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2012: The 'Turn-Around Year for Housing'

by Ashlie DuCros

Still good news for housing market as we come to the end of 2012

Daily Real Estate News/Wednesday, November 28, 2012

 

More housing reports released this week show the housing recovery is gaining momentum.Closed real estate transactions were nearly 18 percent higher in October compared to year-ago levels, according to the October RE/MAX National Housing report, which includes MLS data for 52 metro areas. October — the latest data available — also marked the sixteenth month in a row in which sales were higher to the corresponding month in the previous year.

The Federal Housing Finance Agency also reported this week that housing prices are continuing to rise, increasing 1.1 percent from August to September, and up 4 percent compared to last year. The FHFA price index only encompasses purchase prices of homes that have mortgages owned or guaranteed by Fannie Mae or Freddie Mac.

Meanwhile, Standard & Poor’s/Case-Shiller reported Tuesday that home prices were up 3.6 percent from a year ago.

“As we enter the fourth quarter, 2012 is looking like the turn-around year for housing, with significant increases in sales and prices,” says Margaret Kelly, CEO of RE/MAX. “However, we recognize that this recovery is still fragile and dependent on more reasonable lending and regulation. If qualified buyers can obtain mortgages and more inventory comes to market, this recovery could become even stronger next spring.”

According to the RE/MAX report, 48 of the 52 metro areas analyzed reported higher sales than a year ago, and a record-breaking 40 metros even saw double-digit increases. Some of the biggest rise in sales were reported in Providence, R.I. (48% increase); Chicago (44% increase); Albuquerque, N.M. (39.3%); Burlington, Vt. (37%), and Wichita, Kan. (32.2%).

Source: “Sales, Prices Remain Higher Than 2011,” RISMedia (Nov. 27, 2012) and “FHFA Cites Eight Months of Home Price Increase,” HousingWire (Nov. 27, 2012)

For more information, please contact Ashlie DuCros at 714-743-9778, or go to www.AshlieDuCros.com

Existing-home sales and builder confidence rise

by Ashlie DuCros

By Jim Puzzanghera

November 19, 2012,

WASHINGTON -- The housing market recovery showed signs it is continuing to strengthen as sales of existing homes increased 2.1% in October from the previous month and a measure of home-builder confidence jumped in November to its highest level since 2006.

Sales of existing homes rose to a seasonally adjusted annual rate of 4.79 million last month, up from a downwardly revised 4.69 million rate in September, that National Assn. of Realtors reported Monday. Sales were up 10.9% in October from a year earlier.

Stronger demand helped push up the median home price nationwide to $178,600 in October, an increase of 11.1% from a year earlier, the group said. It was the eighth-straight month to show a year-over-year increase, the first time that's happened since 2005-2006.

Fewer houses on the market also helped drive price increases. There were 2.14 million existing homes for sale in October, down 1.4% from September. That translates to a 5.4-month supply at the current sales rate, the lowest level since February 2006.

Sales by distressed homeowners still accounted for a large chunk of activity. Foreclosures and short sales made up 24% of October's sales. That was the same level as in September, but down from 28% a year earlier.

Superstorm Sandy had some negative impact on sales, the group said.

The Northeast, which was hit hard by the storm, was the only region to show a decrease in sales in October from the previous month. Sales were down 1.7% there, while they increased 1.8% in the Midwest, 2.1% in the South and 4.4% in the West.

"Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country," said Lawrence Yun, chief economist at the Realtors group.

He expected more of an impact in the Northeast in coming months.

The improving housing market led to a boost in builder confidence, according to a measure released Monday.

The National Assn. of Home Builders/Wells Fargo Housing Market Index rose five points in November to 46 from the previous month. It was the seventh straight monthly increase, lifting the index to its highest level since May 2006, before the crash of the subprime housing market.

The index remained below 50, indicating that builders who view sales conditions as poor still outnumber those who view them as good. But the index is up sharply from its 19 reading a year ago, the home builders group said.

“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” said Barry Rutenberg, a home builder from Gainesville, Fla., and chairman of the builders' group.

“In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates,” he said.

For more information, please contact Ashlie DuCros at 714-743-9778, or go to www.AshlieDuCros.com

 

Housing starts highest in more than four years

by Ashlie DuCros

By Ruth Mantell, MarketWatch

WASHINGTON (MarketWatch) — Construction on new homes rose in October to the highest rate in more than four years, government data showed Tuesday, in another sign of a strengthening U.S. housing market.

Housing starts rose 3.6% last month to a seasonally adjusted annual rate of 894,000, the highest rate since July 2008, the U.S. Department of Commerce reported. Starts are up 42% from last year, though the rate remains far below a bubble peak of almost 2.3 million in 2006.

“The October report is very solid and further supportive of the view that we are in the midst of a strengthening housing recovery,” said Michael Dolega, an economist with Toronto-based TD Bank Group.

Economists polled by MarketWatch had expected a decline in housing starts to a rate of 825,000 from an original estimate of 872,000 in September, due in part to disruptions from Hurricane Sandy.

However, Sandy had a minimal effect because hit a relatively small portion of the country and only at the end of the month, government analysts said. By region, October’s starts fell by 6.5% in the Northeast and by 2.5% in the South, while rising 8.9% in the Midwest and increasing 17.2% in the West.

Meanwhile, building permits, a sign of future demand, hit a rate of 866,000 in October, down 2.7% from September, but up 30% from the prior year. Permits for single-family homes rose 2.2% in October to an annual rate of 562,000, while permits for structures with at least two units fell 10.6%.

Stock futures were close to neutral after the release of Tuesday’s data on housing starts.

Housing adding to economic growth

The surprisingly strong report led analysts with Macroeconomic Advisers, a St. Louis-based research firm, to raise their estimate for economic growth in fourth quarter by one-tenth of a percentage point to 1.3%.

“Single-family housing starts and permits were above expectations for October, suggesting more residential investment in the fourth quarter,” Macroeconomic Advisers analysts wrote in a research note.

Housing construction will “add modestly” to economic growth for the next two quarters, analysts at New York-based RDQ Economics wrote in a research note.

“However, with residential investment’s share of GDP at 2.7%, which is only half the share seen over the decade prior to the financial crisis, the impact on growth is likely to be only moderate,” according to RDQ analysts.

Housing gaining strength

Tuesday’s report is the latest data showing a housing market gaining strength. Home prices are on the rise. Also, existing-home sales are up nearly 11% from last year, while sentiment among home builders stands at the highest in more than six years, according to reports released Monday.

While permits declined in October, they are up 30% from last year — permits rose 27% for single-family homes and a whopping 41% for structures with at least five units. Meanwhile, starts for single-family homes are up 35% from last year, while starts for structures with at least five units are up 63%.

With the strengthening market, home-builder stocks have enjoyed large gains over the past year. Shares of both Meritage Homes /quotes/zigman/233326/quotes/nls/mth MTH+1.40% and KB Home /quotes/zigman/274921/quotes/nls/kbh KBH+2.77% have just about doubled over the last 12 months.

Indeed, record-low interest rates and an economy that is adding jobs are supporting the housing market. However, while low rates are attracting some buyers, borrowers still face tight credit conditions.

And despite recent gains, the housing market remains far below peak levels, with millions of workers still unemployed. About one-fifth of mortgage borrowers are underwater, Federal Reserve Chairman Ben Bernanke noted in a recent speech.

However, with rising house prices and household formation, Goldman Sachs economists say they expect housing starts to reach a rate of 1.5 million by the end of 2016.

Ruth Mantell is a MarketWatch reporter based in Washington.

For more information, please contact Ashlie DuCros at 714-743-9778, or go to www.AshlieDuCros.com

 

November 2012 Home Stats for Orange County

by Ashlie DuCros

Check out these numbers of homes for sale vs. in escrow for the month of November in Orange County real estate. For more information, please contact us at aducroshomes@gmail.com, or 714-743-9778

Orange County Home Stats                                November 2012                      
City For Sale In Escrow
Anaheim 177 309
Anaheim Hills 73 53
Brea 48 43
Fullerton 156 118
Irvine 276 213
Laguna Beach 176 22
Newport Coast 76 27
Orange 142 139
Tustin 66 85
Yorba Linda 116 79

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Ashlie DuCros & Associates
Coldwell Banker Previews Global Luxury
21580 Yorba Linda Blvd.
Yorba Linda CA 92887
714-743-9778
Fax: 714-849-5489