Daily Archives: June 26, 2012

Home Prices in U.S. Cities Fall at Slowest Pace Since ’10 | Armonk NY Realtor

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Residential real estate prices fell in April at the slowest pace in more than a year, adding to signs the U.S. housing market was firming.

The S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010, after decreasing 2.6 percent in the year ended March, the group said today in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5 percent drop.

Enlarge image Home Prices in 20 U.S. Cities Fall at Slowest Pace

Home Prices in 20 U.S. Cities Fall at Slowest Pace

Home Prices in 20 U.S. Cities Fall at Slowest Pace

Emile Wamsteker/Bloomberg

A Toll Brothers Inc. model home stands in Randolph, New Jersey.

A Toll Brothers Inc. model home stands in Randolph, New Jersey. Photographer: Emile Wamsteker/Bloomberg

Rosenberg on U.S. Housing Market, Economy, Europe

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June 26 (Bloomberg) — David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., discusses the outlook for the U.S. economy, Europe’s debt crisis and financials. Rosenberg talks with Tom Keene, Sara Eisen and Ken Prewitt on Bloomberg Television’s “Surveillance.” Bloomberg’s Christine Harper also speaks. (Source: Bloomberg)

U.S. Home Prices Starting to Stabilize, Low Says

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June 26 (Bloomberg) — Christopher Low, chief economist at FTN Financial, talks about the outlook for the U.S. housing market and economy. Low talks with Tom Keene, Ken Prewitt and Sara Eisen on Bloomberg Television’s “Surveillance.” (Source: Bloomberg)

A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2 percent unemployment rate.

“Housing has picked up since the middle of last year,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York, who correctly forecast the monthly gain in prices. “Sales have improved and the inventory of homes for sale has been falling, which has brought a bit more balance into the market and fed into a bit of stabilization of prices.”

Estimates in the Bloomberg survey ranged from declines of 1.7 percent to 3.1 percent. The Case-Shiller index is based on a three-month average, which means the April data was influenced by transactions in March and February.

Stocks Rise

Stock-index futures extended earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.2 percent to 1,309 at 9:22 a.m. in New York.

Home prices adjusted for seasonal variations climbed 0.7 percent in April, matching the prior month’s gain, which was revised up from a previously reported 0.1 percent increase. It was the best back-to-back gain since mid 2009. Unadjusted prices increased 1.3 percent in April as 19 of 20 cities showed gains.

Phoenix showed the biggest adjusted monthly increase, with prices rising 2.5 percent from March. Detroit showed the biggest decrease at 2.1 percent.

The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Ten of the 20 cities in the index showed a year-over-year decline, led by a 17 percent drop in Atlanta, the only city to show a double-digit decrease.

Phoenix Rises

Phoenix showed the biggest year-over-year increase, with prices rising 8.6 percent in the 12 months to April.

“We finally saw some rising home prices,” David Blitzer, chairman of the S&P index committee, said in a statement. “While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.”

Prices may be on an upward trajectory as the glut of unsold houses that went on the market after the recession shrinks. There were 2.49 million existing homes for sale in May, down from an average supply of 2.93 million in 2011 and 3.22 million in 2010, data from the National Association of Realtors show.

The same NAR report indicated the median price of an existing home climbed 7.9 percent to $182,600 last month, the highest since June 2010, from $169,300 in May 2011.

More Traffic

“Nobody feels like prices are going down anymore,” Larry Nicholson, president and chief executive officer of homebuilder Ryland Group Inc. (RYL), said during a June 13 investor conference. “Everything we see now would tell us the second half of the year will be better than last year. We’re seeing the quality of the traffic pick up. We’re seeing new traffic. The business has gotten better and moving back towards a normalized process.”

Helping potential buyers step into the market, the average rate on a 30-year fixed loan dropped to 3.66 percent last week, the lowest in data going back to 1972, according to Freddie Mac.

Even so, Federal Reserve Chairman Ben S. Bernanke said last week the economy wasn’t getting a typical boost from a real estate recovery. To spur faster economic growth and more activity in housing, the central bank announced last week it would buy securities to extend the maturities of assets on its balance sheet, thereby lowering longer-term interest rates.

Bloomberg Table

============================================================

1-months 3-months 1-year 2-years 3-years

earlier earlier earlier earlier earlier ============================================================ US Composite-20 1.28% 0.41% -1.90% -6.06% -2.48% ————————————————————San Francisco 3.39% 3.78% -1.36% -6.84% 9.92% Washington DC 2.77% 2.33% 1.58% 1.00% 8.37% Phoenix 2.47% 6.00% 8.62% -0.95% 4.37% Atlanta 2.35% -1.10% -17.00% -20.05% -19.84% Cleveland 2.32% 1.38% -1.27% -7.56% -1.24% Portland 2.02% 1.28% -0.92% -10.00% -10.37% Seattle 1.99% 2.93% -0.96% -7.79% -10.40% Tampa 1.87% 2.67% 0.81% -7.02% -9.22% Dallas 1.70% 3.36% 2.82% -1.46% 1.89% ============================================================

1-months 3-months 1-year 2-years 3-years

earlier earlier earlier earlier earlier ============================================================ Denver 1.69% 2.30% 2.80% -1.37% 2.95% Charlotte 1.60% 2.42% 0.76% -4.19% -6.32% Los Angeles 1.53% 0.88% -3.57% -5.59% 1.76% San Diego 1.38% 2.02% -1.78% -5.97% 5.07% Chicago 1.12% -3.88% -5.63% -13.71% -15.08% Las Vegas 1.08% 0.65% -5.84% -11.65% -19.18% Boston 0.87% -0.45% 0.09% -4.15% 0.51% Minneapolis 0.51% -1.33% 3.80% -7.97% 1.12% Miami 0.40% 1.98% 3.17% -2.56% -3.05% New York 0.13% -1.87% -3.77% -6.60% -7.59% Detroit -3.62% -7.14% 1.23% -3.76% -6.66%

via bloomberg.com

Orlando property prices rise for fourth month in a row | Bedford Corners Real Estate

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Residential property prices in Orlando, Florida, appreciated for the fourth consecutive month in May, with the average price of a home in the city rising by 2.6% from April and 11.1% since the start of the year, according to a new report released by the Orlando Regional Realtor Association.

The four-month trend of rising prices suggests that the market is recovering following a turbulent period that saw prices collapse by up to 70% across parts of Orlando since the market peaked in late 2007.

“The good stuff is getting snapped up. We see more and more multiple offers. It’s reminiscent of 2008,” Mark Dean, broker for Maingate Real Estate in Orlando, told the press.

The core property markets in Orange and Seminole counties are performing particularly well, with the midpoint price in May stood at $120,000 (£76,500), up 9% from a year earlier.

Furthermore, the average property took an average of 12 weeks to sell – three weeks faster than those that sold in May 2011.

The inventory of homes is the most anemic it has been since 2005. At the current pace of sales, the May backlog would sell out in 3.5 months, compared with a six-month inventory, considered a market in balance.

Demand for homes in Orlando is primarily being supported by attractively priced properties, potentially high rental returns and low mortgage borrowing costs – the average interest rate that buyers paid for a 30-year mortgage in May was 3.89%, the lowest on record

via propertyoverseastoday.com

Irish property prices could fall another 20% | Chappaqua Real Estate

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Credit rating agency Moody’s warns that residential property prices in Ireland could plummet by a further 20% from today’s levels before the market finally bottoms out.

If accurate, this would bring the aggregate peak-to-trough fall to 60%, potentially leaving Ireland’s rate of mortgage arrears as high as 13.99%.

“The steep decline in house prices since 2007 has placed the majority of borrowers deep into negative equity,” the agency explained.

The Irish property market’s prospect for recovery has not been helped by Moody’s decision to lower its growth estimate for the Irish economy in 2012 to just +0.2%.

“In this weak economic recovery, it will be difficult for distressed borrowers to significantly increase their debt servicing capabilities and so arrears are likely to continue increasing,” it said.

The collapse in Irish property values is attracting a growing number of potential purchasers, with residential property viewing figures up 400% in Q1 2012 compared to the final quarter of 2011, according to Savills.

The property consultant says that its latest viewing data suggests that homebuyers are returning to the Irish property market, particularly in the greater Dublin area, where the number of homes for sale is at its lowest level for five years

via propertyoverseastoday.com

Further Spanish property price reductions | Armonk Real Estate

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It remains a buyer’s market in Spain, as desperate vendors continue to slash asking prices in a bid to attract more homebuyers, according to the latest data from property portal idealista.

The figures reveal that over half – 54% – of existing vendors reduced their asking prices by an average of 12% in May compared to the same month last year.

The reduction in property asking prices is pretty much in line with the latest property price index from the National Institute of Statistics (INE), which shows that average Spanish house prices fell 12.6% in Q1 compared to corresponding month last year, with the greatest decline – 13.3% recorded in the resale market.

The latest INE index represents the greatest year-on-year fall in prices since the housing crisis started, with the biggest declines of almost 15% in regions like the Balearics and Catalonia.

Despite the recession in Spain and the dire state of the country’s property market, there is mounting evidence to suggest that more international homebuyers are looking to take advantage of cheaper property prices.

Over 3.2m searches were conducted on Rightmove Overseas in May, with Spain accounting for a quarter of all searches on the website. Traditional locations, such as Costa del Sol and Costa Blanca, are the main areas of interest.

via propertyoverseastoday.com

Property boom in Canada continues | Mount Kisco NY Real Estate

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Canadian home prices increased by 5.2% in May compared to same month last year, according to the Canadian Real Estate Association (CREA).

The data released by the industry group shows that the greatest property price growth was recorded in Toronto, up 7.9% year-on-year. Prices appreciated by 4.8% in Calgary, 3.3% in Vancouver, and 2.2% in Montreal.

The rapid rise in Canada property prices is becoming a growing concern for policymakers due to fears of a housing bubble in the country.

The federal government has already introduced various measures aimed at cooling the market, including tightened rules for borrowers and mortgage lenders.

The increase in the Canada home price index for May was the same as April’s annual gain.

“If the government needed further validation to tighten its mortgage rules yesterday, it has it with the May home price report,” Sal Guatieri of BMO Capital Markets.

CREA’s chief economist, Gregory Klump, commented: “The continuation of low interest rates will continue to support Canadian housing activity and prices for some time to come.

via propertyoverseastoday.com

U.S. property prices increase for third straight month | North Salem NY Real Estate

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U.S. property prices increased by 0.8% in April from the previous month, the third consecutive month, as the residential property market shows signs of stabilisation, according to the Federal Housing Finance Agency (FHFA).

The rise beat the 0.4% increase that was the average projection of 19 analysts in a Bloomberg survey.

Property prices, which have appreciated 3% year-on-year, are being supported by greater demand, thanks to lower unemployment, low interest rates and a restricted supply of homes for sale.

The FHFA index, which measures price changes of single- family houses, showed increases in six of the nine regions covered on a seasonally adjusted basis. The monthly gain was led by a 2.2% rise in the area that includes California and Oregon. Prices fell 1.2% in the region that includes Massachusetts and Maine.

The U.S. gauge is 18% below its 2007 peak and is at roughly the same level it was in April 2004, the FHFA said.

The latest Zillow home price index also shows that property prices in the USA increased in May compared to the previous month, climbing 0.5%

via propertyoverseastoday.com

New home sales jump 7.6% in May | Cross River NY Real Estate

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NEW YORK (CNNMoney) — The housing market got some good news on Monday, as the government reported that sales of new homes rose 7.6% in May.

Sales hit an annual rate of 369,000, according to the Census Bureau, compared with the revised April rate of 343,000. That’s up 20% year-over-year, but still a long way from the annual rate of nearly 1.4 million recorded during real estate’s boom years.

The sales hike beat expectations. Economists had forecast a sales rate of 350,000 new homes, according to Briefing.com.

The uptick in home sales was in line with other recent positive reports in the housing market. In May, home builders applied for permits to build new homes at the highest rate since September 2008, and mortgage rates hit record lows last week.

But not all housing numbers looked rosier for the month. Existing home sales slowed slightly in May, slipping 1.5% versus the month prior.

Economists said that the numbers restored some optimism after the soft March and April numbers.

“This improvement indicates that 2012 will be a year of gradual growth for new homes,” said Robert Dietz, an economist for the National Association of Home Builders. “It also means that we’ve seen the end of inventory that’s climbed over the last couple of years.”

Dietz explained that new home sales are a closely-watched barometer of how the economy is doing, since increases in construction translate into job creation.

“Each new home built represents three full-time jobs,” he said. “That’s just good for the economy overall.” To top of page

via money.cnn.com

Westchester – When the Appraisal Sinks the Deal | South Salem NY Real Estate

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IN White Plains recently, 16 couples attended an open house at a wood-frame colonial with four bedrooms and two and a half baths listed for $799,000.

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    What was surprising, said Gary Leogrande, the lead broker for the Leogrande Team at Keller Williams NY Realty, was not the number of people interested in the house — he had already noted an increase in real estate activity this spring — but rather that several of those attending the open house were already in contract to buy other houses.

    “At first I couldn’t imagine what was going on,” recalled Mr. Leogrande, the president of the Empire Access Multiple Listing Service. “Why were they here at this open house if they had signed a contract on another?”

    When he inquired, the buyers explained that at the last minute, as they had approached the finish line, approved mortgages in hand, the appraisals on the houses they had hoped to buy came in lower than expected.

    When that happens, the signed contract is no longer binding. According to Mr. Leogrande and other brokers, this situation has been occurring more frequently as the market tries to rebound but is still unstable.

    Possible compromise solutions in such cases: the seller can come down in price to reduce the amount of the mortgage; the potential buyer can increase the down payment; or the two parties can meet somewhere in between. But in some cases, frustrated buyers choose to wash their hands of the deal altogether, and like those at the open house, they explore other options.

    “We’re at a point in the market where prices are finally trending upward,” said Michael Marciano, a broker with Keller Williams NY, “but banks are still wary of another surge, and they don’t want to be left holding the bag again.”

    Mark Logue, the president of Thoroughbred Mortgage, an affiliate of Wells Fargo and Houlihan Lawrence, said that in the aftermath of the real estate market crash, appraisers felt pressure from skittish lenders to value homes conservatively.

    Another factor complicating appraisers’ lives these days is that stricter state and federal laws require them to base their comparisons on at least six recent similar sales, which after a slow sales period is sometimes hard to do, Mr. Logue said.

    The appraisers might also be strangers to the neighborhood where they are working — which is not always conducive to making accurate appraisals.

    Federal and state code-of-conduct laws passed in the last several years require the bank to choose an appraiser through an intermediary company rather than directly. The goal is to avoid conflicts of interest by preventing lenders, borrowers and brokers from exerting pressure on appraisers. But, said Ted Holmes, Prudential Douglas Elliman’s director of operations for Westchester, the law sometimes results in the hiring of appraisers from out of the area, who have no knowledge of a local market and do not factor in critical variables.

    That can prove problematic in a county like Westchester, where there are many municipalities with overlapping school districts and ZIP codes. For example, a home with a Scarsdale address might actually be in the low-performing Yonkers school district. Or conversely, a modest house may be in a sought-after school district, which assessors unfamiliar with an area may not factor into their reports.

    The laws governing appraisals, taken together with the persistent uncertainty in the housing market, have added perils to the process of getting a house from listing to closing, said Sally Slater, a broker with Prudential Douglas Elliman in Bedford.

    Ms. Slater cited a recent $815,000 listing in Bedford for a ranch with three bedrooms and two and a half baths on two acres with an in-ground pool. Buyer and seller signed a contract for $785,000 and were set to close in 30 days. It was at that point, she recalled, that the appraisal came in at only $700,000.

    “My first response was, ‘Something is clearly wrong here!’ ” Ms. Slater said. “Let’s try another bank. Let’s get another mortgage.” They did, and when the second appraisal came in at $785,000, the sale moved forward.

    The broker described the clients as first-time buyers, already worried about making such a large investment. The last-minute snag, she said, almost scuttled the deal. (As did other buyers and sellers caught in similar predicaments, the buyers requested that their names not be used.)

    In another case, Ms. Slater said, an appraiser from the Midwest was sent to place a value on 105 acres of undeveloped land in Bedford for sale at $1.8 million. He appraised the property at $600,000. Ms. Slater sought an independent appraisal from someone familiar with local property values, who valued the land at its asking price.

    In such cases, buyers are sometimes willing to make up the difference, even if it is substantial. Take for example a century-old three-bedroom center-hall colonial on five acres that Mr. Logue cited in Yorktown. The listing was for $975,000, and the buyer and seller signed a contract for $899,000, only to have the appraisal come in at $815,000.

    In this case, there were not enough comparable properties in the area to request another appraisal, Mr. Logue said, explaining that the two parties are renegotiating.

    “These buyers are not backing out,” he said. “They’re convinced that the view of the countryside from the top of their hill and the charm of the antique house are worth more than whatever some appraiser says.”

    via nytimes.com

    Home Sales Reach Two-Year High as U.S. Rates Fall: Economy | Katonah NY Real Estate

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    Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool.

    Sales of New Homes in U.S. Increased

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    June 25 (Bloomberg) — Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool. Erik Schatzker reports on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

    Enlarge image Sales of New U.S. Homes Increased in May to Two-Year High

    Sales of New U.S. Homes Increased in May to Two-Year High

    Sales of New U.S. Homes Increased in May to Two-Year High

    Emile Wamsteker/Bloomberg

    The deck of a Toll Brothers Inc. model home stands in Randolph, New Jersey. Falling borrowing costs and more affordable properties may keep luring buyers, even as a cooling job market and limited access to credit restrain the recovery.

    The deck of a Toll Brothers Inc. model home stands in Randolph, New Jersey. Falling borrowing costs and more affordable properties may keep luring buyers, even as a cooling job market and limited access to credit restrain the recovery. Photographer: Emile Wamsteker/Bloomberg

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    Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month, the Commerce Department reported today in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low.

    Falling borrowing costs may keep luring buyers to builders like Toll Brothers Inc. (TOL), even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a program to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion.

    “It’s another sign of life in the housing sector,” said Brian Jones, a senior U.S. economist for Societe Generale SA in New York, who forecast a gain to 362,000. “It’s consistent with a gradual improvement in activity, but we’ve got miles to go before we get back to normal.”

    Stocks dropped amid concern that a meeting of European leaders later this week will fail to help contain the region’s debt crisis. The Standard & Poor’s 500 Index dropped 1.6 percent to 1,313.72 at the 4 p.m. close in New York. The yield on the benchmark 10-year Treasury note fell to 1.60 percent from 1.68 percent late on June 22.

    BIS Report

    Elsewhere, the Basel, Switzerland-based Bank for International Settlements said in its annual report published yesterday that central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen finances fall short.

    Bloomberg survey estimates for U.S. new-home sales, which are counted when contracts are signed, ranged from 327,000 to 375,000. The April reading was unrevised at the previously estimated 343,000, while March and February were revised up.

    The median sales price increased 5.6 percent from the same month last year, to $234,500, today’s report showed. Prices have climbed on a 12-month basis since February, the best performance in five years.

    Purchases rose in two of four U.S. regions last month, led by a 37 percent jump in the Northeast, while the South climbed 13 percent. Demand dropped 11 percent in the Midwest and 3.5 percent in the West.

    Lean Supply

    The number of newly constructed houses on the market was at 145,000 compared with the record low of 144,000 reached in April and March. The record high of 572,000 was reached in July 2006. The supply of new houses on the market at the current sales pace dropped to 4.7 months, the lowest since October 2005, from 5 months in April.

    In response to improving demand, builders broke ground on 516,000 single-family houses last month at an annual pace, up 3.2 percent from April and the most this year, the Commerce Department reported last week.

    The Washington-based National Association of Home Builders/Wells Fargo sentiment index rose by 1 point this month to 29, the highest since May 2007, another report last week showed.

    Horsham, Pennsylvania-based Toll Brothers, the largest U.S. luxury-home builder, on May 23 reported second-quarter profit that beat estimates as orders jumped.

    Suppliers Benefit

    United Technologies Corp. (UTX) and Lennox International Inc. (LII), makers of heating and air conditioning units, are among companies benefitting from developers’ positive outlook. Lennox, based in Richardson, Texas, had a 40 percent increase in sales to new-home builders in the first quarter. United Technologies, in Hartford, Connecticut, forecasts about 700,000 housing starts this year, Chief Financial Officer Gregory Hayes said.

    “The expectation is we’re not going to see a huge recovery in the U.S. residential marketplace, but we should see a steady recovery,” Hayes said at a June 14 conference. “Residential is coming back, but it’s very, very slow.”

    The stabilization in housing has boosted builder shares this year. The Standard & Poor’s Supercomposite Homebuilder Index has climbed 33 percent this year through June 22, compared with a 6.2 percent gain for the broader S&P 500.

    Residential construction hasn’t contributed to economic growth over the course of an entire year since 2005, when it accounted for 0.4 percentage point of the 3.1 percent increase in gross domestic product. From 2006 through 2009, the homebuilding slump subtracted 0.8 percent point from growth on average. The declines diminished over the past two years.

    Shrinking Share

    Newly constructed houses made up 6.7 percent of the residential market last year, down from a high of 15 percent during the boom of the past decade.

    Sales of existing homes declined in May as fewer distressed properties reached the market, the National Association of Realtors reported last week. The decline in transactions involving foreclosures and short sales, where a lender agrees to accept less than the balance of the mortgage, helped push the median price of a previously owned house up 7.9 percent from the same time last year, the biggest 12-month gain since February 2006.

    Less competition from existing houses and even lower mortgage rates may keep spurring the market. The average rate on a 30-year fixed loan dropped to 3.66 percent last week, the lowest in data going back to 1972, according to Freddie Mac.

    The central bank last week aimed to keep borrowing costs low. Policy makers announced they will expand the Operation Twist program to extend the maturities of assets on its balance sheet. They said they stood ready to take further action to put unemployed Americans back to work. Fed officials also lowered their outlook for growth and employment.

    via bloomberg.com