Signed contracts to buy existing homes dropped 8.7 percent in December as abnormally cold weather hit much of the U.S., according to a new report from the National Association of Realtors.
The plunge caught economists by surprise. Economists polled by Reuters had forecast pending home sales would tick up 0.3 percent.
This pending home sales index fell to 92.4 from a downwardly revised 101.2 in November. These signed contracts are an indicator of sales in January and February, and are at the lowest level since October 2011.
“Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors,” said the association’s chief economist, Lawrence Yun.
Applications for U.S. home mortgages edged slightly lower in the latest week, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, slipped 0.2 percent to
The index hit its lowest level since December 2000 at the end of last year, soon after the U.S. Federal Reserve announced it would start pulling back on its $85 billion per month bond-buying program as the economy grows strong enough to stand on its own.
The interest rate on fixed 30-year mortgages averaged 4.52 percent last week, the lowest level since November and down 5 basis points from the previous week.
RealtyTrac, released its year-end and fourth quarter 2013 Home Flipping Report, which shows 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16% from 2012 and up 114% from 2011.
Profits are strong in flipping right now. The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from $52,746 in the fourth quarter of 2012.
It looks like the market for flips is slowing, which could portend ill for housing in general. Flips accounted for 3.8% of all sales in the fourth quarter, down slightly from 3.9% of all sales in the third quarter and down from 7.1% of all sales in the fourth quarter of 2012.
“Strong home price appreciation in many markets boosted profits for flippers in 2013 despite a shrinking inventory of lower-priced foreclosure homes to purchase,” said Daren Blomquist, vice president of RealtyTrac. “For the year 21% of all properties flipped were purchased out of foreclosure, but that is down from 27% in 2012 and 32% in 2011. Meanwhile flipped homes were still purchased at an average discount of 13% below market value in 2013, the same average discount as 2012, indicating that investors are finding discounted buying opportunities outside of the public foreclosure process — particularly in those markets with the biggest increases in flipping for the year.”
News of Superintendent Paul Kreutzer’s Tuesday resignation came as no shock to several Katonah-Lewisboro parents.
Nat Mundy, owner of Caps Country Market on Spring Street, said he thought Kreutzer would finish out the year, but didn’t expect him to stay long term.
“I always sort of felt like he was brought in to serve a purpose: find budget cuts, find ways to save the system money,” he said. “He did his job and he probably has another job offer somewhere else.”
Kreutzer’s departure comes less than a week after the board voted 5-2 to close the Lewisboro Elementary School in the fall, which is expected to save about $1.7 million annually. The 300-plus Lewisboro Elementary students will move to Increase Miller and Meadow Pond elementary schools, including Mundy’s fourth grade son, Hunter.
“He’ll change schools. Some friendships will be more distant than they were before. The hard part is he’s only been there three years and was just settling in,” Mundy said. “He was finding his clique of buddies and comfortable socially, and now that all changes.”
The Katonah-Lewisboro School Board announced the resignation at a special meeting Tuesday night. Kreutzer, 42, will receive a $90,000 buyout of the existing portion of his five-year contract in order to avoid litigation, the school district said in a message on its website.
In a 67-32 vote, the U.S. Senate has passed a bill to postpone steep increases in flood insurance rates across the country, the National Association of Realtors announced today.
The Homeowner Flood Insurance Affordability Act calls for a four-year delay on rate increases triggered either by a property’s sale or a flood map update for a property with previously grandfathered rates. The bill also creates an advocate within the Federal Emergency Management Agency (FEMA) to investigate homeowner complaints regarding rates.
The measure now goes to the U.S. House of Representatives where it currently has 181 co-sponsors in favor of the bill — 30 votes shy of a House majority, NAR said.
“NAR will redouble its efforts there to persuade the House leadership to bring a similar bill up for a floor vote at the earliest opportunity,” the trade group added.
– See more at: http://www.inman.com/wire/senate-passes-bill-to-delay-flood-insurance-premium-hikes/?utm_source=20140131&utm_medium=email&utm_campaign=dailyheadlinesam#sthash.3EjBkEO2.dpuf
Members of the National Association of Realtors have until Friday at midnight to sign up for “priority registration” of their own “.realtor” domain name.
NAR will provide a free “.realtor” top-level domain for one year to the first 500,000 members who apply for a .realtor domain that incorporates their name. Members who file a “priority registration” request by Jan. 31 will receive an advance email notification that will provide information on how they can claim their .realtor domain with their name, one day prior to the domain’s general availability.
No specific date has been set for the general release. NAR says it will be “sometime this year.”
Only NAR members (agents and brokers), local and state Realtor associations, association multiple listing services, affiliated institutes, societies and councils, and other NAR-approved licensees will be able to register for the .realtor domain.
– See more at: http://www.inman.com/wire/friday-is-last-day-to-sign-up-for-early-realtor-domain-notifications/?utm_source=20140131&utm_medium=email&utm_campaign=dailyheadlinesam#sthash.PAlD59L8.dpuf
When the $100 million contract on a 41-foot-wide, 20,500-square-foot mansion on Manhattan’s Upper East Side closes in April, New York City will have a new price record for a townhouse sale. Purchased by the Qatar government to house its New York City consulate, the building, located a block east of Central Park, had never changed hands before, according to the jet-setting agent brothers Oren and Tal Alexander of Douglas Elliman, who are ushering the deal to completion.
The townhouse’s pristine upkeep and “turnkey” status helped secure the record contract, the Alexander brothers told the New York Post.“Qatar plans to use the consulate as a place to showcase their own artists,” an unnamed source told the Post.
Source: New York Post – See more at: http://www.inman.com/wire/100m-pending-nyc-townhouse-sale-scrapes-the-8-figure-ceiling/?utm_source=20140131&utm_medium=email&utm_campaign=dailyheadlinesam#sthash.4UEsKAyh.dpuf
Even though home prices in the valley have risen 55 percent and distressed sales have fallen to 15 percent from a high of 60 percent, many people worry about this housing market — not just in the desert but also throughout the country. Some believe prices might be forming another housing bubble. Others worry that early foreclosure investors will begin selling their investments, raising inventories and depressing prices. In our opinion, only one of these issues has merit — and just slightly.
Fear of Bubbles
I’ve studied market bubbles for more than 40 years. In fact, I wrote a book in 2000 on the stock market dot-com bubble, and the current housing market shows no signs of impending trouble. One important sign there is “no bubble” is the constant talk and worry about one. While this may seem strange, it’s rooted in history.
Bubbles occur after many years of constantly rising prices. Buyers become convinced the market carries little risk, since prices never seem to decline. Any warnings that prices have advanced beyond what the economy or wages can support are thought “out of touch” and generally ignored. That prices continue to move higher is proof these warnings are wrong. Alan Greenspan called this condition “irrational exuberance,” and it doesn’t exist today.
What we have now is simply a rapidly recovering housing market driven upward by a special Federal Reserve program that keeps mortgage rates low. When we measure home prices against affordability — the percentage of homeowners who can afford the current median-priced home — we find no bubble; prices are generally in line with historic norms.
We do think there is validity to the worry that investors might begin selling, but we believe it is somewhat overblown.
During the dark days of valley housing — from 2010 through 2011 — we had an inverted market that couldn’t right itself. The normal mechanisms to rebalance weren’t there. Too many buyers throughout California were underwater, and those who could buy were restricted by extremely tight lending conditions. Then an army of cash investors came forth who bought up the huge inventory of distressed homes. Resented by some for their good timing, they did help turn things around and save the day.
Norway’s Prime Minister Erna Solberg warned of “insecurity” gripping the nation’s housing market as deflating prices coincide with a rise in the jobless rate in Scandinavia’s richest economy.
“What we’re seeing now is insecurity in the housing areas,” Solberg said in a Jan. 29 interview at parliament in Oslo. “We have to look into what the reasons are for this. We know that the activity in construction is a little bit lower than anticipated earlier.”
Norwegian house prices have dropped 5 percent since August as the market retreats from a half-decade-long real estate boom. The $500 billion economy is slowing as consumers service record debt burdens and as joblessness climbs. Though unemployment remains well below the euro zone’s 12.1 percent, Norway’s registered jobless rate rose to 3 percent in January, the highest since February 2011, the Norwegian Labor and Welfare Service reported today.
“There has been a tendency for an increase in the unemployment figures in Norway since August,” Solberg said.“We need to see what the reasons are for the unemployment figures before we can answer if we need any” changes in fiscal policy, she said. The government is due to publish a supplement to its budget proposal in May.
Home prices in November fell slightly for the first time since November 2012, as the combination of price gains earlier in 2013 and higher mortgage rates caused prices to reach a plateau, according to a leading index of housing-market activity.
The Standard & Poor’s Case-Shiller index of home prices in 20 top cities fell 0.1% in November. A separate 10-city index also fell by 0.1%, Standard & Poor’s/Dow Jones Indices said in a statement. The 20-city index showed prices 13.8% higher than a year earlier, while the 10-city index rose 13.7%.
The company said the dip is not a reversal of the housing recovery. Prices typically dip in November and this performance was the best for any November since 2005. Seasonally adjusted, prices rose 0.9% in November.
“Beginning June 2012, we saw a steady rise in year-over-year increases, (and) November continued that trend,” said David Blitzer, head of the index committee at S&P/Dow Jones Indices. “The Sun Belt continues to push ahead with Atlanta, Las Vegas, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Tampa taking eight of the top nine spots.”