Monthly Archives: November 2016

Home explains what to watch

Hopes are high for this year as 2016 closed out pending home sales on a high note, however low inventory continues to dampen the high spirits.

Pending home sales increased in December by 1.6% to 109, up from 107.3 in November, according to a new report from the National Association of Realtors. That is an increase of 0.3% from December 2015.

“Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract,” NAR Chief Economist Lawrence Yun said.

“The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs,” Yun said. “Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.”

The supply that is available right now is concentrated in the upper end of the market, according to Yun. This is evident by looking at December data on the year-over-year change in single-family sales by price range. During the month, sales were up around 10% compared to December 2015 for homes sold at or above $250,000, while homes sold between $100,000 and $250,000 only increased 2.3%. However, sales of homes under $100,000 were down 11.6% compared to a year ago.

“The dismal number of listings in the affordable price range is squeezing prospective first-time buyers the most,” Yun said. “As a result, young households are missing out on the wealth gains most homeowners have accrued from the 41% cumulative rise in existing home prices since 2011.”

Existing home sales decreased in December, but closed out the year at the highest pointsince 2006.

The low inventory, however, may not be a problem for long. In fact, Yun expects housing starts will increase by 7.9% in 2017.

“Especially if construction-related regulations are relaxed, all eyes will be on the homebuilding industry this year to see if they can finally start making up lost ground on the severe housing shortages impacting much of the country,” he said.

Increase Real Estate Sell

Following the trend of previous months, October saw an increase in cash sales, according to a report from CoreLogic.

Cash sales slipped to 31.8% of total home sales in October, down 2.7 percentage points from the year before. However, it is a slight increase from September’s 31.7%, marking the fourth consecutive monthly increase.

Following the trend of previous months, October saw an increase in cash sales, according to a report from CoreLogic.

Cash sales slipped to 31.8% of total home sales in October, down 2.7 percentage points from the year before. However, it is a slight increase from September’s 31.7%, marking the fourth consecutive monthly increase.

 

Before the housing crisis, cash sales made up about 25% of total home sales, a mark that could be hit by mid-2018 is the share continues to fall at the same annual rate it did in October.

Real estate owned sales held the largest cash sales share in October at 59.2%, followed by resales at 31.7%, short sales at 30.2% and newly constructed homes at 15.9%.

While cash sales make up many of the sales in the REO category, its share in the market continues to decrease. Within the distressed sales category, REOs made up 5% of the market sales and short sales made up 2.6% of sales in October. The total share of distressed sales came in at 7.7%, the lowest share for any month since October 2007.

The pre-crisis share of distressed sales held steady around 2%. At the current rate of annual decreases, distressed sales could hit that mark by mid-2018.

While distressed sales continue to decrease, some states are still struggling more than others. Maryland had the largest share of distressed sales with 18.6%, followed by Connecticut with 18.3%, Michigan with 17%, New Jersey with 15.8% and Illinois with 14.7%.

On the other end of the spectrum, North Dakota held the smallest share of distressed sales at 2.7%, and, along with the District of Columbia, is within one percentage point of its pre-crisis level.

Value of homes sold in Northwest

The total value of homes sold up North in 2016 increased significantly, according to a report from the Northwest Multiple Listing Service.

Closed sales increased to 95,500 during 2016, an increase of 8.1% from the previous year’s 88,331 closed sales, according to the report, which covers 23 counties in and around Washington state.

Not only were more homes sold, they were sold at a higher price. Total sales in 2016 came in at a value of $40.3 billion, an increase of 18.2% from the previous year.

That is due, in part, to the median sales price increase of 8.9% to $337,500, up from $310,000 last year. However, home prices varied across counties from $102,500 in Ferry County to $489,000 in King County.

All counties, with the exception of Ferry County, showed year-over-year gains in home prices in 2016.

The largest share of homes sold was in the range of $150,000 to $300,000 at 34% of total home sales. Another third of home sales fell in the range of $300,000 to $500,000 and the smallest share was 7% for homes valued under $150,000.

However, new homes are not coming on to the market to replace those sold. Inventory shortages continued to plague the area in 2016, averaging only 1.86 months’ inventory. This is down from the previous year’s average of 2.4 months. In fact, November saw a new low for home inventory in the Northwest.

In general, industry analysts claim a range of four to six month is an indicator of a balanced market, favoring neither buyers nor sellers.

High-end sales surged in 2016 to 3,251 sales of single-family homes priced at $1 million or more. It is up at least 21% from 2015’s 2,676 luxury sales.

Housing inventory in Chicago area

The Chicago metro area saw a strengthening in its housing market in 2016, according to a year-end analysis by real estate agent organization RE/MAX.

Home sales in the Chicago area totaled 114,569 units for the year, an increase of 4.5% from 2015 and the most sold in any year since 2006’s 117,503 units. However, sales did see a slow-down in the second half of the year, increasing only 2%.

The median home sales price also saw an increase of 6.6% in 2016 to $225,000. The pace of home sales also increased significantly to 88 days, down from 2015’s 93 days.

However, inventory continues to be a problem in the area. At the end of December, housing inventory stood at a 2.8-month supply based on the average pace of sales in 2016.

“The metro Chicago market has faced this problem since 2013,” said Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois. “At the end of 2012 we had a 4.7-month supply of homes based on the pace of sales that year.”

“By the end of 2013 there was just a 3.2-month supply, and now our supply is even lower,” Kreider said. “It’s somewhat surprising given that the median sales price of a Chicago-area home was 40% higher this year than in 2012. You would think a price increase of such magnitude would attract a larger pool of homes into the market, but that hasn’t happened yet.”

The number of foreclosures and short sales also saw a decrease in 2016. Distressed homes decreased to 15.3%, down from 21.5% in 2015.

Chicago wasn’t the only city that saw significant increases in home sales during 2016. San Antonio, Texas also saw a record-setting year for its housing market in 2016.

Find real estate agent in Tom Niblo

Weeks passed since Abilene, Texas, real estate agent Tom Niblo was shot and killed in his home, but police have yet to make an arrest.

A newly released search warrant gives more information on the case, and further confirms police’ suspicions of Niblo’s brother-in-law Luke Sweetser, according to an article by Brooke Crum for Abilene Reporter.

However, police released Sweetser, who was arrested on charges of theft of a firearm, from jail Friday after a bond reduction from $400,000 to $75,000.

The morning of the shooting, Niblo’s wife, Cheryl Niblo, got out of bed to go to the bathroom, the search warrant affidavit states. During that time, she heard several shots and she escaped the house unharmed.

From the article:

“The investigation did not reveal evidence of why or how Cheryl McKissack Niblo removed herself from the bedroom at the exact time that Thomas Niblo was shot to death,” the search warrant affidavit states.

The warrant gives more details on the motive that Sweetser could have for wanting to shoot Niblo, according to the article. The family allegedly fought about the execution of a will after the death of Niblo’s father, which named Niblo and his mother executors of the will.

Sweetser’s wife, Niblo’s sister, was specifically excluded in the will, according to an articleby Erica Garner for Big Country Homepage.

Keep crosshairs trained on financial reforms

It’s been a busy first week in office for President Donald Trump, with executive orders on immigration, energy, trade, health care, and more being handed down daily.

But executive orders are just the preamble to the big initiatives that Trump and the Republican majority in Congress are expected to push for shortly.

Chief among those is the “dismantling” of the Dodd-Frank Wall Street Reform Act.

During the presidential transition, Trump’s transition team stated that dismantling Dodd-Frank would be one of the president’s main priorities.

And on Thursday, the American public got a reminder that the president and his party plan to keep that promise.

Speaking before the Congressional Republican Retreat, Vice President Mike Pence said that dismantling Dodd-Frank and its “overbearing mandates” remains a top priority for the Trump administration, a statement that was greeted by applause from the collected Republicans.

(To see Pence’s speech in full, click here. To see the Dodd-Frank section of the speech, fast-forward to the 18:01 mark.)

After Trump and Pence spoke to the GOP retreat, House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, issued a statement saying that he intends to continue pushing for the replacement of Dodd-Frank with a new financial reform package.

Last year, Hensarling introduced the Financial Choice Act, a Republican-crafted Dodd-Frank replacement that would “end taxpayer-funded bailouts of large financial institutions; relieve banks that elect to be strongly capitalized from ‘growth-strangling regulation’ that slows the economy and harms consumers; and impose tougher penalties on those who commit fraud as well as greater accountability on Washington regulators.”

On Thursday, Hensarling said that he will advance the Financial CHOICE Act in the new Congress.

Keep confident on real estate moving

Builder confidence remained steady at the start of 2017 as many look to the new administration, hopeful for a change.

Builder confidence dipped slightly to 67, down from December’s downwardly revised 69, according to the National Association of Home Builders and Wells Fargo Housing Market Index.

While this is a slight decrease, it’s important to remember that December ended 2016 with the highest level of confidence since July 2005.

“Builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

Under the new administration, home builders are predicted strong growth for 2017, however they still hold reservations.

“NAHB expects solid 10% growth in single-family construction in 2017, adding to the gains of 2016,” NAHB Chief Economist Robert Dietz said. “Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components decreased in January. The component measuring current sales conditions decreased three points to 72, while the index charting sales expectations in the next six months decreased two points to 76 and that measuring buyer traffic decreased only one point to 51.