Category Archives: Bedford Hills

Average Boston-area rent falls for the first time in almost 7 years | Bedford Hills Real Estate

Boston, Mass - 06/20/2016 - Construction workers work on the Pierce apartment under construction at corner of Boylston and Brookline Streets in Boston, Mass, June 20, 2016. (Keith Bedford/Globe Staff)

After years of going up, rents in Boston’s super heated real estate market may have finally reached a peak.

Data released Thursday show that apartment rental prices fell slightly at the end of 2016 — the first drop since 2010 — amid a surge of new buildings that have opened in Boston and neighboring cities such as Cambridge, Chelsea, and Somerville.

The decline was modest, just 1.7 percent — or $36 a month on the average lease of $2,038, according to the rental-tracking firm Reis Inc. But it was the latest and clearest sign that the flood of construction in Boston is putting a lid on prices, at least at the upper end of the market.

“When you put that much supply on the market, you’re going to disrupt the equilibrium,” said Sue Hawkes, chief executive of Collaborative Cos., a real estate marketing firm in Boston. “That’s what’s happening.”

During the first nine months of 2016, more than 5,100 apartments, most renting for top dollar, opened in the heart of the Boston area. Another 7,200 are under construction in Boston alone, according to city figures.

While rents may no longer be uniformly escalating, city apartments remain unaffordable for many people, something unlikely to change over the next few years.

Only New York City and San Francisco have higher average rents than Boston.

Still, the expanding supply of rental units is clearly having an effect on the balance of supply and demand, according to Hawkes.

That means renters —at least well-heeled ones — can be choosers for a change.

To woo tenants, some landlords of new luxury buildings are offering free rent for a month or more, covering brokers’ fees and dangling gift cards or other goodies in front of prospective tenants.

But those kinds of perks aren’t available to the majority of renters, especially outside of the immediate Boston area. In parts of the region where there hasn’t been as much construction, rents continue to climb — in some places, far faster than in the market as a whole.

In Malden, for instance, rents are up 5 percent over the last year, according to separate data from the website ApartmentList.com.

Rents in Allston/Brighton and Mission Hill have climbed about 8 percent over the same period, said Ishay Grinberg, president of the Somerville-based website RentalBeast.

“People are getting priced out of downtown,” Grinberg said. “But all it’s doing is pushing rents up higher in areas that may have been slightly less desirable a couple of years ago.”

Over the last year, large apartment buildings have opened up in Chelsea and Quincy, Jamaica Plain, and Dorchester. In Brighton, a wave of new projects is getting underway, and renting at a brisk clip.

In November, Hamilton Co. opened a 49-unit building on Malvern Street in Allston, with two-bedroom units starting at $2,500 a month — less than half the going rate at new complexes in the Seaport District. It was nearly full in a week.

“That’s a very good sign for a working-class building,” said Hamilton’s president, Carl Valeri.

But the demand is also leading to a surge in land and construction prices in Boston’s outer neighborhoods. That’s putting financial pressure on projects that are aiming for a modest price point. If developers believe they won’t hit their projected rents when they open in two years, they might pull back on construction projects, said Travis D’Amato, a broker who specializes in multifamily investments at the real estate firm JLL.

“We are at an inflection point in the market,” D’Amato said. “If construction costs continue to rise and rents don’t continue to rise, we could see some slowdown in development.”

So far, there’s little evidence of that happening.

A number of major projects in outlying neighborhoods — such as the 650-unit Washington Village development near Andrew Square — are poised to get underway later this year.

More proposals, such as a plan to build 680 graduate student-oriented apartments on the grounds of St. Gabriel’s Monastery in Brighton, are going through the city’s approval process.

If those projects come to fruition, rents should eventually flatten in the outlying neighborhoods, just as they appear to be doing downtown, said Sheila Dillon, the city’s housing chief.

“What’s playing out is, really, exactly what we want,” Dillon said. “We want to see investors continue to build housing, and that’s taking pressure off the existing housing stock.”

Meanwhile, the market for high-end living downtown will soon face more tests.

Two huge rental buildings, 832 units in all, are set to open this spring in the Seaport.

In addition, a 585-unit complex in the South End is under construction, and a 45-story apartment tower is planned to break ground soon atop the Government Center Garage.

Builders who have recently launched downtown apartment projects say they’re not worried. Avalon North Station, a 38-story tower that opened in November, has leased 85 of its 503 units. That’s an impressive showing, especially during the holidays, said Scott Dale, senior vice president of development for the developer, Avalon Bay.

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http://www.bostonglobe.com/business/2017/01/05/average-boston-area-rent-falls-for-first-time-almost-years/2JMoK39bFND08wKhQT2BnM/story.html?s_campaign=email_BG_TodaysHeadline&s_campaign=

U.S. new home sales jump to four-month high | Bedford Hills Real Estate

New U.S. single-family home sales rose more than forecast to a four-month high in November, likely as expectations of higher mortgage rates drew buyers into the market.

Other data on Friday showed consumer sentiment holding at near a 13-year high this month as Americans anticipated that a stronger economy would create more jobs.

The Commerce Department said new home sales increased 5.2 percent to a seasonally adjusted annual rate of 592,000 units last month.

Economists polled by Reuters had forecast single-family home sales, which account for about 9.5 percent of overall home sales, rising 2.1 percent to a 575,000-unit rate last month.

New home sales, which are derived from building permits, are volatile on a month-to-month basis and subject to large revisions. Sales were up 16.5 percent from a year ago.

Separately, the University of Michigan said its consumer sentiment index edged up to a reading of 98.2 from 98 earlier this month. That was the highest reading since January 2004.

The U.S. dollar .DXY pared gains and was trading lower against a basket of currencies after the data. Prices of U.S. Treasuries were trading higher while U.S. stock indexes were mixed.

Mortgage rates have been rising rapidly in the wake of Donald Trump’s victory in the Nov. 8 U.S. presidential election, which economists say could be pulling procrastinators into the market in fear of further increases in borrowing costs.

Trump’s plan to boost infrastructure spending and cut taxes is expected to stoke inflation. A report on Wednesday showed sales of previously owned homes rose to near a 10-year high in November.

INVENTORY RISE

Since the election, the interest rate on a fixed 30-year mortgage has increased more than 70 basis points to an average of 4.30 percent, the highest level since April 2014, according to data from mortgage finance firm Freddie Mac.

Mortgage rates are likely to rise further after the Federal Reserve raised its benchmark overnight interest rate last week by 25 basis points to a range of 0.50 percent to 0.75 percent. The U.S. central bank forecast three rate hikes for next year.

Higher borrowing costs come at a time when house price increases are outstripping wage gains, which could make purchases unaffordable for many first-time buyers.

 

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http://www.marketbeat.com/stories.aspx?story=http%3a%2f%2ffeeds.reuters.com%2f~r%2freuters%2fbusinessNews%2f~3%2f96u5-iu_kio%2fus-usa-economy-idUSKBN14C1NI

Share of Past Due Mortgages Drop Significantly | Bedford Hills Real Estate

Information released by the Mortgage Bankers’ Association (MBA) indicates that the share of all 1-4 family mortgage loans past due has returned to a level of normality. According to the MBA’s National Delinquency Survey, the share of all 1-4 family mortgages considered past due fell by 14 basis points to 4.52 percent. One year ago 4.99 percent of loans were considered past due.

The current share of loans past due has fallen significantly from its recession-related peak of 10.1 percent in 2010. Moreover, the current share of past due mortgages is below the average percentage between 1980, the beginning of the series, and 2006, 4.8 percent. Additionally, the average between 1987 and 2006 was 4.6 percent.

presentation1

Deeper analysis finds that the underlying composition of mortgages past due has improved, but has not fully recovered. Mortgages considered past due include those that are 30-59 days past due, 60-89 days late, and 90 or more days delinquent. It excludes mortgages that have entered foreclosure.

The figure below presents the distribution of mortgages past due by the 3 categories of lateness. Currently, about half of past due mortgages, 52 percent, are 30-59 days past due, 17 percent are 60-89 days past due, while 31 percent are 90 or more days delinquent. The present composition is better than the distribution at the peak in 2010, when mortgages 90 or more days past due accounted for half, 50 percent, of all past due mortgages.

However, the composition of past due mortgages on average between 1980 and 2006 was even more concentrated in the 30-59 day late category. On average, over the 1980-2006 period, mortgages 30-59 days past due accounted 67 percent of all past due mortgages while mortgages 90 or more days past due represented 16 percent. Also at 16 percent, the share of mortgages 60-89 days past due between 1980 and 2006 is similar to its current percentage of 17 percent.

presentation2

 

 

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http://eyeonhousing.org/2016/11/share-of-past-due-mortgages-reaches-post-recession-low/

Housing Starts Fall in November | Bedford Hills Real Estate

Housing Starts Fall in November

 

Housing starts posted a notable drop in November after a strong October pace. Total starts were down 18.7%, falling to a 1.09 million seasonally adjusted annual rate after a 1.34 million rate in October. However, the decline was concentrated in the volatile multifamily sector. The single-family sector continues to show anon improving trend, consistent with rising home builder confidence.

According to estimates from the Census Bureau and the Department of Housing and Urban Development, single-family starts declined 4.1% to an 828,000 annual rate from a robust October pace of 863,000. Year-to-date, single-family construction is 9.6% higher than this time of 2015. And as measured on a three-month moving average, single-family starts are at a post-cycle high, as seen on the graph below.

Single-family permits point to more growth in 2017. Single-family permits, as measured on a three-month moving average, are also at a cycle high (778,000 annual rate) and are 8.1% higher on a year-to-date basis.

Multifamily development was the primary reason the headline starts number declined in November. Total multifamily starts were down 45% for the month, dropping from a strong but unsustainable October pace of 477,000 to a 262,000 annual rate in November. On a year-to-date basis, multifamily starts are approximately 4% lower than this time in 2015, as the market levels off and finds a balance between supply and demand.

On a monthly basis in November, single-family starts were up 19.8% in the Midwest, but fell by 4.6% in the South, 7.6% in the Northeast and 15.3% in the West. However, the monthly numbers mask the improvement seen around the county during 2016 for single-family construction. On a year-to-date basis, single-family construction is up 12.4% in the Midwest, 10.9% in the Northeast, 9.5% in the South, and 7.6% in the West.

Focusing on housing’s economic impact, in November 57% of homes under construction were multifamily (599,000). This multifamily count is 9% higher than a year ago. There were 445,000 single-family units under construction, a gain of 7% from this time in 2015. This is the highest count of single-family units under construction since September of 2008.

 

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http://eyeonhousing.org/2016/12/behind-the-november-starts-headline/

Mortgage rates up to 4.08% | Bedford Hills Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving higher for the fifth consecutive week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.08 percent with an average 0.5 point for the week ending December 1, 2016, up from last week when it averaged 4.03 percent. A year ago at this time, the 30-year FRM averaged 3.93 percent.
  • 15-year FRM this week averaged 3.34 percent with an average 0.5 point, up from last week when it averaged 3.25 percent. A year ago at this time, the 15-year FRM averaged 3.16 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.15 percent this week with an average 0.4 point, up from last week when it averaged 3.12 percent. A year ago, the 5-year ARM averaged 2.99 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“The 10-year Treasury yield remained flat despite an upward revision to third quarter GDP. The 30-year mortgage rate rose 5 basis points to 4.08 percent, rising a total of 51 basis points in three short weeks. With mortgage rates at the highest we’ve seen this year, borrowers are now backpedaling on refinance opportunities. The latest Weekly Applications Survey results from the Mortgage Bankers Association show refinance activity down 16 percent week over week.”

Composition of New Home Sales Financing Shifts in Third Quarter | Bedford Hills Real Estate

NAHB analysis of the most recent Census estimates concerning sources of financing for new home salesreveals that the composition of mortgages by financing method shifted over the third quarter of 2016. The share of new home sales financed with conventional loans expanded at the expense of FHA-insured and VA-backed mortgages. The shift to conventional mortgages indicates continued return to health in the mortgage market.

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The Census Bureau’s Quarterly Sales by Price and Financing reports that the conventional share fell to 57% in the third quarter of 2010. Since then, the conventional share has trended upward, reaching 74% in the third quarter of 2016, 6 percentage points above its level in the previous quarter, 68%. However, as Figure 1 illustrates, in quarters prior to the most recent one, the conventional share remained relatively steady.

The expanded conventional share of new home sales over the third quarter of 2016 was partially offset by a decline in the percentage of sales financed with FHA-insured mortgages. After rising from 10% in the fourth quarter of 2014 to 17% in the second quarter of 2016, largely reflecting a decline in the annual MIP, the share held steady at or near this level until second quarter of 2016 before falling 3 percentage points to 14% in the third quarter.

In addition, the share of new home sales backed by VA mortgages fell to 7% over the third quarter after holding steady at or near 9% since the fourth quarter of 2014. Meanwhile, the share of homes financed with all cash was unchanged over the third quarter at 5% near its average level in 2002, 4%. However, while cash sales account for 5% of total new home sales, new construction accounts for 15% of all-cash sales.

The future evolution of the financing composition remains is worth tracking. On the one hand, the compositional shift recorded over the third quarter of 2016 may point to return to the mix of financing seen in the years just prior to the most recent recession. On the other hand, the shift in composition may be a temporary occurrence and components may return to the steady proportions that steadily prevailed over 2015 and the first half of 2016.

 

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http://eyeonhousing.org/2016/10/composition-of-new-home-sales-financing-shifts-in-third-quarter/

Homeownership Rate Edges Up | Bedford Hills Real Estate

According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate rose to 63.5% in the third quarter 2016, reversing the downward trend of homeownership rate nationwide. It is 60 basis points higher than the rate in the second quarter 2016, which is largely driven by the increase in the millennial and 65+ homeownership rates.

Compared to the peak at the end of 2004, the homeownership rate has steadily decreased by 5.7 percentage points and remains below the 25-year average rate of 66.2%.
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The millennial homeownership rate increased by 1.1% after reaching its own historically lowest level of 34.1% in the second quarter 2016. It suggests that millennials are gradually returning to the housing market.

Compared to a year ago, homeownership declined among all age groups except for those ages 35 to 44 and over 65 since a year ago. The homeownership rate for 44-45 age group decreased from 69.9% in the third quarter of 2015 to 69.1%, which is the largest drop among all age groups.

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The nonseasonally adjusted homeowner vacancy rate remained low at 1.8% in the third quarter 2016. At the same time, the national rental vacancy rate held at 6.8%, around the historical lowest level ever since 1990s.
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The HVS also provides a timely measure of household formations – the key driver of housing demand. Although it is not perfectly consistent with other Census Bureau surveys (Current Population Survey’s March ASEC, American Community Survey, and Decennial Census), the HVS remains a useful source of relatively real-time data.

The housing stock-based HVS revealed that the number of households increased to 118.6 million for the third quarter 2016. This is 1.2 million higher than a year ago and sustains gains recorded at the end of 2015. Growth in household formations will spur rental housing demand first, and ultimately, home sales.

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http://eyeonhousing.org/2016/10/homeownership-rate-edges-up/

Builder Confidence Remains Solid in October | Bedford Hills Real Estate

Builder confidence in the market for newly constructed single-family homes remained on firm ground in October, declining two points to a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

hmi_oct

Despite the decline, the HMI now stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress. However, builders in many markets continue to express concerns about shortages of lots and labor. Mortgage rates remain low and the HMI index measuring future sales expectations has been over 70 for the past two months. These factors will sustain continued growth in the single-family market in the months ahead.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Two of the three HMI components posted losses in October. The component gauging current sales conditions dropped two points to 69 and the index charting buyer traffic fell one point to 46. Meanwhile, the index measuring sales expectations in the next six months rose one point to 72.

 

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http://eyeonhousing.org/2016/10/builder-confidence-remains-solid-in-october/

Mortgage rates average 3.54% | Bedford Hills Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates increasing to their highest level since late June.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.54 percent with an average 0.5 point for the week ending November 3, 2016, up from last week when it averaged 3.47 percent. A year ago at this time, the 30-year FRM averaged 3.87 percent.
  • 15-year FRM this week averaged 2.84 percent with an average 0.5 point, up from last week when they averaged 2.78 percent. A year ago at this time, the 15-year FRM averaged 3.09 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.87 with an average 0.4 point, up from last week when it averaged 2.84 percent. A year ago, the 5-year ARM averaged 2.96 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“A jump last week in the PCE — the price index tracked most closely by the Fed — raised the prospect that inflation might not be completely dead after all. Investors reacted by driving the yield on the 10-year Treasury to its highest point since June. The 30-year mortgage rate jumped 7 basis points to 3.54 percent, the largest 1-week increase in over six months.”

U.S. mortgage application activity falls to five-month low | Bedford Hills Real Estate

A measure of U.S. mortgage application activity decreased for a second week to a five-month low as 30-year mortgage rates rose to their highest since June, data from the Mortgage Bankers Association released on Wednesday showed.

The Washington-based industry group’s mortgage market index fell 1.2 percent to 486.2 in the week ended Oct. 28, which was the lowest level since the week of May 27.

Interest rates on 30-year fixed-rate mortgages, which are the most widely held type of U.S. home loans, averaged 3.75 percent in the latest week, matching the level last seen in June, MBA said.

Mortgage rates increased with higher U.S. Treasury yields with 10-year yields hitting their highest levels in about five month last week. US10YT=RR

U.S. bond yields climbed on speculation about whether overseas central banks may refrain from injecting more monetary stimulus to help their economies.

The group’s seasonally adjusted index on weekly applications to buy a home edged down 0.4 percent to 207.0 last week, which was the lowest since January.

The purchase activity gauge is seen as a proxy on home sales.

MBA’s weekly barometer on refinancing requests declined by 1.6 percent to 2,088.0, which was the weakest since June

 

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http://www.reuters.com/article/us-usa-mortgages-idUSKBN12X1I0?il=0