Who to blame for higher home prices?

Posted in Economics, National Real Estate, New Development | 18 Comments

From the WSJ:

Regulatory Costs Inflate New-Home Prices, Builders Say

As the cost of construction permitting has risen over the past decade, Atlanta home builder Dennis McConnell has taken a new approach with customers.

He now itemizes the regulatory costs so buyers can see firsthand why the price tags for his houses are so high. Among recent charges he has outlined: $8,000 for a new type of storm-water capture device required for each house, $3,500 for customized architectural plans required on every lot and about $15,000 to remove a tree from the property.

With every new regulation, “the more expensive it becomes,” said Mr. McConnell, president of Healthy House of Georgia. “I don’t build affordable houses anymore.”

As home builders pick up the pace after a punishing downturn, they face a bevy of new regulations and higher fees governing everything from environmental quality and park access to regulations on the amount of brick on a home exterior. Builders say many of the new requirements are well-meaning, but added up they translate to higher costs that are passed on to prospective purchasers.

For the past five years, the median new home price has been 32% to 38% higher than the median price of a resale home, according to data from the U.S. Census and the National Association of Realtors, the largest such gap since the figures started being tracked in the 1960s. Compliance costs are one of many factors affecting prices of new homes, economists said. Builders have also focused more on the move-up and premium markets throughout the economic recovery, meaning a tendency toward larger, pricier homes.

Several recent studies have documented how increased regulatory and permitting costs affect prices. A report by John Burns Real Estate Consulting in Irvine, Calif., concluded that new homes have become “permanently more expensive to build” because of increased regulations.

The study surveyed more than 100 building-industry executives, asking for examples of costs that didn’t exist a decade earlier. New regulations included a survey required in some areas of the Midwest to determine whether endangered bats are on a property, which builders said can cost $10,000 or more for each new development.

A report in May from the National Association of Home Builders found that the average cost for builders to comply with regulations has risen nearly 30% over the past five years. A study from housing-research firm Zelman & Associates calculated that local “impact fees” charged to builders and developers to pay for services such as roads, sewers and parks have climbed 45% since 2005 to an average of $21,000 per home across 37 major markets.

New Economik Report from Shillow

Posted in Economics, Housing Recovery, National Real Estate | 77 Comments

From Zillow:

It’s well known that a lack of homes for sale is limiting home buyers’ choices this home shopping season. But this inventory shortage is also contributing to another home buying hurdle – along with limited options, buyers also have increasingly limited time to make a decision on a home purchase.

The typical U.S. home sold in May (the latest month for which data is available) spent just 78 days on the market, more than a week less than the same time last year (86 days), according to the Q2 2016 Zillow Real Estate Market Report (figure 1). And not only is the time a home spends on the market currently much less than recent months, it’s also well below historic norms. Since the beginning of 2010, the long-term monthly average of the time a typical U.S. home spent on the market before selling is roughly 111 days.

Homes are selling more quickly this year than last in 27 of the nation’s 35 largest metro housing markets – in some cases, much more quickly. In Charlotte (70 days), Philadelphia (98 days) and Pittsburgh (97 days), homes are selling more than two weeks faster this spring compared to a year ago. In the eight markets where homes are taking longer (or at least as long) to sell this year than last, the phenomenon may be more attributable to the fact that realistically, homes in those areas can’t sell much more quickly. In seven of those eight markets, homes are selling more quickly than the current national average of 78 days (Miami, at 103 days, is the lone exception).

Markets in the Bay Area and Pacific Northwest epitomize this need for speed. In San Francisco and San Jose, the typical home sold in just 43 days in May, the fastest-moving large markets in the nation. In Seattle homes sold in 47 days, and in Portland homes sold in 51 days. Considering it typically takes a minimum of 30 days (and often 45 days or longer) for a home sale to close once an initial offer is accepted, the window a buyer realistically has to look at a home and decide whether to make an offer in these markets is astoundingly brief.

When there are so few homes on the market in the first place, it makes sense that those that are available would be scooped up more quickly. But in addition to the speed of the market being a product of limited inventory, that speed may also be contributing to that scarcity of inventory too. Potential sellers might love the attention their home will get once listed – and the chance for a windfall profit if a bidding war breaks out over it. But many of those sellers also have to turn around and become buyers. They may end up in a bidding war of their own once they try to buy in this environment, if they can even find a suitable home to begin with. Instead, it’s likely that many current homeowners who don’t have to sell are choosing to stay put rather than enter the fray – which in turn only contributes to tighter inventory.

It all adds up to a very competitive market for buyers, and a fast-moving (and potentially very lucrative) market for sellers. In an environment where one may have only a few days to decide to make an offer on a home, it’s critical that buyers and sellers enter the market prepared and with clear eyes, and to resist the temptation to settle for a home that may not suit their needs in the interest of just buying a place. It’s tough going out there, but the right home will become available for those that are patient but prepared to strike fast once it comes on the market.

First time buyers coming back?

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 81 Comments

From HousingWire:

Existing home sales increase 4 months in a row

It’s no shock that existing home sales increased again this month, marking the fourth consecutive month of increases, according to the National Association of Realtors.

What is new, however, is that these home sales were boosted by a flood of first-time homebuyers entering the market, the largest quantity in four years, in fact.

The Northeast was the only outlier, with a decline in closings in June as sales fell to their lowest overall share since July 2009.

“Sales of existing homes were unexpectedly strong in June, edging up for the fourth consecutive month to a nine-year high and defying expectations for a modest monthly decline,” Zillow Chief Economist Svenja Dudell said. “The gain is even more surprising given a continued shortage of homes available for sale, with inventory down almost 6% compared to the same time a year ago.”

The total existing home sales, completed transactions that include single-family homes, town homes, condominiums and co-ops, increased by 1.1% to a seasonally adjusted annual rate of 5.57 million in June, up from May’s downwardly revised 5.51 million.

Sales are now up 3% from June 2015, and remain at their highest annual pace since February 2007, when sales were at 5.79 million.

“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” NAR Chief Economist Lawrence Yun said. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.”

On the other hand, there is a question about whether this pace can continue in the coming months.

“Looking ahead, it’s unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing,” Yun said.

The median existing home price in June hit $247,000, an increase of 4.8% annually, according to the report. June’s increase marks the 52nd month of annual increases, and even surpassed May’s peak median sales price of $238,900.

“Existing home sales edged out a small gain in June, helped by a rise in first-time buyer numbers,” Capital Economics Property Economist Matthew Pointon said. “But the months’ supply of homes for sale has fallen to its joint-lowest level for 11 years, and the recent drop in mortgage rates following the Brexit result has not given mortgage applications for home purchase a boost.”

“Therefore, it seems unlikely that existing home sales will continue to rise,” Pointon concluded.

The office building is dead, long live industrial and warehouse

Posted in Economics, New Development, New Jersey Real Estate | 169 Comments

From the Record:

N.J. industrial vacancy rate hits record lows

As consumers increasingly shop online, the stuff they buy is filling up New Jersey warehouses, pushing industrial vacancy rates to historic lows, Cushman & Wakefield reported Monday.

The vacancy rate for northern and central New Jersey fell to 5 percent in the second quarter, and asking rents reached their highest levels since 2000, Cushman & Wakefield reported. The average asking rate for warehouse space was $6.55 a square foot, up more than 26 percent over the past three years.

Rental activity was most robust in the Meadowlands and at Exit 8A of the New Jersey Turnpike, according to Jason Price, Cushman & Wakefield’s research director for the tri-state suburbs.

Online sales are the main engine driving the demand for warehouse space.

“As quality industrial space in northern and central New Jersey dissipates, demand is anticipated to remain robust through the second half of the year,” said Andrew Judd, Cushman & Wakefield’s New Jersey market leader.

Areas around Port Newark/Elizabeth command the highest asking rents for warehouse space. The largest amount of space leased during the quarter was at Exit 8A, with 2.8 million square feet of leases. The Meadowlands recorded 1.5 million square feet of leases.

Bergen County posted a 6.6 percent vacancy rate and average rent of $7.19 for warehouse space. Passaic had a 5.4 percent industrial vacancy rate and average warehouse rent of $6.35.

East Orange the next big thing?

Posted in Housing Recovery, New Development, New Jersey Real Estate | 115 Comments

From the Star Ledger:

Is $12M real estate sale sign that East Orange could become millennial hot spot?

When millennials searching for walkable, transit-oriented communities are priced out of high rises in Hoboken and Jersey City, will they head to East Orange?

A recent $12 million land sale seems to suggest it might be.

According to commercial real estate broker Gebroe-Hammer Associates, a developer has purchased four apartment buildings in the Essex County city. East Orange has been working in recent years to change its reputation from a high-crime neighbor of Newark to a bustling transit-oriented community and “an example of urban excellence.”

The four buildings – at 24 South Grove Street, 25 North Harrison Street, 235 South Harrison Street, and 107 New Street – are all near the Brick Church Train Station, about a half an hour ride to NYC.

“East Orange’s greatest assets are its mass transit links, which have drawn copious private investment that is the on-going stimulus for revitalization initiatives as well as the introduction of millennials into the tenant-base demographic,” said Gebroe-Hammer Managing Director David Oropeza.

“East Orange’s population renting percentage continues to climb and exceed the state average.”

According to city officials, ProudLiving Companies, a Montclair-based developer, purchased the buildings. Company representatives did not return calls seeking comment on the purchase.

The sale comes after several city initiatives to make East Orange a viable option for young professionals, including a clean-up of vacant properties, crime crack-down, and designation as a transit village.

City officials called the purchase “urban excellence at its best.”

“(It’s) a continuation of our partnership with property owners, developers and real estate firms to purchase and rehab older housing stock for our existing residents and to attract potential newcomers,” said Valerie Jackson, East Orange’s Director of Policy, Planning and Development.

“Modernizing these residential buildings will further enhance our efforts to develop around our train stations and increase the walkability of our community.”

It is unclear when renovations will begin.

Zombie Go!

Posted in Foreclosures, New Jersey Real Estate | 111 Comments

From the Record:

‘Zombie’ houses in foreclosure can sit vacant and haunt neighbors for years

On Wilson Avenue in Wayne, a shady street of well-kept homes, the wood contemporary at No. 96 stands out. It’s been empty for years, thick moss grows on the roof and, neighbors say, water from a broken pipe flooded the interior and poured down the street several years ago.

On Berdan Avenue in Fair Lawn, a piece of black tarp hangs off the roof of a brick Cape Cod, and two dead evergreens stand sentinel at the front steps. Get close to the house and you’ll catch a whiff of mold.

On Cumberland Avenue in Teaneck, weeds grow through the patio behind a vacant brick ranch; inside, paint is peeling off the walls in sheets.

Neighbors call these homes eyesores. Real estate experts have another name: “Zombie” houses — homes in foreclosure that stay empty and neglected for years.

A decade after the housing market began its slide into the worst downturn in generations, New Jersey still has about 4,000 homes left empty because of foreclosures, according to RealtyTrac, which follows the foreclosure market nationwide. That’s about 6.2 percent of the total number in foreclosure in the state, higher than the national rate of 4.7 percent.

These abandoned homes are a headache for towns and neighbors. Under New Jersey law, the properties have to be maintained by the mortgage lender while they’re in the foreclosure process, but neighbors say the maintenance usually doesn’t go beyond mowing the lawn and making sure the doors are locked.

Visits to 10 vacant homes in middle-income North Jersey neighborhoods recently turned up places with cracked windows, fallen tree limbs, weeds growing through cracks in driveways, ragged shrubs and usually a notice glued to the front door — often from the property maintenance company hired by the lender. Many smell of mildew, signaling water damage inside. (However, most of the lawns had obviously been mowed.)

The number of zombie houses in New Jersey is higher than the national average because the state is still working through a backlog of distressed properties heading into foreclosure. According to the Mortgage Bankers Association, in the first quarter of this year, New Jersey led the nation in foreclosure starts as it continued to deal with the fallout of the housing crash. About 11.5 percent of New Jersey mortgages were either in foreclosure or late on payments in the quarter, compared with 6.5 percent nationwide.

New Jersey has been slower than the rest of the nation to get through the foreclosure crisis because here, as in about half of states, foreclosures go through the courts, which slows the process. New Jersey’s pipeline was further slowed about five years ago when state courts required the mortgage industry to answer accusations of trampling homeowners’ rights in the rush to evict.

These forlorn houses stand out among the neighboring homes, which are usually carefully maintained. Neighbors find them disheartening.

AC – Foreclosure Capital of the US

Posted in Foreclosures, Shore Real Estate | 59 Comments

From Philly.com:

New Jersey and Atlantic City area top U.S. foreclosures: report

New Jersey and two of its distressed cities had the highest rates of U.S. foreclosure activity in the first half of 2016, according to RealtyTrac data released on Thursday.

New Jersey’s foreclosure rate was 0.98 percent of housing units, or one in every 102 homes, the data showed. That was more than any other state and more than double the national rate of 0.40 percent, or one in 249 homes.

Atlantic County, home to New Jersey’s cash-strapped gambling hub Atlantic City, again had the highest foreclosure rate of any major U.S. metropolitan area at 1.8 percent.

Four of Atlantic City’s casinos closed in 2014 and remain shuttered, mostly because of gambling competition in neighboring states, though one, the Showboat, reopened this month as a hotel only.

Atlantic City has topped the national list of metro area foreclosures for at least a year.

Trenton, the state capital, was second with 1.31 percent during the first half of 2016.

Still, New Jersey was mostly in line with the national downward trend, which saw a 20 percent drop in foreclosure filings compared with the prior six months and an 11 percent decline over the first half of 2015 overall.

There were outliers, with 19 states posting year-over-year increases in the first half, including Massachusetts, Connecticut and Virginia.

Five big cities, all in the East, also had higher rates: Boston, Philadelphia, New York, Washington and Baltimore.

“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” Daren Blomquist, RealtyTrac senior vice president, said in a statement.

Is the problem supply or demand?

Posted in Demographics, Economics, National Real Estate | 71 Comments

From Bloomberg (Hat tip Hoodafa):

Millennials Need a New Housing Bubble

Every year since 2009 we’ve been running a housing deficit: More housing for sale has been absorbed than built. With a glut of housing left over from the housing bubble and the great recession, it’s logical that construction of new supply was subdued for a few years. But vacant inventory for sale normalized in 2012, and currently stands at a 12-year low. So why aren’t builders building more? The pace of construction remains far below the rate of household creation.

Part of the blame is caused by a shortage of construction workers. After the housing bust, many construction workers left for other industries, such as the then-booming energy sector, or retired. They’ve been slow to return, and current immigration policy makes it difficult to bring in new workers from other countries. As a result, the unemployment rate for construction workers is at its lowest level since 2000. If current trends continue, by next summer the construction labor shortage may be approaching the severity seen immediately after World War II.

In response to a nearly generational low in housing inventory and construction worker shortage, one might expect that there would be booming wage growth for construction workers, drawing labor away from other industries. Yet we don’t have conclusive signs of that. Year-over-year wage growth for construction workers is currently 2.7 percent, nearly a full point lower than it was at the same time in the year 2000.

The lack of growth in new construction jobs is sobering. Despite a need for more housing, and despite the labor shortage and the wage growth, construction industry employment fell 6,000 in April and 16,000 in May and showed no growth in June. This is the first time in more than five years that construction employment has shown no growth for three months.

This is all the more perplexing because the cyclical conditions for real estate have rarely been better. In addition to the low level of inventory and rising secular demand as millennials are ready to buy homes, the economy has rising wage growth and historically low levels of interest rates, as I wrote about last week.

While the signals from the economic data are very strong, the market signals have been more muted. What’s clear is that 2-3 percent construction wage growth and 5-6 percent house price appreciation isn’t anywhere close to creating strong enough price signals to encourage the market to build all the housing we’re going to need over the next decade.

July Beige Book

Posted in Economics, Employment, Housing Recovery, NYC, North Jersey Real Estate | 41 Comments

From the Federal Reserve:

Beige Book – July 13, 2016 Second District–New York

The Second District’s economy has picked up, growing modestly since the last report, and labor markets remain tight. Contacts note continued moderate pressure on input prices and wages but little change in selling prices overall. Manufacturers report a modest rebound in activity, while service-sector businesses indicate a slight increase. Consumer spending was little changed, on balance, and tourism activity has remained sluggish. Residential real estate markets were mostly improved but weaker at the high end, while commercial real estate markets were steady to stronger. Residential construction has tapered off, whereas commercial construction has picked up. Banks report further strengthening in loan demand and continued improvement in delinquency rates.

Construction and Real Estate

The District’s housing markets have been mixed since the last report, with widespread signs of weakness at the high end of the market. New York City’s rental market has shown further signs of slackening: rents have been flat to down slightly in Manhattan, while they have continued to edge up in Brooklyn and Queens. In all these areas, rents on larger units have declined. Vacancy rates across the city, though still low, have moved up, and landlord concessions (e.g., free month’s rent, waived fees) have reportedly grown more widespread.

New York City’s co-op and condo resale market has strengthened somewhat–mainly in Brooklyn and Queens, where prices are up 8-10 percent or more from a year ago and sales volume has picked up as well. Manhattan resale prices are up roughly 5 percent from a year ago, with most of the rise on smaller apartments, while sales volume has receded from high levels. The inventory of resale units remains low, while the inventory of newly developed apartments for sale, mostly luxury, is reported to be high.

Elsewhere across the region, resale activity for single-family homes has picked up across New York State and in northern New Jersey. A real estate contact in the Buffalo area characterizes the local housing market as particularly robust and notes strong demand for downtown properties. There has also been a strong pickup in sales volume in suburbs around New York City, though prices have held steady. Residential construction has tapered off throughout most of the District, in both the multi-family and single-family sectors.

Commercial real estate markets have been stable to somewhat stronger through mid-year. Office availability rates edged up in Manhattan; despite a pickup in leasing activity, a large amount of space coming onto the market was not fully absorbed. Elsewhere, office availability rates were steady to down slightly; across upstate New York, they were at multi-year lows. New office construction has picked up in New York City but remains sluggish across the rest of the District. Industrial real estate markets strengthened further–particularly across the New York City metro region–with asking rents continuing to climb briskly and vacancy rates falling to their lowest levels since before the recession. New factory and warehouse construction picked up in the second quarter.

Can we say the national foreclosure crisis is over?

Posted in Foreclosures, Housing Recovery, National Real Estate | 43 Comments

From HousingWire:

Foreclosures, serious delinquencies nearing decade low

The number of homes in some stage of foreclosure and the number of seriously delinquent mortgages continued to decline in May, falling to the lowest level since October 2007, according to the latest data from CoreLogic.

CoreLogic’s May 2016 National Foreclosure Report shows the national foreclosure inventory, which is the total number of homes at some stage of the foreclosure process and completed foreclosures, hovers around 390,000 homes.

In April, the national foreclosure inventory was roughly 406,000 homes, and in March, that figure was 427,000 homes.

According CoreLogic’s report, May’s foreclosure inventory hit the lowest level in nearly nine years.

CoreLogic’s report also showed that in May, the foreclosure inventory declined by 24.5% and completed foreclosures declined by 6.9% compared with May 2015.

The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, which represents a decline of 67.9% from the peak of 117,813 in September 2010.

CoreLogic’s report also showed the sustained improvement in the number of mortgages in serious delinquency, defined as loans that are 90 days or more past due, and loans in foreclosure or Real Estate Owned.

According to CoreLogic’s report, the number of mortgages in serious delinquency fell by 21.6% from May 2015 to May 2016, with 1.1 million mortgages, or 2.8% of all mortgages, in this category.

The May 2016 serious delinquency rate is also the lowest in nearly nine years, reaching the lowest level since October 2007.

Trading lawns for square footage

Posted in Demographics, Economics, National Real Estate, New Development | 57 Comments

From the Atlantic:

The Shrinking of the American Lawn

The American house is growing. These days, the average new home encompasses 2,500 square feet, about 50 percent more area than the average house in the late 1970s, according to Census data. Compared to the typical house of 40 years ago, today’s likely has another bathroom and an extra bedroom, making it about the same size as the Brady Bunch house, which famously fit two families.

This expansion has come at a cost: the American lawn.

As homes have grown larger, the lots they’re built on have actually gotten smaller—average area is down 13 percent since 1978, to 0.19 acres. That might not seem like a lot, but after adjusting for houses’ bigger footprints, it appears the median yard has shrunk by more than 26 percent, and now stands at just 0.14 acres. The actual value lies somewhere between those two numbers, since a house’s square footage could include a second (or third) floor. Either way, it’s a substantial reduction.

And this is data on new homes. No one is going door-to-door and lopping off front lawns (well, except for where they are). The truth is far more sinister: Americans are voluntarily buying houses with smaller yards. What does the United States stand for, if not the right to a fertile, springy carpet of turf thicker than the Bradys’ wall-to-wall shag?

Forced to choose between having a bigger lawn and a bigger house, Americans who live near economic hubs are picking the house.

The cultural primacy of the lawn has other enemies, too. As my colleague Megan Garber noted last year in “The Life and Death of the American Lawn,” a mix of drought-conscious environmentalism and shift in social mores has made spending money and effort on perfectly tufted turfgrass seem a bit simpering, even selfish. “Maybe, as the billboards dotting California’s highways cheerily insist, ‘Brown Is the New Green,’” she wrote. Witness the rise in rock gardens and drought-resistant yards.

An inflection point approaches. For now, a lawn is still an end in itself, a place to play and garden and stick pink flamingos. But if the shrinkage continues, the lawn is in danger of becoming merely symbolic. That’s nothing new to city dwellers, who count themselves lucky to have a patch of grass and have made public parks their front yards for centuries. But it would signal a profound change in suburbia, and not an altogether attractive one, as McMansions squeeze ever tighter together, hulking and lonely.

People still want to live here?

Posted in Housing Recovery, New Jersey Real Estate | 26 Comments

From the Record:

Sales of starter homes spark rise in North Jersey real estate activity

When Makeda and Kai Mallea started shopping for a house in Maywood, they had to compete with other eager buyers.

“Houses would come on the market and disappear instantly. There would be five or six offers on the table,” says Kai Mallea, a 32-year-old software engineer.

So when he and his wife, a social worker, saw a three-bedroom colonial they liked, they realized they had to act quickly.

“We looked at the home, we liked it, we drove around the neighborhood to check it out, and we put in an offer that night,” Mallea recalls.

The Malleas’ experience reflects a jump in demand for North Jersey homes — especially starter homes — during the spring, traditionally the liveliest home-buying season.

According to the New Jersey Realtors, the volume of sales from January through May rose almost 20 percent in Bergen County and 28 percent in Passaic County over the same period last year. And buyers’ hunger for homes left the supply of properties on the market down about 17 percent in both counties in May, the most recent figures available.

Even with the increased demand, prices have barely budged. According to the New Jersey Realtors, single-family homes sold for a median $439,000 in Bergen and $288,250 in Passaic in the first five months of the year — both little changed from a year earlier. That could be because after watching home prices crater in the housing bust, buyers (and their mortgage lenders) are wary about overpaying.

Realtors say that while the luxury market has been cool this spring, the under-$400,000 price range has been busy, with bidding wars often breaking out over houses in good condition.

This spring’s activity in the starter-house market cuts against the grain of recent nationwide trends.

First-timers have been conspicuously absent from the home market in recent years, making up only about 30 percent of buyers, down from long-term averages around 40 percent, according to the National Association of Realtors.

Millennials have held back because of student debt, a preference for urban lifestyles and a concern that homes may not be a wise investment, after watching property values plummet in the housing crash about 10 years ago.

But many of those millennials seem to be moving toward homeownership, as they marry and have children or just grow tired of paying ever-rising rents.

Neighbors to the north looking strong

Posted in Housing Recovery, NYC, National Real Estate | 16 Comments

From LoHud:

Reports: Home sales surge across region

The Lower Hudson Valley real estate market showed some health in the second quarter, as the number of home sales in Westchester, Putnam and Rockland counties rose sharply compared to the same period last year.

In Westchester, the number of home sales from April to June was 2,241, up 11.5 percent from the 2015 figure, 2,009. The volume was second highest for a second quarter in a decade, according to Jonathan Miller, CEO and president of Miller Samuel Real Estate Appraisers & Consultants and the author of the Elliman report, which covers sales in Westchester, Putnam and Dutchess counties.

The number of homes up for sale in that quarter was 5,149 in Westchester, down 13.7 percent from the 2015 figure, 5,965.

“We’ve now had sales going up for over four years, with regional transactions rising in 16 out of the last 18 quarters,” Rand stated. “Most importantly, we’re now seeing sustained sales increases driving sales totals to levels that rival the height of the last seller’s market, with almost 15,000 single-family home and 3,000 condos sold over the past 12 months.”

Surges in sales haven’t directly translated into an increase in pricing, however, particularly in Westchester.

Westchester’s overall median sales price for residential properties in the second quarter was $492,000, up 6.3 percent from a year before. But the second quarter median sales price for single family homes went down to $640,750 from $650,500 in 2015, according to the Elliman report.

The drop was largely caused by a “relative lack of demand in the very high end of the market, for homes selling above $3 million,” Rand wrote.

The number of Westchester single-family home sales in the second quarter was 1,472, up by 20.1 percent from the 2015 figure, 1,226. The inventory was 3,417 in the second quarter, down by 10.7 percent from a year before, 3,826.

In Rockland, the second quarter median sale price for single family homes was $430,000, up 4.9 percent from the 2015 median, according to the Rand Report. The number of sales also rose 28.2 percent to 495 from the same time last year.

In Putnam, the second quarter median sale price for single family homes was $314,000, up 10.2 percent from 2015. The number of sales rose 36.3 percent to 274 in the second quarter compared to the same period last year, when the figure was 201.

International purchases rise, shift to lower priced properties

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 113 Comments

From CNBC:

Foreign buyers flood US real estate, but buy cheaper homes

The appetite for U.S. real estate continues to flourish, but international buyers are shifting their sights from luxury to less-pricey properties. This may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign buyers more at the negotiating table. There are also fewer nonresident foreigners investing in the market.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence combined to present significant challenges for foreign buyers over the past year,” said Lawrence Yun, chief economist of the National Association of Realtors (NAR). “While these obstacles led to a cool down in sales from nonresident foreign buyers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign buyers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s annual report on international activity in U.S. real estate. That is a 1.3 percent decline in dollar volume from the previous survey. The number of properties purchased, however, rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

“The slight drop in dollar volume can probably be accounted for based on the types of properties purchased, and the locations of many of those properties. We’ve seen at least some evidence that foreign buyers — both investors and people just looking for a home — have begun looking beyond expensive markets like San Francisco, New York City and Washington D.C., and buying properties in smaller, less-expensive cities in the Southeast and Midwest,” said Rick Sharga, executive vice president at Ten-X (formerly Auction.com), an online real estate marketplace .

Another major shift was in the makeup of international buyers. Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was a slight decrease from last year’s survey but was still three times as much as Canadian buyers, who were ranked second. Chinese buyers also bought the most expensive homes at a median price of $542,084.

As for U.S. destinations, five states accounted for half of foreign buyer purchases: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent). Latin Americans, Europeans and Canadians, who historically favor warmer climates, were most prevalent in Florida and Arizona. Asian buyers flocked to California and New York. Texas was more a mix of buyers from Latin American, the Caribbean and Asia. Texas may be more of an investment play, as demand for single-family rentals there remains strong.

refinance … BOOM!

Posted in Economics, Mortgages, National Real Estate | 61 Comments

From National Mortgage News:

Brexit Drives Mortgage Application Activity Surge: MBA

Mortgage applications increased 14.2% from one week earlier as rates dropped in reaction to the Brexit vote, according to data from the Mortgage Bankers Association.

The MBA’s Weekly Mortgage Applications Survey for the week ending July 1 found that the refinance index increased 21% from the previous week to the highest level since January 2015. Meanwhile, the market share of refi apps increased to 61.6%, the highest level since February 2016, from 58.1%.

At the same time, the seasonally adjusted purchase index increased 4% from one week earlier. On an unadjusted basis, purchase applications are up 23% over the same week in 2015.

“Interest rates continued to drop last week as markets assessed the impact of Brexit, downgrading the likelihood of additional rate hikes by the Fed, and mortgage rates for 30-year conforming loans dropped to their lowest level in over three years,” said Mike Fratantoni, the MBA’s chief economist.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to its lowest level since May 2013, 3.66%, from 3.75%.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to its lowest level since January 2011, 3.67%, from 3.74%.

The average contract interest rate for 30-year mortgages insured by the FHA decreased to its lowest level since May 2013, 3.56%, from 3.61%, while for 15-year fixed-rate mortgages, the average decreased to its lowest level since May 2013, 2.96%, from 3.02%.