Jan 7, 2014 | Housing Analysis
The Case-Shiller 10 and 20-City Home Price Indices for October were released on December 31. Although home prices in most cities continued to show year-over-year gains, the pace of home price appreciation is expected to slow in 2014.
Year-over-year increases have been in double digit territory since March 2013, but month-to-month readings suggest that the rate of increasing home prices is slowing.
According to David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, “…the monthly numbers show that we are living on borrowed time and the boom is fading.”
The 10 and 20 city indices are showing that home prices some cities that were showing little or no growth in 2013 are posting higher rates of appreciation, while growth in cities that have shown very high increases in home prices are beginning to lose momentum.
Year-over-Year Growth In Double Digits
The 10-and 20-city indices each posted year-over year gains of 13.60 percent between October 2012and October 2013. These were the highest year-over-year gains since February of 2006.
Home prices recovered to mid-2004 levels in October, but remained 20 percent lower than peak home prices seen in June and July of 2006.
Here are figures for 10 cities showing the highest increases in home prices year-over-year in October 2013:
City Y-O-Y Growth Rate
Las Vegas, NV 27.10 %
San Francisco, CA 24.60%
Los Angeles, CA 22.10%
San Diego, CA 19.70%
Atlanta, GA 19.00%
Phoenix, AZ 18.10%
Detroit, MI 17.30%
Miami, FL 15.80%
Tampa, FL 15.20%
Seattle, WA 13.10 %
Home prices in the 10 and 20-city indices have gained 23.10 percent and 23.70 percent since home prices reached their lowest points in March 2012.
Month-To-Month Readings Indicate Slower Growth
Month-to-month readings show a slowing trend in home price growth. 18 of 20 cities included in the S&P Case-Shiller Home Price Indices showed slower growth in October as compared to September’s readings.
The Federal Reserve will begin tapering its asset purchases this month and will continue doing so unless economic conditions slow to a point where the Fed considers tapering counter-productive to economic growth.
Concerns over the tapering of “quantitative easing” and higher mortgage rates are seen as contributing to slower gains in home prices.
Although some analysts have identified indicators of economic growth, most seem to agree that home prices are likely to increase by single-digit percentages in 2014.
Jan 6, 2014 | Mortgage Rates
The last week of 2013 brought relatively good news in view of the economic roller coaster rides caused by legislative impasse. A brief shutdown of federal government agencies, and nail-biting suspense over if and when the FOMC of the Federal Reserve would taper its quantitative easing program.
Last week’s news was not high in volume due to the New Year holiday, but it does suggest that a general economic recovery is progressing and that housing markets are leading the “charge!”. Here are the details:
The NAR’s data of month-to-month reading of 0.20 percent showed an increase of 0.20 percent over October’s reading of -1.20 percent, which was the lowest reading for pending home sales in five months.
Lawrence Yun, chief economist for NAR, said that “…the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014.”
November’s year-over-year reading for pending home sales was 101.7 against a reading of 103.3 for November 2013. The good news is that November’s reading exceeded a 10-month low of 101.50 for October 2013.
Rapid Rises In Home Prices May Have Peaked
The S&P Case-Shiller 10 and 20- city home price indices for October was released Tuesday with positive results for both indices showing year-over-year gains in average home prices at 13.60 percent.
On an un-adjusted basis, the 10 and 20 city indices each gained 0.20 percent between September and October. The indices each showed a 1.00 percent gain in home prices on a seasonally adjusted annual basis. Case-Shiller cautioned that home prices are expected to rise at single-digit rates during 2014.
Consumer Confidence Rises, Housing And Manufacturing Sectors Improve
December’s consumer confidence reading gained 6.1 points for a reading of 78.1. This also exceeded the expected reading of 76.2.
The prior two months had shown decreased in readings thought to have been caused by the government shutdown in October. Consumers indicated that they are more confident about the economy than they have been in five and a half years.
Housing and manufacturing are leading the recovery, which reflects stronger housing, production and possibly manufacturing jobs, which have lagged behind increased production.
The national unemployment rate stood at 7.00 percent last week, which remains 0.50 percent above the Federal Reserve’s targeted rate of 6.50 percent.
Weekly jobless claims came in lower than expectations of 342,000 jobless claims at 339,000 new jobless claims. The prior week’s reading showed 341,000 new jobless claims.
Although a small decrease in new claims, last week’s reading further suggested that the economic recovery is on track.
Mortgage Rates
Thursday’s mortgage interest rate survey showed incremental increases in mortgage rates; concerns over continued tapering of the Fed’s QE program may have been a factor in the slight uptick in last week’s rates.
Average rates for mortgage loans rose as follows. The rate for a 30-year fixed rate mortgage increased from 4.48 to 4.53 percent with discount points rising from 0.70 percent to 0.80 percent.
The rate for a 15-year fixed rate mortgage was 3.55 percent with discount points unchanged at 0.70 percent. The rate for a 5/1 adjustable rate mortgage rose by five basis points to 3.05 percent with discount points unchanged at 0.40 percent.
Economists seem to agree on continued improvement in the economy for 2014, however rising mortgage rates and high unemployment remain as obstacles for faster economic recovery.
Jan 3, 2014 | Around The Home
The holiday season is coming to an end. It’s time to pack up the stockings, and take the ornaments off the tree.
That tree was a beautiful Christmas decoration, but now that the evergreen is turning brown, and its needles are falling all over the carpet, you realize it’s time to get it out of the house.
But don’t just throw it away. You have several options. Here are five interesting ways to use your dead Christmas tree.
It’s For The Birds
Keep the tree in its stand and set it outside. You can put some birdhouses in it, or surround it with bird seed. The birds will appreciate your Christmas tree long after you’re tired of looking at it. Take off the tinsel first!
It’s For The Fish
If you (or your neighbor) has a pond, just drop the tree overboard and give it a proper sailor’s burial. A dead Christmas tree is the ultimate home for fish.
The fish can sleep easy behind the branches, and you can sleep easy, knowing your beloved tree is still getting some use. It’s a big help to those trying to keep a pond stocked for fishing.
It’s For The Plants
A dead Christmas tree can be an excellent gardening tool. Cut branches and place them around your perennials to help keep them warm. If you’ve been vacuuming up all those fallen needles, spread them around the garden.
They make great mulch. Better yet, rent a wood chipper, and chop up the whole tree. That’s even greater mulch. If you’re not a gardener, there are several organizations that will accept your tree as a donation.
Burn Baby Burn
Another option is simply use your tree as firewood. Evergreens are great for bonfires and outdoor fireplaces. They ignite really easily. But don’t burn them indoors! The creosote buildup can be dangerous.
Get Crafty
If you’re craving a more creative approach, there are several great dead Christmas tree craft ideas out there. Some people chop up the trunk and use cross sections as planters.
You can also paint a coat of polyurethane on some small sections, and use them as coasters. You could even attempt to make some homemade potpourri. The possibilities are endless.
The fate of your dead Christmas tree is in your hands. You can burn it, make a habitat for animals, make some mulch, or even make some coasters.
The important thing is not to let it end up in a landfill. These dead trees have so many better uses than rotting with the trash.
Jan 2, 2014 | Home Seller Tips
Many people think that selling a home after the holidays and during the Winter season is a bad idea. Most people are not in the home buying mood, because they are thinking about the holidays.
Also, buyers will think that you are desperate and they will give you offers that are less than list price.
Advantages Of Selling Your Home Now
However, there are some advantages to selling your home over the holidays and into the new year. There will be less homes on the market, so there won’t be as much competition.
Also, buyers will likely be on their holidays from work, so they will have much more time to view properties and look around at homes.
Another factor is mood – buyers will generally be feeling more cheery and relaxed over the holidays, which will result in them being more likely to make the decision to buy a home.
A home can have a really romantic and cosy feeling during the winter season, which could make a buyer fall in love with it.
When You Are Selling Your Home During The Winter Season, Here Are Some Tips To Keep In Mind:
- Choose a good real estate agent who will be able to communicate with you well and find the right buyers for your house.
- Price the house realistically. This time of year, it helps to be competitive. You might even get buyers competing, which will push the price up as they bid against each other.
- Make sure that you have all of the paperwork in order, including an energy performance certificate, fittings and fixtures list and much more.
- Give your home a little makeover so that it gives a great first impression. Touch up the paintwork, rearrange the furniture and remove clutter.
- Giving a sense of airy lightness is important, especially in the winter months. Make sure that your windows let in plenty of natural light.
- Be flexible. You might need to be able to accommodate last minute viewings or viewings at strange times, so keep your schedule open.
- Serve seasonal drinks and snacks at your open house, such as mulled wine, eggnog and cookies, to put your buyers in a good mood.
- Have your moving company chosen and ready to go in advance, in case there is the possibility of a quick sale.
These are just a few tips to keep in mind for selling your home over the holidays. For more helpful tips, contact your trusted real estate professional.
Dec 31, 2013 | Housing Analysis
The holiday season and winter weather slowed home sales in November. Last week, the NAR reported that sales of existing homes had slumped to their lowest level in nearly a year, but this was not unexpected.
Short supplies of available homes and rising mortgage rates have increased pent-up demand for homes have kept some buyers on the sidelines.
Improvement In The Labor Market
4.90 existing homes were sold in November; this was lower than the 5.13 million existing homes sold in October, as well as lower than expectations of 5.00 million existing home sales in November.
Existing home sales for November 2013 were also 1.20 percent lower than for November 2012; this is the first time in 29 months that existing home sales were lower year-over-year.
Lawrence Yun, chief economist for NAR, described the slow-down in sales as a “clear loss of momentum.” The outlook for 2014 is better, as analysts expect continued improvement in the labor market.
The pent-up demand for homes will ease as homeowners begin to list their homes for sale as home prices increase. Mr. Yun also noted that prices for existing homes are increasing at their highest rate in eight years.
The national median home price of existing homes rose to $196,000 in November, which represents a year-over-year increase of 9.40 percent. There was a 5.1 month supply of previously homes available at the current sales rate.
Housing Market Continues To Progress Over Long Term
The Census Bureau and HUD report that 464,000 new homes were sold in November. This was 2.10 percent lower than October’s rate of 474,000 new homes sold. This represents an increase of 16.60 percent as compared to the 398,000 new homes sold in November 2012.
The national median home price for new homes in November was $270,900; with an average new home price of $340,300. The seasonally-adjusted estimate of new homes for sale in November was 167,000; this reading represents a 4.30 month supply of new homes for sale.
While home builder confidence is up and recent labor reports indicate improving job markets, the Fed’s decision to taper its quantitative easing program in January is generating some uncertainty as mortgage rates will likely rise as the Fed winds down the QE program.
