Tuesday, December 24, 2013

Sales of New Homes in U.S. Exceeded Forecasts in November

Home Construction 

Purchases of new U.S. homes exceeded projections in November, holding near a five-year high and showing the housing recovery was gaining momentum even as mortgage rates climbed.

Sales declined 2.1 percent to a 464,000 annualized pace, following a revised 474,000 rate in October that was the strongest since July 2008, figures from the Commerce Department showed today in Washington. The median forecast of 75 economists surveyed by Bloomberg called for 440,000.

Home purchases are strengthening as builders respond to pent-up demand unleashed by employment gains and record-high stock prices. Applications for building permits held near a five-year high in October, signaling a pickup in new-home construction will be maintained through the start of 2014.

“You did have a rise in mortgage rates, but house prices are still about 20 percent below the peak, affordability is high, and the labor market is improving,” said Gennadiy Goldberg, an economist at TD Securities USA LLC in New York. “There’s a natural demand for more housing.”

Economists’ estimates in the Bloomberg survey ranged from 390,000 to 475,000. October sales were originally reported as a 444,000 pace. The Commerce Department revised up data for each month back to August.

The market is on pace to reach 435,100 new homes sold this year, the most since 2008, according to Bloomberg calculations.

The median sales price for a new home climbed 10.6 percent from November 2012 to $270,900, today’s report on sales showed.

Purchases cooled in two of four U.S. regions in November, led by a 26.6 percent drop in the Midwest. Sales jumped 31.1 percent in the West and 15.2 in the Northeast.
Less Supply

The supply of homes dropped to 4.3 months, the lowest since June, from 4.5 months in October. There were 167,000 new houses on the market at the end of November, down from 179,000 the prior month.

New-home sales, tabulated when contracts are signed, are considered a timelier barometer than purchases of previously owned dwellings, which are calculated when a contract closes. New construction accounted for about 7 percent of the residential market in 2012.

Building permits fell 3.1 percent in November from the prior month to a 1.01 million rate, Commerce Department data showed last week. October’s 1.04 million level was the highest since June 2008.

At the same time, sales of previously owned homes declined for the third consecutive month in November to the lowest level of the year as rising mortgage rates and a limited supply of properties discouraged buyers.

Purchases dropped 4.3 percent to a 4.9 million annual rate, the National Association of Realtors reported last week. The median forecast of economists in a Bloomberg survey called for the pace to slow to 5.02 million. Still, the group projects 2013 will be the best year for the industry in seven years, with an estimated 5.1 million properties sold.

The average rate on a 30-year mortgage was 4.47 percent in the week ended Dec. 19, according to McLean, Virginia-based Freddie Mac. The rate reached a record low of 3.31 percent a year ago and was at 3.35 percent as recently as May.

Homebuilders such as Los Angeles-based KB Home (KBH:US) see the rise in interest rates as a short-term “pause” for buyer demand that won’t crimp an acceleration in the housing recovery next year.

“Higher mortgage rates, higher home prices and lower consumer confidence due to uncertainty in Washington triggered a pause among homebuyers who are now being more cautious,” Chief Executive Officer Jeffrey Mezger said on a Dec. 19 earnings call. “Affordability is at attractive levels, demographics remain strong and there’s pent-up demand due to delayed household formation” that will support the market in 2014. 


Article curated from Business Week

Friday, December 20, 2013

Home sales post first annual drop in 29 months

Existing home sales fell for the third straight month and posted their first annual decline in more than two years.

 Existing home sales lost steam in November as buyers faced higher interest rates and a tight supply of homes for sale, the National Association of Realtors said Thursday.

Sales dropped for the third straight month to a seasonally adjusted annual rate of 4.9 million, down 4.3% from October and down 1.2% from a year earlier — marking the first year-over-year drop in 29 months.

Home sales are being hurt by higher mortgage interest rates, limited inventory and tight credit, says Lawrence Yun, NAR chief economist.

The slip in sales volume doesn't mean that the housing recovery is "coming off the rails," however, says Paul Ashworth, chief economist for Capital Economics.

That's because home prices are still rising at a rapid clip annually and new home construction is strengthening, with starts up 23% in November.

Home prices are a more reliable gauge of market strength than home sales, says Patrick Newport, IHS Global Insight economist.

In October, home prices were up 12.5% year over year but just 0.2% from September, CoreLogic data show. Virtually no month-to-month growth is expected for November, CoreLogic says.

November's sales results are more evidence of a housing market returning more to normal after a historic housing bust and then rapid price bounce off the bottom, says Budge Huskey, Coldwell Banker CEO. He, too, expects moderating price gains going forward.

The drop in existing sales in November was most pronounced in the West, which has also seen the most robust price increases amid tight inventories. Sales there were down 8.5% from October and 10% from last year, NAR says.

Homes are still selling quickly, however. For the U.S. overall, the median time on the market for a home sold last month was 56 days, down from 70 days a year earlier.

Expanding inventory may lengthen that. Since a bottom in January, the supply of homes for sale is up 8.4%, on a seasonally adjusted basis, says Jed Kolko, Trulia economist.

NAR's report follows the Federal Reserve's announcement that it will trim its bond buying starting next month.

The Fed's tapering, which was expected, will likely drive mortgage interest rates higher. That'll be "a tough reality check for many home buyers," says Ellen Haberle, economist for real estate brokerage Redfin. Many buyers have come to expect rates under 5%, she says.

The latest Freddie Mac data put the average 30-year-fixed rate loan at 4.47%, up from 3.37% a year ago. Yun expects rates to get to 5.5% by the end of next year.

Article curated from USA Today


 

 

Thursday, December 19, 2013

Which Social Networks are Best for Real Estate Marketing?

Social media is a great marketing tool for almost any kind of business; however, you need to be strategic about the platforms you choose to use. Certain social media networks work better for specific industries. For example, Pinterest is great for clothing retail stores, but it may not work as well for a calibration testing company.

A company can spend a lot of time on and money building a presence on a social media platform, but it may not generate results simply because it’s not the right medium.

Here is a list of the social networks that real estate agents and real estate brokerages should be using for social media marketing.


1. Facebook – Show your personality

Why should clients want to work with your real estate agents over others?

Whether you have a website or not, Facebook is a great way to show clients what makes your company unique. Why should clients choose your agency over others? Add friendly photos of real estate agents and their happy clients. Show client testimonials and thank you notes. Post videos of walk-throughs and images of new homes on the market.


2. Twitter – Show Your Expertise

Why should clients trust your agency over others?

Twitter is a great way to make connections and establish your brand. Comment on industry news. Start a conversation with the real estate press and media writers. In a landscape as competitive as Chicago, Twitter can help you build trust through new connections and strengthen ties to the community.


3. Pinterest – Show Your Creativity

Why should clients be inspired by your agency?

Pinterest is one of the most visual social media platforms of today. Show off your work! Pin inspiring photos of incredible homes and offices around the world. Inspire people to want a new home or office.

Furthermore, Pinterest already has two major categories related to real estate: architecture and home décor. That means that there are enough people on Pinterest interested in architecture and home décor to make them one of the 37 main categories on the network. 


I’m willing to bet that people interested in home décor and architecture on Pinterest are more likely to be interested in real estate than other users. Target those pinners! Other categories that are related to real estate include travel, gardening and design.

Social media has become an integral part of content marketing and online advertising. With 2014 approaching quickly, now is the time to build a strong social foundation to support the growth and success of your real estate agency.


Article curated from Chicago Agent Magazine

Social media is a great marketing tool for almost any kind of business; however, you need to be strategic about the platforms you choose to use. Certain social media networks work better for specific industries. For example, Pinterest is great for clothing retail stores, but it may not work as well for a calibration testing company.
A company can spend a lot of time on and money building a presence on a social media platform, but it may not generate results simply because it’s not the right medium.
Here is a list of the social networks that real estate agents and real estate brokerages should be using for social media marketing.

1. Facebook – Show your personality

Why should clients want to work with your real estate agents over others?
Whether you have a website or not, Facebook is a great way to show clients what makes your company unique. Why should clients choose your agency over others? Add friendly photos of real estate agents and their happy clients. Show client testimonials and thank you notes. Post videos of walk-throughs and images of new homes on the market.

2. Twitter – Show Your Expertise

Why should clients trust your agency over others?
Twitter is a great way to make connections and establish your brand. Comment on industry news. Start a conversation with the real estate press and media writers. In a landscape as competitive as Chicago, Twitter can help you build trust through new connections and strengthen ties to the community.

3. Pinterest – Show Your Creativity

Why should clients be inspired by your agency?
Pinterest is one of the most visual social media platforms of today. Show off your work! Pin inspiring photos of incredible homes and offices around the world. Inspire people to want a new home or office.
Furthermore, Pinterest already has two major categories related to real estate: architecture and home décor. That means that there are enough people on Pinterest interested in architecture and home décor to make them one of the 37 main categories on the network. I’m willing to bet that people interested in home décor and architecture on Pinterest are more likely to be interested in real estate than other users. Target those pinners! Other categories that are related to real estate include travel, gardening and design.
Social media has become an integral part of content marketing and online advertising. With 2014 approaching quickly, now is the time to build a strong social foundation to support the growth and success of your real estate agency.
- See more at: http://chicagoagentmagazine.com/social-networks-best-real-estate-marketing/#sthash.kSnyv7jn.dpuf
Social media is a great marketing tool for almost any kind of business; however, you need to be strategic about the platforms you choose to use. Certain social media networks work better for specific industries. For example, Pinterest is great for clothing retail stores, but it may not work as well for a calibration testing company.
A company can spend a lot of time on and money building a presence on a social media platform, but it may not generate results simply because it’s not the right medium.
Here is a list of the social networks that real estate agents and real estate brokerages should be using for social media marketing.

1. Facebook – Show your personality

Why should clients want to work with your real estate agents over others?
Whether you have a website or not, Facebook is a great way to show clients what makes your company unique. Why should clients choose your agency over others? Add friendly photos of real estate agents and their happy clients. Show client testimonials and thank you notes. Post videos of walk-throughs and images of new homes on the market.

2. Twitter – Show Your Expertise

Why should clients trust your agency over others?
Twitter is a great way to make connections and establish your brand. Comment on industry news. Start a conversation with the real estate press and media writers. In a landscape as competitive as Chicago, Twitter can help you build trust through new connections and strengthen ties to the community.

3. Pinterest – Show Your Creativity

Why should clients be inspired by your agency?
Pinterest is one of the most visual social media platforms of today. Show off your work! Pin inspiring photos of incredible homes and offices around the world. Inspire people to want a new home or office.
Furthermore, Pinterest already has two major categories related to real estate: architecture and home décor. That means that there are enough people on Pinterest interested in architecture and home décor to make them one of the 37 main categories on the network. I’m willing to bet that people interested in home décor and architecture on Pinterest are more likely to be interested in real estate than other users. Target those pinners! Other categories that are related to real estate include travel, gardening and design.
Social media has become an integral part of content marketing and online advertising. With 2014 approaching quickly, now is the time to build a strong social foundation to support the growth and success of your real estate agency.
- See more at: http://chicagoagentmagazine.com/social-networks-best-real-estate-marketing/#sthash.kSnyv7jn.dpuf

Wednesday, December 18, 2013

Nov. housing starts highest since Feb. 2008

Housing starts in November cracked an annual rate above 1 million, the second month that's happened this year.



Housing starts rose almost 23% last month, touching their highest level in more than five years and further demonstrating the housing market's growing strength.

Housing starts hit a seasonally adjusted annual rate of 1.09 million -- topping October's revised estimate of 889,000 -- and rising about 30% from the year before, the Commerce Department reported.

November's rate was the highest since February 2008 and marked only the second month in the past four years that the annual rate cracked the 1 million mark.

Single family home starts reached their highest level since March 2008 at 727,000 -- still far below normal -- but up almost 21% above the revised October figure.

Building permits, which indicate future construction, were again above a million units in November.

The big jump in starts was only for November, while September and October starts remained around lower summertime levels.

But the November jump doesn't look like a one-month blip because both October and November permits, which lead starts by 1 or 2 months, were strong as well. That points to continued construction growth in December, says Jed Kolko, Trulia economist.

The housing construction numbers follow Tuesday's report of a strong bounce in U.S. home builder confidence.

The National Association of Home Builders/Wells Fargo builder sentiment index climbed to 58 in December. That matched an 8-year high reached in August.

Housing starts should pick up further next year as the industry gradually recovers, says the National Association of Home Builders.

It expects 825,000 starts next year for single family homes and 322,000 for multi-family homes.

That's still far below what the NAHB considers a normal rate of about 1.3 million for single family and 324,000 for multi-family, says David Crowe, NAHB chief economist.
Meanwhile, higher mortgage rates are hitting the market.

The average interest rate for a 30-year-fixed rate mortgage increased to 4.62% last week, the highest level since September, the Mortgage Bankers Association says.

Mortgage applications for home purchases were down 6% from the week before and 12% from a year ago, MBA says.
 
"Mortgage applications fell further last week, with the market index falling to its lowest level in more than a dozen years," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Both purchase and refinance applications fell as interest rates increased going into today's Federal Open Market Committee meeting."

Article curated from USA Today

Friday, December 13, 2013

Soaring home-price growth to slow down in 2014: analyst

U.S. home prices that have galloped higher this year will slow down in 2014 as more sellers become willing and able to place their homes on the market, according to a Wednesday research note.

Analysts at Capital Economics expect annual home-price growth to hit about 4% next year, compared with a rate that recently exceeded 13%.

“We expect this year to mark the peak for house-price inflation, and anticipate that the rate of price rises will more than halve in 2014,” according to the note.

Low inventory levels have supported the rapid gains in home prices, which, in turn, are enticing sellers to place their homes on the market, including properties that have regained equity.

“Rapidly increasing house prices have been particularly important in bringing sellers who were previously in negative equity back to the market,” analysts wrote.

Capital Economics expects the supply of homes available for sale to rise to 2.5 million in 2014 from 2.2 million this year, including large growth for new homes.

“Even with distressed supply falling, we are forecasting a considerable increase in the inventory of homes for sale over the next few years,” analysts wrote.


Article curated from The Wall Street Journal's Market Watch

Thursday, December 12, 2013

Foreclosures drop to lowest level in 7 years

The foreclosure crisis is showing signs that it's finally fading away.

foreclosed home
The number of new foreclosure filings -- which includes default notices, auctions and bank repossessions -- dropped 15% to a total of 113,454 properties in November, according to RealtyTrac, an online marketer of foreclosed properties.

That was the biggest monthly decline since November 2010, and foreclosure filings are now at the lowest level since December 2006. From a year ago, filings are down 37%.


"[T]he depth and breadth of the decrease provides strong evidence that we are entering the ninth inning of this foreclosure crisis with the outcome all but guaranteed," Daren Blomquist, vice president at RealtyTrac, said in a statement. 


Along with general economic improvements that have made it possible for homeowners to stay on top of mortgage payments, people are also trying harder to hold onto their homes as housing prices continue to rise. 

"People have more to lose if they lose their home," said Jed Kolko, chief economist at Trulia.


While filings are much lower than the average of 300,000 filings per month during the height of the foreclosure crisis, they haven't quite recovered to the level of around 86,000 that was seen in 2005 and 2006, before the housing bubble burst. And certain markets, like Florida, Delaware, Maryland and South Carolina, are still struggling with high rates of foreclosures. 

"While foreclosures will likely continue to stage a weak rally in certain markets next year as the last of the distress left over from the Great Recession is dealt with, it is highly unlikely that there will be a foreclosure comeback that poses any major threat to the solid housing recovery that has now taken hold," said Blomquist. 

Article curated from CNN