Tag Archives: South Salem Real Estate

Single-family housing starts slows | South Salem Real Estate

The May pace of single-family housing starts was effectively flat relative to April after downward revisions for prior months, standing at a seasonally adjusted annual rate of 764,000. However, according to estimates from the Census Bureau and the Department of Housing and Urban Development, the May rate marks a 10% gain in the pace of single-family construction on a year-over-year basis.

Yesterday’s increase in the NAHB/Wells Fargo Housing Market Index suggests the industry will expand single-family home construction in the months ahead.

starts_hmi_june

On a three-month moving average basis, single-family starts ticked down due to the elevated construction pace recorded in February. While NAHB expects growth in single-family construction due to favorable demographics, lot supplies are a growing challenge holding back production, particularly in markets in the West and Northeast.

Multifamily starts (2+ unit production) came in at a 400,000 pace on a seasonally adjusted annual basis, showing surprising strength and up 8% on a year-over-year basis. However, the pace of multifamily permits is down almost 28% on year-over-year basis as of May. This is consistent with the NAHB forecast, which shows a smaller total of multifamily starts for this year compared to 2015.

Regionally, expansion has been particularly strong in the South, where single-family starts for April are 17% higher than a year ago. On a non-seasonally adjusted basis, 55% of single-family starts for the month were located in the South.

There has been some weakening in the West, where single-family starts are down almost 5% on a year-over-year basis. Access to lots is a key concern. The Midwest showed a monthly drop of 15%, but on a year-over-year basis single-family start are 8% higher. Single-family construction is up almost 13% in the Northeast.

units under production

Taking the long view, an examination of the count of homes currently under construction provides the degree of market mix and momentum of the recovery in home construction. As of May, 56% of units under construction in the nation were multifamily (574,000), a 16% gain in the total from a year earlier.

 

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http://eyeonhousing.org/2016/06/single-family-starts-flat-in-may/

Number of Unfilled Construction Sector Jobs Keeps Rising | South Salem Real Estate

The count of unfilled jobs in the overall construction sector reached another post-Great Recession high in March.

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) increased to 210,000 in March. The current estimate represents the highest monthly count of job openings since May 2007.

The open position rate (job openings as a percent of total employment) for March was 3%, also a cycle high. On a three-month moving average basis, the open position rate for the construction sector increased to 2.7%.

The overall trend for open construction jobs has been an 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_march

The construction sector hiring rate, as measured on a three-month moving average basis,  was effectively unchanged in March at 4.9%. In contrast, the quits rate for construction increased significantly in March, rising to a 2.4% rate. This bears watching in the months ahead as it may signal that employers are having trouble retaining existing workers given tight labor market conditions.

Monthly employment data for April 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builders and remodelers hiring stalled in April, falling by 3,800. However the recent hiring pace remains stronger than the second half of 2015. The current 6-month moving average of jobs gains for residential construction is just under 19,000.

Residential construction employment now stands at 2.590 million, broken down as 728,000 builders and 1.86 million residential specialty trade contractors.

res construction employment Apr

Over the last 12 months home builders and remodelers have added 141,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 603,800 positions.

In April, the unemployment rate for construction workers declined significantly to just under 6% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010.

 

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http://eyeonhousing.org/2016/05/number-of-unfilled-construction-sector-jobs-keeps-rising/

Dearth of homes for sale in So California | South Salem Real Estate

Packed open houses. Bidding wars. Rising prices.

That’s the landscape for much of the Southern California housing market as the spring selling season gets underway. Competition is as fierce, or even greater, than last year in many corners of the Southland, and would-be buyers can expect a pitched battle if they want to close a deal, real estate agents say.

The frenzied start has been driven by a dearth of homes for sale, low mortgage rates and steady job growth. Homes are selling faster than a year earlier, with more of them going for above the list price, data from online brokerage Redfin show.

“Be ready to write the offer on the Realtor’s car,” mortgage broker Jeff Lazerson said.

Another sign of the market’s strength came this month when data provider CoreLogic reported that sales in February jumped 9% from a year earlier. The median price, meanwhile, climbed 3.7% — the 47th straight month it’s risen.

Lazerson said his clients in Los Angeles and Orange counties are putting an average of five offers on a house before they’re successful. And he’s seeing more demand from first-time home buyers, as well as those who want to upgrade to a bigger home.

“The market seems to be healthy again on all levels,” he said.

Real estate agent Heather Presha has seen the craziness firsthand.

With few homes for sale in the Leimert Park neighborhood where she works, buyers are flooding open houses that pop up. Many are coming from the Westside, no longer able to afford a home near the ocean as prices have steadily risen across the region.

The added demand is pushing values higher in the South L.A. neighborhood filled with old Spanish-style homes.

Pat Douglas, another agent in Leimert Park, put it this way: “Anything good that is on the market is going quick with multiple offers.”

In Los Angeles County, there was a 4.9-month supply of homes for sale in February compared with a 5.2-month supply a year earlier — meaning no homes would be on the market after that time period if sales continued at their current pace and no new listings emerged, according to the California Assn. of Realtors. Orange County saw a similar trend.

The Realtors consider a six- to seven-month supply a market that favors neither buyers nor sellers.

“The inventory issue is why price growth is strong,” said Redfin chief economist Nela Richardson.

Recently there’s been a healthy jump in listings, Richardson said, but it’s unclear if the trend will hold.

If it does, house hunters such as Abigail Lee and her husband, Ray, would be overjoyed.

The couple are looking for a home under $2 million, but they’ve found little suitable near a good public school. They’ve put in only two offers in the roughly six months they’ve been looking — and were unsuccessful both times.

 

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http://www.latimes.com/business/realestate/la-fi-spring-market-20160328-story.html

Leading Marks Index Points to Slow and Steady Housing Recovery | South Salem Real Estate

The economic and housing recovery continues at a slow, but steady pace. For the country as a whole, theNAHB/First American Leading Markets Index (LMI), released today, rose to .94 in the fourth quarter of 2015, .01 point higher than its level in the third quarter of 2015, .93, and .04 point higher than its level from one year ago, .90. The index uses single-family housing permits*, employment, and home prices to measure proximity to a normal economic and housing market. The index is calculated for both the entire country and for 337 local markets, metropolitan statistical areas (MSAs). A value of 1.0 means the market (or country) is back to the last level of normality.

Nationally, all three components of the LMI contributed to the 4-quarter growth in the nationwide score, .04 point to .94, but only house prices and permits contributed to the quarter-over-quarter increase, .01 point, as the employment component of the LMI was unchanged over the last 3 months. Over the year, the house prices component increased from 1.32 to 1.38, 1.37 to 1.38 over the quarter, the permits portion rose from .44 to .48, .47 to .48 over the quarter, and employment rose from .95 to .96, remaining unchanged over the quarter. Regionally, 117 of the 337 markets, 35%, have an LMI Score that is greater than or equal to 1.0 and are considered normal.

Presentation4

While most markets do not have an Overall LMI Score that is greater than or equal to 1.0, a recovery in one or more components of the LMI has taken place in MSAs across the country. At 322, the number of MSAs where house prices have reached normal is the highest of any of the LMI components, however that level has been unchanged over the year. In contrast, the recovery in employment and in permits is smaller but spreading, with the expansion in employment further along. The number of MSAs whose employment component has recovered reached 76 in the fourth quarter of 2015, 11 more than its level in the third quarter and a 73% increase from its level from one year ago, an additional 32 markets. Meanwhile, the number of MSAs whose permits score reached or exceeded 1.0 totaled 41, 8 more than the previous quarter and 17 more than 1 year ago

 

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http://eyeonhousing.org/2016/02/leading-marks-index-points-to-slow-and-steady-recovery-for-the-us/

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

Stronger Growth for Residential Construction Employment | South Salem Real Estate

The count of unfilled jobs in the overall construction sector increased in November, as hiring in the home building sector accelerated.

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) increased to 135,000 in November from 121,000 in October. The cycle high of 168,000 open positions was set during March.

On a three-month moving average basis, the open position rate (job openings as a percent of total employment) for the construction sector held steady at 1.9% for November. The overall trend for construction open jobs has been increasing, although the current open rate is down from the cycle high last reached in May (2.4%) as construction hiring picked up in recent months.

cosntr JOLTS

The construction sector hiring rate, as measured on a three-month moving average basis, increased to 5.1%, although it remains near rates set in the spring of 2015. The quits rate for construction jumped to 2% for November, the highest rate since December 2014.

Monthly employment data for December 2015 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builders and remodelers increased hiring significantly on a seasonally adjusted basis for the last two months. Total residential construction employment grew by 23,100 for December, after a pickup of 31,500 for November. The November gain was the largest single increase during the post-recession period.

The pace of hiring for the residential construction industry had been slowing over the course of 2015. With the jumps in November and December however, the six-month average of monthly employment growth is now a healthy 15,000.

Residential construction employment now stands at 2.534 million, broken down as 710,000 builders and 1.82 million residential specialty trade contractors.

res constr employ

Over the last 12 months home builders and remodelers have added 137,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 547,700 positions.

In December, the unemployment rate for construction workers increased slightly to 7% on a seasonally adjusted basis, up from the cycle low of 6.5% set during July. The unemployment rate for the construction occupation has been on a general decline since reaching a peak rate of 22% in February 2010.

Many builders continue to cite access to labor as a top business challenge as the market recovers (for example, see this NAHB survey on the issue, focusing on builder and subcontractor workers).

For the economy as a whole, the November JOLTS data indicate that the hiring rate held steady at 3.6% of total employment. The overall open job rate increased to 3.7%, near the 3.8% cycle high set during July.

 

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http://eyeonhousing.org/2016/01/stronger-growth-for-residential-construction-employment/

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/

Northeast, Midwest Markets Warm up as Year Winds Down | South Salem Real Estate

Outside it may be cold and snowy with early storms, but housing prices are warning up in some of the most stunningly negative Midwestern and Northeastern markets, according to Clear Capital’s November market report.

Regionally the West still leads the appreciation parade, with quarterly increases of 1.2 percent and annualized price growth at 7.5 percent.  But the Northeast and Midwest both gained ground compared to earlier in the year.  The Northeast saw an increase in quarterly growth in November, a 0.1% uptick. This is an unexpected shift for a region that, just a few months prior, lagged behind the rest of the country in quarterly growth.

“As the year draws to a close, housing continues to recalibrate and the Midwest maintains its impressive trend. November’s data shows Detroit up 135% from the trough, with other regional MSAs demonstrating strong growth. In January we predicted that the Midwest would be a frontrunner this year for both homeowners and investors, and the region’s small percentage point gains, subsiding losses, and decreased volatility indicate steady improvement that is reflective of the greater recovery,” wrote Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

Other market showing new life in the second half of the year are:

  • Providence, R.I. – a mainstay on the list of lowest performing markets until October – has seen a huge increase in growth, jumping from -0.8% quarterly growth in October to 3.1% in November. Gains of this magnitude are more expected during the early spring season, when markets typically gain momentum leading into the peak summer season.
  • Cleveland and Detroit have also seen a similar upward pattern during this typically slower season. Quarterly growth in Cleveland has bumped up 0.2% to 2.2% quarterly growth, while Detroit’s quarterly growth has upticked 0.1% from October to 2.5% quarterly growth in November.
  • While these increases are notable, bringing Cleveland 52.3% and Detroit a whopping 135.1% above trough, don’t be blindsided by the numbers. Cleveland is still -37.1% below peak while Detroit is -39.3%, demonstrating that both MSAs still have a long road to recovery ahead.

 

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http://www.realestateeconomywatch.com/2015/12/northeast-midwest-markets-warm-up-as-year-winds-down/

Year-on-year, new home sales grew 4.9 percent | South Salem Real Estate

Sales of new single-family houses in October 2015 were at a seasonally adjusted annual rate of 495,000, up 10.7 percent from last month but below market expectations.

The inventory of properties for sale reached the highest since early 2010 while both median and average prices decreased.

New Home Sales in the United States averaged 654.25 Thousand from 1963 until 2015, 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

 

Mortgage Rates average 3.97% this week | South Salem Real Estate

Freddie today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates largely unchanged as analyst expectation turned from world events to the Federal Open Market Committee’s (FOMC) October minutes.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.97 percent with an average 0.6 point for the week ending November 19, 2015, down from last week when it averaged 3.98 percent. A year ago at this time, the 30-year FRM averaged 3.99 percent.
  • 15-year FRM this week averaged 3.18 percent with an average 0.5 point, down from last week when it averaged 3.20 percent. A year ago at this time, the 15-year FRM averaged 3.17 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.98 percent this week with an average 0.5 point, down from last week when it averaged 3.03 percent. A year ago, the 5-year ARM averaged 3.01 percent.
  • 1-year Treasury-indexed ARM averaged 2.64 percent this week with an average 0.3 point, down from 2.65 percent last week. At this time last year, the 1-year ARM averaged 2.44 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.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM or the regional breakouts for the 30-year and 15-year fixed rate mortgages, or the 5/1 Hybrid ARM