Mar 22, 2012 | Housing Analysis
The market for home resales stays strong.
Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that cannot be classified as new construction.
Last month’s sales data represents a 9 percent improvement from the year prior.
There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.
Some analysts believe that a 6-month home supply indicates a housing market in balance.
The real estate trade group’s report contained other noteworthy statistics, too :
- 32 percent of home sales were made to first-time buyers
- 33 percent of home sales were made with cash (i.e. no mortgage)
- 34 percent of home sales were of foreclosed homes or homes in short sale
In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.
Even accounting for last month’s high contract failure rate, (more…)
Mar 21, 2012 | Housing Analysis
Home builder confidence in the newly-built, single-family housing market remains high.
In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.
When home builder confidence reads 50 or better, it reflects favorable builder conditions in the single-family, new home market. Readings below 50 suggest unfavorable builder conditions.
The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.
Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.
In March, home builders provided mixed replies to the survey questions :
- Current Single-Family Sales : 29 (-1 from February)
- Projected Single-Family Sales : 36 (+2 from February)
- Buyer Foot Traffic : 22 (Unchanged from February)
It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. The reasons for this are several and should be of interest to today’s home buyers.
First, the jobs market is heating up. The U.S. economy has (more…)
Mar 16, 2012 | Housing Analysis
After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac.
In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.
A “foreclosure filing” is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.
Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.
This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the (more…)
Mar 1, 2012 | Housing Analysis
Standard & Poors released its December 2011 Case-Shiller Index this week. The report is the most widely-cited, private-sector metric for the housing market. The index aims to measures change in home prices from month-to-month, and from year-to-year, in select U.S. cities and nationwide.
According to the report, between November and December 2011, home values fell within 18 of the Case-Shiller Index’s 20 tracked markets; and through the 12 months leading up to December 2011, 19 of 20 tracked markets fell.
Only Detroit posted year-over-year gains, adding 0.50% since December 2010.
Now, these statistics may look dire for the housing market, but it’s important to remember that the Case-Shiller Index — though widely-cited — remains a flawed statistic for everyday buyers and sellers in Worcester County area. Rather, the monthly Case-Shiller Index is more appropriately applied by policy-makers and economists to macro-economic issues than by you and me for buy-or-sell decisions..
There are three ways in which Case-Shiller is flawed — each tied to the way by (more…)
Feb 29, 2012 | Housing Analysis
The housing market appears headed for a strong spring season.
After a brief setback in December, the Pending Home Sales Index resumed its climb in January, posting a 2 percent gain over the month prior.
The data puts pressure on Worcester County area home buyers. This is because a “pending home” is a home that’s under contract to sell, but has not yet sold. It’s tracked by the National Association of REALTORS® and, among all housing statistics, it’s the only one that’s “forward-looking”.
The Pending Home Sales Index is important to home buyers throughout Massachusetts because 80% of homes under contract to sell close within 60 days of contract. In this way, the Pending Home Sales Index forecasts the housing market 1-2 months into the future.
This is very different from how NAR’s Existing Home Sales report works; or, how the Census Bureau’s New Home Sales report works. These two metrics tell us what’s already happened in housing.
By contrast, the Pending Home Sales Index tells us what’s coming next.
January’s Pending Home Sales Index reading lifts the monthly metric to its highest level since April 2010 — the month during which the 2010 federal home buyer tax credit expired — foreshadowing a strong housing market (more…)
Feb 28, 2012 | Housing Analysis
The new construction market rolls on.
As foreshadowed by February’s Homebuilder Confidence survey, which rose to a 4-year high, the Census Bureau reports new homes are selling more quickly than builders have built them, lowering the national “home supply” to levels not seen since 2006.
A “new home” is a home that is considered new construction and, at the current pace of sales, the nation’s entire new home inventory of 151,000 homes would be sold in 5.6 months.
Anything less than 6.0-month supply is thought to connote a “sellers’ market”.
321,000 new homes were sold last month on a seasonally-adjusted, annualized basis. 7 of 10 new homes sold for less than $300,000.
The South Region continues to account for the majority of new construction sales, posting a 59% market share in January. South Region sales were up 9 percent as compared to December. The other 3 regions turned in mixed results.
- Northeast Region : +11.1% from December 2011
- Midwest Region : -24.5% from December 2011
- West Region : -10.6% from December 2011
Unfortunately, the Census Bureau’s New Home Sales data could be wrong.
Although New Home Sales were said to fall by about (more…)
