Monthly Archives: August 2014

Housing markets improve | South Salem Real Estate

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Freddie Mac (OTCQB: FMCC) today released its newly updated Multi-Indicator Market Index(SM) (MiMi(SM)) showing the U.S. housing market continuing to plod along with most markets still generally weak, while those with stronger local economies and favorable demographics continue to improve at a much stronger pace. The second quarter MiMi report is also available, which includes further analysis on each of the states, plus the District of Columbia as well as the top 50 metros areas.

News Facts:

  • The national MiMi value stands at 73.7, indicating a weak housing market overall with only a slight improvement (0.04%) from May to June and a 3-month positive trend change of (0.16%). On a year-over-year basis, the U.S. housing market has improved by 7.67%. The nation’s all-time MiMi high of 121.87 was June 2008; its low was 59.8 in September, 2011, when the housing market was at its weakest. Since that time, the housing market has made a 23.3 percent rebound.
  • Thirteen of the 50 states plus the District of Columbia have MiMi values in a stable range, with North Dakota (96.2) the District of Columbia (94.3), Wyoming (92.3), Montana (89.7) and Alaska (88.7) ranking in the top five.
  • Six of the 50 metro areas have MiMi values in a stable range, with San Antonio (92.0), Austin (87.4), New Orleans (84.8), Salt Lake City (84.5), and Houston (83.9) ranking in the top five.
  • The most improving states month-over-month were Nevada (+1.56%), Illinois (+1.09%), Connecticut (+0.93%), Rhode Island (+0.87%) and Colorado and Kentucky (tied at +0.82%). On a year-over-year basis, the most improving states were Nevada (+23.5%), Florida (+14.8%), Illinois (+12.9%), California (12.0%) and South Carolina (+11.9%).
  • The most improving metro areas month-over-month were Las Vegas and Riverside (tied at +1.69%) followed by San Jose (+1.48%), Chicago (+1.30%) and Miami (+1.19%). On a year-over-year basis the most improving metro areas were Las Vegas (+26.5%), Riverside, (+19.2%), Miami (+17.2%), Orlando (+16.1%) and Chicago (+15.9%).
  • In June, 21 of the 50 states and 25 of the 50 metros are showing an improving three month trend. The same time last year, every state plus the District of Columbia, and every metro was showing an improving three month trend.

Quote attributable to Freddie Mac Chief Economist Frank Nothaft:

“As we see the economy slowly normalizing we’re starting to see its effects in the housing market as well, albeit very slowly. The good news is the big housing markets, of which some were also the hardest hit, continue to improve. For example, from the same time last year, California is up 12 percent and every market MiMi tracks in the state is improving. Meanwhile, Florida is up nearly 15 percent and Illinois is up nearly 13 percent over the past year. Likewise, the stalwarts of the recovery continue to be those states in the North Central section of the country, places like North Dakota, Montana, Wyoming and then south to Texas and Louisiana. In these areas not only are markets producing jobs, but better paying jobs that translate into workers taking out applications to purchase a home and income growth that keeps homebuyer affordability strong.”

Quote attributable to Freddie Mac Deputy Chief Economist Len Kiefer:

“With this release of MiMi we’re including our first quarterly report, which provides further analysis beyond the monthly MiMi release. For example, the most improved metro and state markets over the quarter were Las Vegas and Illinois which were up nearly 5 and 4 percent respectively. Though Las Vegas has shown considerable improvement, it is still a weak market, with the lowest overall MiMi index value of 48.2 as of June. Driving the improvement in Illinois over the past three months is the Employment Indicator which is up 16.9 percent while the Current on Mortgage Indicator is up 3.8 percent since March. In fact, the Employment Indicator in Illinois (87.8) moved from Weak to its stable In Range status over the past quarter, reflecting improvements in local labor market conditions.”

With the latest release of MiMi, the index has been rescaled, making the data more transparent and easier for housing professionals and analysts to follow. The rankings of states and metropolitan areas are unchanged. The underlying data and basic methodology are also unchanged. This release also makes it easier to identify the most improving state and metro markets on a monthly basis.

MiMi monitors and measures the stability of the nation’s housing market, as well as the housing markets of all 50 states, the District of Columbia, and the top 50 metro markets. MiMi combines proprietary Freddie Mac data with current local market data to assess where each single-family housing market is relative to its own long-term stable range by looking at home purchase applications, payment-to-income ratios (changes in home purchasing power based on house prices, mortgage rates and household income), proportion of on-time mortgage payments in each market, and the local employment picture. The four indicators are combined to create a composite MiMi value for each market. Monthly, MiMi uses this data to show, at a glance, where each market stands relative to its own stable range of housing activity. MiMi also indicates how each market is trending, whether it is moving closer to, or further away from, its stable range. A market can fall outside its stable range by being too weak to generate enough demand for a well-balanced housing market or by overheating to an unsustainable level of activity.

 

 

 

 

 

 

Mortgage applications rise 2.8% after weeks of low interest rates | Cross River Real Estate

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Mortgage applications increased 2.8% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 22, 2014.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 2% compared with the previous week.

The Refinance Index increased 3% from the previous week.  The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 11%  lower than the same week one year ago.

The refinance share of mortgage activity increased to 56% of total applications, the highest level since March 2014, from 55% the previous week.  The adjustable-rate mortgage share of activity remained unchanged at 8.0% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28% from 4.29%, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80%  loan-to-value ratio loans.  The effective rate remained unchanged from last week.

 

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http://www.housingwire.com/articles/31177-mortgage-applications-rise-28-after-weeks-of-low-interest-rates

 

4 charts show how even Realtors are losing confidence in housing | Katonah Real Estate

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The July 2014 Realtor Confidence Index shows that Realtors aren’t enthusiastic about current conditions and the outlook for the next six months.

Concerns about federal regulations burdening the process, the drop in demand for middle and lower-cost homes, and rising affordability problems headlined their concerns.

Realtors reported some uptick in inventory in some areas, but generally, supply remained tight relative to demand in many areas, especially for “lower” and “middle-priced” homes, according to the July survey conducted by the National Association of Realtors.

Distressed sales continued to account for a smaller share of the market.

Realtors continued to report about the restrictive effects of the current credit conditions, especially in relation to the credit score and down payment requirements that will qualify buyers for a mortgage.

The home buying process was reported to be “long and difficult” even for “quality borrowers”.

Although the home price recovery has encouraged more listings, the strong price growth amid modest wage income gains has also made homes less affordable, creating a demand for lower-priced homes that are, unfortunately, in short supply.

 

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http://www.housingwire.com/articles/31169-charts-show-how-even-realtors-are-losing-confidence-in-housing

 

Housing starts rise back above 1 million | Bedford Hills Real Estate

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Housing starts are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate future production for homebuilders, future demand for raw materials, and labor costs. This data will even affect the forecasts for home-related retailers, like Lowe’s and Home Depot.

 

Housing starts cover the number of privately owned housing units that started in a given period. For multi-family units, each individual unit is considered a housing start. If there’s a lot of multi-family construction happening, then housing starts can become elevated, and investors must take care not to read too much into the builders of single-family homes.

Both single-family and multi-family starts increase

Housing starts rose from an upward-revised 975,000 to 1,052,000. Multi-family starts were 423,000 in July—an increase from the 318,000 pace in June. Single-family starts increased from 606,000 to 656,000. Single-family starts have been much more stable than multi-family starts and have shown a steady rise.

 

 

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http://finance.yahoo.com/news/critical-predictor-housing-starts-rise-202711095.html

Housing market stuck in downward spiral | Bedford NY Real Estate

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Home price growth continues to slow, according to today’s S&P/Case-Shiller index.

According to the index, home growth rates grew 6.2% nationwide for the 12-month period ending in June, much lower than the double-digit gains seen last year. The S&P/Case-Shiller composite index of 20 major cities through the U.S. increased 8.1% over the same period, down from a 9.4% in May and below economists’ expectations of 8.4%.

Home prices appear to be moderating but that’s good news says Shari Olefson, CEO of The Carnegie Group. “Those big increases that we saw last year were not sustainable and in general we’re still seeing an upward trend when you look at the big picture,” she says.

Still, it’s not all roses for Olefson. “What I wasn’t happy with are some of the trends we’re seeing in new construction,” she notes.

New homes sales fell by 2.4% from June to July, yet July’s new homes sales were up 12.3% from the previous year. “New construction appears to be up significantly from last year but when you dig beneath the surface what’s up are multifamily homes,” says Olefson. “Single family homes are up by just 1% which defies logic because we’ve had over 3 million single family units that have been converted to residential rentals.”

Some believe that these numbers mean that housing is approaching normal levels, but Olefson disagrees. She sees more potential buyers turning into renters and believes there’s a lack of suitable housing and loan products for what people can afford now.

 

 

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http://finance.yahoo.com/news/housing-market-is-stuck-in-downard-spiral–shari-olefson-155251001.html

China’s falling real-estate prices trigger protests, clashes | Pound Ridge Real Estate

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The sharp drop in China’s housing prices has led to an outburst of anger among property owners, leading to violent clashes in some cases, according to local media reports Tuesday.

In one case, scores of property owners surrounded a Shanghai sales office of Greentown China Holdings Ltd. 3900, +8.58% GTWCF, -33.19%  to protest the developer’s 25% cut to prices within a five-day period, according to a report on the NetEase NTES, +1.62%  news portal site 163.com.

Protesters held banners with slogans such as “You cheated us!” and “300,000 yuan [$48,750] worth of assets evaporate within five days — years of work in vain!” according to photographs of the demonstration posted on the site.

The report quoted a sales manager from Greentown as saying that the price-cut was aimed to boost sales and “cope with competition” from rival China Vanke Co. 2202, +1.48% the nation’s largest residential property developer.

In other Chinese cities, such confrontations between buyers and developers have turned violent.

In the eastern city of Jinan, banner-carrying owners blocked a street to protest another 25% price cut for a local housing development, this one conducted over the space of two weeks, according to the local-government-run Life Daily newspaper.

The protesters clashed with a group of counter-protestors suspected to have been hired by local developers, injuring some of the demonstrators and forcing the police to break up the fight, 163.com said in a separate report.

 

 

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http://www.marketwatch.com/story/chinas-falling-real-estate-prices-trigger-protests-clashes-2014-08-26

Eliot Spitzer in talks for 2.8-acre Kedem Winery site in Williamsburg | Bedford Corners Real Estate

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Eliot Spitzer, who last year made his most aggressive move since returning to the family firm with the purchase of a pricey West Side development site, is close to inking a deal to buy a large, stalled residential project on the Brooklyn waterfront, according to sources.

Spizter Enterprises is in negotiations to buy the 2.8-acre Kedem Winery site in Williamsburg, where developer the Rector Hylan Corp. has for several years  tried unsuccessfully to build a pair of mixed-use towers two blocks south from Two Trees Management’s Domino Sugar Factory development.

Spitzer Enterprises declined to comment and the current owner could not be reached. Several sources said Spitzer is in advanced negotiations to buy the site, though another prospective buyer may be in the mix as well.

The Rector Hylan development firm bought the six lots that make up the property between Broadway and South 9th Street for $11.3 million in 2003, and three years later received a pair of special permits from the City Planning Commission allowing for larger, denser buildings than the area’s zoning would have allowed.

The company had planned to build a 24-story tower with 309 residential units on the southern end of the site and an 18-story tower on the northern side with 104 units. All told, the buildings would have an envelope greater than 600,000 square feet, including 26,400 square feet of retail along Kent Avenue. The developer agreed to set aside 20 percent of the buildings’ units as affordable housing.

But Rector Hylan struggled to secure financing for the project as the market turned downward and ultimately failed to get shovels in the ground. When the permits lapsed last summer the company filed for and was granted a three-year extension. The renewal will take them to mid-June 2016.

– See more at: http://therealdeal.com/blog/2014/08/25/eliot-spitzer-in-talks-for-2-8-acre-kedem-winery-site-in-williamsburg-sources/#sthash.WoIPaOkQ.dpuf

Meet the investors behind NYC’s hottest real estate startups | Chappaqua Real Estate

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It’s no surprise that Uber, Instagram and Buzzfeed are attracting big-name technology investors. The three upstart businesses are rattling the cages of established industries and possess an undeniable ‘cool’ factor. But what may surprise some is that many of the early backers of these companies are also betting big on startups in the New York real estate scene.

Josh Kushner’s venture capital firm Thrive Capital, a backer of Uber and Instagram, is also an investor in leasing platform Hightower, real estate marketplace Honest Buildings and residential brokerage Urban Compass. Founder Collective, which backs Buzzfeed, also bankrolls office search marketplace 42Floors and real estate information firm CompStak. This cross-pollination by investors, sources said, shows that real estate is now truly on the tech industry’s radar.

“For too long, the real estate and tech industries were not communicating with each other and that’s what’s really changed over the past few years,” said Jared Kushner, CEO of Kushner Companies and an active player in the space through an investment in Thrive. “As a result, tech startups are starting to solve important problems, which has led to the creation of better companies and more investor interest.” That interest is translating into a lot of cash, too.

Globally, real estate tech startups pulled in more than $740 million in funding between July 2012 and July 2014, as The Real Deal reported last month. That number doesn’t take into account recent capital raisings in New York, such as Urban Compass’ $40 million Series B funding round and Hightower’s $6.5 million Series A round.

 

 

 

– See more at: http://therealdeal.com/blog/2014/08/25/meet-the-investors-behind-nycs-hottest-real-estate-tech-startups/#sthash.6MTRoAcm.dpuf

Buying and selling homes could soon be as easy as trading stocks | Armonk Homes

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HomeUnion wants to level the playing field for smaller investors, helping them compete with institutional giants to identify bargain-priced single-family rental properties in markets around the country, and then buy and manage them from afar.

Institutional investors try to make a killing by snatching up undervalued homes and renting them out. But it can be harder for smaller investors to get in on the action if they don’t live near the markets with the best deals, or don’t want to be landlords.

 

 

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http://www.inman.com/2014/08/26/buying-and-selling-homes-could-soon-be-as-easy-as-trading-stocks/?utm_source=20140826&utm_medium=email&utm_campaign=dailyheadlinesam

2014’s new home market is ‘running in place’ | Chappaqua Real Estate

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Sales of new single-family homes clung to their same bumpy path again last month, unexpectedly slipping to their weakest annual pace since March, the Census Bureau said Monday.

Neither markedly stronger nor dramatically weaker, sales over the past 10 months haven’t moved much.

“The new home sales figures by now have that lived-in feeling, with few signs of a significant change, in either direction, over the near term,” said Richard Moody, chief economist of Regions Financial.

The new home market is “basically running in place,” he said in emailed comments Monday.

July’s seasonally adjusted annual rate was 412,000, down 2.4% from June’s higher revised rate of 422,000, the Census Bureau said. Previously-reported sales rates for April and May also were revised up.

 

 

 

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http://www.usatoday.com/story/money/business/2014/08/25/july-new-home-sales/14558325/