Tag Archives: South Salem NY Homes for Sale

Construction worker shortage | South Salem Real Estate

The drumbeat of hammers echoes most mornings through suburban Denver, where Jay Small, the owner of company that frames houses, is building about 1,300 new homes this year.

That’s more than triple what he built a few years ago, when “you couldn’t buy a job” in the residential construction industry, he said.

Now, builders can’t buy enough workers to get the job done.

Eight years after the housing bust drove an estimated 30 percent of construction workers into new fields, homebuilders across the country are struggling to find workers at all levels of experience, according to the National Association of Homebuilders. The association estimates that there are approximately 200,000 unfilled construction jobs in the U.S. – a jump of 81 percent in the last two years.

The ratio of construction job openings to hiring, as measured by the Department of Labor, is at its highest level since 2007.

“The labor shortage is getting worse as demand is getting stronger,” said John Courson, chief executive of the Home Builders Institute, a national nonprofit that trains workers in the construction field.

The impact is two-fold. Without enough workers, residential construction is trailing demand for homes, dampening the overall economy.

And with labor costs rising, homebuilders are building more expensive homes to maintain their margins, which means they are abandoning the starter home market. That has left entry-level homes in tight supply, shutting out may would-be buyers at a time when mortgage rates are near historic lows.

Nationwide, there are 17 percent fewer people working in construction than at the market peak, with some states – including Arizona, California, Georgia and Missouri – seeing declines of 20 percent or more, according to data from the Associated General Contractors of America.

The labor shortage is raising builders’ costs – and workers’ wages – and slowing down construction.

Small, the Denver builder, estimates that he could construct at least 10 percent more homes this year if he had enough workers. But he remains short-staffed, despite raising pay to levels above what he paid during the housing bubble a decade ago.

“It’s getting to the point where you’re really limited in what you can deliver,” Small said. “We lost so many people in the crash, and we’re just not getting them back.”

HIGHER COSTS

The average construction cost of building a single family home is 13.7 percent higher now than in 2007, even as the total costs of building and selling a house – a figure that includes such items as land costs, financing and marketing – are up just 2.9 percent over the same period, according to a survey by the National Association of Homebuilders.

The problem is accentuated by strong demand for newly constructed homes, with sales reaching a nine-year high in July.

Private companies say that they are having a hard time attracting workers, and they are often forced to give employees on-the-spot raises to prevent them from going to competitors. Carpenters and electricians are often listed as the most in-demand specialties.

Tony Rader, the vice president of Schwob Building Company, a general contractor in the Dallas area, said his company has started handing out flyers at sporting events, churches and schools in hopes of luring more people into the field.

“The biggest problem I face every day is where are we going to find the people to do the work,” he said, adding that it’s becoming increasingly common for his company and others to turn down projects.

Dallas contractors are fighting over the limited supply of workers as three major mixed-use projects are going up right next to each other on the so-called “$5 billion mile” in Frisco, a northern suburb. Meanwhile, the metropolitan area is adding about 30,000 newly built homes annually.

With fewer workers, contractors are becoming wary of signing new work contracts, especially as many of them include fines for not completing a job by a designated date.

“I’ve got two lawsuits right now where it may cost us mid-six-figures because there’s not enough labor out there to get it done,” said one contractor in the North Dallas area who declined to be identified.

Lawyers in hot residential markets say that it is becoming increasingly common for construction companies to try to negotiate for more time.

“Subcontractors are having a hard time staffing up,” said Edward Allen, a Denver attorney who said he has seen more lawsuits over project delays in the past two years.

GUARANTEED WORK, FEW TAKERS

Colorado alone will need 30,000 more workers in the construction field in the next six years, a number that does not account for those who will retire, according to a study by the Association of General Contractors.

The state passed a bill last year pledging $10 million over three years to fund free training for plumbers, electricians and carpenters.

Yet Michael Smith, who heads a Denver-based nonprofit that administers the training, said that he can’t fill the seats. High schools are focused on preparing students for college, ignoring those that may be better suited for vocational work. Students may be put off by construction’s reputation as a dangerous, cyclical field, he said.

“We’ve so demonized working with your hands in this country,” he said. “We’ve got a booming economy, and we can’t keep up with the pace of growth.”

Students who go through the four-week program are all but guaranteed a job paying $16 an hour or more immediately, with the possibility of commanding $80,000 or more in annual income after five years without taking on any student debt, he said.

On-the-job training is also a common path for new workers. Eduardo Salcido – a 25-year-old concrete finisher working at a 232-home Toll Brothers subdivision going up in the Denver suburb of Broomfield – said that he received on-site training after entering the construction field as a painter.

He has earned one raise since beginning the training two years ago and is now certified as a semi-skilled finisher.

 

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http://www.marketbeat.com/stories.aspx?story=http%3a%2f%2ffeeds.reuters.com%2f~r%2freuters%2fbusinessNews%2f~3%2f_EzpXwF3fCY%2fus-usa-housing-labor-idUSKCN11C0F7

Homeowners doing much better than #renters | South Salem Real Estate

Lee Semel: Flickr/Creative Commons

How has the housing market changed since the recession? A new report by Apartment List paints a less-than-positive picture for renters. In the aftermath of the mortgage crisis, many of the costs of homeownership have gone done, even as homeownership rates reach record lows. At the same time, costs associated with renting have risen at a time when more and more Americans are renting apartments and single-family homes.

While homeownership rates have reached historic lows across the country, hitting numbers not seen since the ‘60s, three particular areas and demographics have seen the biggest loss. According to the Apartment List analysis of Census data,  the recent downturn really hit those living in Sunbelt Cities (Las Vegas, Orlando, Atlanta), Americans under 45 years of age, and Hispanic and African-American consumers.

In fact, minorities experienced the largest drops in homeownership: Hispanics (-4.0%), African Americans (-5.5%), and other minorities (-6.7%). Non-Hispanic whites were somewhat less affected, with a homeownership decline of -3.3%.

Homeownership by ethnicicy

While a drop in the national homeownership rate has serious implications for long-term financial health, those who do own are often reaping the benefits of lower costs, especially compared to renters. Historically low interest rates mean monthly payments have dropped 13% since 2007. That can really add up: the median monthly mortgage payment is $2,754, but widespread refinancing has cut that to $2,263, a savings of roughly $6,000 a year. With median household income at $54,000 in 2014, that extra money can provide a significant boost.

The story is much different for renters. Rents have increased an average of 3.7% nationwide, exacerbating differences between owners and renters. For instance, in Houston, homeownership costs have dropped $289 since the Recession, while the cost to rent has risen by $115.

Rental price comparison US

The median national rent increased from $901 to $934. While $33 may seem small, held up against a steep 14% drop in inflation-adjusted income for renters, and it becomes much more significant.

Like many aspects of the U.S. economy in the last decade, the stratification of the housing market may only increase inequality. Those with the money to buy are reaping the advantages of historically low costs, while those who can’t, especially Millennials and minorities, are being locked out and missing out on a chance to build household wealth.

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http://www.curbed.com/2016/8/18/12533778/homeownership-rental-inequality-study

New-home sales crush estimates | South Salem Real Estate

2015 tally for new-home sales is 15% higher than 2014

Sales of new homes rebounded handily in December, a signal of continued strength in the housing market.

Sales ran at an annual pace of 544,000, the highest since February, the Commerce Department said Wednesday. Economists surveyed by MarketWatch had forecast a 506,000 pace.

That represented a 10.8% increase over a slightly upwardly revised November pace of 491,000. New home sales are volatile and often revised, but the trend has been generally up. December’s number was 9.9% higher than the same period a year ago, and there were 501,000 new homes sold during 2015, a 14.5% increase over 2014.
Still, new-home sales are a fraction of what they used to be, even before the housing bubble began to swell. Some builders have found it difficult to attract workers, many of whom left the industry when the bubble burst. Many have remained tentative about building too many homes as the economic recovery remained tepid and wages stagnant.

Many builders have responded to those market conditions by targeting higher-end customers. Prices have risen steadily over the past few years. They averaged $294,575 throughout 2015, up 4% compared to 2014’s average.

Builders, and economists, want to see more first-time buyers entering the market, which would require more moderately-priced homes. That’s a strategy that has worked for the country’s largest builder, D.R. Horton DHI, -0.59% company executives said on a Monday earnings call.

Read: First-time buyers slowly return to housing market

Many builders have seen solid business growth over the past few years, even as their stocks have struggled. Lennar LEN, +0.12% shares have declined about 9% over the past 12 months, while Toll Brothers TOL, -1.12% is down 28%.

The sales data help confirm that the housing market is strengthening, Pantheon Macroeconomic Chief Economist Ian Shepherdson wrote in a note Wednesday. “The consensus always looked timid, given the very warm weather in December; new home sales are measured at the point contracts are signed, which often happens at sales offices at construction sites. Unseasonably warm winter weather makes these sites much more appealing places to visit.”

But other data, including builder sentiment and mortgage applications, signal stronger activity than the pace of new home sales suggest, Shepherdson wrote, “so we have to expect further gains over the next few months.”

 

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http://www.marketwatch.com/story/new-home-sales-soar-to-annual-rate-of-544000-2016-01-27

Residential Construction Employment Grew | South Salem Real Estate

The count of unfilled jobs in the overall construction sector remained elevated in October, as residential construction employment continued to grow.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) came in at 205,000 in October, after reaching 221,000 in September. The cycle high was 225,000 set in July.

The open position rate (job openings as a percent of total employment) for October was 3%. On a smoothed twelve-month moving average basis, the open position rate for the construction sector increased to 2.7%, setting a cycle high and surpassing the top twelve-month moving average rate established prior to the recession.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.

jolts-dec-pub

The construction sector hiring rate, as measured on a twelve-month moving average basis, remained steady at 4.9% in October. The twelve-month moving average for layoffs was also steady (2.7%), remaining in a range set last Fall.

Monthly employment data for November 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builder and remodeler net hiring jumped significantly, as sector employment increased by 19,600. The November gains continue the improvement in the Fall after a period of hiring weakness early in 2016. The 6-month moving average of jobs gains for residential construction has now increased to a healthier 10,400 per month.

Residential construction employment now stands at 2.644 million, broken down as 743,000 builders and 1.901 million residential specialty trade contractors.

res-constr-employ

Over the last 12 months home builders and remodelers have added 120,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 658,000 positions.

 

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http://eyeonhousing.org/2016/12/residential-construction-employment-grew-in-november/

Mortgage rates average 3.90% | South Salem Real Estate

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates largely unchanged following a shortened week and mixed economic signals prior to the Fed’s meeting next week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.90 percent with an average 0.6 point for the week ending September 10, 2015, up from last week when it averaged 3.89 percent. A year ago at this time, the 30-year FRM averaged 4.12 percent.
  • 15-year FRM this week averaged 3.10 percent with an average 0.7 point, up from last week when it averaged 3.09 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent this week with an average 0.5 point, down from last week when it averaged 2.93 percent. A year ago, the 5-year ARM averaged 2.99 percent.
  • 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.3 point, up from last week when it averaged 2.62 percent. At this time last year, the 1-year ARM averaged 2.45 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 links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

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

“Following a shortened week, mortgage rates were virtually unchanged, inching up 1 basis point to 3.90 percent. The employment report released last Friday provided mixed signals, adding one more note of uncertainty prior to the Fed’s September meeting. The unemployment rate dropped to 5.1 percent in August, the lowest rate since April 2008, but only 173,000 jobs were added, well below expectations. Wages grew 2.2 percent, a neutral indication at best.

Housing Affordability Posts Solid Gain in First Quarter | South Salem Real Estate

Lower interest rates and home prices contributed to a solid boost in nationwide affordability in the first quarter of 2015, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.

“Consumers benefitted from continued low mortgage rates and some fall in the price of homes sold in the first quarter, as these conditions offer a great time to buy,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

“The past two quarters have seen an improvement in affordability as mortgage rates remain low,” said NAHB Chief Economist David Crowe. “Eighty-five percent of the metropolitan areas measured experienced an increase in affordability. Along with favorable home prices and pent-up demand, this broad improvement should help encourage more buyers to enter the marketplace.”

In all, 66.5 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,800. This is up from the 62.8 percent of homes sold that were affordable to median-income earners in the fourth quarter.

The national median home price declined from $215,000 in the fourth quarter to $210,000 in the first quarter. Meanwhile, average mortgage interest fell from 4.29 percent to 4.03 percent in the same period.

For the second straight quarter, Syracuse, N.Y. remained the nation’s most affordable major housing market, as 95.6 percent of all new and existing homes sold in the first quarter of 2015 were affordable to families earning the area’s median income of $68,500.

Also ranking among the most affordable major housing markets in respective order were Toledo, Ohio; St. Louis; Akron, Ohio; and Harrisburg-Carlisle, Pa.

Meanwhile, Sandusky, Ohio topped the affordability chart among smaller markets in the first quarter of 2015. There, 96.3 percent of homes sold during the first quarter were affordable to families earning the area’s median income of $69,600. Other smaller housing markets at the top of the index included Cumberland, Md.-W.Va.; Elmira, N.Y.; Davenport-Moline-Rock Island, Iowa-Ill.; and Kokomo, Ind.

 

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http://www.nahb.org/en/news-and-publications/Press-Releases/2015/may/housing-affordability-posts-solid-gain-in-first-quarter.aspx

Housing Production Stumbles | South Salem Real Estate

Housing starts fell 17% to their lowest level since January 2014. The decline was across the board in building types and regions. Single-family starts were down 14.9% and multifamily starts were down 20.8%. Single-family starts were down the most in the weather sensitive Northeast (-60.7%) and Midwest (-32.4%) but were also down in the less unseasonable weather patterns of the South (-5.9%) and West (-9.1%).

While total building permits were up 3%, single-family permits were down 6.2% with only the West recording a rise in single-family permits (+5.6%). Multifamily permits were up 18.3% to the highest level since April 2014 and only the third time above 470 since 2006.

Aside from a small weather impact in the Northeast and Midwest, the decline is in line with a hesitation in builder sentiment as measured by the NAHB/Wells Fargo March Housing Market Index that fell 2 points to 53. Builders express concern that buyers are unable to attain a mortgage because of tight underwriting standards and that buyers continue to expect price concessions and discounts.

Coincident with buyers discount expectations, builders are facing higher costs and reduced availability of lots on which to build the homes and workers to construct them. The squeeze is causing builders to slow construction until new home prices rise, consumers regain confidence and the supply chain for lots, labor and to a lesser extent building materials rebuilds.

The underlying conditions for a good, not great, housing rebound remain in place. The economy is adding jobs at a much faster pace than earlier in the recovery, overall growth is more dependably positive, mortgage rates are historically low and there is considerable pent-up demand waiting to be released. Consumers need to regain their confidence in those trends and to readjust their expectations for home prices. The softness in the fourth quarter GDP estimates and the very slow rise in worker pay and household incomes contributed to the current hesitation.

Actual Housing Starts and Trends

 

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http://eyeonhousing.org/2015/03/housing-production-stumbles/

CoreLogic Kicks off 2015 in Style | #SouthSalem Real Estate

CoreLogic reports shows that home prices nationwide increased 5.7 percent in January 2015 compared to January 2014. This change represents 35 months of consecutive year-over-year increases in home prices nationally.

On a month-over-month basis, home prices nationwide increased by 1.1 percent in January 2015 compared to December 2014*.  Some 27 states and the District of Columbia are at or within 10 percent of their peak. Four states, New York (+5.6), Wyoming (+8.3 percent), Texas (+8.3 percent) and Colorado (+9.1 percent), reached new highs in the home price index since January 1976 when the index starts.

The CoreLogic HPI Forecast indicates that home prices, including distressed sales, are projected to increase 0.4 percent month over month from January 2015 to February 2015 and, on a year-over-year basis, by 5.3 percent** from January 2015 to January 2016. Excluding distressed sales, home prices are expected to increase 0.3 percent month over month from January 2015 to February 2015 and by 4.9 percent** year over year from January 2015 to January 2016. The CoreLogic HPI Forecast is a monthly projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“House price appreciation has generally been stronger in the western half of the nation and weakest in the mid-Atlantic and northeast states,” said Dr. Frank Nothaft, chief economist at CoreLogic. “In part, these trends reflect the strength of regional economies. Colorado and Texas have had stronger job creation and have seen 8 to 9 percent price gains over the past 12 months in our combined indexes. In contrast, values were flat or down in Connecticut, Delaware and Maryland in our overall index, including distressed sales.”

“We continue to see a strong and progressive uptick in home prices as we enter 2015. We project home prices will continue to rise throughout the year and into 2016,” said Anand Nallathambi, president and CEO of CoreLogic. “A dearth of supply in many parts of the country is a big factor driving up prices. Many homeowners have taken advantage of low rates to refinance their homes, and until we see sustained increases in income levels and employment they could be hunkered down so supplies may remain tight. Demand has picked up as low mortgage rates and the cut in the FHA annual insurance premium reduce monthly payments for prospective homebuyers.”

 

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http://www.realestateeconomywatch.com/2015/03/corelogic-kicks-off-2015-in-style/

 

 

NAR Reports Existing Sales Disappoint | South Salem Real Estate

Existing home sales decreased 4.9% in January, and the share of sales for first-time buyers continued to disappoint. The National Association of Realtors (NAR) reported January 2015 total existing home sales at a seasonally adjusted rate of 4.82 million units combined for single-family homes, townhomes, condominiums and co-ops, down from a revised 5.07 million units in December. January existing sales were up 3.2% from the same period a year ago.

Existing Home Sales January 2015

Existing sales from the previous month were down in all four regions, ranging from 2.7% in the Midwest to 7.1% in the West. Year-over-year, existing sales were up in all four regions, ranging from 5.6% in the South to 0.9% in the Midwest.

The first-time buyer share decreased to 26% in January, down from 29% in December and 31% in November. This continuing downward trend follows 2014 during which the annual share of first-time buyers fell to its lowest level in nearly three decades. Reports of easing mortgage standards will help first-time buyers, and a full recovery awaits their return to their typical 40% share.

Total housing inventory increased 0.5% in January to 1.87 million existing homes. At the current sales rate, the January 2015 inventory increased to a 4.7-month supply, up from a 4.4-month supply in December. NAR also reported that in January the typical time on the market was 69 days, up from 66 days in December, and slightly up from 67 days during the previous January. NAR reported that 30% of homes sold in January were on the market less than a month, down from 31% in December and 32% in November.

The distressed sales share January sales remained unchanged from December at 11%, and was down from 15% during the same month a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts. January all cash sales increased to 27% of transactions, up from 26% in December and 25% in November, but were down from 33% during the same month a year ago. Individual investors purchased a 17% share in January, unchanged from December, but that share was down from the 20% share last January. Some 67% of January investors paid cash, up from 63% in December and 61% in November. The awaited withdrawal of cash investors will create more opportunity for first-time buyers.

The January median sales price of $199,600 was 6.2% above the previous January, and represented the 35th consecutive month of year-over-year price increases. The median condominium/co-op price dropped for the sixth consecutive month to $198,300 in January, but was up 5.3% from the same period a year ago.

The Pending Home Sales Index decreased 3.7% in December, so the decline in January existing sales was not a surprise. However, it is expected that existing sales will regain their upward momentum during 2015, hopefully supported by the much awaited recovery for first-time buyers.

 

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http://eyeonhousing.org/2015/02/existing-sales-disappoint/

Easier mortgage rules, stable rates bring back U.S. home buyers | South Salem Real Estate

Many U.S. home buyers are returning to the market after almost a year as interest rates stabilize and regulators propose more relaxed rules on mortgage lending.

U.S. homebuilders D.R. Horton Inc and Toll Brothers Inc reported jumps in orders this week at rates not seen since last year.

“We’re definitely seeing a lot more purchase business than we have in the past,” said Matt Hackett, underwriting manager at Equity Now, a New York-based mortgage lender.

Interest rates fell in October to their lowest since June 2013 after rising steadily for the past year. Although up slightly since, they are still at historic lows.

New rules proposed will allow Americans to buy homes with down payments as low as 3 percent.

“The buyers realize that they’re never going to get this kind of low interest rate environment,” said David Crowe, chief economist at the National Association of Home Builders.

Wayne Wellington, a 47-year old inspector at the Broward County housing authority in Florida, said he wanted to upgrade his current house for a larger property before rates spiked.

“Interest rates look like they’re on the verge of moving up a little bit and I’ve got to capitalize now on these wonderful rates,” he told Reuters.

The improvement in buyer sentiment is bringing much needed relief to homebuilders, which reported an underwhelming spring selling season this year. Spring selling is to homebuilders what the holiday season is to retailers.

“First-time home buyers are the ones missing from the marketplace (and) part of the reason we’ve had a relatively slow recovery in housing. Some relaxation in the overly restrictive lending standards will bring the first-time home buyer back,” Crowe said.

The Dow Jones U.S. home construction index rose about 4 percent this year to Monday’s close, after doubling between January 2012 and January 2014.

Five of the largest U.S. homebuilders – D.R. Horton, Toll Brothers, Lennar Corp, PulteGroup Inc and KB Home – trade below their intrinsic values, according to StarMine.

The StarMine model measures how much a stock should be worth when considering expected growth rates over the next 15 years.

 

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http://finance.yahoo.com/news/easier-mortgage-rules-stable-rates-182541447.html