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Monthly Archives: September 2013

"Housing Barometer" shows market 67 percent "normal"

The housing market has been on a roller coaster ride following the burst of the "housing bubble" back in late 2007. It was back then that real estate analytics group Trulia started grading the condition of the market using their "Housing Barometer" to gauge how the economy was to returning to pre-recession levels.

The group looks at three different pieces of information on a monthly basis to determine how far along the recovery has come: new-home construction starts from the U.S. Census Bureau, existing home sales from the National Association of Realtors and the delinquency-plus-foreclosure rate from the Mortgage Bankers Association.

Homes flying off the market at record pace

As we reported recently, August 2013 proved to be the best month in roughly six years for the housing market, with roughly 5.48 million homes sold on a seasonally-adjusted basis. What is perhaps most encouraging about this figure is the fact that the amount of time each of these properties remained on the market was significantly shorter than homes for sale in previous years.

According to figures from the National Association of Realtors (NAR), more than half of the properties sold were closed upon in 43 days or less, with 40 percent of total homes leaving the market in under one month. During the same time last year, the average amount of time a home remained on the market was roughly 70 days and more than 90 days in August of 2011.

Nation's major cities experiencing sustaining property value gains

We have recently reported that housing starts - the first stages of purchasing for new homeowners - were up markedly in August, while demand for new properties remains far below total supply. Now, even more reports have been released pertaining to the real estate and stock market that indicate the recent bout of good news isn't a fluke but signs of a prolonged recovery.

According to the most recent Standard & Poor's/Case-Shiller 20-city home price index, home values were up roughly 12.1 percent in June from year-ago levels in the group's rankings of the most populous metropolitan areas.

Most Americans confident housing recovery sustained

Prices on new properties have been trending upward for months now, and despite a decrease in affordability, home sales continue to increase. The latest figures from Bankrate.com's monthly Financial Security Index shows that the majority of Americans believe that the cost of new housing will keep rising over the coming months and that this isn't discouraging borrowers from investing in real estate.

Roughly 55 percent of all those who took part in the survey anticipate that prices will continue to go up as 2013 comes to a close. Only a slim 9 percent of respondents anticipated that prices would fall, while 27 percent believed that these figures would remain stagnant for the foreseeable future. But what is most encouraging about these figures is the fact that many of the respondents polled told Bankrate.com that they believe real estate is a much better investment than the stock market at the moment.

Analysts predict market will even out in coming months

With demand for new housing reaching its highest level in almost a decade, prices have likewise skyrocketed in the most desirable locales coast to coast. Despite a major uptick in purchase costs and a decline in property inventories throughout the country, prospective buyers are still entering fierce bidding wars and paying top dollar for desirable homes.

However, many analysts are anticipating that several factors are bound to contribute to a major cooling of the currently white-hot real estate market. Specifically, supply of new housing stock has failed to keep up with burgeoning demand, which is starting to drive prices beyond the price point of even the most ambitious buyers. As well, interest rates on conforming loans have been rising steadily over the past several months and are anticipated to continue inching farther away from the record-low levels reached last year.

Fed expected to slow down qualitative easing

Over the past 12-plus months, the Federal Reserve has helped spur a recovery nationwide in the housing market by enacting a policy of qualitative easing in an attempt to keep interest rates on home loans as low as possible. This practice essentially called for the central bank to purchase large quantities of distressed bonds and loans to take the debt burden off of the private sector.

As a result, homeownership became a more affordable venture for prospective buyers, underwater borrowers were able to refinance with better terms and the national economy benefitted as a result.

Foreclosure "floodwaters" receding, states RealtyTrac

According to the latest data from real estate analytics group RealtyTrac, foreclosure filings were down markedly in August compared to 2012 levels as starts shrank to their lowest volume in more than half a decade.

Filings in August were off 34 percent compared to the same period in 2012, which is in line with estimates that not only have mortgage refinances helped to curb underwater borrowers from filing for foreclosure, but improvements to the national economy have stabilized homeowners' fiscal outlooks.

Fannie Mae economist offers insight into housing recovery

Douglas Duncan, chief economist for the mortgage financing institution Fannie Mae, recently spoke with The Los Angeles Times about the housing market's burgeoning recovery and what it means for American home buyers and sellers.

Residential demand - especially condos - up in major metros

After years of stagnation, the market for luxury condos seems to be rebounding markedly in major action centers across the country. In major cities like Boston, San Francisco, New York and Dallas, thousands of condo units have been approved for construction and skylines are changing as residential towers pop up by the dozens.

"We went from hearing nothing about condos six months ago to hearing about them every other day now," Mark Humphreys, CEO of Dallas-based Humphreys & Partners Architects, a leading designer of rental and for-sale residential projects, told Yahoo Finance. "They're coming back.

Pending home sales exceed year-over-year levels for 27th consecutive month

The most recent pending home sales index from the National Association of Realtors (NAR) indicated that the number of contracts that were signed for property purchases last month dipped slightly over the period compared to June.

This report, which looks at contracts pending on new home purchases and not actual closings, fell from 110.9 in June to 109.5 in July, which is a comparably slight decrease compared to more dramatic readings over the past several years. As well, the index is well above where it was in July 2012 when the reading was a mere 102.6.