Daily Archives: March 3, 2013

Seven cities where home prices are soaring | Armonk Homes


Workers frame the first home in a new community in Gilbert, Ariz.(Photo: Matt York, AP)

Story Highlights

  • Seven major cities had double-digit home price gains in 2012
  • Economies in these cities vary widely, from Phoenix to Detroit
  • Looking at trends may be important to home price gains elsewhere

Nearly every important set of government and private-sector figures show a housing market on the rebound. The recovery picked up steam in recent months with home sales jumping in January and December.

One of the most widely followed measures of home price changes is the S&P/Case-Shiller home price index. There are several home price indexes that this research group has created, but the one most often cited is the base index. Set at 100 in January 2000, it tracks price changes monthly in 20 major U.S. cities.

In December, the value of homes in the 20 cities Case-Shiller measures rose by 6.8% year-over-year. New York City was the only city where prices fell. In seven cities, the price increase was dramatic, in the double digits.

Home prices haven’t recovered in any of these cities to where they were at their peak. And some of the cities showing the strongest gains aren’t the ones that were the hardest hit during the devastated downturn.

The housing market recovery has been and will continue to be uneven. The same is true with unemployment, which mirrors changes in housing markets. But while changes in the national unemployment rate tells you companies are hiring and layoffs are subsiding, it hardly tells the whole tale. The devil is in the details.

For example, the Case-Shiller index showed home prices in Detroit jumped 13.6% in 2012 year over year, and they surged 23% in Phoenix for the same period. And the economy and the housing market in these cities are very different.

In Detroit, the unemployment rate surpassed 17% in 2009 though the nation’s jobless rate never rose above 10.1% the past decade. And even though the city’s jobless rate has rebounded seven percentage points, it remains more than two percentage points above the nationwide rate, which was 7.8% in December and ticked up to 7.9% in January.

By contrast, the metropolitan Phoenix area jobless rate stayed below the national rate throughout the recession, peaking at 8.6% in 2009. And at 6.7%, it is more than a percentage point below the nationwide rate.

24/7 Wall St. reviewed the seven cities with the biggest home price gains to find trends that could explain why they’re doing the best of major cities tracked. These trends may be critical to the broad recovery of real estate across the nation in the longer term.

7. Los Angeles
• 10.2% rise in home prices last year
• 40.4% drop in home prices the past six years
• $345,000 median home price
• 9.3% unemployment rate
Los Angeles still suffers from higher unemployment than the U.S. average. Home prices here hit their post-bubble low in the third quarter of 2008. Distressed sales fell to around 35% of all single-family home sales last year, down from nearly 49% the year before. As the share of distressed sales continues to fall, home price gains will pick up steam.

6. Miami
• 10.6% rise in home prices in 2012
• 50.4% drop in home prices the past six years
• $196,000 median home price
• 8.1% unemployment rate
Miami home prices peaked in the first quarter of 2007 and fell rapidly in the fourth
quarter of 2008. Though not nearly as strong as what Las Vegas boasts, Miami’s economy has a strong tourism component. But it also serves as a port of trade for Caribbean and Latin American nations. Neither tourism nor trade fared well during the economic downturn. And Miami’s housing market, like many others, is still recuperating from the overbuilding of the real estate boom.

5. Minneapolis
• 12.2% rise in home prices in 2012
• 31.7% drop in home prices the past six years
• $187,000 median home price
• 5.1% unemployment rate
Unemployment in Minneapolis peaked at 7.9% in 2009, and the current rate is the lowest among the seven cities with the biggest home price gains in 2012. House prices here peaked in the first quarter of 2006 and had their biggest decline in the first quarter of 2009, around the same time that the national unemployment rate was rising rapidly. Short sales have declined to around 10% of the total in this area, and foreclosure sales are slightly less than a third of all sales.

4. Las Vegas
• 12.9% rise in home prices in 2012
• 60% drop in home prices the past six years
• $147,000 median home price
• 10% unemployment rate
Las Vegas, like Phoenix, experienced a home building boom that peaked in the first quarter of 2006. The tourism-based economy took a drubbing during the Great Recession. Home price gains continue to be hindered by the number of distressed properties on the market. Distressed sales comprised 73.6% of all home sales in January of 2012, and that share had fallen to 48.7% a year later.

3. Detroit
• 13.6% rise in home prices in 2012
• 53.6% drop in home prices the past six years
• $45,000 median home price
• 10.2% unemployment rate
Detroit’s median home price remains the lowest by far of any of the 20 cities in the Case-Shiller benchmark index. One of just a handful of large U.S. cities where the unemployment rate remains in double digits, the city’s jobless rate has plummeted since its Great Recession peak. But at 10%, the unemployment rate here is higher now than it was during the worst periods for a few of the other cities in the index. The biggest decline for home prices in Detroit occurred in the second quarter of 2009, with prices falling from a peak in the first quarter of 2006. Foreclosure sales have dropped from around 55% in January of 2012 to around 36% a year later.

2. San Francisco
• 14.4% rise in home prices in 2012
• 22.3% drop in home prices the past six years
• $717,000 median home price
• 7.3% unemployment rate
Home prices in San Francisco peaked in the first quarter of 2007, and the price trough came about two years later. Yet, while prices fell 20%, they never got cheap, especially compared to the median home prices in other cities in the index. And, among other reasons, a tight supply of homes for sale remains a reason for why prices are higher here.

1. Phoenix
• 23% rise in home prices in 2012
• 49.8% drop in home prices the past six years
• $164,000 median home price
• 6.7% unemployment rate
The city’s home price gains were the best of the 20 cities in the Case-Shiller index, and distressed sales, which includes foreclosure and short sales, as a share of the total are lower here than in any other city. Home prices in Phoenix bottomed and its jobless rate peaked at 9.3% in 2009, which was the second-lowest peak rate among these seven cities. Phoenix has the opposite problem of San Francisco; it still suffers from an oversupply of homes for sale. But the outlook for home sales and prices is upbeat.

24/7 Wall St.com is a financial news and analysis website. In this analysis, home price gains are as of December 2012, year over year. Home price declines cited are as of June 30, 2012, going back six years. The median home prices are as of June 30, 2012, and the metropolitan area unemployment rates are as of Dec. 31, 2012.

Fed watches as banks gain mortgage profits | Cross River Real Estate

Fed watches as banks gain mortgage profits

Money for foreclosure counselors runs dry in New Jersey | Waccabuc Realtor

JPMorgan Chase is moving up in the mortgage business, in just about every way possible. Only a few years ago, customer satisfaction surveys available from J.D. Power and Associates placed the mortgage originator and servicer past 10th place — hardly something for a big four bank to brag about.

Five ways robots will change real estate | Bedford Hills Real Estate

Here come the machines. It may sound like science fiction, but it’s not. Robots are about to be everywhere, including real estate. And with all due respect to my humble Roomba, this new crop of bots is going to change everything. In fact, they already have. Robots are in the wild, cleaning up nuclear waste, sanitizing hospital rooms, and entertaining us all. How will they impact real estate? It’s anyone’s guess at this point; but here’s five ways I think robots will impact real estate within the next five years.

1. Telepresence helps agents scale
New telepresence robots, like the ones from Double Robotics, will finally let us be in two (or more) places at once. Control the robot from your iPad and communicate face-to-virtual face with co-workers and potential clients. Send a telepresence robot along to an open house. Invite brokers and clients to attend previews from the comfort of their home or office. The possibilities of telepresence are limitless.

2. An extra set of hands
Robots like Romo could lend a helping hand. Need exterior shots? Send a Romo out to the street for wide angle views. How about a cameraman for your video? Check. Need a BPO? A Romo with some simple software can canvas a street and send back data while you meet with clients.

3. On the spot underwriting
How about a robot who can issue conditional approvals and underwrite loans in real time? Robots with natural language processing could collect data from a client interview and, connected to an underwriting engine, produce financing options and approvals in minutes.

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4. Eyes in the sky
The issue of private drones is unfolding in front of our eyes. Federal, state, and local governments are racing to issue guidance on drone use; but no matter the outcome, drones will become fixtures in our skies. Depending on how legislation shakes out, drones could be used for aerial views, home flythroughs and more. This is already happening with remote controlled quadcopters. The machines will handle it with a few taps on your iPhone tomorrow.

5. Finding the perfect home
Robots could make finding the perfect home a breeze. Imagine a robot who could use information about your client, their Facebook interests along with some simple questions about their income, to query and sort MLS listings for the perfect place for them. You’ll look like genius for finding a home that is just what your clients were looking for, close more transactions and spend less time showing homes.

Of course, how exactly the future will play out is anyone’s guess; but one thing’s for sure, robots will be a part of it. Want to learn more about robots in real estate? Join us at Inman’s Real Estate Connect in San Francisco, where the top robotics experts will share their thoughts on when and how robots will change real estate. Come see the future at Connect, meet Rovo and his friends, and own tomorrow.