Category Archives: South Salem

Where are the Nation’s Second Homes? | South Salem Real Estate

According to NAHB estimates, the total count of the second home stock reached 7.5 million in 2014, an increase of 0.6 million over 2009 when NAHB Economics last produced these estimates. The share of second homes among the total housing stock also increased from 5.4% to 5.6%.

It is worthwhile to understand the patterns of second homes because they could have a significant economic impact on local housing markets and thus have important policy implications. This analysis focuses on the number and the location of second homes qualified for the home mortgage interest deduction using the Census Bureau’s 2014 American Community Survey (ACS).

The county with the largest share of second homes is Hamilton County, NY with 79.3%, followed by Forest County (74%), PA, and Rich County (72.7%), UT. As one might expect, the top 10 counties with the largest share of second homes are mostly tourist destinations.

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In-depth analysis, however, shows that the concentration of second homes is not simply restricted to conventional locations like beachfront areas. There were 913 counties spread over 49 states, where second homes accounted for at least 10% of the local housing stock. Only Connecticut and Washington D.C. were exceptions. 357 counties, 11% of all counties in the U.S., had at least 20% of housing units that were second homes.

27 counties in 14 states had over half of housing units qualified as second homes. Of these counties, five counties are in Michigan, four in Colorado and Wisconsin, two in California, Massachusetts, Pennsylvania, Utah, and one county each in Idaho, Missouri, North Carolina, New Jersey, New Mexico, and New York. These national patterns are mapped below.

sechome

Of course, the geographic locations of second homes also correspond to population density. Counties with more than 25,000 second homes are mostly located in or near metropolitan areas. The table below lists the top 10 counties with the most second homes. States with at least one such county are Arizona, Florida, California, Massachusetts, Illinois, New York, New Jersey, Nevada, South Carolina, Delaware, Texas, Michigan, and Maryland.

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NAHB estimates are based on the definition used for home mortgage interest deduction: a second home is a non-rental property that is not classified as taxpayer’s principal residence. Examples could be: (1) a home that used to be a primary residence due to a move or a period of simultaneous ownership of two homes due to a move; (2) a home under construction for which the eventual homeowner acts as the builder and obtains a construction loan (Treasury regulations permit up to 24 months of interest deductibility for such construction loans); or (3) a non-rental seasonal or vacation residence. However, homes under construction are not included in this analysis because the ACS does not collect data on units under construction.

 

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http://eyeonhousing.org/2016/12/top-posts-of-2016-where-are-the-nations-second-homes/

Builder Confidence Begins Year on a High Note | South Salem Real Estate

Builder confidence in the market for newly-built single-family homes jumped seven points to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since July 2005.

The increase in market confidence follows the November election results, increasing hopes among home builders and other stakeholders in the residential construction industry that the incoming administration will reduce costly regulatory burdens, particularly for small businesses. Research from NAHB published earlier this year indicated that for home builders, such regulatory costs have risen by more than 29% over the last five years.

While the significant increase in builder confidence for December could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing as we head into 2017. And the rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.

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.

All three HMI components posted healthy gains in December. The component gauging current sales conditions increased seven points to 76 while the index charting sales expectations in the next six months jumped nine points to 78. Meanwhile, the component measuring buyer traffic rose six points to 53, marking the first time this gauge has topped 50 since October 2005.

Builder Confidence Holds Firm in November | South Salem Real Estate

Builder Sentiment Up

Builder confidence in the market for newly-built single-family homes held steady in November at a level of 63 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth. Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. These factors will help keep housing on a steady, upward path in the months ahead.

 

hmi_nov

It is worth noting that most of the November HMI responses originated before the elections. Thus, builder confidence remained unchanged as the industry awaited the results.

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.

The HMI components measuring buyer traffic rose one point to 47, and the index gauging current sales conditions held steady at 69. Meanwhile, the component charting sales expectations in the next six months fell two points to 69.

 

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http://eyeonhousing.org/2016/11/builder-confidence-holds-firm-in-november/

Overlooked real estate markets | South Salem Real Estate

Every month, we tell you exactly where the country’s hottest real estate markets are: the regions where insane bidding wars have become the new normal, where people pay $5.5 million for a teardown, and buyers write desperate/sad “Please, please, please, let me buy your house!” letters. With tight inventory throughout the country having pushed up home prices 8% in the past year, we are starting to see more markets acting, well, crazy.

But it made us wonder: What about the (polar) opposite? What are the United States’ coldest markets?  You know, the ones where there’s plenty of inventory, and shopping for a home doesn’t resemble the final round of the Hunger Games?

Of course, plenty of markets see minimal real estate activity because no one actually wants to live there—they’re economically depressed, with few jobs or anything else of note to draw residents. We didn’t want those. Instead, we focused on the nation’s 100 largest metropolitan areas, and identified the top 10 where homes don’t fly off the market at head-spinning speeds, and there isn’t crazy competition from other buyers.

And to make certain that these markets aren’t just good bargains, but also good places to live, we filtered out markets where the unemployment rate ranks in the bottom 20% of major U.S. metros.

Markets that are cold, but not frosty

The result is this list of our top 10 overlooked real estate markets in the United States, the places that offer excellent value in less hectic home-buying environments. Bargain hunters, rejoice!

“This year has been great for the real estate market nationally, and we’re seeing widespread health and strong demand,” says our chief economist, Jonathan Smoke. “These 10 markets are no exception. They are all healthy, they just aren’t as frenetic as other markets. In each of these areas, we’ve seen improved buying interest and faster sales compared to previous years.”

Sorry, West Coast: You didn’t make the cut.

But each of the following markets have some special attractions for home buyers, including some you probably aren’t aware of. So read on, for the chillest of the chill!

cold-01

1. El Paso, TX

Median home price: $160,000

Median days on market: 91

Tucked between the U.S. and Mexico, El Paso’s fate is tied to two countries. It’s positioned for tourism and trade opportunities, but the recent strength of the U.S. dollar has discouraged Mexican shoppers, who are spending less. Growth in employment in El Paso was slow after the recession that began in 2008, but the metro area outperformed the rest of the state in 2015, according to the Dallas Federal Reserve.

Housing prices are going up, but the market has yet to take off.

“New construction picked up, and homes that haven’t been sold in the previous years piled up,” says Realtor® Rudy Montoya. “We are in a buyer’s market.”

Bonus: The area’s warm climate and diverse culture makes it an attractive retirement community.

Special lures: The cost of living is low, the margaritas are fine (El Paso claims to have invented ’em) and the green chile enchiladas con arroz y frijoles are awesome.

2. Albany, NY

Median home price: $239,000

Median days on market: 96

Albany’s housing market may offer affordability, but buying a home here can still be a daunting task. Homeowners in Albany County pay a median of $4,166 in property tax, one of the highest in the country. Although it’s the capital of New York state, the number of government jobs has been shrinking since the recession.

However, after the city started marketing itself as a tech hub, new corporate sectors have been starting to take hold. Companies like IBM and GlobalFoundries have set up research centers and plants here, and the city is expected to fill 1,180 new jobs in software and Web development through 2020, according to the New York Department of Labor.

Special lure: Yeah, it’s freezing. But this place comes to life in the winter, with more sledding, ice skating, snowmobiling, and tubing per capita than just about any metro in the U.S. Invest in long johns.

3. Virginia Beach, VA

Median home price: $259,300

Median days on market: 73

The rolling waves and soft sand not only make Virginia Beach a beautiful place to call home, but also a pretty darn nice place to visit—which is why tourism accounted for $1.4 billion in revenue, and plenty of job growth in 2015, according to the U.S. Travel Association.

So how come it shows up as a “cold” market? Well, summer may be gorgeous, but Virginia Beach isn’t quite as appealing in winter. Home sales slow precipitously, from 64 days on the market to 96 days. The city is also vulnerable to hurricanes, most recently Hurricane Matthew.

Special lure: Do you consider fishing to be a sport? Then this is the city for you.

4. Winston-Salem, NC

Median home price: $176,900

Median days on market: 96

Strolling the neighborhoods of Winston-Salem, you can’t help notice the quaint historical architecture and tall oaks. It feels as if time has slowed down. So, too, has the pace of home sales. Winston-Salem homes typically take 19 days longer to sell than the national median.

But that doesn’t worry the locals.”These communities have long-standing history—we don’t have a huge influx of people moving in, so there’s no quick housing turnaround,” says Samuel Aubrey, CEO of Winston-Salem Regional Association of Realtors®. The upside: The market sees fewer price fluctuations, even during recessionary periods.

Special lure: Birthplace of Krispy Kreme donuts.

5. Augusta, GA

Median home price: $194,700

Median days on market: 102

“People are attracted to Augusta because of the low cost of living,” says local Realtor Drew May. “And we’re just two hours from Atlanta and two hours from the coast.”

The Masters Golf Tournament enlivens the city once a year, with fans and tourists, but the rest of the year, it’s definitely … quiet. It’s a 9-to-5 city filled with blue-collar jobs manufacturing golf cars, medical supplies, and paperboard. The current unemployment rate of 5.8%  is slightly higher than the national average. Still, it has tons of historic charm going for it, and an epic mountain-bike trail system.

Special lure: It was the home town of James Brown, the godfather of soul!

6. Columbia, SC

Median home price: $183,400

Median days on market: 75

The second-largest metropolitan area in South Carolina, Columbia is a melting pot of global companies, students and educators, and a strong military presence. BlueCross BlueShield, and the University of South Carolina bolster the economy, with more than 10,000 jobs.

Yet one thing that makes home buyers hesitate about Columbia is the crime rate: Violent crime affects 65 in every 1 million people, 73% more than the national average. Some of the safest neighborhoods, however, include LexingtonBlythewood, and Lake Murray.

Special lure: This is a place in love with historical preservation.

7. Allentown, PA

Median home price: $192,500

Median days on market: 87

Want to avoid getting punched in this city? Avoid playing Billy Joel’s 1982 song “Allentown” on a jukebox (if you can find it, that is). That ode to the sad decline of this blue-collar town still stings. When Joel sang, “Out in Bethlehem they’re killing time,” he meant nearby Bethlehem Steel, once the nation’s second-largest steel producer, which finally went bankrupt in 2003.

But after decades of struggle, Allentown is quietly finding its way along the comeback trail. Although the region’s economy is now a far cry from its heyday, manufacturing jobs are gaining ground, slowly but steadily. The region’s GDP now ranks 73rd out of the 382 largest metropolitan areas in the U.S., up two spots from 2014. Its gains translate into a 5% year-over-year gain in home prices.

Special lure: The Lehigh Valley IronPigs are one of the most beloved Triple-A minor league baseball teams in the nation. Go Pigs!

8. Greensboro, NC

Median home price: $167,500

Median days on market: 94

Greensboro, like many cities and children, has nicknames—some good, and some not so good. It’s called “GREENsboro” because it’s green and lush; it’s called “GreensBORING” because its downtown is abandoned after 5 p.m., though a major face-lift has given the neighborhood new life.

The typical cycle of selling a home is longer than three months, putting the market among the “underachievers.” Local Realtor Jim Wilhoit attributes slow sales to the high-end market, but says the market is healthy overall.

“Sales of homes that are above $400,000 are very slow,” Wilhoit says. “It’s more expensive than most people here can afford. And people who own a home in that price range are not actively looking to sell.”

Special lure: Greensboro has 33,000 active students, which makes this one of America’s true college towns.

9. Birmingham, AL

Median home price: $184,500

Median days on market: 86 days

Young people are leaving Birmingham: The city’s craft beer scene, growing green spaces, and a roster of talented chefs are not enough to keep the millennials. Between 2011 and 2015, the metro lost 3% of its population between the ages of 25 and 34, while nationally, the age group grew by 6%. The reason? Job scarcity drove many to nearby Nashville and Atlanta, for better employment and higher salaries.

Apart from creating new jobs, much of the city’s effort goes into reinventing downtown, with a luxury “rooftop residential” market—namely lofts and high-end condos. Will the real estate market make a comeback? Let’s give it some time.

Special lure: Half Moon cookies and gourmet popsicles.

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http://www.realtor.com/news/trends/top-10-most-overlooked-real-estate-markets/?identityID=563634a60b124c77df02b110&MID=2016_1028_WeeklyNL-9&RID=3397440202&cid=eml-2016-1028-WeeklyNL-blog_1_mostoverlookedmarkets-blogs_trends

 

First-Time Buyers Step Up | South Salem Real Estate

Existing home sales, as reported by the National Association of Realtors (NAR), increased 3.2% in September and were up 0.6% from the same month a year ago, as first-time buyers seized a 34% share of sales. Total existing home sales in September increased to a seasonally adjusted rate of 5.47 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly adjusted 5.30 million units in August.

existing-home-sales-september-2016

September existing sales increased in all four regions, ranging from 5.7% in the Northeast to 0.9% in the South. Sales increased by 5.0% in the West in September, despite a 5.3% decrease in the August PHSI for that region. Year-over-year, September sales increased by 2.3% in the Midwest and 1.6% in the West, while falling 0.9% in the South. The Northeast remained unchanged year-over-year for September.

Total housing inventory increased by 1.5% in September, but remains 6.8% lower than its level a year ago. At the current sales rate, the September unsold inventory represents a 4.5-month supply, compared to a 4.6-month supply in August.

The August all-cash sales share was 21%, down from 22% in August and 24% during the same month a year ago. Individual investors purchased a 14% share in September, up from 13% in August and a year ago. The September first-time home buyer share of 34% was up from 31% in August, and 29% from the same month a year ago. Distressed sales, comprised of foreclosures and short sales, fell to 4%, the lowest rate since NAR launched that series in 2008.

The September median sales price of $234,200 was 5.6% above the same month a year ago, and represents the 55th consecutive month of year-over-year increases. The median condominium/co-op price of $222,100 in September was up 6.1% from the same month a year ago.

 

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http://eyeonhousing.org/2016/10/first-time-buyers-step-up/

New home sales decline 1.9% | South Salem Real Estate

Sales of new single-family houses in the United States declined 1.9 percent to a seasonally adjusted annual rate of 563,000 in October of 2016, compared to market expectations of a 0.3 percent rise. Figures for the previous month were revised down by 19,000 to 574,000. New Home Sales in the United States averaged 651.70 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.

United States New Home Sales

 

 

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http://www.tradingeconomics.com/united-states/new-home-sales

US New Home Sales Unexpectedly Rise 3.1% | South Salem Real Estate

Sales of new single-family houses in the United States rose 3.1 percent to a seasonally adjusted annual rate of 593,000 in September of 2016, compared to market expectations of a 1 percent decline. Figures for the previous month were revised down by 34,000 to 575,000. New Home Sales in the United States averaged 651.94 Thousand from 1963 until 2016, reaching an all time high of 1389 Thousand in July of 2005 and a record low of 270 Thousand in February of 2011. New Home Sales in the United States is reported by the U.S. Census Bureau.

United States New Home Sales
Calendar GMT Reference Actual Previous Consensus Forecast (i)
2016-09-26 02:00 PM Aug -7.6% 13.8% -8.8%
2016-10-26 02:00 PM Sep 593K 575K 600K 610K
2016-10-26 02:00 PM Sep 3.1% -8.6% -1%
2016-11-23 03:00 PM Oct 3.1%
2016-11-23 03:00 PM Oct 593K 450K
2016-12-23 03:00 PM Nov

 

 

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http://www.tradingeconomics.com/united-states/new-home-sales

Housing #affordability at the worst level in seven years | South Salem Real Estate

Home affordability is at the worst level in seven years, with 24% of the U.S. county housing markets less affordable than their historic affordability averages in the third quarter, the most recent ATTOM Data Solutions Home Affordability Index for third quarter 2016 recorded.

This level is not only up from 22% of markets in the previous quarter, but it is up from 19% of markets a year ago.

The only other time affordability came in worse than this was in third quarter of 2009 when 47% of markets were less affordable than their historic affordability averages.

The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3% down payment — including property taxes and insurance.

“The improving affordability trend we noted in our second quarter report reversed course in the third quarter as home price appreciation accelerated in the majority of markets and wage growth slowed in the majority of local markets as well as nationwide, where average weekly wages declined in the first quarter of this year following 13 consecutive quarters with year-over-year increases,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.

“This unhealthy combination resulted in worsening affordability in 63% of markets despite mortgage rates that are down 45 basis points from a year ago.

According to the report, out of the 414 counties analyzed in the report, 101 counties (24%) had an affordability index below 100 in the third quarter of 2016, meaning that buying a median-priced home in that county was less affordable than the historic average for that county going back to the first quarter of 2005.

Key counties highlighted include: Harris County (Houston), Texas; Kings County (Brooklyn), New York; Dallas County, Texas; Bexar County (San Antonio), Texas; and Alameda County, California in the San Francisco metro area.

Despite the negative news, Blomquist did point out one positive area.

“Some silver lining in this report is that affordability actually improved in some of the highest-priced markets that have been bastions of bad affordability, mostly the result of annual home price appreciation slowing to low single-digit percentages in those markets,” Blomquist continued.

He explained that this is an indication that home prices are finally responding to affordability constraints — a modicum of good news for prospective buyers who have been priced out of those high-priced markets.

This infographic from ATTOM Data Solutions shows the U.S. home affordability affliction and some possible antidotes.

 

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http://www.housingwire.com/articles/38158-housing-affordability-at-the-worst-level-in-seven-years?eid=311691494&bid=1542377

National Home Prices Re-accelerated | South Salem Real Estate

S&P Dow Jones Indices released the Case-Shiller (CS) National Home Price Index for July. The index rose at a seasonally adjusted annual growth rate of 5.0%, faster than the 2.1% in June. House prices have decelerated since the beginning of 2016 due to the sharp decline in existing home sales at the end of 2015. But, home prices started to accelerate in May and home price appreciation increased to 5.0% in July.

The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 5.8% in July, following 3.4% in June, confirming the reacceleration in home prices.

figure1_jul16

However, local housing markets varied greatly. Figure 2 shows home price appreciation for 20 major U.S. metropolitan areas in July.

Twelve out of the 20 metro areas had positive home price appreciation. The highest one in the list was Portland, OR with an annual rate of 8.2%, followed by Denver with an annual rate of 6.6%. Phoenix placed third with an annual rate of 5.9%.

Home price appreciation in the remaining eight metro areas was negative. They are San Francisco, Washington, DC, Atlanta, Chicago, Boston, Detroit, Minneapolis, and New York. Home price appreciation in Chicago was -5.9%, the lowest among 20 metro areas.

figure2_jul16

 

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http://eyeonhousing.org/2016/09/national-home-prices-reaccelerated-local-home-prices-varied-in-july/

Mortgage rates at 3.47% | South Salem Real Estate

Oct 13, 2016) – Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates following Treasury yields and moving higher.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.47 percent with an average 0.6 point for the week ending October 13, 2016, up from last week when they averaged 3.42 percent. A year ago at this time, the 30-year FRM averaged 3.82 percent.
  • 15-year FRM this week averaged 2.76 percent with an average 0.6 point, up from last week when they averaged 2.72 percent. A year ago at this time, the 15-year FRM averaged 3.03 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week with an average 0.4 point, up from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 2.88 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.

“This week the 10-year Treasury yield continued its climb as an increasing number of financial market participants foresee a December rate hike after a series of positive economic data releases. The 30-year fixed-rate mortgage moved up 5 basis points to 3.47 percent in this week’s survey, the first increase in one month. Even though we’ve seen economic activity pick up, consumer price inflation and implied inflation expectations remain below the Federal Reserve’s 2 percent target.”