Tag Archives: home buyers

U.S. Housing Sector Shifts to Buyers Markets in September

U.S. Housing Sector Shifts to Buyers Markets in September

by Miho Favela in The World Property Journal

According to Realtor.com’s ‘Advance Read of September Trends‘, with month-over-month declining prices and increased time on market, the September 2015 housing market has transitioned into a buyer’s market. This means that it is now easier for buyers to purchase a home than it has been any time so far this year.

“The spring and summer home-buying seasons were especially tough on potential buyers this year with increasing prices and limited supply,” said Jonathan Smoke, chief economist for Realtor.com. “Buyers who are open to a fall or winter purchase should find some relief with lower prices and less competition from other buyers. However, year-over-year comparisons show that fall buyers will have it tougher than last year as the housing market continues to show improvement.”

Housing demand is in its seasonally weaker period and as a result, median list prices are continuing to decline from July’s peak. Likewise, inventory has also peaked for 2015, so buyers will see fewer choices through the end of the year. Top line findings of the monthly report that draws on residential inventory and demand trends over the first three weeks of the month include:

  • National median list price is $230,000 down decreased 1 percent over August and up 6 percent year-over-year.
  • Median age of inventory is now 80 days, up 6.7 percent from August, but down 5 percent year-over-year, reflecting the seasonal trend for fall listings to stay longer on the market as the day becomes shorter.
  • Listings inventory will likely end the month down 0.5 percent from August.

Realtor.com September 2015 Market Hotness Data

The 20 hottest markets in the country, ranked by number of views per listing on Realtor.com and the median age of inventory in each market, in September 2015 are:

WPJ News | Top 20 hottest real estate markets in the U.S.
Key takeaway from Realtor.com September Hotness Index:

  • California maintains 11 cities on the Hotness Index due to continued tight supply and turbo charged economy. Markets in the state have been characterized as having extremely tight supply all year, so frustrated buyers who have not been able to find a home so far remain active, supporting continued strength in sales across much of Northern and Southern California.
  • Texas and Michigan also continue to feature multiple markets also driven by job growth, but compared especially to the California markets have more affordable inventory attracting a broader base of potential buyers.
  • Fort Wayne, Ind., and Modesto, Calif., both entered the top 20 list in September having just missed in August. Both markets benefit from strong housing affordability for their regions.

“The hottest markets are little changed in September as supply remains tight and demand remains strong,” Smoke commented. “Sellers across all these markets continue to see listings move much more quickly than the rest of the country in September, and the seasonal slow-down is not as strong in these markets.”

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Payment Buyers Picked Up Slack Left By Investors During First Half Of 2015

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RealtyTrac has released its June and Midyear 2015 U.S. Home Sales Report, which shows distressed sales, cash sales and institutional investor sales in June were all down from a year ago to multi-year lows even as sales to first-time home buyers and other buyers using FHA loans increased compared to a year ago in June and reached a two-year high in the second quarter. Buyers using Federal Housing Administration (FHA) loans—typically low down payment loans utilized by first-time home buyers and other buyers without equity to bring to the closing table—accounted for 23 percent of all single family home and condo sales with financing—excluding all-cash sales—in the second quarter of 2015, up from 20 percent in the first quarter and up from 19 percent in the second quarter of 2014 to the highest share since the first quarter of 2013.

The report also shows 914,291 single family and condo sales through April 2015—the most recent month with complete sales data available—at the highest level through the first four months of a year since 2006, a nine-year high. 

“As the investor-driven housing recovery faded in the first half of 2015, first-time home buyers, boomerang buyers and other traditional owner-occupant buyers started to step into the gap and pick up the slack,” said Daren Blomquist, vice president at RealtyTrac. “This is good news for sellers in many markets, providing them with strong demand from a larger pool of buyers, and U.S. sellers so far in 2015 are realizing the biggest gains in home price appreciation since 2007. In June sellers sold for above estimated market value on average for the first time in nearly two years.”

Cash buyers down nationwide, up in New York City and 20 other markets
All-cash buyers accounted for 22.9 percent of all single family home and condo sales in June, down from 24.7 percent of all sales in the previous month and down from 29.1 percent of all sales in June 2014 to the lowest share of monthly cash sales nationwide since August 2008. The June cash sales share was almost half the peak of 42.1 percent in February 2011. Metros with highest share of cash sales in June were Homosassa Springs, Florida (53 percent), Naples-Marco Island, Florida (52 percent); Miami (50 percent); Sebastian-Vero Beach, Fla. (50 percent); and New York (49 percent).

“The first six months of sales in South Florida have been at a record pace. The millennials are entering the market along with many home buyers who had difficulty during the last recession while the investor market has quieted,” said Mike Pappas, CEO and president of Keyes Company, covering the South Florida market. “It is a real market with real buyers and sellers. The buyers have many lending options and are still enjoying low interest rates and many sellers are selling at their peak prices.”

In New York and 20 other markets analyzed for the report, the share of cash sales increased from a year ago, counter to the national trend. The New York metro share of cash sales increased from 40 percent in June 2014 to 49 percent in June 2015. Other markets with an increasing share of cash sales included Raleigh, North Carolina; Greenville, South Carolina; Bellingham, Washington located between Seattle and Vancouver, Canada; Knoxville, Tennessee; Providence, Rhode Island; and San Jose, Calif.

“Cash buyers have been a significant player in the Seattle housing market over the past 18 months, but the modest drop in this buyer segment doesn’t come as a surprise given the aggressive rise in home prices in recent months,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “Higher prices are forcing these buyers to dig deeper into their pockets and this process has started to push some out of the market. The same can be said for first time buyers; many of them are having a hard time qualifying for a loan also due to the rise in home prices in Seattle.”

Institutional investor share in June matches record low
Institutional investors—entities purchasing at least 10 properties during a calendar year—accounted for 1.7 percent of all single family and condo sales in June, the same share as in May but down from 3.5 percent of all sales in June 2014. The 1.7 percent share of institutional investor sales in May and June was the lowest monthly share going back to January 2000—the earliest data is available—and was less than one-third of the monthly peak of 6.1 percent in February 2013.

Metro areas with the highest share of institutional investor sales in June 2015 were Macon, Georgia (10.2 percent); Columbia, Tenn. (9.5 percent); Memphis, Tenn. (8.7 percent); Detroit (7.8 percent); and Charlotte (5.3 percent).

Other major metros with a high percentage of institutional investor sales included Tampa (4.3 percent); Atlanta (4.0 percent); Tulsa, Oklahoma (3.9 percent); Oklahoma City (3.7 percent); and Nashville (3.7 percent).

The share of institutional investors increased from a year ago in just four markets: Detroit; Macon, Georgia; Lincoln, Nebraska; and Birmingham, Alabama.

Distressed sales drop to new record low
Distressed sales—properties in the foreclosure process or bank-owned when they sold—accounted for eight percent of all single family and condo sales in June, down from 10.6 percent of all sales in May and down from 19.0 percent of all sales in June 2014 to the lowest monthly share since January 2011—the earliest that data is available. The share of distressed sales reached a monthly peak of 45.9 percent of all single family and condo sales in February 2011.

Metro areas with the highest share of distressed sales in June were Salisbury, North Carolina (30.6 percent); Gainesville, Ga. (23.8 percent); Jacksonville, N.C. (22.2 percent); Boone, N.C. (22.1 percent); and Marion, Ohio (21.9 percent).

Major metro areas with a high share of distressed sales in June included Chicago (14.7 percent); Baltimore (14.4 percent); Orlando (13.8 percent); Jacksonville, Fla. (13.6 percent); and Memphis (13.4 percent).

Markets with highest and lowest share of FHA loan purchases in first half of 2015
Nationwide, buyers using FHA loans accounted for 22 percent of all financed sales in the first half of 2015, up from 19 percent of all sales in 2014 and up from 20 percent of all sales in 2013.

Among markets with a population of 1 million or more, those with the highest share of buyers using FHA loans in the first six months of 2015 were Riverside-San Bernardino-Ontario in inland Southern California (35 percent); Las Vegas (32 percent); Oklahoma City (31 percent); Salt Lake City (30 percent); and Phoenix (29 percent).

Major markets with the lowest share of buyers using FHA loans in the first six months of 2015 were San Jose, California (7 percent); Hartford, Connecticut (10 percent); San Francisco (12 percent); Boston (12 percent); and Milwaukee (13 percent). 

First-half 2015 sellers realized highest home price gains since 2007
Single family home and condo sellers in the first half of 2015 sold for an average of 13 percent above their original purchase price, the highest average percentage in home price gains realized by sellers since 2007, when it was 30 percent.

Major markets where sellers in the first half of 2015 realized the biggest average home price gains were San Jose, Calif. (41 percent); San Francisco (37 percent); Denver (29 percent); Portland (25 percent); Los Angeles (25 percent); and Seattle (20 percent).

There were six major markets where sellers in the first half of 2015 on average sold below their original purchase price: Chicago (seven percent below); Cleveland (seven percent below); Hartford, Conn. (three percent below); Jacksonville, Fla. (two percent below); St. Louis (one percent below); and Orlando (one percent below).

Homes sold in June sold above estimated market value on average
Single family homes and condos in June sold for an average of $291,450 compared to an average $287,634 estimated market value for those same homes at the time of sale—a 101 percent price-to-value ratio. June was the first time since July 2013 that the national price-to-value ratio exceeded 100 percent.

Major metro areas with the highest price-to-value ratios—where homes sold the most above estimated market value—were San Francisco (106 percent); Hartford, Conn. (105 percent); Baltimore (105 percent); Rochester, N.Y. (104 percent); and Providence, R.I. (103 percent).

Other major markets with price-to-value ratios above 100 percent in June included Washington, D.C. (103 percent); Phoenix (103 percent); Sacramento (103 percent); Portland (103 percent); Seattle (102 percent); San Jose (102 percent); and St. Louis (102 percent).

Sales volume at highest level since 2006 in 16 percent of markets analyzed
The number of single family homes and condos sold in the first four months of 2015 were at the highest level in the first four months of any year since 2006 in 43 out of 264 (16 percent) metropolitan statistical areas with sufficient home sales data. Markets at nine-year highs included Tampa; Denver; Columbus, Ohio; Jacksonville, Fla. and San Antonio.

There were 23 markets where sales volume in the first four months of 2015 was at 10-year highs, including Denver; Columbus, Ohio; San Antonio; Tucson, Ariz.; and Palm Bay-Melbourne-Titusville, Fla.

Among major metro areas with a population of one million or more, 22 out of 51 markets (43 percent) were at eight-year highs for single family home and condo sales in the first four months of the 2015, including New York, Dallas, Houston, Seattle and Portland.

Source: National Mortgage Professional Magazine

Demand for Housing Hits All-Time Low

by Colin Wilhelm

Consumer demand for housing has dropped to its lowest recorded level due to reduced confidence in financial security and income raises, a new survey from Fannie Mae says.

The government-sponsored enterprise’s March national housing survey found that 41% of Americans expect their financial situation to improve over the next year, and 22% said their income had increased substantially over the last year.

Most importantly, the percentage of respondents who said they planned to buy a home dropped five basis points to 60%, an all-time survey low.

“We’ve seen modest improvement in total compensation resulting from a strengthened labor market,” Fannie Mae chief economist Doug Duncan said in a release.

“However, income growth perceptions and personal financial expectations both eased off of recent highs, consistent with Friday’s weak jobs report. Simultaneously, the share of consumers expecting to buy on their next move has declined. Meanwhile, the wait for housing expansion continues.”