Home Prices Surge to Fastest Pace in Year

DAILY REAL ESTATE NEWS | TUESDAY, MARCH 24, 2015

Existing-home sales showed some improvement in February, but remain constrained by low inventories of homes for-sale that are pushing price growth to the fastest pace in a year, according to the National Association of REALTORS®.

"Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsustainable levels," says Lawrence Yun, NAR’s chief economist. "Stronger price growth is a boon for home owners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before [mortgage] rates rise."The median existing-home price for all housing types was $202,600 in February – 7.5 percent higher than a year ago.

Mortgage rates, for now, continue to hover near historical lows. The 30-year fixed-rate mortgage averaged 3.71 percent in February, according to mortgage giant Freddie Mac.

"With all indications pointing to a rate increase from the Federal Reserve this year – perhaps as early as this summer – affordability concerns could heighten as home prices and rents both continue to exceed wages," says Yun. Indeed, an NAR study earlier this month found a widening gap between rent and income growth across the country, which is making it more difficult for renters to become home owners.

Here are some more findings from NAR's latest housing report:4 Stats to Gauge the Market

1. Existing-home sales: Existing-home sales rose 1.2 percent month-over-month, reaching a seasonally adjusted annual rate of 4.88 million in February. Sales are 4.7 percent higher than a year ago.

2. Housing inventory: Housing inventories rose 1.6 percent to 1.89 million existing-homes for-sale in February, but remain 0.5 percent below a year ago. Unsold inventory is at a 4.6-month supply at the current sales pace. Most economists consider a 6-month supply healthy for the market.

3. Distressed sales: Foreclosures and short sales comprised 11 percent of sales in February, down from 16 percent a year ago. In February, 8 percent of sales were foreclosures, and 3 percent were short sales. On average, foreclosures sold for a discount of 17 percent below market value (in January, it was 15 percent) and short sales were discounted by 15 percent on average (from 12 percent in January).

4. Days on the market: Properties were on the market for 62 days, on average, in February, down from 69 days in January. Short sales were on the market for the longest – 120 days. Foreclosures tended to sell in 58 days and non-distressed homes took 61 days. Thirty-four percent of homes sold in February were on the market for less than a month, according to NAR’s report.

By Region

The following is an overview of how sales fared in February across the country:

• Northeast: existing-home sales plunged 6.5 percent to an annual rate of 580,000, but are 3.6 percent above year ago levels. Median price: $241,800, up 3.3 percent year-over-year.
• Midwest: existing-home sales were mostly unchanged from January at an annual level of 1.08 million, but are 4.9 percent higher than February 2014 levels. Median price: $152,900, up 8.8 percent from a year ago.
• South: existing-home sales rose 1.9 percent to an annual rate of 2.11 million last month, and are 6 percent higher than year ago levels. Median price: $177,900, up 8.5 percent from a year ago.
• West: existing-home sales increased 5.7 percent to an annual rate of 1.11 million in February, and are 2.8 percent above a year ago. Median price: $290,100 -- 4.2 percent above February 2014.

Source: National Association of REALTORS®

Both Home Prices and Affordability on the Rise

DAILY REAL ESTATE NEWS | WEDNESDAY, FEBRUARY 18, 2015

The spring market will likely be a hotter one this year, as low interest rates and a healthier economy lure more home buyers to the marketplace. 

NAR's latest housing report:Tight Supplies Put Home Prices on the Move

“Interest rates below 4 percent, rising rents, and healthier local job markets are convincing more consumers to consider home ownership,” Chris Polychron, National Association of REALTORS® president, said in a recent news release showing fourth-quarter 2014 home prices moving up. 

An increase in the national family median income (to $65,782) mixed with low interest rates slightly improved affordability in the fourth quarter compared to the previous quarter, NAR reports. Affordability improved despite the national median single-family home price moving up to $208,700 in the fourth quarter, an increase of 6 percent year-over-year.

“Low interest rates helped preserve affordability last quarter, but it’ll take stronger income gains and more housing supply to help meet the pent-up demand for buying,” says Lawrence Yun, NAR’s chief economist.

To purchase a single-family home at the national median price, a buyer making a 5 percent down payment would need an income of $45,863. A 10 percent down payment would require an income of $43,449, and $38,621 would be needed for a 20 percent down payment.

The following were the five lowest-cost housing markets in the fourth quarter:

1. Youngstown-Warren-Boardman, Ohio: $78,000
2. Rockford, Ill.: $86,800
3. Toledo, Ohio: $87,100
4. Decatur, Ill.: $90,400
5. Cumberland, Md.: $90,500

Source: National Association of REALTORS®

List Hub Cuts Off Zillow and Trulia!

Good morning,

Here are today’s rates and commentary:

CONF 30YR FRM*   CONF 15YR FRM*   FHA 30YR FRM*  JUMBO 30YR FRM*

3.500% Rate             2.875% Rate            3.250% Rate          3.500% Rate

3.542% APR              2.914% APR             3.299% APR           3.512% APR

0.000 Points              -0.250 Points           0.125 Points          0.000 Points

What's Driving Rates?

Germany expects negotiations with Greece to drag on until the current round

 of bailout funding runs out and is prepared to play a waiting game until April or

 May, when the country approaches a cash crunch, a person familiar with the 

matter said. Greece would not immediately go bankrupt at the end of February

 because it has resources to last beyond that point and Germany is ready to wait 

until there is a more urgent financing need to strengthen its bargaining position, 

said the person, who asked not to be identified discussing internal talks.

Have a great day.

Tammy Ranger-Mortgage Loan Officer

NMLS# 685286

Lake Michigan Credit Union

310 W. Front Street

Traverse City, MI 49684

P: (231) 932-6284

F: (231) 932-6298

C: (231) 218-1161
Send Secure Email

E: Tammy.Ranger@lmcu.org

SOLD!! Grass River Natural Area Surrounds You!!

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Alert Notice issued by Antrim County - November 18, 2013:

Alert Notice issued by Antrim County - November 18, 2013: 

Water levels in Antrim County are currently at extremely high levels. It is highly probable that additional precipitation will result in further
increases of water levels. Waterfront residents are strongly urged to take measures necessary to reduce potential damage to their property.

Vacation Home Sales Surge in 2013

Vacation Home Sales Surge in 2013; Investment Property Declines

DAILY REAL ESTATE NEWS | WEDNESDAY, APRIL 02, 2014

Vacation home sales rose strongly in 2013, while investment purchases fell below the elevated levels seen in the previous two years, according to the National Association of REALTORS®.
NAR’s 2014 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2013, shows vacation-home sales jumped 29.7 percent to an estimated 717,000 last year from 553,000 in 2012. Investment-home sales fell 8.5 percent to an estimated 1.1 million in 2013 from 1.21 million in 2012. Owner-occupied purchases rose 13.1 percent to 3.7 million last year from 3.27 million in 2012. The sales estimates are based on responses from households and exclude institutional investment activity.
NAR Chief Economist Lawrence Yun expected an improvement in the vacation home market. “Growth in the equity markets has greatly benefited high-net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” he said. “However, vacation-home sales are still about one-third below the peak activity seen in 2006.”
Vacation-home sales accounted for 13 percent of all transactions last year, their highest market share since 2006, while the portion of investment sales fell to 20 percent in 2013 from 24 percent in 2012.
Yun said the pullback in investment activity is understandable. “Investment buyers slowed their purchasing in 2013 because prices were rising quickly along with a declining availability of discounted foreclosures over the course of the year,” he said.
“In 2011 and 2012, investment property was a no-brainer because home prices had sharply overcorrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework,” Yun added.
The median investment-home price was $130,000 in 2013, up 13 percent from $115,000 in 2012, while the median vacation-home price was $168,700, up 12.5 percent from $150,000 in 2012.
All-cash purchases remained fairly common in the investment- and vacation-home market: 46 percent of investment buyers paid cash in 2013, as did 38 percent of vacation-home buyers.
Of buyers who financed their purchase with a mortgage, large downpayments continued to be the norm in 2013. The median down payment for investment buyers was 26 percent, while vacation-home buyers typically put 30 percent down.
Forty-seven percent of investment homes purchased in 2013 were distressed homes, as were 42 percent of vacation homes.
Lifestyle factors remain the primary motivation for vacation-home buyers, while rental income is the main factor in investment purchases.
The typical vacation-home buyer was 43 years old, had a median household income of $85,600, and purchased a property that was a median distance of 180 miles from his or her primary residence; 46 percent of vacation homes were within 100 miles and 34 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 6 years, down from 10 years in 2012.
Five percent of vacation-home buyers had already resold their property, while another 9 percent plan to sell within a year. “This reflects the 28 percent of recreational property buyers who said they purchased to diversify investments or saw a good investment opportunity,” Yun said.
Buyers listed many reasons for purchasing a vacation home: 87 percent want to use the property for vacations or as a family retreat, 31 percent plan to use it as a primary residence in the future, 28 percent wanted to diversify their investments or saw a good investment opportunity, 23 percent plan to rent to others, and 22 percent intend it for use by a family member, friend, or relative.
Forty-one percent of vacation homes purchased last year were in the South, 28 percent in the West, 18 percent in the Northeast and 14 percent in the Midwest.
Investment-home buyers in 2013 had a median age of 42, earned $111,400, and bought a home that was relatively close to their primary residence – a median distance of 20 miles.
Fifty percent of investment buyers said they purchased for rental income, 34 percent wanted to diversify their investments or saw a good investment opportunity, and 22 percent bought for a family member, friend, or relative to use – often to house a son or daughter while attending college.
Seven percent of homes purchased by investment buyers last year have already been resold, and another 10 percent are planned to be sold within a year. Overall, investment buyers plan to hold the property for a median of 5 years, down from 8 years in 2012.
Thirty-eight percent of investment properties purchased last year were in the South, 25 percent in the West, 18 percent in the Northeast, and 19 percent in the Midwest.
More than eight out of 10 second-home buyers, both for vacation and investment homes, said it was a good time to buy.
Approximately 43.4 million people in the U.S. are ages 50-59 – a group that dominated second-home sales in the middle part of the past decade and established records. An additional 42.7 million people are 40-49 years old, which is the historic prime age range for purchasing second homes, while another 40.4 million are 30-39 years of age.
NAR’s analysis of U.S. Census Bureau data shows there are 8.0 million vacation homes and 43.7 million investment units in the United States, compared with 74.7 million owner-occupied homes.
The 2014 Investment and Vacation Home Buyers Survey, conducted in March 2014, includes answers about 2,203 homes purchased during 2013 from a representative panel of 2,008 U.S. households. The survey controlled for age and income, based on information from the larger 2013 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
The 2014 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500 or online by visiting www.realtor.org/prodser.nsf/Research. The report is free to NAR members and costs $149.95 for nonmembers.

Source: National Association of REALTORS®