NAR Housing Economist 2013 Housing Trends

According to Lawrence Yun, chief economist for the National Association of Realtors (NAR), there were a few surprises in the housing market this year.

Price appreciation was more accelerated than anticipated, and cash purchases continued to make up an uncharacteristically large portion of sales.“The recovery accelerated a lot faster than we anticipated, which was great for sellers and for the 75 million homeowners who saw their home values appreciate,” Yun said in his 7 Housing Trends for 2013.

After a minimal rise from $179,000 to $180,000 over the year in 2012, the national median listing price shot up to $199,500 by September this year, according to Realtor.com.  Another surprise for Yun was the large portion of cash purchases. Over the past three years, cash purchases have made up about one-third of home sales, according to Realtor.com.  Both investors and overseas purchasers contribute to this trend, but Yun said, “Even some owner-occupant buyers are cash buyers because of the excessively tight underwriting standards for loans.”  “Some people are getting help from relatives to buy, and then they plan to take out a home equity loan later to repay them,” he said.

Other trends this year include rising mortgage rates, persistently high affordability, bidding wars, demand from first-time home buyers, and mounting popularity for real estate mobile apps.

As Yun expected, mortgage rates increased this year, “but they’re still very affordable when you look at rates on a historical basis,” he said.  Rising mortgage rates and rising prices contributed to a decline in affordability this year, but despite reaching a five-year low, Yun said, the affordability rate is “still the fifth highest for the past 30 years.”

Price appreciation, low mortgage rates, and a third ingredient—scarce inventories—created a recipe for bidding wars this year. As of September, the housing market holds a five-month supply of homes, according to realtor.com.  The market is also beginning to see more demand from traditional buyers.  While homeownership has declined over the past several years, there is now a “replenishment of renters who want to buy homes,” said Barry Habib, co-owner and chief market strategist for Residential Finance Corp., according to realtor.com.

Yun also took note of a growing trend among real estate brokerages to produce mobile apps to help both buyers and sellers. “Nearly every Realtor and brokerage in the country introduced a mobile app this year,” according to Realtor.com, and consumers are relying on those apps.

Sixty-eight percent of homebuyers used a mobile app while searching for a home, according to a study by Google and NAR.  

Prices Up, Inventory Low in Most Western Mass Markets

It was reported this week that the median price of a home in the Pioneer Valley rose 8.1 percent in June, from $185,000 in June 2012 to $200,000 last month in June 2013.

In Franklin County, sales were down 2 percent from 51 to 50. The median sales price rose 18.7 percent from $160,000 to $189,975.

The overall real estate market has improved, but the inventory of rural properties on the market remains high.   

It has been a busy summer and I think the positive news on housing will continue. 

Read more about the Pioneer Valley Sales.

Wall Street Housing Bet - Pretty Big

Recent articles about the housing market all continue to say the same.  People are predicting or what I should say “hoping” that the real estate market will continue to improve and Wall Street is banking on it!   As one person mentioned there is still plenty to go wrong - Washington - Debt Ceiling, must I say more!  As I look at the past year, I am pleased to report it was one of my best year in sales.  I do predict the housing market will continue to improve slow and steady.   

Click here to read the article "How Big is Wall Street's Housing Bet?

What to expect in 2013! Housing Market Update

I came across a very good article in regards to the 2013 housing market that I think is very accurate and offers good tips for both buyers and sellers.    I added some of my thoughts into the article pertaining to our local market area.

Overall the housing market has stabilized and there is no reason to be fearful of further large declines in property values.    There should be an increase of buyers looking, trying to take advantage of the continued low interest rates and low house values.   This does not mean that sellers can get all excited and think they can get a lot more for their houses.  There will be several of you that still will have a difficult time breaking even.  It will take a few more years before we will see the values increase to levels of 2005-2007.

Pricing property is still very important.    The majority of people buying are getting mortgages and the appraiser that is hired by the bank will have the final say as to the value of the home.   

If you want to buy, you have to be ready to make an offer.  If it’s a new listing a low offer will not be beneficial to you.  However, if a home has been on the market for a while you might be in a better position to negotiate.   It all depends on the property and the seller’s motivation.   Your buyer’s agent will research the situation and guide you along as to the best way to proceed.

Here are a few things to watch in 2013 that could change the housing market:

Fed chairman Ben Bernanke is lifting housing by buying bonds to keep mortgage rates low. How much longer can he keep that going?

The loss of mortgage deductions. Should the tax break on mortgage interest get cut,  it would throw cold water on the real estate recovery.

Sellers sit on the fence. Homeowners could remain on the sidelines as the ranks of buyers grow. In that case, the inventory of homes would shrink even more, lifting prices faster than expected.

Homeowners get bullish. A spate of home construction is already taking place in several major markets. In those regions, the housing stock is likely to stabilize, keeping price gains modest.

Banks loosen their grip. If tight lending standards return to historical norms, realtors argue, the market could see an additional 500,000 to 700,000 home sales next year.

Employer confidence rises. Since jobs are the engine of the housing market, a pickup in hiring later in the year, which economists are predicting, could accelerate a real estate rebound in the second half of 2013.

This information is taken from the article - Real estate: Find opportunity next year

By Carla Fried, CNN Money

Economic Update - Mortgages & Housing

Housing Starts, Mortgage Purchase Applications

On October 17, 2012, in Economic Updates, by Ken Fears, Manager, Regional Economics

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses housing starts and mortgage purchase applications.

§  There were two positive news releases for the housing market this morning; housing starts were up along with purchase applications for mortgages.

§  Single-family starts rose 11.0 in September over the August figure and 42.3% higher than a year ago.  The August number was also revised upward and permits for new construction of single-family units rose 7.6% in September.

§  The single family construction numbers are a positive sign for the market as they suggest that homebuilders feel confident in low inventories and are willing to delve back into the market despite tight financing that often requires self-funding of projects.  While construction is up, the 603,000 single family units started in September (seasonally adjusted at annual rates) was well below the 1.15 million units averaged annually from 1980 to 2007.

§  The purchase portion of the weekly mortgage applications index rose 1% on the heels of a 2% increase last week.   The refinance component fell 5% after a 2% decrease last week.

§  Purchase applications are headed in the right direction, but at low levels.  Lenders have complained of high refi volumes taxing their processes, so the decline on that side of the business should help homebuyers.  It may also help to reduce the spread between banks cost of capital and the rates that they loan at as a decline on the refi side would help to heat up competition for borrowers, passing on more the impact of QE3 to homebuyers.

§  Construction is up, which is a good sign of the sustainability of the low inventory levels which have driven price growth and buyer confidence.  In addition, growth of mortgage applications suggests that demand should remain robust through the end of the year and we may see some further improvement in rates to draw buyers out during the winter months.  However, lending conditions remain tight and an improvement on this front, hopefully with clarification on Basel III and Dodd-Frank (QM and QRM) as we approach January, should help to unlock more demand.

Ken Fears is the Manager of Regional Economics. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

Will home price rebound in 2013?

Economists expect 2013 home price rebound

BY INMAN NEWS, MONDAY, JUNE 25, 2012.

Inman News®

After experiencing a slight dip this year, home prices will see modest increases starting in 2013 and through 2016, according to a quarterly survey of more than 100 economists, real estate experts and investment strategists.   It is still hard to believe that this could be the case.  The real estate market has certainly improved from last year but home price rebound on the way.  I'm not convinced.   Read more!

Local Housing Update - Channel 22 - Listen to our own Kevin Sears!

InFocus: The Housing Market: wwlp.com