FL July Single Family Home Sales Jump 21.8%

By | Uncategorized | No Comments

Florida housing remains strong as demand continues to fuel new home sales. The Florida Realtor’s Association also reported pending home sales up 6.5% and multi-family sales up 3.8%. This bodes well for sellers as we move closer to winter. Typically slow summer sales have kicked off early as snowbirds who want to be away from colder northern states during the cold frozen months seek a refuge before season begins at Thanksgiving. Inventory is low with resale at a 4 month supply, less in South Florida. It is definitely a seller’s market. New home builders confidence index is at it;s highest point, 61, since 2005.


New Foreclosures at Lowest Since 2005, REO Releases Jump

By | Uncategorized | No Comments

Realty Trac reported new foreclosures are at the lowest point since 2005 and banks are releasing pent up properties at near retail prices at the highest level since 2007. With lender requirements stiffened since 2007, there have been very few delinquencies on loans originated since 2009. This has also created a large pool of lender reserves and many like FHA are expected to lend more aggressively.

Cash Sales Fall to Lowest Since 2009 as Distressed Property Sales Wane

By | Uncategorized | No Comments

The number of cash property sales declined to 25%, July, as the inventory of distressed properties also falls. Investor flippers who are not eligible for conventional financing are exiting housing as both the number of and selling price of distressed homes shrink returns. South FL still has some of the highest cash sales at just under 60%. This is positive for markets because it signals a return to normalcy. NAR reported, July 2, that the number of mortgages 3 months or more delinquent has fallen to the lowest level since 2008, another sign that there won’t be another flood of foreclosures to come. Low inventories and increasing demand for homes continues to heat up selling prices. Nation wide there is less than a 5 month supply of housing and in some markets with strong job growth, i.e. Denver, Seattle and Raleigh, Case Schiller reports a less than 1 month supply.

Housing is Hot; Inventory is Low, Demand High

By | Industry News | No Comments

Summary of a July report by Lawrence Yun, chief economist, NAR.

Housing Markets are Hot. May existing-home sales were the highest since 2009, new home sales hit a seven-year high and housing permits at an eight-year high.  Pending contracts on existing homes hit a nine-year high.

  • Buyers are coming back in force.
    • First-time buyers were 32% of all sales vs. 27%, 2014.
    • Investors are exiting because high home prices lowers their return rates.
  • Inventory remains low in most markets.  In areas with very strong job growth, i.e. Denver and Seattle, there is less than a one month supply.
  • Inventory shortage is due primarily to reduced building since 2009.  1.5 million new homes annually is normal.  New home construction 2009 to 2014:
    • 2009: 550,000
    • 2010: 590,000
    • 2011: 610,000
    • 2012: 780,000
    • 2013: 930,000
    • 2014: 1.0 million
  • 1.1 million new homes in 2015 and 1.4 million in 2016.  New home sales will follow this pace relieving housing shortages.
  • Disruptive shadow inventory is very low.  Distressed home sales are only 10 percent of all transactions and will fall further in the upcoming months.  There are far fewer mortgages seriously delinquent (not current for 3 or more months).
  • There is a housing shortage.  The result is a higher than normal home price growth.  Home price gains are beating wage-income growth by at least three or four times in most markets.
  • Housing affordability is falling due to rising home prices and mortgage rates.  Reduced investor cash sales will put more importance on future interest rates.
  • The Federal Reserve will raise rates soon; maybe September more likely October.  With continual raising rates over the next two years.  They may rise further, if inflation returns.
  • Inflation could pass 3 percent by early 2016. Low gas prices has lowered inflation to zero but by November, the change in gas price will no longer have an impact.  Rents, near an 8-year high are growing at 3.5 percent.  Bond market yields will rise.
  • Mortgage rates; 4.3%-4.5% by year end, above 5% by the end of 2016.
  • Rising mortgage rates drive initial buyer rush that will end as mortgage affordability declines.
  • Fortunately, there is a counter balance to rising rates.
    • Credit scores are not aligned with the expected default rate.  New methods will be implemented boosting many individuals’ scores making them able to buy.
    • FHA mortgage premium has come down, saving consumers money.  By year end, FHA will show healthier finances that could trigger more 2016 premium reductions.
    • Fannie and Freddie, owned by taxpayers, are making huge profits as mortgages have not been defaulting over the past several years, partly due to tight credit and no lender risk.  Mortgage approvals should modestly improve next year.
    • Portfolio lending and private mortgage-backed securities are slowly reviving.  Mortgages are not defaulting creating big cash reserves.  Less conventional mortgages will become more widely available.
  • Improving available credit will help soften the impact of rising interest rates.
  • Existing and new home sales rise, 5.8 million home sales in 2015, up 7 percent from 2014.  This will be 25 percent below 2005 at the bubbles height.  Home prices will rise 7 percent.  Housing industry, 2015 revenue will rise 14%, 2016 growth 7 – 10%.
  • Apartment construction is back to normal.

More Americans Buying Homes

By | Uncategorized | One Comment

Business Insider reported that 72% of Americans, polled by the Wells Fargo Housing Index Survey, say that now is a good time to buy a home. That’s up from 68% in 2014. Surprise, we are doing more than just talking. New Construction Permits jumped 11.8%, Market Insider said, the highest level since 2007. That’s annual rate of 1.28 million new homes. Apartment construction is leading the way. With predicted demand at 1.5 million, there is still room for more housing expansion.

Housing Is Back

By | Uncategorized | No Comments

Fortune Magazine reported, June, that all stats now confirm housing is back to pre-recession levels. “The increasing level of new construction is entirely consistent with the strong demand and corresponding price gains…in both rents and home prices . . . Builders are more confident… the last time that NAHB’s housing market index…was higher than yesterday’s reported number, was 2005… Likewise, apartment owners are encouraged by lower vacancies and higher rents.”

Two Updates; Fed Did Not Raise Rates & CPFB Delayed Know Before U Owe

By | Uncategorized | No Comments

Wednesday, The Federal Reserve did not raise key interest rates. They did say they expect to bump them this fall is the economy stays on track.

Today, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said “The CFPB will delay the effective date of the Know Before You Owe rule until October 1, 2015″ These new disclosure rules were part of the Dodd-Frank mortgage lending changes that have been enacted since 2010.

Hackers Drive Billions of Fake Click Thrus & Page Views

By | Uncategorized | No Comments

The digital media advertising market is worth hundreds of billions of $. Coordinated, managed, hacking has resulted in the takeover of millions of unsuspecting computers. The machines are secretly, remotely controlled and programmed to create digital traffic for paying customers who need to justify their ad rates. This not well publicized and little known fact was revealed by Ad Age. Major player Google is on the case and working to catch, expose and eliminate this scourge. They have the most to lose if media buyers and the public learn about this manipulation and stop or reduce ad spending on unproductive traffic that doesn’t convert to sales. Why pay per click with no resulting sales??