Sales Soar for New Homes in April

New home sales data released this week showed that sales were 16.6% higher than March when comparing the seasonally adjusted annualized rates, and 23.8% higher than last year.
This news comes from estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.

The median sales price of new houses sold in April 2016 was $321,100; the average sales price was $379,800. The seasonally adjusted estimate of new houses for sale at the end of April was $243,000. This represents a supply of 4.7 months at the current sales rate.

At last we have a clear, statistically significant view that the new home market is having its best spring buying season in a decade,” says Realtor.com® chief economist Jonathan Smoke. “April’s non-seasonally adjusted volume of new home contracts was estimated to be 61,000, which was the highest April volume since 2007. However, a key difference between now and 2007 is that 38 percent of the new homes sold then were completed speculative inventory. In April, less than 30 percent of new homes sold were completed. Likewise, the supply of new homes for sale in 2007 was 7.4 months. This April’s new home supply was 4.7 months – solidly below normal. It appears that the growth in sales is coming from higher price points, indicating that builders are finding success with move-up, luxury, and active adult home buyers rather than entry level buyers. Hopefully this will free up existing home owners to sell their lower priced homes as they move up.

Quicken Loans Vice President Bill Banfield stated, “The spring home buying season is in full swing as builders have been picking up steam through the first quarter. While the large jump in new home sales is encouraging, I would look for a normalization in the coming months that shows a slow but steady increase in the health of the housing market.

Source: RISmedia.com

5 Reasons NOT to “For Sale By Owner”

In today’s market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of those reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

  • 44% on the internet
  • 33% from a Real Estate Agent
  • 9% from a yard sign
  • 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Source: Keeping Current Matters (www.keepingcurrentmatters.com)

Swanky Condo Breaks Ground in West Palm Beach

This is the first major waterfront condo in West Palm Beach since 1987. It comes at a time when the city’s downtown and surrounding neighborhoods have 25 major projects in the pipeline.

In a recent interview, Golub said he was attracting buyers from the Northeast and Palm Beach homeowners who wanted to leave older homes for a new condo with luxury amenities.

Bristol Palm BeachUnits range from 3,700 square feet with three bedrooms to 9,000 square feet with five bedrooms. The interior designer is Amir Khamneipur, who selected woods, stone and imported custom fittings. Amenities include a marble-decked lobby, a club lounge, a fitness center, a two-story wet and dry spa, terrace gardens, and a 75-foot lap pool. The building features a concierge and Bentley service throughout the Palm Beach area.

The developers said the Bristol Palm Beach is 40 percent pre-sold. The developer is asking for 50 percent deposits in stages during construction.

Units start at $5 million. The project should be completed in fall 2018.

Source: South Florida Business Journal

Florida Housing: New Listings, Median Prices Rise in March ’16

ORLANDO, Fla. – April 20, 2016 – Florida’s housing market reported higher median prices, more new listings and fewer all-cash closed sales in March, according to the latest housing data released by Florida Realtors®. Statewide closed sales eased last month amid tighter inventory: Single-family home sales totaled 23,758, remaining relatively the same (down 0.6 percent) from March 2015.

“Many Florida homeowners have been able to rebuild home equity due to strong price growth, but that can also pose a challenge for first-time buyers and move-up buyers,” says 2016 Florida Realtors President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. “However, new listings rose in March, which is good news for potential buyers. New listings for existing single-family homes rose 5.6 percent compared to a year ago while new listings for townhouse-condo properties are up 2.6 percent.”

Meanwhile, sellers received more of their original asking price at the closing table. Sellers of existing single-family homes in March received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).

The statewide median sales price for single-family existing homes last month was $209,500, up 10.3 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $155,000, up 3.3 percent over the year-ago figure.

March marked 52 months in a row that statewide median sales prices for both single-family homes and for townhouse-condo properties rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

FloridaRealtor March 2016 Market Data1

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2016 was $212,300, up 4.3 percent from the previous year the national median existing condo price was $198,900. In California, the statewide median sales price for single-family existing homes in February was $446,460; in Massachusetts, it was $309,000; in Maryland, it was $235,206; and in New York, it was $235,000.

Looking at Florida’s townhouse-condo market, statewide closed sales totaled 10,076 last month, down 7.1 percent compared to March 2015. However, the closed sales data reflected fewer short sales and cash-only sales in March: Short sales for townhouse-condo properties declined 39.3 percent while short sales for single-family homes dropped 33.2 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.

FloridaRealtor March 2016 Market Data2

“Overall, statewide inventory levels essentially held steady in March; however, beneath the surface, we can see that active listings in the most affordable price tiers are continuing to decline,” says Florida Realtors Chief Economist Brad O’Connor. “These declines are being offset by the growth in the upper price tiers, particularly in the luxury market. The active inventory of homes listed for over $1 million, for instance, was up 18.3 percent year-over-year among single family homes and 38.6 percent among condos and townhouses.”

Inventory was at a 4.5-months’ supply in March for single-family homes and at a 6.3-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.69 percent in March 2016, down from the 3.77 percent average recorded during the same month a year earlier.

Download directly the March 2016 Market Data for analysis.

 

SOURCE:  Florida Realtors

 

NAR: February pending home sales up 3.5%

Pending home sales rose solidly in February to its highest level in seven months, according to the National Association of Realtors® (NAR). Led by a sizeable increase in the Midwest, all major regions except for the Northeast saw an increase in February contract activity.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 3.5 percent to 109.1 in February from a downwardly revised 105.4 in January and it’s 0.7 percent higher year-to-year. The index has now increased year-over-year for 18 consecutive months, though last month’s annual gain was the smallest.

“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” says Lawrence Yun, NAR chief economist.

“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers,” Yun adds. “Without adequate supply, sales will likely plateau.”

According to Yun, last month’s noticeable slump in existing-home sales had one silver lining: Price appreciation lessened to 4.4 percent, which is still above wage growth but more favorable than the 8.1 percent annual increase in January.

“Any further moderation in prices would be a welcome development this spring, particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition,” adds Yun.

Existing-homes sales this year are forecast to be around 5.38 million, an increase of 2.4 percent from 2015. The national median existing-home price for all 2016 is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.3 percent and prices rose 6.8 percent.

The PHSI in the Northeast declined 0.2 percent to 94.0 in February, but it’s still 12.6 percent above a year ago. In the Midwest, the index shot up 11.4 percent to 112.6 in February, and it’s now 2.5 percent above February 2015.

Pending home sales in the South increased 2.1 percent to an index of 122.4 in February but it’s 0.4 percent lower than last February. The index in the West climbed 0.7 percent in February to 96.4, but it’s now 6.2 percent below a year ago.

Source:  FloridaRealtors/March 28, 2016.

NAHREP Report: Major Surge in Latino Homeownership

Despite tight supply conditions, home ownership among Hispanic households spiked in 2015, according to the State of Hispanic Home Ownership Report published by the Hispanic Wealth Project and the National Association of Hispanic Real Estate Professionals. This was the first increase observed since 2009.

latino_real_estateHispanic home ownership rate averaged 45.6 percent in 2015, just 0.2 percent higher than the year prior. But in just the 12 months ending December 2015, it soared from 44.5 percent to 46.7 percent — the largest one-year increase in more than a decade.

“The Hispanic home ownership numbers were very encouraging, and all leading indicators strongly suggest that the trend will continue,” says Joseph Nery, president of NAHREP. “Policy makers and the housing industry need to recognize that the face of home ownership in America has changed, and it is in everyone’s interest to ensure that these new consumers have access to relevant lending products, affordable housing stock, and culturally competent service providers in the coming years.”

It should also be mentioned, that Latinos led in workforce participation and household formation growth nationwide. This seems to indicate Hispanics to be a primary driver of overall home ownership rate the next decade and beyond.

The significance of Hispanics to housing and the economy will continue to grow, creating opportunity for all who focus on this vibrant, dynamic, and important part of the U.S. economy.

Source: National Association of Hispanic Real Estate Professionals

Homeowner Equity is on the Rise

With home prices inching up, more Americans are emerging from being underwater (owing more on their mortgage than their home is currently worth).

Several reports have tried to estimate how many homeowners came out from being underwater last year. CoreLogic reported that about 1.4 million borrowers moved above water for the first nine months of 2012. Zillow recently estimated that 2 million homeowners emerged last year. And J.P. Morgan Securities reported that the number of underwater homeowners fell from 11 million to 7 million in 2012.

“Estimates can vary for a number of reasons,” The Wall Street Journal reports. “Underwater borrowers can move back to positive equity by paying down their loan principal or by seeing prices rise. Properties can also ‘exit’ negative equity when they go through foreclosure or when the bank approves a short sale. In those cases, borrowers aren’t being returned to positive equity – instead, they simply cease to be borrowers.”

Many of the largest home gains across the country came in areas that had a high number of underwater borrowers.

“If this correlation persists in the coming years, the underwater problem could fade much faster than implied by the speed of national house prices appreciation,” Goldman Sachs researchers told The Wall Street Journal.

 

 

Can a mortgage insurer sue after short sale?

Question

I completed a short sale on my home, and the agreement didn’t address whether I still was on the hook for the forgiven debt. I was just served with a lawsuit from a mortgage insurance company that wants me to pay the deficiency”.

What’s going on?

Answer

Here’s an answer from Florida attorney Gary M. Singer, who is a board-certified expert in real estate law in Florida:

I’m seeing more of these lawsuits. A common misconception about private mortgage insurance is that it protects the borrower. In reality, while the borrower pays for this insurance, it actually is designed to protect your lender if you default on the mortgage. Not all loans have PMI. But if yours does, and you complete a short sale or lose the home in foreclosure, your lender can make an insurance claim with the PMI company. The company then can stand in your lender’s shoes to try and collect the money back from you, a legal concept known as “subrogation.”

The theory is that because your actions resulted in the insurer having to pay the claim, the company can seek repayment from you. You can respond to this lawsuit by making the company prove it has the right to collect the deficiency, just as you would make the lender prove it has the right to foreclose.

You may be able to settle with the insurer for less than the full amount you owe. Of course, if the deficiency had been previously waived by your lender in the short sale or foreclosure, you don’t have to worry about any of this.

That’s why it’s so important to make sure the lender forgives the debt.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

 

 

Continued Florida market upswing seen in January 2013

Florida’s housing market reported increased sales, higher median prices, more pending sales and the continued shrinking of inventory levels in January 2013, according to the latest housing data released by Florida Realtors®.

“This year started out strong for Florida’s housing market,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “Homes sales continue to rise, mortgage rates remain near historic lows and the inventory of for-sale homes is lower than it’s been in years. Plus, the time it takes for a home to sell is dropping; the median days a home is on the market declined about 15 percent for both single-family homes and for townhome-condo properties. However, overly restrictive credit requirements remain an obstacle for many potential buyers, who find it difficult to access affordable financing options.”

Statewide closed sales of existing single-family homes totaled 13,679 in January, up 11.7 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 31 percent over the previous January. The statewide median sales price for single-family existing homes last month was $145,000, up 12.4 percent from the previous year.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in December 2012 was $180,300, up 10.9 percent from the previous year. In California, the statewide median sales price for single-family existing homes in December was $366,930; in Massachusetts, it was $303,500; in Maryland, it was $243,741; and in New York, it was $229,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 6,670 units sold statewide last month, up 2 percent compared to January 2012. Meanwhile, pending sales for townhouse-condos in January increased 17 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $112,000, up 18 percent over the previous year. NAR reported that the national median existing condo price in December 2012 was $184,100.

According to Florida Realtors’ data, this is the 13th month in a row that statewide median sales prices for both single-family homes and for townhouse-condo units seen a year-over-year increase.

The inventory for single-family homes stood at a 5.6-months’ supply in January; inventory for townhouse-condos was at a 6.2-months’ supply, according to Florida Realtors.

“I’m particularly impressed with the rise in percentage of list price received by sellers,” said Florida Realtors Chief Economist Dr. John Tuccillo, referring to the January data. Sellers of single-family existing homes in January received an average of 92.2 percent of their original list price; sellers of townhome-condo units received an average of 93 percent.

“This can encourage other potential sellers to come forward, thus easing the market’s inventory crunch,” Tuccillo noted. “But, despite the progress of Florida’s housing market, it’s still being held back by the difficulty consumers have in accessing credit.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.41 percent in January 2013, down from the 3.92 percent average during the same month a year earlier.

For the detailed 2013 report click here.

 

Pending Home Sales Rise Again in November

Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain.

The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage,” he said.

“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.

Pending home sales are not affected by the recently published rebenchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.

The PHSI in the Northeast rose 8.1 percent to 77.1 in November but is 0.3 percent below November 2010. In the Midwest the index increased 3.3 percent to 91.6 in November and is 9.5 percent above a year ago. Pending home sales in the South rose 4.3 percent in November to an index of 103.8 and remain 8.7 percent above November 2010. In the West the index surged 14.9 percent to 121.2 in November and is 2.9 percent higher than 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.