, another company that has their own home price index that I like, came out with a report saying the Case-Shiller report was too optimistic and that their (RadaLogic) home price index was a better reflection of home values. Dennis Norman The good news is May’s new home sales rate of 267,000, which was the lowest sales rate on record, was revised upward to 281,000. The bad news is June’s sales rate of 330,000 was revised downward to 315,000 and now new home sales for July were reported at 276,000 the new lowest rate on record. Due to the dismal sales, the inventory of new homes on the market increased from an 8 month supply in June to a 9.1 month supply in July. Dennis Norman Yes, the headline is correct….New home sales in June were up 23 percent from May, but unfortunately the revised May annual new home sales rate of 267,000 was the lowest rate of sale on record therefore even after a 23.6 percent increase it only brought June up to 330,000 new homes, a rate that is now the second lowest new home sales rate on record. June’s new home sales rate is 16.7 percent below a year ago. There is some good news in the report; the inventory of new homes (seasonally adjusted) at the end of Continue Reading → Dennis Norman Last month after the new home sales reports came out I had this to say: “I’m very encouraged by home sales in March and April, both in new homes and existing home sales and, if it wasn’t for the fact the homebuyer tax-credit incentive expired April 30th, no doubt a factor that caused buyers to rush to buy, I would feel the market was turning. However, I have strong concerns that this recent “housing recovery” is the result of an artificial market created by incentives, leading to sort of a “sugar-rush” among homebuyers, and now that Continue Reading → Dennis Norman The U.S. Department of Commerce released a report showing the sale of New Homes in February were at a seasonally adjusted annual rate of 308,000, a 2.2 percent decrease from the revised January rate of 315,000 and is 13.0 percent below a year ago. The inventory of new homes (seasonally adjsuted) at the end of February is 9.2 months a slight increase from January’s inventory of 9.1 months. My Mantra As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the Continue Reading → Publishers note: If you have been reading our blog for a while you are probably aware we have been supporters and advocates of the home-buyer tax credit as well as the extension and expansion of the credit, which happened last week. We realize however, there are people that do not support the credits for a variety of reasons. I came across the article below which was written prior to passage of the extension of the credit by Ted Gayer. I think this is a well written piece and does present the “other side of the coin”…Ted agreed to allow us Continue Reading → Loose lending standards in government-backed mortgages is setting up the next wave of defaults and sharp declines in housing prices. Charles Hugh Smith, Of Two Minds Beneath the hype that housing has bottomed is an ugly little scenario: lending standards are still loose and the low-down payment, high-risk loans being guaranteed by government agencies are setting up the next giant wave of defaults and foreclosures. You might have thought that the near-demise of risky-mortgage mills Fannie Mae and Freddie Mac would have cooled the supply of highly leveraged Continue Reading → I posted yesterday on the Wall Street Journal article Report Sheds Light on Why Homeowners Walk Away. A couple of commenters on the WSJ article said why they were walking away from their mortgage, and I thought their comments were interesting enough to repeat. The first walker says that as a good borrower he is unable to have his loan modified, the second blames bank policies: The banks (my lender is CITI) are unwilling to modify mortgages for the people able to pay. I suspect if the people underwater, but with money and good credit – you know, responsible people Continue Reading → Dennis Norman Due to the overwhelming demand for up to date information on the St. Louis housing market, as well as the positive response to our prior reports we have published, at St. Louis Real Estate News we will now be publishing “St Louis Real Estate Market Update Reports on a regular basis. We hope that you enjoy the information and we certainly hope the reports start having more positive news in them soon. If there is any data we are not including that you would like to see please let us know in a comment. Dennis Norman Statistics and reports are flying at us from every direction about the real estate market nowadays. Some reports say we have hit bottom, some even say the housing market has started a recovery others say worse times are ahead. Since I don’t think anyone can really tell us what the future has in store for the housing market I thought now may be a good time to look at history…at least short term history, to see where things stand at this point. Along the way we may see a trend or perhaps even feel like we Continue Reading → Charles Hugh Smith, Of Two Minds By: Charles Hugh Smith: In February 2007 I suggested a 4% mortgage delinquency rate could trigger a decline in the entire housing market. Since that proved prescient, we should revisit the analytic tool behind that call: the Pareto Principle. There is a whiff of euphoria in the housing market, a heavily touted confidence that “the bottom is in.” It’s all roaring back–rising sales, multiple bids by anxious buyers, 3.5% down payments, low mortgage rates and the bonus of an $8,000 first-time home buyer credit (a gift from U.S. taxpayers). Continue Reading → |
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