Tag Archives: Cross River Real Estate for sale

Key Building Materials Remain Stubbornly Expensive | Cross River Real Estate

Inflation in prices received for building materials (prior to sales to consumers) was mixed in September according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. Although their monthly changes were relatively modest, the prices of OSB and ready-mix concrete have been trending upward for quite some time and remain at historically high levels.

OSB prices climbed 2.5% in September, continuing a 7-month trend that has the commodity at its highest price since June 2013. Since February, monthly increases have averaged 3.2%, pushing prices up by a cumulative, eye-popping 25%.

2016-10-ppi-osb-prices1

In addition, although the price of ready-mix concrete fell marginally in September, the long-term trend remains concerning. Monthly increases have averaged 0.3% over the last five years as the price of ready-mix concrete has steadily risen by roughly 20%.  While gypsum prices picked up (+0.1%), the prices of softwood lumber and steel mill products fell by 1.4% and 0.5%, respectively.

2016-10-ppi-grmcsl

After holding steady in August, the economy-wide PPI rose 0.3% in September. Over three-quarters of the increase was the result of a 0.7% increase in prices for goods, while the rise in prices for services was a more modest 0.1%. Final demand prices for core goods (i.e. goods excluding food and energy) inched up 0.3%, and prices for core goods less trade services rose 1.5% over the 12 months ended in September. This represented the largest 12-month increase in two years.

 

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http://eyeonhousing.org/2016/10/key-building-materials-remain-stubbornly-expensive/

Features and Colors of Kitchens in New Homes | Cross River Real Estate

What are the features and colors included in kitchens of newly constructed homes? Data from Houzz, combined with information from the 2016 Builder Practices Survey, provides insight.

The 2016 Builder Practices Survey (BPS) is a national survey of homebuilders, conducted by Home Innovation Research Labs, that captures valuable information on the product features included in new residential construction, both single-family and multifamily.

It is a robust survey of 1,381 respondents who built single-family detached units and 199 respondents who built multifamily or single-family attached units (i.e. townhomes). Results are available on national and regional levels.

Analyzing the BPS can uncover interesting trends in the construction of new kitchens, such as countertop material type, cabinet type, and appliances.

Although the BPS covers a broad range of topics, it does not touch upon the color themes of kitchens in new construction. Houzz, an online platform dedicated to home remodeling and design, conducted an online survey on this very topic. Its survey asked recent buyers of newly constructed homes about the colors themes in their kitchens. The survey is national in scope and had 203 respondents.

Combining data from the BPS with the Houzz survey can provide powerful information on what today’s new kitchens look like. The following provides a snapshot of the 2015 product features and color themes included in kitchens of newly constructed single-family homes:

Countertops & Backsplashes
Figure 1 displays the type of countertop material installed in new kitchens. Granite countertops are overwhelmingly the most popular with 64 percent of new homes having this material type. It is no surprise that only 14 percent of new homes have laminate countertops. Based on NAHB’s Consumer Preference Surveyreport, laminate countertops are the least desired kitchen feature and are likely only installed when affordability is a major concern. Besides these material types, 9 percent each of new homes have engineered stone and solid-surface countertops.

Figure 1: Countertop Material Type (1)
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The Houzz survey provides insight on countertop color. Figure 2 displays the countertop color of those who have granite countertops, the most popular countertop material. Three color choices stand out: 30 percent of respondents have multi-colored countertops, 26 percent have white, and 18 percent have black. Twenty-six percent reported some other color, or were not sure about their countertop color.

Figure 2: Countertop Material Color (2)

figure2

In addition to countertop material color, buyers also noted the color of their backsplashes (Figure 3). Twenty-six percent of respondents reported having white backsplashes, 13 percent reported beige, 12 percent reported multi-colored, and 6 percent reported gray. Forty-three percent reported some other color, or were not sure of their backsplash color.

Figure 3: Backsplash Color (3)

figure3

 

Cabinetry
Figure 4 displays the types of cabinets installed in new homes. Wood-based cabinets are the most common, but there is variation in the panel type of wood cabinets. Sixty percent of new homes have raised panel wood cabinets, compared to 25 percent that have flat panel wood cabinets. Only 5 percent of new homes have laminate cabinets, and the remaining 10 percent consists of various other types, such as glass cabinets.

Figure 4: Cabinet Type (4)

figure4

Figure 5 displays the cabinet colors reported by respondents in the Houzz survey. The most popular color is white (34 percent), followed by wood – medium tone (20 percent), gray (9 percent), wood – dark tone (7 percent), and multi-colored (6 percent).

Figure 5: Cabinet Color (5)

figure5

 

Appliances
Figure 6 displays the percentage of new homes that have each appliance listed. Cooktops and ranges are almost always provided in new kitchens with 97 percent of new homes having these features. Features that are also commonly installed include dishwashers (92 percent), microwave ovens and garbage disposals (both 84 percent); and refrigerators and freezer (65 percent).

Items less frequently installed in new homes include clothes dryers and washers (36 and 34 percent, respectively), wall ovens (18 percent), hot water recirculation piping (17 percent), water softeners and central vacuum systems (both 13 percent); hot water dispensers and standby generators (both 8 percent); trash compactors (4 percent), and elevators (2 percent).

Figure 6: Percentage of New Homes that Include Appliance (6)

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Figure 7 displays the colors of appliances installed in new kitchens. Most respondents reported that “stainless steel” is the color theme of their appliances, 6 percent reported black, and 4 percent reported white.

Figure 7: Appliance Colors (7)

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The combination of data from the BPS and the Houzz survey provides a sense of what new kitchens look like. New kitchens tend to have granite countertops, raised panel wood cabinets, and come with a standard set of appliances, such as cooktops & ranges, microwaves, dishwashers and garbage disposals. New kitchens also have white, multi-colored, or wood-based color themes, and are complemented by “stainless steel” appliances.

 

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http://eyeonhousing.org/2016/10/features-and-colors-of-kitchens-in-new-homes/

Home prices increasing annually | Cross River Real Estate

Home prices continued their increasing trends continued to increase in July, but at a slower rate than before, according to the most recent report by S&P CoreLogic Case-Shiller Indices released by S&P Dow Jones Indices and CoreLogic.

“The S&P CoreLogic Case-Shiller National Index is within 0.6% of the record high set in July 2006,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee. “Seven of the 20 cities have already set new record highs.”

“The 10-year, 20-year, and National indices have been rising at about 5% per year over the last 24 months,” Blitzer said. “Eight of the cities are seeing prices up 6% or more in the last year. Given that the overall inflation is a bit below 2%, the pace is probably not sustainable over the long term.”

Annually, the National Home Price index showed a gain of 5.1% in July. This is up slightly from June’s 5% annual gain. The 10-City Composite increased by 4.2% annually and the 20-City Composite increased by 5%. Each of these is down from June’s 4.3% and 5.1% for the respective composites.

Click to Enlarge

Case-SHiller

(Source: S&P Dow Jones Indices, CoreLogic)

“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5% annual rate,” Blitzer said. “The statement issued last week by the Fed after its policy meeting confirms the central bank’s view that the economy will see further gains.”

While the Federal Open Market Committee did not raise rates at their last meeting, Janet Yellen, Federal Reserve System chair of the Board of Governors, explained, “Our decision does not reflect a lack of confidence in the economy.”

She explained the Fed preferred to take a more cautious approach to see if current growth would continue.

“Most analysts now expect the Fed to raise interest rates in December,” Blitzer said. “After such Fed action, mortgage rates would still be at historically low levels and would not be a major negative for house prices.”

Out of the 20 cities, Portland, Seattle and Denver reported the highest annual gains over the last six months. In July, Portland increased 12.4%, Seattle increased 11.2% and Denver increased 9.4%.

After seasonal price adjustment, the National Index increased by 0.4% monthly but the 10-City Composite decreased 0.1%. The 20-City Composite remained unchanged.

 

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http://www.housingwire.com/articles/38133-case-shiller-results-barely-miss-july-2006s-high?eid=311691494&bid=1540391

‘Zombie’ foreclosures decline across the country | Cross River Real Estate

As the foreclosure crisis recedes, some unwanted consequences continue to haunt neighborhoods around the country.

“Zombie” foreclosures — those properties that are currently in the foreclosure process but vacant — fell again in the third quarter, according to Attom Data Solutions. Zombies made up 4.7% of all foreclosures, down 9% from a year ago.

Among the top ten states for zombies, there have been some big declines: zombies are down 28% in Florida, 26% in California, and 14% in Illinois compared to a year ago. But they’re up 6% in New York and 3% in Massachusetts.

Still, as the housing market stays hot, lenders seem to be moving more quickly to take possession of properties where homeowners are having trouble. The number of vacant bank-owned properties jumped 67% in the third quarter compared to a year ago, to 46,604, Attom said.

The states with the biggest number of properties in foreclosure are also the states with the most zombies. They are mostly states that require foreclosures to go through a court process, including New York, New Jersey, Florida, Illinois, and Indiana.

Judicial foreclosures can be a blessing, because they provide protections to homeowners, and a curse, because they take so long to complete. The lengthy and complicated process increases the likelihood that a foreclosure will become a zombie — but the hot housing market increases incentives for struggling homeowners to fight to hold on to their properties.

 

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http://www.marketwatch.com/story/zombie-foreclosures-decline-across-the-country-except-in-some-states-where-theyve-built-strongholds-2016-09-08

San Francisco’s housing bubble is collapsing | Cross River Real Estate

house, San Francisco, California Flickr / Håkan Dahlström

Here’s the other side of central-bank engineered asset price inflation, or “healing the housing market,” as it’s called in a more politically correct manner:

San Francisco Unified school district, which employs about 3,300 teachers, has been hobbled by a teacher shortage. Despite intense efforts this year – including a signing bonus – to bring in 619 new teachers to fill the gaps left behind by those who’d retired or resigned, the district is short 38 teachers as of Monday, when the school year started. Others school districts in the Bay Area have similar problems.

For teachers, the math doesn’t work out. Average teacher pay for the 2014-15 school year was $65,000. And less after taxes. But the median annual rent was $42,000 for something close to a one-bedroom apartment. After taxes and utilities, there’s hardly any money left for anything else.

A teacher who has lived in the same rent-controlled apartment for umpteen years may still be OK. But teachers who need to find a place, such as new teachers or those who’ve been subject of a no-fault eviction, are having trouble finding anything they can afford in the city. So they pack up and leave in the middle of the school year, leaving classes without teachers. It has gotten so bad that the Board of Supervisors decided in April to ban no-fault evictions of teachers during the school year.

Yet renting, as expensive as it is in San Francisco, is the cheaper option. Teachers trying to buy a home in San Francisco are in even more trouble at current prices. And it’s not just teachers!

This aspect of Ben Bernanke’s and now Janet Yellen’s asset price inflation – and consumer price inflation for those who have to pay for housing – is what everyone here calls “The Housing Crisis.”

As if to drive home the point, so to speak, the California Association of Realtors just released itsHousing Affordability Index (HAI) for the second quarter. It is based on the median house price (only houses, not condos), prevailing mortgage interest rate, household income, and a 20% down payment.

urban houses san franciscoShutterstock

In San Francisco, the median house price – half sell for more, half sell for less – is $1.37 million. According to Paragon Real Estate, if condos were included, the median price would drop to $1.2 million.

The median household income in San Francisco is $84,160, including households with more than one earner. So a household of two teachers with $130,000 in household income is doing pretty well, comparatively speaking.

The monthly mortgage payment for the median house in San Francisco, after a 20% down payment and at the prevailing rock-bottom mortgage rates, is $6,740 per month, or $80,900 per year!

So what kind of minimum qualifying household income would be required for the mortgage of a median house, plus taxes and insurance? For the US on average, $47,200 per year. In San Francisco, $269,600 per year. It would require a household of four teacher salaries!

Only the top-earning 13% of households in San Francisco can afford to buy that median house!

Other Bay Area counties have similar out-of-whack affordability rates: In San Mateo County (part of Silicon Valley), only 14% can buy that median home; in Marin County (north of the Golden Gate) 18%; Santa Clara Country (where San Jose is) 19%; Alameda County (where Oakland is) 20%. And so on.

And this despite the historically low mortgage rates. If prevailing mortgage rates rose to 6%, practically no one could afford to buy.

Then there’s the issue of down payment that the CAR so elegantly glosses over: the 20% down payment of for that median house in San Francisco is $275,000!

House in San FranciscoJustin Sullivan/Getty Images

How are people going to save $275,000 after taxes while living and renting in a city that is as pocket-cleaning expensive as San Francisco? Saving $275,000 on a median household income of $84,160 while paying $42,000 a year in rent, plus taxes, utilities, food, transportation, clothes, parking tickets…..

Saving anything is going to be tough. But even if that household, using herculean discipline, can save 5% of its income a year (so $4,200 a year), it would take 65 years to save that down payment. Oh well. There goes the dream.

These are a scary numbers for the housing market! If only 13% can buy that median home – when in a healthier housing market, over 50% should be able to buy a median home – who the heck is going to buy the rest of the homes?

This puts a stranglehold on demand. To sustain these crazy home prices, San Francisco needs to bring in an endless flow of highly paid people, including absentee foreign investors, to replace the teachers and other middle-class households, the artists and shop keepers and office workers, and to push out city employees, nurses, and the like. That’s how the process has worked.

But that endless influx of highly paid people and investors is grinding to a halt. Some companies are still hiring, but others are laying off, and highly paid workers are just switching jobs rather than pouring into the city in large numbers. That’s a sea change for this housing market.

It comes at a time when a historic building boom is throwing thousands of high-end condos and apartments on the market every year, for years to come.

 

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http://www.businessinsider.com/san-franciscos-housing-bubble-collapsing-under-its-own-lopsidedness-2016-8

Housing Starts down year over year in April | Cross River Real Estate

HUD AND CENSUS BUREAU ANNOUNCE NEW RESIDENTIAL CONSTRUCTION ACTIVITY IN APRIL

 

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the Census Bureau jointly announced the following new residential construction statistics for April 2016:

BUILDING PERMITS

Privately owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,116,000. This is 3.6 percent (±1.3%) above the revised March rate of 1,077,000, but is 5.3 percent (±1.3%) below the April 2015 estimate of Single-family authorizations in April were at a rate of 736,000; this is 1.5 percent (±0.8%) above the revised March figure of 725,000.  Authorizations of units in buildings with five units or more were at a rate of 348,000 in April.

HOUSING STARTS

Privately owned housing starts in April were at a seasonally adjusted annual rate of 1,172,000. This is 6.6 percent (±10.2%)* above the revised March estimate of 1,099,000, but is 1.7 percent (±10.1%)* below the April 2015 rate of 1,192,000. Single-family housing starts in April were at a rate of 778,000; this is 3.3 percent (±12.1%)* above the revised March figure of 753,000. The April rate for units in buildings with five units or more was 373,000.

HOUSING COMPLETIONS

Privately owned housing completions in April were at a seasonally adjusted annual rate of 933,000. This is 11.0 percent (±12.3%)* below the revised March estimate of 1,048,000 and is 7.4 percent (±10.6%)* below the April 2015 rate of 1,008,000. Single-family housing completions in April were at a rate of 691,000; this is 3.6 percent (±12.6%)* below the revised March rate of 717,000. The April rate for units in buildings with five units or more was 232,000

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www.hud.gov

US home prices steady | Cross River Real Estate

Case Shiller Home Price Index in the United States is expected to be 182.37 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Case Shiller Home Price Index in the United States to stand at 179.06 in 12 months time. In the long-term, the United States S&P Case-Shiller Home Price Index is projected to trend around 159.65 Index Points in 2020, according to our econometric models.

United States S&P Case-Shiller Home Price Index

 

 

Forecast Actual Q1/16 Q2/16 Q3/16 Q4/16 2020 Unit
Case Shiller Home Price Index 183 182 182 180 179 160 Index Points
United States S&P Case-Shiller Home Price Index Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States S&P Case-Shiller Home Price Index using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States S&P Case-Shiller Home Price Index – was last predicted on Tuesday, March 29, 2016.
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http://www.tradingeconomics.com/united-states/case-shiller-home-price-index/forecast

Pending Sales Down | Cross River Real Estate

The Pending Home Sales Index declined 2.5% in January, but has increased year-over-year for 17 consecutive months. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased 2.5% in January to 106.0 from an upwardly revised 108.7 December, and was 1.4% above the same month a year ago.

Pending Home Sales January 2016

The PHSI increased slightly in the South by 0.3%, but fell in the remaining three regions, ranging from a 3.2% decrease in the Northeast to a 4.9% decrease in the Midwest. Year-over-year, three regions increased, ranging from 10.9% in the Northeast to 0.4% in the West. The South decreased 1.3% from the same month a year ago.

Existing sales increased 11.0% in 2015, and improving economic conditions and rising employment suggest a continuing recovery in existing sales. However, both housing starts and new home sales stumbled in January. Also, the long-term weakness among first-time buyers will continue to dampen all sales in 2016.

 

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http://eyeonhousing.org/2016/02/pending-sales-down-2/

US New Home Sales at 10-Month High | Cross River Real Estate

New Home Sales in the United States is expected to be 526.44 Thousand by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate New Home Sales in the United States to stand at 539.95 in 12 months time. In the long-term, the United States New Home Sales is projected to trend around 589.69 Thousand in 2020, according to our econometric models.

United States New Home Sales

 

Forecast Actual Q1/16 Q2/16 Q3/16 Q4/16 2020 Unit
New Home Sales 544 526 533 536 540 590 Thousand
United States New Home Sales Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of United States New Home Sales using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – United States New Home Sales – was last predicted on Wednesday, January 27, 2016.
United States Housing Last Q1/16 Q2/16 Q3/16 Q4/16 2020
Building Permits 1232 1245 1249 1254 1259 1310
Housing Starts 1149 1165 1173 1182 1192 1288
New Home Sales 544 526 533 536 540 590
Pending Home Sales 2.7 1.99 1.7 1.54 1.45 1.33
Existing Home Sales 5460 5546 5402 5396 5378 5115
Construction Spending -0.4 0.22 0.27 0.29 0.3 0.31
Housing Index 0.5 0.48 0.44 0.43 0.42 0.31
Nahb Housing Market Index 60 59.27 58.97 58.48 58.01 53.23
Mortgage Rate 4.02 4.6 4.9 5.1 4.19 6.5
Mortgage Applications 8.8 0.98 0.48 0.48 0.48 0.48
Home Ownership Rate 63.7 63.7 63.7 63.7 63.7 63.7
Case Shiller Home Price Index 183 183 182 181 180 160

 

 

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

NAR Lowers Sales Forecast | Cross River Real Estate

The National Association of Realtors has reduced its outlook for existing sales in 2016 from a 3 percent increase over 2015 (5.45 million sales) to an increase of only 1 to 2 percent (5.30 to 5.40 million sales).

The new forecast, three months before the opening of the home sales season, amends an early one made at NAR’s annual meeting in November.

“This year the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” said NAR Chief Economist Lawrence Yun in a video posted on the NAR site. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

With one month of data remaining for 20151, Yun expects total existing-homes sales to finish the year up 6.5 percent from 2014 at a pace of around 5.26 million –the highest since 2006, but roughly 25 percent below the prior peak set in 2005 (7.08 million).

Yun did not alter his November price forecast. The national median existing-home price for all of 2015 will be close to $221,200, up around 6 percent from 2015.  Yum calls for prices to soften to a 5 to 6 percent increase in sold prices.

 

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http://www.realestateeconomywatch.com/2016/01/nar-lowers-sales-forecast/