Daily Archives: May 2, 2012

Distressed Sales Were At 29 Percent Of Market | South Salem NY Real Estate

Distressed sales go through several stages – the initial overdue status for mortgage payments, the actual foreclosure by the financial institution, and the final sale of the property, frequently by Realtors® through the MLS.

  • Measured at the MLS sales level, distressed sales have hovered in the 30 to 35 percent range for a number of years, with heavy sales concentrations in a few states. According to the latest Realtors® Confidence Index, as of March 2012, distressed sales were 29 percent of total sales. Realtors® in some areas are reporting shortages in inventory as demand picks up and have indicated that additional distressed properties on the market could be sold relatively easily.
  • The Existing Home Sales market is bifurcated, with distressed properties frequently being sold at significant discounts to market, frequently in subpar condition when going to market, and reported to be popular with investors seeking bargain prices.
  • The level of distressed sales fluctuates from month to month.
  • Currently Realtors® in a number of states are reporting shortages of inventories of distressed real estate: the market is clearing distressed properties from the market at a rapid rate.

Personal Income Report | Katonah NY Real Estate

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses personal income data.

  • Personal income increased 0.4% in March while personal consumption rose 0.3%. The savings rate, therefore, inched up a notch to 3.8 percent. That is, on average, people spent $962 for every $1000 of take-home pay. During the housing boom years, people did not save and spent just about all of their income.
  • Income is recovering. Both wages and salaries are up in the aggregate as 3.5 million additional people are working now versus three years ago. Rental income has been rising robustly. Also, income to small business entrepreneurs, which always undergoes a big swing over a business cycle, is coming back as well. The income going to the unemployed as jobless benefits has been falling, though it is still at double the normal levels.
  • Income trends point to continued economic expansion, albeit at a slower than desired pace. Combining income with corporate profits assures that there is no fresh recession in sight for the remainder of this year.
  • A possible train wreck is possible in early 2013. Much higher taxes and sharp sequestered cuts to defense and discretionary government spending cuts are on tap at the start of 2013 – if Congress and the White House cannot pass a new budget. GDP could contract by 3% from these new impending laws. Most political analysts, however, believe some compromise will be made to agree on a new budget this year. Under the assumption of a compromise, GDP will likely grow by 2.5% in 2012 and by close to 3% in 2013.

Bedford Hills NY Real Estate | Homeownership Rate

The homeownership rate declined further in the latest data, with 65.5% of households owning their homes in the first quarter of 2012. At the peak, 69.4% were homeowners. Though a 5% decline may not sound too large to a casual observer, in a country with over 100 million households the figure represents a swing of 5 million families and households.

A review of historical homeownership shows that the number of homeowning families rise by about 1 million each year. But over the past six years, with the collapse of the housing market bubble, the total number of homeowners has fallen by a million, rather than adding 6 million as the historical relationship would have implied. On the flip side of the coin, the number of renters has shot up by 5 million over the same time period.

Real estate investors are trying to take advantage of the latest trend. Last year investment property purchases surged. Unlike the housing bubble years when investors were able to take out easy/funny mortgages, the current set of investors are going in predominately all-cash. Just this fact alone assures that the current real estate market is settling on very solid ground and a recovery in the housing market will be genuine and sustainable.

Cash Sales in March | Bedford NY Real Estate

Realtor® comments in the latest Realtors® Confidence Index survey,  indicate that an increasing number of home buyers have been making all-cash purchases in recent years.  The high preponderance of all-cash sales appears to be due to a number of factors:  Unrealistically high loan underwriting standards, a significant level of investor participation in the market, and sales of properties as second homes.  Cash sales made up 31 percent of residential sales in March.