Tag Archives: real estate news

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Home ‘value’ isn’t absolute – it’s subjective

SAN FRANCISCO – June 12, 2014 – The concept of value is subjective when it comes to home amenities, and sellers often find that price and cost do not equal value.

Buyers’ and sellers’ motivations and desires play a big role, but they can be difficult to calculate. Some people may be willing to pay more for a pool, a main-floor master bedroom or to live a certain location, for example, but these features may turn off others.

Experts point out that a home’s worth is based on the data as well as the role it serves for the person living there. Other factors to consider include functional obsolescence due to over-improvement, whether the market will pay more for unique features like outdoor kitchens or media and audio systems, and whether buyers want athletic equipment in their homes that they can access at professional gyms and training facilities.

It’s important for buyers to consider whether the home works for them, as the “value in use” to the occupant may not be supported by market data.

Source: Inman News (03/31/14) Miller, Hank

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

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Leading Markets Index shows 56 metros at or above normal levels in June

NAHB: Leading Markets Index shows 56 metros at or above normal levels in June

 

WASHINGTON – June 10, 2014 – Of the approximately 350 metro markets nationwide, 56 returned to or exceeded their last normal levels of economic and housing activity in June, according to the National Association of Home Builders/First American Leading Markets Index (LMI). This represents a net gain of nine metros year-over-year.

The index’s nationwide score of .88 held steady from the previous month. This means that based on current permit, price and employment data, the nationwide average is running at 88 percent of normal economic and housing activity. Meanwhile, 30 percent of metro areas saw their score rise this month and 83 percent have shown an improvement over the past year.

“Markets are gradually returning to normal levels of housing and economic activity,” said NAHB Chairman Kevin Kelly. “When we see more sustainable levels of job growth, this will unleash pent-up demand and bring more buyers into the marketplace.”

Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.4 – or 40 percent better than its last normal market level. Other major metros at the top of the list include Honolulu; Oklahoma City; Austin, Texas and Houston. Rounding out the top 10 are Los Angeles; San Jose, Calif.; Harrisburg, Pa.; Pittsburgh and Salt Lake City – all of whose LMI scores indicate that their market activity now equals or exceeds previous norms.

“Of the three components in the LMI, the one lagging is single-family housing permits, which is only 43 percent of the way back to normal while home prices are 26 percent above their last normal level and employment is at 95 percent of its previous norm,” said NAHB Chief Economist David Crowe. “In the 22 metros where permits are at or above normal, the overall index indicates that these markets have fully recovered.”

“Well over one-third of all markets are operating at a level of at least 90 percent of previous norms, and this bodes well for a continuing housing recovery in the year ahead,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning their markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., respectively.

The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity.

More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison.

© 2014 Florida Realtors®

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‘Buying Naked’ on TLC latest entry into the nude reality TV trend

“Naked and Afraid” and “Naked Castaway” have been surprise hits for Discovery Channel; now it looks like TLC is getting in on the baring-all act with a new series, “Buying Naked.” However, instead of being oddly naked in the woods or stranded in some desperate situation, “Buying Naked” will feature a community where clothing-optional clients are shopping the real estate market with the help of expert realtor Jackie Youngblood.

Pasco County, FL, boasts the largest concentration of nudist communities in the nation, and happily holds the title, “Nudist Capital of America.” Now, TLC follows Jackie and her team as they help “in the buff” homebuyers find their dream house. Prospective homebuyers typically consider such factors as location, layout, and budget, to help influence their decisions. However, finding a home for a nudist goes well-beyond the concerns that come with typical house hunting.

Jackie and her team must keep in mind the hazards that are lurking for their clothing-optional clientele – everything from countertop height to sharp corners and flooring (rug burn hurts!). Routine tasks such as cooking, cleaning and even just walking can present safety risks for the unclothed occupants of the home. Fortunately, Jackie and her team take extra care to uncover the perfect property to accommodate their clients’ unique needs and lifestyles.

In the season premiere of “Buying Naked,” Jackie brings together the “textiles” or clothed conservatives of the Pasco County real estate industry and the nudists of the community for a very hands-on networking event. Meanwhile, the team’s newest recruit, Alex, is put to the test when she enters a nudist community for the first time, and has to prove she’s got what it takes to sell a home to an especially eclectic nudist pair.

The whole “naked” theme that seems to be developing with reality shows is mystifying, at best–are we really that interested in people in the buff, or are we (and networks) just running out of ideas? Whatever the reason, at least the people in this series have a legitimate reason to be naked, as they are, after all, nudists; being naked and testing one’s survival skills has never made any practical sense.

“Buying Naked” premieres on TLC on Saturday, June 28, at 10/9c, and is produced by Paper Route Productions for TLC.

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Realtors to condo boards: Get FHA certification

WASHINGTON – May 27, 2014 – Many prospective condominium buyers find that they cannot use FHA financing – not because they personally do not qualify, but because the entire development where they want to buy is ineligible.

Due to policy changes at the federal level and decisions by condo boards, FHA lending has become off-limits to thousands of communities in the last few years.

Agency officials have banned “spot” loans and will insure mortgages only for units in condo projects that have passed a certification process. That process looks at elements such as budgets, reserves, percentage of renters, insurance coverage and delinquencies on condo-fee payments.

FHA contends that its revised procedures weed out fiscally weak, poorly managed projects. However, some condo boards argue that FHA’s evaluation criteria are too strict, and that the certification process is bureaucratic and cost-prohibitive.

Since changing its policy four years ago, the number of condo developments approved for FHA financing has plummeted by over 50 percent. As of mid-May, FHA says just 10,020 communities out of roughly 144,000 condo projects nationwide had FHA certification – about 7 percent.

The country’s real estate community is rallying to persuade condo boards to seek the certification. An educational video that debuted at the recent National Association of Realtors spring legislative conference, for instance, emphasizes the “positive benefits” of certification. It urges directors to keep unit values high by expanding the pool of potential buyers, help unit owners tap equity for retirement, and remember the low risk of default associated with FHA borrowers.

Source: Washington Post (05/24/14) P. 5; Harney, Kenneth R.

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Small businesses more optimistic about economy

WASHINGTON – May 15, 2014 – April’s Small Business Optimism Index rose 1.8 points to a post-recession high of 95.2 – the first time it crossed the 95 mark since 2007.

Seven index components improved, one was unchanged and two fell. The National Federation of Independent Businesses (NFIB) compiles the monthly index.

“April’s index did pass the 95 mark that seemed to block any progress in optimism for the past five years,” says NFIB chief economist Bill Dunkelberg. “However, the index is still 5 points below the average reading from 1973 to 2008, and far from what is considered expansion levels.”

While the 95 level seemed to be a cap on optimism that has now been passed, Dunkelberg does not yet consider the recession fully over.

“This reading can only be characterized as a high end recession reading,” he says. “Small business confidence rising is always a good thing, but it’s tough to be excited by meager growth in an otherwise tepid economy. … So while the improvement is welcome, as long as small business owners continue to have negative views about the future, the 95 number may fade.”

Review of April indicators

  • Labor markets. NFIB owners increased employment by an average of 0.07 workers per firm in April (seasonally adjusted), weaker than March but the seventh positive month in a row and the best string of gains since 2006. The remaining 74 percent of owners made no net change in employment.
  • Job creation. Twenty-four percent of all owners reported job openings they could not fill in the current period (up 2 points). This suggests that the unemployment will ease a tenth of a point or more. Fourteen percent reported using temporary workers, up 1 point from March. Job creation plans reversed a recent negative trend and rose 3 percentage points to a seasonally adjusted net 8 percent.
  • Sales. The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months improved 4 points to a net negative 2 percent – far better than the negative 31 percent readings in 2009.
  • Expected real sales volumes posted a 2-point decline after a strong 9-point gain in March, falling to a net 10 percent of owners. While down a bit, it is still the third highest reading since early 2012.
  • Earnings and wages. Earnings trends improved 4 points to a net negative 20 percent (net percent reporting quarter to quarter earnings trending higher or lower), the best reading since 2007. Not seasonally adjusted, 15 percent reported profits higher quarter to quarter (up 3 points), and 41 percent reported profits falling (down 1 point).
  • Rising labor costs are keeping pressure on earnings. Two percent reduced worker compensation and 23 percent raised compensation, yielding a seasonally adjusted net 20 percent reporting higher worker compensation. The gains in compensation are now solidly in the range typical of an economy with solid growth.
  • Credit markets. Credit continues to be a non-issue for small employers. In April, just five percent of the owners reported that all their credit needs were not met, 1 point above the record low. Thirty percent reported all credit needs met, and 53 percent explicitly said they did not want a loan. Only 1 percent reported that financing was their top business problem (tied with the record low) compared to 22 percent citing taxes, 20 percent citing regulations and red tape and 15 percent citing weak sales. Small business owners are far more concerned about taxes, regulations and health care costs than financing issues.
  • Inventories. The pace of inventory reduction was steady, with a net negative 6 percent of all owners reporting growth in inventories (seasonally adjusted). Reductions are good if in response to strong sales, but not so good if it is in response to weak sales.
  • Inflation. Seasonally adjusted, a net 12 percent of owners raised selling prices, up 3 points after an 8-point rise in March. Twenty-five percent plan on raising average prices in the next few months (up 2 points). Only 3 percent plan reductions (unchanged) – far fewer than actually reported reductions in past prices. Overall, the report suggests the U.S. economy will see a bit more inflation.

© 2014 Florida Realtors®

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Fla.’s housing market shows strength in 1Q 2014

ORLANDO, Fla. – May 12, 2014 – Florida’s housing market reported higher median prices, more new listings, fewer days on the market and a slight uptick in inventory during the first quarter of 2014, according to the latest housing data released by Florida Realtors®.

Closed sales of single-family homes statewide totaled 50,251 in 1Q 2014, up 2.3 percent over the 1Q 2013 figure.

“The first three months of 2014 show a strong housing market in Florida, with diminishing distressed property sales,” says 2014 Florida Realtors President Sherri Meadows, CEO and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages. “More jobs are being created, putting more Florida residents back to work, and our population continues to increase. All of these factors are bolstering the state’s economy and providing a solid foundation for a strong housing market.

“Statewide, new listings for single-family homes over the three-month-period rose 12 percent year-over-year, while new townhouse-condo listings rose 8.2 percent. Home sellers, whether in the single-family home market or the townhouse-condo market, received more than 92 percent, on average, of their original listing price during the first quarter of this year.”

The statewide median sales price for single-family existing homes in 1Q 2014 was $168,000, up 9.1 percent from the same time a year ago, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties during the quarter was $135,000, up 16.9 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Looking at Florida’s townhome-condo market, statewide closed sales totaled 24,860 during 1Q 2014, down 0.8 percent compared to 1Q 2013. The closed sales data reflected fewer short sales last month: Short sales for condo-townhome properties declined 55.8 percent while short sales for single-family homes dropped 52 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.

“The first quarter statistics reflect the fact that Florida, in part a derivative market, has felt the sting of the northern winter.” said Florida Realtors Chief Economist Dr. John Tuccillo. “Yet, the market is showing some positive movement. Sales are up, particularly for non-distressed properties. Other data indicate that this is a market that is settling down and returning to more stabilized conditions.”

In 1Q 2014, the median days on market (the midpoint of the number of days it took for a property to sell during that time) was 58 days for single-family homes and 56 days for townhouse-condo properties.

Inventory was at a 5.7-months’ supply in the first quarter for single-family homes and at a 6-months’ supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.36 percent for 1Q 2014, up from the 3.50 percent average recorded during the same quarter a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Media Center and look under Latest Releases, or download the 1Q 2014 data report PDFs under Market Data.

© 2014 Florida Realtors®