Sunday, December 13, 2015


Source: RealtyTrac

IRVINE, Calif. – Dec. 3, 2015 — RealtyTrac® (, the nation’s leading source for comprehensive housing data, today released its October 2015 U.S. Home Sales Report, which shows that among 94 major metro areas analyzed for the report, 33 markets (35 percent) have now reached new all-time home price peaks in 2015.

The report also shows that the median sales price of U.S. single family homes and condos in October was $207,500, up 1 percent from the previous month and up 10 percent from a year ago — the highest year-over-year percentage increase since February 2014.

The 10 percent increase in October 2015 came following 20 consecutive months of single-digit annual increases in median home sales prices and marked the 44th consecutive month with a year-over-year increase in median home prices. Despite nearly four years of increases, the U.S. median sales price in October was still 9 percent below the previous peak of $228,000 in July 2005.

“Home price appreciation did not go into hibernation in October even as the housing market entered the typically slower fall season,” said Daren Blomquist, vice president at RealtyTrac. “More than one-third of the nation’s major housing markets have now reached new home price peaks this year, and nearly 90 percent of markets posted an annual increase in home prices in October. Home sellers are sitting pretty in this market, realizing an average profit-since-purchase of 16 percent — the highest in any month since December 2007, on the cusp of the Great Recession.”

Metro areas that have reached new home price peaks in 2015 include Detroit, which hit a new peak in October with a median sales price of $155,000. Other metros that reached a new price peak in 2015 include Dallas, Houston, Atlanta, St. Louis, Denver, Pittsburgh, Charlotte, Portland, San Antonio and Columbus, Ohio.

“While increases in pending sales indicate continued strong demand for housing into 2016, coupled with healthy increases in available housing inventory across the state, there remains concern over a decrease in overall closed volume for the fourth quarter of 2015,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio. “This concern squarely rests on continued delays in the housing transaction cycle involving new government regulatory procedures of TRID (the new integrated loan disclosure forms required at closing). Prior to October 2015, housing transactions were normally trending in the neighborhood of 30 to 45 days to close, but new TRID regulations have pushed current housing transaction to 45 to 70 days to close. These delays are pushing October pending transactions to closings in late November, December, if not January in some instances.”

There were a total of 2,815,704 single family homes and condos sold in the first 10 months of 2015, according to public record sales deeds collected by RealtyTrac. That was a nine-year high for the first 10 months of the year and a 6 percent jump from the same time period in 2014, when there were a total of 2,667,436 single family and condos sold in the first 10 months of the year.

89 percent of major markets post year-over-year increases in median home prices
Among 94 major metropolitan statistical areas with 500 or more sales with home price data available in October 2015, 84 (89 percent) saw an increase in sales prices from the previous year, while only 10 metros saw a decline in median sales prices from a year ago. Those with the biggest annual increase in median sales price were Detroit, Michigan (up 29 percent), Charleston, South Carolina (up 17 percent), Denver, Colorado (up 17 percent), St. Louis, Missouri (up 16 percent), Bridgeport, Connecticut (up 15 percent) and Cape Coral, Florida (up 15 percent).

“With the threat of increasing interest rates that can steal tens of thousands in potential buying power we are seeing home sales increase. Now, more than ever the race for a home in an already ultra-competitive sellers’ market becomes as strategic as a Super Bowl defense,” said Al Detmer, broker associate at RE/MAX Alliance, covering the Greeley market in Colorado. “The increasing market is two sided as it is a dream for sellers and a nightmare for even the most novice buyer.”

Other major markets with double-digit appreciation compared to a year ago included Palm Bay, Florida (up 15 percent), Modesto, California (up 14 percent), Raleigh, North Carolina (up 14 percent), Washington, D.C. (up 13 percent), Philadelphia, Pennsylvania (up 13 percent), and Ocala, Florida (up 13 percent).

Share of cash sales increase on monthly basis for third consecutive month
Cash sales may be down from their peak of 41.1 percent in February 2011, but October 2015 saw the share of cash sales increase on a monthly basis for the third consecutive month, with all-cash sales accounting for 28.9 percent of all sales during the month — up from 28.4 percent in the previous month but still down from 30.4 percent a year ago.

RealtyTrac analyzed 230 metros with at least 10 or more cash sales and at least 100 sales in October 2015 and found that more than half (128 metros) saw a monthly percent increase in cash sales. Metros with the highest share of cash sales included Homosassa Springs, Florida (61.4 percent), Naples, Florida (60.1 percent), Columbus, Georgia (54.9 percent), Miami, Florida (53.7 percent), Greeneville, Tennessee (52.8 percent) and The Villages, Florida (52.2 percent).

“All trends are positive for an improving real estate market in South Florida. Our prices continue to rise due to limited land and an increasing and diverse population,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market, where median home prices increased 11 percent from a year ago in October, according to the RealtyTrac data. “More first-time buyers are entering the market propelled by loosening credit and low down payment requirements of FHA loans. Our distressed market is moving back toward historical norms. Property owners may be surprised at the improvement in equity from the great recession bottom and the timing is good to sell as our inventory is still low.”

Counties with biggest home seller gains and losses in October 2015
RealtyTrac analyzed 127 counties with at least 500 sales in October 2015 and where home price data was available both on the most recent purchase and the previous purchase. In 15 of those counties (12 percent) home sellers on average in October sold for a lower price than what they purchased for.

Counties where sellers on average sold for the biggest percentage loss were Burlington County, New Jersey in the Philadelphia metro area (13 percent loss), Kane County, Illinois in the Chicago metro (9 percent loss), Shelby County, Tennessee in the Memphis metro area (4 percent loss), Guilford County, North Carolina in the Greensboro metro area (4 percent loss), and Cook County, Illinois in the Chicago metro area (4 percent loss).

Counties where sellers on average sold in October for the biggest percentage profit since purchase were Alameda County, California in the San Francisco metro area (75 percent gain), Santa Clara County, California in the San Jose metro area (61 percent gain), San Mateo County, California in the San Francisco metro area (58 percent gain), San Bernardino County, California in the Riverside metro area (52 percent gain), and Multnomah County, Oregon in the Portland metro area (51 percent gain).

Other counties where sellers realized hefty gains in October were Denver County, Colorado (49 percent gain), Travis County, Texas in the Austin metro area (48 percent gain), Contra Costa County, California in the San Francisco metro area (48 percent gain), King County in the Seattle metro area (48 percent gain), and Orange County, California in the Los Angeles metro area (46 percent gain).

“The Seattle housing market remains remarkably tight and very competitive. Buyers are still fighting over any new listing which is well priced and this has led to rapid price escalation. As such, we are seeing an average price gain substantially higher than the national average,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattlemarket, where median home prices increased 10 percent from a year ago in October, according to the RealtyTrac data. “I believe we will start to see sellers come to market in greater numbers in 2016 as they look to lock in the growth in value that they have seen in recent years. This is fairly intuitive as mortgage rates are expected to rise in the coming year which will certainly lead to slowing home price growth. It remains a challenging market for first-time buyers in Seattle. Even with the growth in low down payment programs (FHA), housing here is expensive — especially in areas close to the job centers. Unless we see an increase in new, affordable housing, which is unlikely, it will continue to be a challenge for those trying to buy their first home.”

Ogden, Visalia and Salt Lake City post highest share of FHA buyers
Buyers using Federal Housing Administration (FHA) loans — typically low down payment loans utilized by first time homebuyers and other buyers without equity to bring to the closing table — accounted for 16.1 percent of all single family home and condo sales with financing — excluding all-cash sales — in October 2015, down from 16.9 percent in the previous month but up from 12.6 percent in October 2014.

Metro areas with the highest share of FHA buyers in October 2015 included Ogden, Utah (34.2 percent), Visalia, California (30.9 percent), Salt Lake City, Utah (30.6 percent), Elkhart, Indiana (29.9 percent), Yuma, Arizona (29.9 percent), and Merced, California (29.5 percent).

Killeen, Columbus, Jacksonville post highest share of institutional investor purchases
Sales of homes to institutional investors — entities that purchase at least 10 properties during a calendar year — accounted for 3.6 percent of all single family home and condo sales in October, unchanged from the previous month but down from 5.5 percent in October 2014.

Among markets with at least 100 or more total sales in October 2015, those with the highest share of institutional investor purchases were Killeen, Texas (12.4 percent), Columbus, Georgia (12.2 percent), Jacksonville, North Carolina (11.6 percent), Huntsville, Alabama (10.1 percent), and Memphis, Tennessee (10.1 percent).

“It’s interesting to note that the top four markets for institutional investors are all small- to medium-sized markets near military bases,” Blomquist noted.

Bank-owned sales continue to decline in 2015
In October 2015, 8.1 percent of all sales were bank-owned (REO) single family homes and condos. This was unchanged from the previous month but down from 10.6 percent of all sales in October 2014. The October median sales price of a bank-owned home was $121,000, 42 percent lower than the overall median home sales price during the month.

Metros with the highest share of REO sales in October 2015 were East Stroudsburg, Pennsylvania (31.7 percent), Bakersfield, California (25.5 percent), California, Maryland (24.5 percent), Tallahassee, Florida (20.3 percent) and Jacksonville, Florida (19.0 percent).

Short sales decrease month over month and year over year
Short sales accounted for 5.2 percent of all single family and condo sales in October, unchanged from the 5.2 percent in the previous month but down from 5.5 percent a year ago.

Markets with the highest share of short sales in October were Salisbury, Maryland (13.5 percent), Torrington, Connecticut (12.6 percent), Atlantic City, New Jersey (12.6 percent), Yuma, Arizona (11.0 percent), Jacksonville, North Carolina (10.8 percent) and Providence, Rhode Island (10.2 percent).

Markets bucking the national trend with a year-over-year increase in share of short sales included Springfield, Massachusetts, Ocala, Florida, Worcester, Massachusetts, Baton Rouge, Louisiana and Fayetteville, North Carolina.

Report methodologyThe RealtyTrac U.S. Home Sales Report provides percentages of distressed sales and all sales that are sold to investors, institutional investors and cash buyers, a state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds, foreclosure filings and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available for those previous months. Median sales price is calculated based on the sales price on the publicly recorded sales deed when available. If no sales price is recorded then the purchase loan amount is used to calculate median price, and if no purchase loan amount is available, the property’s Automated Valuation Model (AVM) at time of sale is used to calculate the median price.

DefinitionsAll-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.

Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in a calendar year.

REO sale: a sale of a property that occurs while the property is actively bank owned (REO).

In-foreclosure sale: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).

About RealtyTrac RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary, the company’s proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac’s data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers.



Source: DS News

The topic of bubbles forming in the housing market is something that has been thrown around for quite some time. As home prices soar to new heights—with no sign of decline—housing bubbles appear to be popping up in many markets.

Housing markets situated in ever-popular (and expensive) San Francisco, California are showing bubble signals, but experts believe that other markets are not too far behind.

Zillow's Home Price Expectations Survey of 108 panelists showed that one-third of respondents agreed that the San Francisco housing market is in a bubble, while 20 percent indicated that the market is at-risk for bubble conditions in the next year.

"Without 20/20 hindsight, it's difficult to identify bubbles as they're happening, but it is very clear that nationally we are not seeing a return of the conditions that caused the last national bubble," said Dr. Svenja Gudell, Zillow's Chief Economist. "Tighter lending restrictions today mean we aren't seeing buyers get loans they realistically can't pay back, like we did in years past. It's significant that some experts are starting to worry about bubble conditions, but in my opinion, there's no real danger of a severe crash like the one we all remember from the last decade."

In addition to San Francisco, California, New York City, New York; Houston, Texas, and Los Angeles, California; Miami, Florida; San Diego, California; and Seattle, Washington were at the top of Zillow's list markets that are already in a housing bubble.

"A handful of markets–especially the Bay Area–are very hot right now, and it's possible home values may actually begin to fall somewhat in these places as more residents are priced out amidst rising affordability concerns, especially when interest rates rise. Whether those local conditions constitute a 'bubble' is up for debate, even among economists," Dr. Gudell explained.

According to Zillow's panelists, home values are projected to grow at an annual rate of 3.9 percent through the end of 2015, which shows that the housing market will start to slow. All panelists agreed that the expected average annual home-value appreciation rate is now just over 3 percent, resulting in a national median home value of more than $215,000 by the end of 2020.

"The long-term outlook for U.S. home values has diminished to a three-year low, and a clear-cut consensus among the experts remains elusive, even at the national level," said Terry Loebs, Pulsenomics Founder. "Based on the projections of the most optimistic forecasters, home values nationally will increase 4.7 percent next year and surpass their May 2007 peak levels in April 2017.

Loebs continued, "In contrast, the data collected from the panel's most pessimistic respondents expect only 2.3 percent appreciation for next year, and even more subdued appreciation thereafter–a path that would delay the market's eclipse of the bubble peak until September 2019. The divergence of expert views regarding the existence of regional price bubbles and the path of future home values is a reminder that the U.S. housing sector has yet to fully heal more than eight years after the epic bust, and that significant risks have re-emerged within certain large metropolitan area housing markets."



Source: The Housing File

The long, steady recovery from the housing crisis and the recession that followed is nearly over, with the consumer lending market, including mortgages, expected to recover completely in 2016, according to a new report fromTransunion.

Transunion published its 2016 forecast for the mortgage market this week, and the report states that the mortgage market will return to its pre-crisis state by the end of 2016.

According to Transunion’s analysis, the national mortgage loan serious delinquency rate, which is the ratio of borrowers 60 or more days past due, will decline from 2.5% at the end of 2015 to 2.06% at the conclusion of 2016.

Consumer level mortgage delinquency rates peaked at 6.94% during the first quarter of 2010 and have been declining nearly every quarter since, Transunion’s report showed.

According to Transunion’s report, the 60-day mortgage delinquency rate sat at 6.89% at the end of 2009, before jumping in the first quarter of 2010 to 6.94%.

By the end of 2010, the delinquency rate sat at 6.44%. At the end of 2011, the delinquency rate sat at 5.94%, falling again to 5.06% at the end of 2012.

After that, the delinquency rate dropped significantly, to 3.84% at the end of 2013. By the end of 2014, the delinquency rate was a 3.29%.

And the delinquency rate is expected to drop to 2.5% by the end of this year.

Transunion’s 2016 projection is that the year-end delinquency rate will sit at 2.06%, much more in line with the pre-crisis delinquency rate.

“We have observed that a ‘normal’ delinquency rate falls between 1.5% and 2% in the past, and our forecast puts the nation back at this level,” said Steve Chaouki, executive vice president and head of TransUnion’s financial services business unit.

“Newer vintage mortgage loans have been performing at this level for the last few years, but a combination of factors such as the funneling of bad mortgage loans through the foreclosure process, an improvement in the employment picture and an uptick in housing prices were needed to get back to normal,” Chaounki continued.

Transunion’s forecast also projects continued growth in the average mortgage debt per borrower, which has slowly gained in recent years, due in part to a rebound in housing prices.

Debt levels are expected to experience a $9,000+ gain by the end of next year from the year-end low observed in 2012, Transunion’s report shows.

At the end of 2012, the average mortgage debt per consumer was $183,339. It’s grown by roughly $2,000 per year since then.

The average mortgage debt per consumer is projected to finish 2015 at $189,917 and rise to $192,512 by the end of 2016.

“This is a clear indicator that housing prices are recovering and consumers are gaining access to more mortgage loans,” said Chaouki. “Fannie Mae’s recent announcement to use trended data in the assessment of mortgage applicants could also very well boost mortgage originations in the second half of 2016.”

According to Transunion’s report, previous analysis of the Fannie Mae announcement found that with the use of trended data, the percentage of consumers in the super prime risk tier would increase from 12% of the population to 21%.

Super prime consumers generally have the greatest access to new loans at the lowest pricing, Transunion said.

TransUnion’s data shows that the number of mortgage accounts has remained “relatively low” for the last three years, though growth has been seen during the last two years.

As of the third quarter of this year, there were 52.6 million mortgage accounts, which is approximately 7 million less than there were during the third quarter of 2009.

“We are a long way from returning to pre-recession levels in terms of mortgage accounts, but changing consumer preferences for housing also may play a role in this slow recovery,” Chaouki said. “If the economy continues to perform well, we do believe the net number of mortgages will increase over the next year.”



Source: The Wall St. Journal

The largest boom in new apartment construction in three decades is doing little to slow rent increases or ease affordability concerns for renters across the country, a new report finds.

A record number of renters are spending more than 30% of their incomes on rent—a ratio that economists consider financially burdensome, according to a report released Wednesday by Harvard University’s Joint Center for Housing Studies. The report, “America’s Rental Housing: Expanding Options for Diverse and Growing Demand,” says more than 21 million households are burdened by how much they pay in rent, up from fewer than 15 million in 2001.

Nearly half of renters are paying more than 30% of their incomes in rent, the report says. While that is a slight improvement from 2011, it remains above where it has been for most of the last 13 years.

Inflation-adjusted rents rose 7% from 2001 to 2014, while renter household incomes fell 9%, creating affordability challenges for many renters. A recent boom in construction would normally be expected to ease such concerns by providing a flood of new supply.

One reason that hasn’t happened is simply that new supply hasn’t kept up with the swell in demand. In mid-2015, 43 million families and individuals lived in rental housing, up nearly 9 million from 2005—the largest gain in any 10-year period on record. In contrast, the number of rental units expanded by just 8.2 million, most of that from the conversion of single-family homes into rentals.

“As much as we’ve seen an increase in rental supply, the increase in rentals demand has been astounding,” said Chris Herbert, managing director of the Joint Center for Housing Studies.

Another factor is that much of the new supply is aimed at higher-income renters. The median asking rent for new market-rate apartments hit $1,372 last year, a 26% increase from 2012, according to the report.

Developers say this partly reflects increases in land prices and construction costs, which make it difficult to build anything but high-end buildings. “As my father always says, a sheet of drywall doesn’t care if it’s in a luxury high-rise or an affordable housing project—it costs the same,” said Toby Bozzuto, president and chief executive of the Bozzuto Group, a Washington-area builder.

So far at least, those high-priced apartments are being gobbled up by young professionals renting well into their 30s and retirees downsizing into apartments. The number of higher-income renters earning $100,000 or more has grown by 1.6 million over the last decade. Households over age 40 now make up the majority of renters, according to the report.

The report’s findings underscore a challenge to helping especially middle-income renters. Years of low rates of rental construction have created a shortage of older rental units affordable to firefighters and paralegals. It is likely to take years for some of housing being built now now to come down in price, leaving cities struggling to hold onto middle-class families.

“I think the prognosis unfortunately is probably not good,” Mr. Herbert said.


Thursday, October 1, 2015


Story Highlights

• Six in 10 investors say local housing prices on the rise
• Large, small investors say homeowning an important investment

WASHINGTON, D.C. -- Roughly six in 10 U.S. investors say housing prices in their area are rising. Just 11% say prices are falling, while a quarter believe prices are stable.

These data are from the third-quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey, conducted Aug. 7-16. Investors are defined for this survey as U.S. adults who have at least $10,000 invested in stocks, bonds or mutual funds, a criterion met by 44% of U.S. adults in the current survey. The large majority of these investors own homes (83%) while a much smaller figure rent (15%). In April, Gallup found thatmost Americans expected local housing prices to increase.

Among all investors who perceive that local housing prices are rising, sentiment is mixed about how increasing prices are affecting their personal financial outlook. About half say rising housing prices make them feel no differently about their discretionary spending or investing in the stock market, while about a third say they are more optimistic about their spending and investments. On the other hand, 56% say rising housing prices make them more optimistic about the economy's outlook, with 24% saying they make no difference.

The vast majority of investors who own their homes see owning property as "important" or "critical" to building wealth. Neither the size of one's investments nor an investor's age appears to influence how a home-owning investor values his or her primary residence as a means of building wealth.

Bottom Line

A significant majority of investors of varying ages and portfolio sizes see owning property as a way to build wealth. And most investors perceive that housing prices are going up.

However, few say that these price increases are having a real effect on their own day-to-day spending or investments. Instead, the majority of investors who are seeing housing prices increase in their local market say these increases are making them more optimistic about the outlook for the economy.



Recent indicators released about the strength of the housing market have been all over the map. In some cases, quite literally.

Most cities east of the Mississippi River—from Chicago to Miami—saw home prices drop between June and July, according to the S&P/Case-Shiller Home Price Index. Meanwhile, most metropolitan areas west of that dividing line, from Portland to Las Vegas, saw home prices rise over the month.

Geographic divides help explain the unevenness in the housing market’s performance in recent months. Prices have continued rising, even as the pace of existing-homes sales tumbled in August. New-home sales hit their highest level since early 2008 in August, but forward-looking indicators of the strength of the housing market have also been weak.

Economists say that getting a clear read on the housing market has become difficult as local markets are performing very differently. The dividing line between the haves and have nots, in a word: jobs.

Local areas especially with strong technology sectors are seeing prices rise rapidly, while many former industrial cities in the Northeast have slumped. Chicago saw prices decline 1.2%. Even New York City and its suburbs saw a seasonally adjusted decline in prices of 0.5%, likely driven by declining interest in living in single-family homes on Long Island and in Westchester.

Meanwhile, San Diego saw prices rise 0.8% seasonally adjusted, while in Las Vegas they rose 0.4%.

“These conflicting trends may be confusing and even frustrating for some, but right now they shouldn’t be too much cause for concern. The market is continuing to heal and find its footing in a new environment, one where highly local factors [including jobs] matter more in local markets than national trends,” saidSvenja Gudell, chief economist at Zillow.

Indeed, over time the divide between California cities and some of their Rustbelt counterparts becomes even more apparent. Home prices in Los Angeles, San Francisco and San Diego have more than doubled since January 2000. In Detroit they have grown just 3% since then, and in Cleveland just 10%, according to Case Shiller.

“A good deal of the economic recovery is tied to technology and technology stocks, which until China were doing reasonably well,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

Nonetheless, Mr. Blitzer warned that the California economy could struggle if the Chinese economy continues to stutter because it relies significantly on trade with Asia. That could eventually have an impact on home prices in the West.



Even though the market has recovered from near-historic low mortgage interest rates, it’s still a great time to become a homeowner. Whether you’re considering buying a property to live in or one to rent out, the time is now.

Great Rates for Home Buying
According to, current interest rates for a 15-year fixed mortgage hover around 3.2%. Barely surpassing inflation, this rate also allows current homeowners to refinance their loans or to put extra money toward their retirement accounts instead of paying off their mortgage early.

If you’re looking to get a mortgage right now, make sure your credit report is in top shape. Review it to see if there are inaccuracies — you want to be prepared to get the best interest rate possible. Check out a few different lenders; you never know which one will be able to get you the best rate.

If you’re considering buying a house to act as rental income, doing so when rates are low is one of the most important factors to the success of your investment. We don’t know where interest rates will go in the future. They could fall even lower or rebound to pre-recession figures, but right now is a good time to bet on the housing market.

Will Lipovsky, a blogger at First Quarter Finance, said since interest rates for mortgages are still low while the stock market is doing well, now could be a perfect time to get into real estate.

“The stock market has been doing really well for the past few years, minus a recent dip,” he said. “Why not take those gains and parlay them into real estate? Real estate has been pretty level in most areas. You may be positioning yourself nicely for another market spike.”

For some people, putting money they’ve earned into real estate could be a nice way to diversify their investments. Instead of buying more stocks or mutual funds, buying real estate can be a good way to round out a portfolio, even for a seasoned investor. Plus, there are special deductions you can take as a landlord that you don’t qualify for if you live in the home.

But is Buying the Right Thing for You?
If you’re considering buying a home, the time is now given outside factors. But is it a good time for you? Do you have the savings for a down payment? Do you have an emergency fund that can cover any unexpected repairs? Do you anticipate living in the same area for at least the next five years?

“Interest rates are still near historic lows,” said Paula Pant, a blogger at Afford Anything. “That said, you shouldn't buy a home because rates are low — that's letting the tail wag the dog — but if you're contemplating buying this year vs. next year, you may want to purchase before a potential rate hike.”

No matter if you’re looking to become a landlord or if you want to upgrade, real estate is not one-size-fits-all. Some cities are particularly good for investors while others have few areas that are good for development.

“Particular neighborhoods hold great investment opportunities, while other neighborhoods don't,” Pant said. “The short answer is yes, there are many good deals for homeowners and investors alike; the long answer is that everyone needs to do their homework, particularly with regard to location.”

The Bottom Line
With interest rates hovering near historic lows, now is a great time to buy into the real estate market. But don't just buy just to buy — make sure you can really afford the down payment and other costs associated with purchasing a house without sacrificing everything from your savings pool.


Sunday, July 5, 2015


The fledgling U.S. housing recovery lost momentum last year as homeownership rates continued to fall,
single-family construction remained near historic lows, and existing home sales cooled, concludes a new report titled "The State of the Nation's Housing" from the Joint Center for Housing Studies of Harvard University.

Making sense of the story
• Rental markets continued to grow, fueled by another large increase in the number of renter  households. However, with rents rising and incomes well below pre-recession levels, the U.S. is
also seeing record numbers of cost-burdened renters. 

• The flip side of falling homeownership rates has been exceptionally strong demand for rental  housing, with the 2010s on pace to be the strongest decade for renter growth in history. 

• While soaring demand is often attributed to the millennials' preference to rent, households aged 45-64 in fact accounted for about twice the share of renter growth as households under the age of 35. 

• The other byproduct of this surge in rental demand is that the national vacancy rate fell to its lowest point in nearly 20 years. Given the limited supply of rental units, rents rose at a 3.2 percent  rate last year- twice the pace of overall inflation. 

• While the cost-burdened share of homeowners began to recede in 2010 (because some homes were lost to foreclosure, and low interest rates helped other homeowners reduce their monthly costs), the cost-burdened share of renters has held near record highs. In 2013, almost half of all renters had housing cost burdens. 

• Cost burdens are climbing the income ladder, affecting growing shares of not just low-income renters but moderate- and middle-income renters as well. 

• The cost-burdened share of renters with incomes in the $30,000-45,000 range rose to 45 percent between 2003 and 2013, while one in five renters earning $45,000- 75,000 are now cost-burdened as well.

Read the full story



Where you live should never determine how far you go in life. That principle was central to our nation’s founding, and it has remained an enduring promise for generations of Americans. It’s why we’ve invested in public schools, infrastructure and housing. And it’s why we’ve come together, time and again, to ensure that no matter how the times may change, one thing remains the same–that in the United States, anyone can go as far as their hard work will take them.

It’s time to renew our commitment to this founding ideal. As I learned on a recent visit to Ferguson, MO, sometimes the reach of a child’s dreams depends more on where they are born than on where they want to go. In fact, a child growing up in the Clayton area of St. Louis can expect to live 18 years longer than a child living just eight miles away in the JeffVanderLou neighborhood.

In a nation founded on the principle of equal opportunity, that’s unacceptable.

The leaders who came together earlier this month for the 2015 meeting of Clinton Global Initiative America called on every sector and community to address a central question our society must answer: “How do we ensure that everyone–no matter where they live or how much they earn–can make it in America?”

Answering that question will require us to invest in three key areas. First, we must ensure that all communities provide their citizens with a strong foundation, which means ensuring folks have clean water, that electricity and transportation are reliable and available to everyone, that neighborhoods are safe, and that the housing market is free from discrimination and affordable to Americans up and down the income scale. The U.S. Department of Housing and Urban Development makes each of these basics a cornerstone of our local and regional partnerships as part of our Sustainable Communities and Choice Neighborhoods initiatives.

I can’t stress enough how critical safe neighborhoods are to economic opportunity–it’s nearly impossible for a child to make it in America if she can’t even make it to school. That’s why in Chicago we’ve joined forces with a non-profit and the City to revitalize the Woodlawn neighborhood. In addition to renovating hundreds of units of affordable housing and creating new market-rate units, we’re also helping to boost public safety. The University of Chicago has agreed to place its public safety officers at key locations along school routes to protect the children who live in nearby public housing. No child should have to riskrobberies or violence to get an education, and I’m proud that the University of Chicago has made the community’s children their children as well.

Second, we must promote smart, inclusive planning in every community. We can’t have one plan for the suburbs and another for cities. Instead we must view our communities as connected, because they are. Just look at what Denver–CGI America’s host city for the past two years–did in the 1980s to jumpstart its then struggling economy. The surrounding suburbs joined forces with urban neighborhoods to invest in creating a vibrant core to boost the entire region. HUD, in partnership with the U.S. Department of Transportation, is working with local officials to build on that work by expanding permanent affordable housing, improving access to jobs, and enhancing connectivity along Denver’s transit corridors. We’re fighting to advance these goals in more communities, which is why President Barack Obama has proposed greater funding for HUD initiatives that promote inclusive planning and that provide housing support and choices to low-income families.

Finally, our nation must make the investments necessary to prepare citizens, especially our youth, to compete in the global economy. That means we must cultivate brainpower and match it to economic opportunity. Creating great schools is a vital step, but it can’t be the only one. We must also create enrichment opportunities for young people outside of the classroom. That’s why HUD is investing in educational opportunity for children in a number of communities, including in the Yesler neighborhood in Seattle.

Working with the Gates Foundation, the local housing authority, and the school board, we’ve created an after-school tutoring program for 400 students. And the results have been impressive. Between 2011 and 2013, science scores for fifth graders rose from 15 percent who met the state standard to nearly 60 percent.

We also know that prosperity hinges on empowering tomorrow’s American workforce with tangible pathways to employment, especially ones that lead to industries of the future. So HUD is now committing through CGI America to connect more public housing residents to continuing education and job training opportunities. That includes a new initiative HUD is launching in partnership with the U.S. Departments of Energy and Education called “STEM, Energy, and Economic Development” or “SEED.” SEED will leverage federal investments and partnerships in Washington, DC, Cleveland, Tampa, San Antonio and Denver to connect public housing residents to energy-sector training and jobs, helping them boost their skills and their earnings.

This is a start, and we will keep working to build communities of promise. Creating a new national agenda that tackles the inequality crisis and fosters enduring prosperity will require leadership, engagement and vision. And it will require that we work together. If we are to make equal opportunity real for every American, we must ensure that all citizens–no matter their income or zip code–have a fair shot to pursue their dreams.



Two real-estate economists said Thursday that many home builders aren’t doing a good job of determining what home buyers want.

Nela Richardson, chief economist for brokerage Redfin Corp., and Selma Hepp, chief economist for Zillow Group’s Trulia real-estate website, both said builders aren’t constructing enough entry-level housing to meet demand. They’re focusing more of their resources instead, the economists said, on building pricey homes for buyers with ample credit.

“If there is any speculation in building, it’s going to be toward the higher end,” Ms. Richardson said, speaking during a panel discussion at the National Association of Real Estate Editors’ annual conference in Miami.

By speculation, she meant building homes without buyers already signed up. Building entry-level homes on a “spec” basis was a common practice before and during last decade’s real estate boom, when there was ample demand for those homes.

But that entry-level demand fell off dramatically in the downturn and since, with many entry-level buyers hampered by strict mortgage-qualification standards and mounting student debt. Meanwhile, demand for pricier homes remains strong, so builders can safely construct spec homes in that segment. But determining if entry-level demand is recovering well enough to warrant wide-scale spec building of less expensive homes requires builders to make an educated guess about future demand.

The economists say entry-level housing demand is adequate and increasing. But many builders aren’t so sure.

“First-time purchasers have begun coming back to the housing market, more slowly than expected and more slowly than they have historically,” Stuart Miller, chief executive ofLennar Corp. said during the builder’s call Wednesday to discuss its fiscal second quarter results with investors. “They’ve had the most difficulty accessing the mortgage market. And although that is beginning to open up … they are not yet jumping into the marketplace.”

Both economists noted that condominium construction generally is depressed relative to demand because builders are focused more on rental apartments. Condos are a common landing spot for first-time buyers because condos are smaller and less expensive than detached, single-family homes.

Trulia’s Ms. Hepp said builders are wary of building condo projects due to theprevalence of construction-defect lawsuits filed in various states by condo owners associations. Redfin’s Ms. Richardson added that it’s easier and less risky for builders to sell a newly constructed multifamily complex to a single institutional buyer rather than piecemeal to scores or hundreds of individual buyers as condos.

The economists were split on whether home construction will fully return in far-flung suburbs, often called exurbs. Builders had all but abandoned those areas in the downturn, because the price-sensitive buyers that favor the less-expensive housing built in the exurbs had stopped buying and many buyers favor the shorter commutes to and from homes closer to the city center.

“Every indication is that millennials want something different,” Ms. Richardson said in explaining her prediction that the exurbs won’t fully return to favor. “They want to feel connected to their neighbors and their communities.”

Ms. Hepp countered that price is the driving factor for many buyers. “Why people go to the exurbs is because of affordability,” she said.

The economists each cited data from their firms’ surveys regarding buyer preferences. Recent Trulia surveys found that two out of five buyers prefer new homes because they want modern features, the ability to customize amenities and less need for maintenance and repairs, Ms. Hepp said. She added that roughly half of respondents said they want larger homes than those they were in.

Redfin surveys found that 36% of buyers cited convenience as the main factor driving their home purchase, 11% cited affordability and 5% said they primarily want a newly built home.


Thursday, March 5, 2015


Calif. median home price: January 2015:
     • California: $426,790

     • Calif. highest median home price by region/county January 2015: San Mateo, $1,012,500
     • Calif. lowest median home price by region/county January 2015: Del Norte, $152,260

Calif. Pending Home Sales Index: 

January 2015: Increased 26.7 percent from 70.9 in December to 89.8 in January.

Calif. Traditional Housing Affordability Index: 

Fourth Quarter 2014: 30 percent (Source: C.A.R.)

Mortgage rates: Week ending 2/26/2015 (Source: Freddie Mac)

     • 30-yr. fixed: 3.80% fees/points: 0.6%
     • 15-yr. fixed: 3.07% fees/points: 0.6%
     • 1-yr. adjustable: 2.99% Fees/points: 0.5%

*Info provided by the California Association of Realtors


Sunday, March 1, 2015


Home prices are beginning to grow at a faster pace again, which is not good for the spring market.

Sticker shock was behind weak sales in 2014, but as price gains began to ease, buyers came back. Now prices are heating up again due to severely weak supply.

There were nearly 9 percent fewer homes for sale in January of this year than there were a year ago, according to

"January's inventory data suggest a continuation of the tightening trend we identified last month in the December data, and with a shortage of inventory typically comes increased home prices," said Jonathan Smoke, chief economist at "Half of the 200 markets tracks experienced year-over-year price increases of at least 6 percent in January."

Higher prices, coupled with weak supply, caused an unexpectedly large drop in January home sales, down nearly 5 percent from January of 2014, according to the National Association of Realtors.

"This is a notable speed bump," said NAR's chief economist, Lawrence Yun, who deemed the phenomenon, "puzzling," given a stronger economy and rising rents.

There is strong demand, but it is hitting a roadblock in supply. Listings are down significantly in parts of California and in formerly strong markets like Las Vegas and Denver, according to Texas is also seeing a very tight market as well as Chicago and Boston.

According to running surveys by, potential buyers are saying they can't find a home that meets their needs and/or budget. Usually inventory drags are more localized, but today's market is behaving more nationally than in the past.

"Typically for a home seller in the past, they live in their home for seven years and then make a move," said Yun. "Now we're seeing home sellers are living in their home for 10 years."

Yun blames what he calls a "lock-in" effect—that homeowners today have such good mortgage rates that they don't want to lose that rate by moving. Others disagree.

"I think of the lock-in effect as mattering if rates are rising from low levels, so that the rate someone would get on their next home would be higher than the rate they've had on the home they're selling," said Jed Kolko, chief economist at Trulia. "However, rates didn't start their recent rise until February, and these inventory and sales data are for January."

More likely, people aren't selling because they can't afford a move up, or because they still owe more on their current mortgages than their homes are worth. Somewhere between 7 million and 10 million borrowers are underwater, and millions more don't have enough equity in their homes to afford to sell and move up.

As for first-time buyers, their share dropped in January to just 28 percent of homebuyers; this after a slight improvement in their activity last fall. Rents continue to rise, and ironically keep renters from seeking what is often more affordable homeownership.

"Widespread and rapid growth in rents, combined with stagnant wages, are keeping many would-be buyers stuck in rental housing, writing ever-larger checks to their landlords instead of saving for a down payment. Today's renters are tomorrow's buyers, and the longer these would-be buyers stay on the sidelines, the longer full recovery will take," said Stan Humphries, chief economist at Zillow.

Bethesda, Maryland, real estate agent Jane Fairweather expects to see a strong spring.

"Judging by my desk, we will be putting a boatload of homes on the market in March and April," she said, but admitted: "I think demand will be greater than supply again this year. Low inventory keeps prices propped up."

Now, as home prices begin rising ever more quickly, homeownership lurches further out of reach. New supply would certainly help, but even the builders are still operating at an anemic pace. Newly built homes come at a significant price premium to existing homes, and therefore sales have not been as robust for the builders.



Fewer multiple offers and more homes sold below asking price point to less competitive buyers’ market

LOS ANGELES (Feb. 25) – Pending home sales rose from December’s extreme lows and posted month-to-month and year-to-year increases in January, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Additionally, California REALTORS® responding to C.A.R.’s January Market Pulse Survey saw more price reductions and an increase in open house traffic, compared to a year ago.  The Market Pulse Survey is a new monthly online survey of more than 300 California REALTORS® to measure sentiment about their last closed transaction and business activity for the previous month and the last year.



New household formation in the United States has recovered from the widespread job losses that came with the recession, according to a new studyfrom the Lusk Center for Real Estate at the University of Southern California.

The study was conducted authored by Gary Painter, director of the Lusk Center, and doctoral candidate Jung Hyun Choi, to determine how long declines in household formation would last following a major economic shock such as a drop in employment that occurred during the recession.

The study found that household formations consistently return to their previous levels in about three years regardless of whether employment has recovered at the same rate during that time.

"This shows us that even a permanent increase in the unemployment rate will not have a permanent impact on housing formation," Painter said. "As a result, policymakers and industry practitioners have a new level of predictability when it comes to how economic crises impact the rate of new households."

The researchers found in their study that household formations in the U.S. fell to almost zero during the recession's peak years of 2008 to 2010, but then played three years of catch-up and have now recovered to pre-recession levels of about one million per year. Quarterly data from 1975 to 2011 showed that household recoveries typically lasted three years following periods of unemployment.

"The freeze in formations is over and people are again moving out and forming households. This means that real estate professionals and policy makers should not keep waiting for pent-up demand," Painter said. "So while a number of factors will continue to influence the housing recovery, household formation is no longer one of them."


Wednesday, February 11, 2015


The New Year, that is 2015, has started with a much bigger bang than 2014 did.  In fact, it started to pick up at the end of 2014.  The total number of sales for November, 2014 (condos, single-family resale and new homes) totaled 15,643 for all of So Cal. (This includes Ventura, LA, OC, San Bernardino, Riverside, and San Diego.)  That number jumped an astonishing amount to 19,205 for December 2014, a 22.8% jump.  So you can imagine how anemic  the numbers were all year as the total for Orange County for 2014 was 33,844, down 8.2% from 2013's total.  That number was for all homes as stated above.  The median price, meanwhile, hit $585,000 and that was up 9.3% from 2013.  This completed two back to back years of fairly rapid appreciation gains, and experts rightly predicted a heavy slowdown, which actually started last winter, with appreciation steadily dropping all last year.  There was a total of 20,496 single-family resale, 9,166 condos sold and 4,182 new homes.  This year already is showing strong signs of volume recovery as interest rates promise to stay down...for now.  But many buyers are getting the message loud and clear from the Fed, that rates will probably rise sometime this summer.  This is a strong motivating factor for "fence sitters", who are waiting for that perfect time to buy.  The perfect time to buy is when you are financially and emotionally motivated, don't worry about the market,  but in particular, inventory is expected to strengthen this spring as more and more sellers are able and willing to sell, having enjoyed two strong years of equity growth.  You can expect to see our strongest "move up" market in over 7 years as people who want to do something, as well as those who have to do something, all enter the market.



Most of us have read about or if you were selling a higher end home, may have experienced, the foreign nationals who have been snapping up properties in the US, particularly in So Cal, especially the OC.  Now listing inventory of the higher priced homes are starting to pile up as these buyers grapple with the stronger dollar.  It is a conundrum.  On the one hand, their money doesn't go nearly as far.  On the other hand, compared to many foreign currencies, the dollar is the safest haven and hedge against inflation.  Even said, listing agents might be compelled to obtain price reductions to move their high end properties.  Be patient and be realistic are the watch words for this market.  Even with this being the case, these off shore buyers will still bring competition to the high end.



So read the headline of a recent OC Register article.  But there was a great chart from Demographia that listed the top 10 cities with the least affordable homes, in terms of the ration of an area's median home price to local median household incomes, from a study of 86 cities.  The good news is that greater OC isn't on the list, the bad news LA is, but the good news is that at least it's #10.  The cities you ask?: 1) Hong Kong  2) Vancouver, BC  3) Sydney  4) San Francisco  4) tied- San Jose  6) Melbourne  7) London  8) San Diego  9) Auckland, New Zealand  10) Los Angeles



The last complete month is December2014 and the numbers are: Total sales - 2,880, which is down 6.8% for the same month of 2013; The median price for all homes was - $591,000 which rose a mere 3.7% (much more sustainable and will lead to a healthier market for 2015); The total number of resale homes was 1,726, both price hikes and volume nearly flat at less than 1% for both; Condos sold a total of 744 and the price was $390,000 volume down 4.2% and prices up 4.8%.



Rising equity will always have a stabilizing effect, because it allows all segments and price ranges in the market to make independent decisions regarding their home, which ultimately cause more interaction between price ranges and people move up or down in size and price according to their need of growing family, empty nesters, and retirement.  Equity is a very liberating quality in homeowner economics.  And although credit standards tightened immensely after the recession, there are now emerging more loan programs, the resurgence of some old programs and some revamps even in government lending such as the lowering of the FHA mortgage insurance by almost half a point.  On a median priced home, that can be over $200 a month or even more.  That increases a buyers, "buying power", tremendously.  All who are looking to buy should speak with a lender to find out exactly how much you qualify for...buyers may be surprised by their purchasing powers.  Sellers are also in a great position.  At last it would seem we may be trending to a totally equitable market.  It has been sometime.  Surely the results will be an encouraging factor in our economy for the year ahead.  


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