Daily Archives: April 23, 2012

Cities With Least Realistic Home Prices | North Salem NY Homes

By Quentin Fottrell and AnnaMaria Andriotis

The asking price is the starting point for all home sales, a ballpark figure typically close to what buyers end up paying. But the nation’s real estate market is so out of whack, experts say, that in many cities the gap between the asking and purchase prices has grown enormous. In fact, while home sales are on the decline nationally, list prices keep rising.

Existing single-family home sales fell 2.6% in March from a month earlier to a seasonally adjusted rate of 4.48 million units, according to data released Thursday by the National Association of Realtors. Meanwhile, the median sales price rose to $163,800, up 5% from February and up 2.5% from a year prior. On a national level, the data suggests that individuals who are buying homes are willing to pay more. On a regional level, however, buyers’ offers vary significantly.

In some markets, sellers aren’t getting what they’re asking for or anywhere near it. In the Atlanta metro area, for instance, the median list price was $150,000 in December, according to Realtor.com. But the median sales price was just $90,600 at the end of the year, according to the latest data from the NAR. In Jacksonville, Fla., the median listing price is 34% higher than the median sales price, while in Washington D.C. it’s 13% higher.

It appears these price gaps between asking and actual sales prices continued into March. This week, Realtor.com reported that median list prices rose 5.6% in March from a year prior. Meanwhile, national median sales prices over this period rose just 2.5%, according to the NAR. March marks the beginning of the peak home buying season that stretches through the summer. List prices tend to rise with the temperature, says Julie Reynolds, a spokeswoman for Realtor.com.

Still, experts say asking prices in some cities appear to be way off. When there’s a $50,000 or more difference between the asking and selling price, that’s a sign that the house is likely overpriced, says Mark Goldman, real estate lecturer at San Diego State University’s Corky McMillin Real Estate Center. “Sellers and their agents are more optimistic than the buyers closing on deals,” he says.

For their part, realtors in Atlanta and Washington, D.C., say that the difference is largely due to lagging buyer demand for homes in the suburbs that’s led to homes selling at discounted prices. They say real estate in the city is in high demand and selling near asking prices. In some areas, foreclosure sales, which typically sell at a discount, are pulling selling prices of non-distressed homes down.

SmartMoney crunched the numbers to find the metro areas where the gap between listing prices and the actual purchase prices are the largest and the areas where they’re the smallest:

Just Over 60 Percent of Buyers with a Mortgage Made Down Payments Less Than 11 Percent | South Salem NY Real Estate

According to information in the latest Realtors® Confidence Index, a total of 32 percent of residential home purchasers were reported as making an initial down payment of 20 percent or more in February 2012 among those obtaining a mortgage. Approximately 64 percent of purchasers obtaining mortgages were reported as making down payments less than 11 percent.

Housing Starts and Permits | Katonah NY Real Estate

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses housing starts and permits.

  • Data on housing starts and permits were released this morning by the US Census.  Starts eased for the second consecutive month, 5.8% from February to March on a seasonally adjusted and annualized basis, but remain stronger than the same month last year by 10.3%.  The bulk of the decline was on the multifamily side, 19.8%, but single family starts eased modestly.
  • Analysts had hoped for stronger numbers for starts in March, but the consecutive declines from January’s strong pace suggests that the unseasonably good weather over the winter may have pulled some building forward.  However, the steady year-over-year strength in starts points to a better year for construction overall in 2012 than 2011.
  • Permits were a different story.  They are not as susceptible to fluctuations driven by the weather.  Permits rose 4.5% in March from a month earlier and were up 30.1% compared to March of 2011.  The steady growth of permits suggests that builders are making plans for sustained construction later this year.
  • Data on industrial production (IP) was also released this month.  IP was flat in March compared to February, after strong readings all winter.  The manufacturing sector declined 0.2%, while construction fell 1.3%.  The decline in these figures may signal some weakening from the strong pace of GDP growth in December through February.
  • Industrial production and starts had been strong for several months, but the softening of manufacturing and construction suggests some near-term weakness.  Like manufacturing, construction is important for the housing market because it creates jobs and confidence.  The sharp decline in construction during the housing bust was a drag on GDP growth.  Modest improvement in construction not only eliminates that drag on GDP, but begins to add to GDP growth.  As GDP rises, so will jobs, the stock market, and the confidence consumers need to make large purchases like houses.  While construction and manufacturing may be off their heady figures from the winter, they are still strong relative to last year and point to stronger overall figures for 2012 compared to 2011.

Mortgage Purchase Applications | Bedford Hills Real Estate

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses mortgage purchase applications.

  • Mortgage applications for home purchases declined notably by 11 percent in the past week according to the Mortgage Bankers Association.  The data does not appear to jive with increased home sales across many parts of the country.
  • The rather big decline is coming off of several consecutive weeks of moderate increases.  Despite some mild swings, this data has been moving mostly sideways (neither consistently rising nor falling) over the past 18 months.  Home sales by contrast have been consistently up by 5 to 10 percent in 2012.
  • One has to be mindful that home sales closings and mortgage applications can diverge, because there is no data on actual approvals of those mortgage applications.  In addition, there has been a big increase in all-cash deals in the past 3 years.  A good one-third of home sale transactions have been all-cash, thereby completely bypassing the mortgage process.
  • Refinance applications rose a notch.  Mortgage brokers will encounter some upturn in refinance business over the next several months because of a new federal policy to help responsible homeowners tap into low rates even if the homeowner is underwater.  Simply put, someone with a 6 percent mortgage rate should be able to refinance into the prevailing rate of 4 percent provided that the person has been current on mortgage payments.  Realtors® should identify their past clients and inform them of the possibility.
  • Refinance activity is expected to quickly dry up towards the end of the year and into 2013 because of the long term interest rates.  Mortgage business by that time will be mainly from home purchase activity.

Cheaper Air-Conditioning Bill Ahead | Bedford NY Real Estate

Natural gas prices took a deep dive from six months ago.  Last week, the price was slightly under $2 per unit. Increased ‘fracking’ has brought an abundance of new natural gas to the market in addition to bringing mining jobs to Pennsylvania, West Virginia and North Dakota. During this time last year and over the hot summer, the price was $4 to $4.50. Assuming the gas prices will not rise, because there is no imminent plan for a slowdown in fracking, the energy cost at home and in commercial buildings could be sliced in half even with those 2 ton air conditioners—which you on Unclutterer—running, provided your energy company utilizes natural gas.

For REALTORS® who get asked about energy costs of a dwelling from renters and from homebuyers, they should be mindful that last year’s energy bill may not be a good reflection of the likely cost this year.

This positive impact of plunging natural gas prices is being overshadowed, however, by rising gasoline prices at the pump. The natural gas bill arrives once per month. However, gasoline fill-up occurs on a weekly basis for many people. That frequent reminder at the gas stations will be the source of consumers’ views about the broader economy. Some drivers may decide to give up air-conditioning while driving to lower the gasoline consumption, but the uncomfortable heat will surely to lead to steaming anger.