Dec 2, 2011 | Housing Analysis
If you’re waiting for home prices to reach its bottom, you may have missed your window.
After 3 consecutive months of easing, the Pending Home Sales Index jumped 10 percent in October, lending credence to the belief that housing is in recovery.
The Pending Home Sales Index is a monthly publication from the National Association of REALTORS®. It measures the number of homes under contract to sell nationwide. October’s reading is the highest for all of 2011, and the second-highest dating back to April 2010.
April 2010 was the last month of the last year’s federal home buyer tax credit.
For buyers and sellers in Worcester and nationwide, the Pending Home Sales Index is a housing metric worth watching. Different from the Existing Home Sales and New Home Sales reports which report on “the past”, the Pending Home Sales Index is a forward-looking housing market indicator.
According to the National Association of REALTORS®, 80% of homes under contract close within 2 months.
The majority of the rest close within (more…)
Nov 30, 2011 | Housing Analysis
Standard & Poor’s released its September 2011 Case-Shiller Index this week. The index tracks home price changes in select cities between months, quarters, and years.
The Case-Shiller Index for September showed drastic devaluations nationwide.
As compared to August, home values fell throughout 17 of the index’s 20 tracked markets, led by Atlanta’s 5.9% drop. On an annual basis, home values have now returned to early-2003 levels.
That said, home buyers and sellers should be cautious when referencing the Case-Shiller Index. The index is a flawed metric and, as such, can lead to improper conclusions about the housing market overall.
The Case-Shiller Index’s first flaw is its most obvious — its limited sample set.
According to Wikipedia, there are more than 3,100 municipalities nationwide. Yet, the Case-Shiller Index includes data from just 20 of them in its findings. These 20 cities account for fewer than 1% of all U.S. cities, and just a small percentage of the overall U.S. population.
The “national figures” aren’t really national, in other words.
Even on a city-by-city basis, the Case-Shiller Index gets it wrong. (more…)
Nov 29, 2011 | Housing Analysis
If you plan to buy of new construction in Massachusetts sometime in 2012, don’t expect today’s low prices. Like everything in housing of late, the market for newly-built homes appears to be stabilizing and, in some markets, improving.
As foreshadowed by this month’s strong Homebuilder Confidence survey, the Census Bureau reports that the number of new homes sold rose to a 6-month high in October, climbing to 307,000 units on a seasonally-adjusted, annualized basis.
A “new home” is a home that is considered new construction. It’s the opposite of an “existing home”.
Home buyers are comparing new construction to home resales and liking what they see. At the current sales pace, the nation’s complete new home inventory would now be depleted in just 6.3 months. This marks the lowest home supply since April 2010 — the last month of the last year’s federal homebuyer tax credit.
By building only to meet new demand, builders are keeping home supplies in check, and home prices stable. They’ve also found a niche market — 80% of homes sold last month sold for less than $300,000.
Split by region, the Census Bureau reports October’s New Home Sales as follows : (more…)
Nov 23, 2011 | Housing Analysis
The housing market continues to signal that a broad rebound is underway. In October, despite sparse home inventory, the number of properties sold increased 1.4% nationwide.
According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, October Existing Home Sales gained 70,000 units as compared to September, registering 4.97 million existing homes sold overall.
An “existing home” is a home that has been previously occupied and, as compared to prior months, the stock of homes for sale is depleted.
Just 3.3 million homes were listed for sale last month. This represents a 2 percent drop from September and marks the sparsest home resale inventory of 2011.
The current home supply would last 8.0 months at today’s sales pace — the fastest rate since January 2010.
The real estate trade group’s report contained other noteworthy statistics, too : (more…)
Nov 18, 2011 | Housing Analysis
Another day, another signal that the market for newly-built homes is improving.
Single-Family Housing Starts rose to a seasonally-adjusted, annualized 430,000 units in October — a 4 percent increase from September and the highest reading in 3 months.
A “Housing Start” is a home on which ground has been broken.
The increase in surprised Wall Street analysts, although it shouldn’t have.
Earlier this week, the National Association of Homebuilders showed that Homebuilder Confidence is at its highest point since May 2010, the effect of better market conditions and more sold units. Rising housing starts amid a lift in builder confidence is to be expected — the two metrics have moved with loose correlation since mid-2000.
However, as with everything in real estate, Single-Family Housing Starts volume varied by location. The nation’s 4 regions posted wide-ranging results :
- Northeast Region : + 10.0% from September
- Midwest Region : -4.1% from September
- South Region : +11.3% from September
- West Region : -10.2% from September
Buyers of new construction in Fitchburg, Leominster area can infer two key points from last month’s data. (more…)
Nov 17, 2011 | Housing Analysis
Homebuilder confidence continues to rise.
Just two months after falling to a multi-month low, the Housing Market Index surged again in November, climbing another three points to 21. It’s the second straight month that the HMI posted a 3-point gain, catapulting the index to an 18-month.
The Housing Market Index is monthly report from the National Association of Homebuilders. It’s meant to measure confidence among the nation’s homebuilders, scored on a scale of 1-100.
When homebuilder confidence reads 50 or better, it reflects favorable conditions for homebuilders. Readings below 50 reflect unfavorable conditions.
The Housing Market Index has not read north of 50 since April 2006.
As an index, the HMI is actually a composite reading; the result of three separate surveys sent to homebuilders each month. The National Association of Homebuilders asks it members about current single-family home sales volume; projected single-family home sales volume over the next 6 months; and current “foot traffic”. (more…)
