Monthly Archives: May 2013

The Inflation Data Are Pointing To Another Housing Bubble | Katonah Real Estate

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t’s easy to spot a Fed-sponsored housing bubble if you look in the right places. The best place to start is an analysis of price inflation as measured by the BLS as compared to a CPI-variant that takes actual housing prices into consideration instead of rent.

This is a followup to my post Dissecting the Fed-Sponsored Housing Bubble; HPI-CPI Revisited; Real Housing Prices; Price Inflation Higher than Fed Admits.

Data for the following charts is courtesy of Lender Processing Services (LPS), Specifically the LPS Home Price Index (HPI).

The charts were produced by Doug Short at Advisor Perspectives. Anecdotes on the charts in light blue are by me.

Background

The CPI does not track home prices per se, rather the CPI uses a concept called “Owners’ Equivalent Rent” (OER) as a proxy for home prices.

The BLS determines OER from a measure of actual rental prices and also by asking homeowners the question “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”

If you find that preposterous, I am sure you are not the only one. Regardless, rental prices are simply not a valid measure of home prices.

OER Weighting in CPI

CPI categories

Mish Shedlock

OER is now at 24.041% of CPI, which still rounds to 24.0%, but the other housing wedge is now an even 17.0%, down from 17.1% in the previous version.

 

The rest of the charts show various effects if one substitutes actual home prices as measured by the HPI in the data.

Two Inflation Indexes 

CPI with HPI substitute for OER and FFR

Mish Shedlock

click on any chart for sharper image

As measured by the CPI, price inflation is 1.47% annualized. As measured by HPI-substitution, price inflation is a much higher 3.33%. The Fed would have you believe everything is under control. Of course they said the same thing in 2005.

Read more: http://globaleconomicanalysis.blogspot.com/2013/05/hugely-negative-real-interest-rates.html#ixzz2SnQBfapO

Do You Know These Time Saving Blogging Tips? | Cross River Realtor

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Over the last few days we’ve been tackling the problem of ‘not enough time to blog’ that many bloggers struggle with. I started by sharing 7 tips for busy bloggers on how to find time to blog and then had 14 of my blogging friends share a little about their blogging routines.

When I asked these 14 bloggers about their routines I also asked if they had any tips for other busy bloggers. I’m glad I did because collectively they give some great insight below.

Chris Garrett

chris_garrett_blogworld.jpg

  1. Write down any ideas you have and transfer them to your blog drafts as soon as possible. If you can, skip the writing down part and go direct to your blog drafts. Maybe use a smart phone so you are more likely to have a handy route to your blog!
  2. In your drafts add a semi-decent headline (not final, just enough to get the idea across) and some bullets. At the very least the point you want to make. If you don’t then you will forget what your post was about. Trust me on this, I speak from experience, ha.
  3. Work out the best time of day for you to write and schedule time in that slot. I find my best writing is between 10am and 1pm, and second best between 6pm and 8pm. After lunch is a better time for me to talk but not write. We all have a rhythm, listen to yours.
  4. Set a timer. Tell the family to not disturb you until the time is up. Close all distractions. Write.
  5. Break up your writing into less daunting chunks if you need to. One session just do outlines. Next session do bad drafts. Third some editing. Then formatting. Then final polish and posting. Don’t try to do too much otherwise you will never do enough!

 

 

http://www.problogger.net/archives/2013/04/27

Despite Sellers’ Markets, Seventy-one Percent Still Say it’s a Good Time to Buy | South Salem NY Real Estate

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Home prices are rising at double digit rates. Inventories are at historic lows. Two out of five applicants for a purchase mortgage are rejected. Yet nearly three quarters of Americans say it’s a good time to buy a home.

While some would argue its always a good time to buy, conditions have turned to favor sellers in most markets across the nation. Yet even though a slight majority of consumers participating in Fannie Mae’s latest monthly National Housing Survey expect prices to rise over the next three months, 71 percent said its still a good time for buyers.

By contrast, the share of respondents who say now is a good time to sell climbed 4 percentage points in April but still reached only 30 percent, compared to 15 percent at the same time last year. That’s not even half as many as those who said it’s a good time to buy. The percentage that said it’s a good time to buy stayed steady from March.

The share of respondents who say mortgage rates will go up fell 3 percentage points to 43 percent, while those who say they will go down increased slightly to 7 percent.

The average 12-month rental price change expectation held steady at 4.1 percent.

Forty-eight percent of those surveyed say home rental prices will go up in the next year, a 2 percentage point decrease from last month’s survey high.

The share of respondents who said they would buy if they were going to move increased slightly to 65 percent.

“For the first time in the survey’s three-year history, the majority of Americans surveyed now expect home prices to increase,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country. Reflecting that increased optimism toward housing, the share of Americans who think it is a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again.”

 

 

 

http://www.realestateeconomywatch.com/2013/05

The 10 Commandments of Twitter- Jeff Bullas | North Salem Realtor

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When I stumbled upon Twitter 54 months ago I was bemused, flummoxed and even curious. What is this social network that keeps me to 140 characters, sounds like a bird and seemed…well…. pointless?10 Commandments of Twitter

I tweeted here and there and collected 31 followers in 90 days of meandering. Even followed people with large Twitter tribes on topics as diverse as food, photography and politics. Malcolm Turnbull, the local senator must have thought I was a Twitter groupie.

Luckily he didn’t report me for stalking.

My progress on Twitter was slow, confused but persistent. Despite this I continued to tweet, retweet and play. My curiosity was undiminished.

Obsession on Twitter is not unknown. Some people such as Jennifer Aniston’s boyfriend at the time tweeted so much that she decided that he loved Twitter more than her.

She moved onto boyfriend number twenty seven.

Twitter is more powerful than you think

Twitter’s sometimes chaotic nature does make management of the torrent of tweets seem like herding cats. It is essential that you plug your Twitter account into a management tools such as Hootsuite and Tweetdeck. This will help you manage your stream with lists of people and hashtags that categorise on topics.

The real power of Twitter is that you can build a follower base that allows you to share a focused stream of content that adds value to your followers daily lives.

There are no fancy Facebook “Edgerank” algorithms to throttle your tweets and choke your content distribution.

Its pure and wild. I like that.

So what are some fundamental principles that you should embrace if you want Twitter to work for you?

The 10 Commandments of Twitter

Here are 10 commandments that may guide you to the Twitter promised land of a large and loyal following.  That engages with you and shares your content with speed and velocity.

Thou shalt

Moses used this term so I thought that I couldn’t go wrong if I borrowed the term “Thou shalt”

1. Write a meaningful “bio” description

If you are using Twitter for purely personal reasons then go crazy and knock yourself out with a crazy and cute bio. If you are serious then make sure that when they read it they know in a heartbeat what you are about.

2. Have a link

I don’t know how many times I have looked for a link to take a deeper dive into a Tweeter to see what they do and where they have come from but get stymied. If you don’t have a blog then take them to your Linked account or Facebook page.

Let them discover the real you. The bio is just the start

3. Be focused

Build a tribe of Twitter followers who are passionate and interested in your topic of interest. That can be done with tools such as Tweepi or Twellow.

4. Automate where appropriate

This may seem evil to some but as you grow your follower base things like following back become time consuming and unmanageable. Automate the boring tasks such as content distribution and follow back but not the conversation and engagement
Read more at http://www.jeffbullas.com/2013/05/08/the-10-commandments-of-twitter/#rCCZyAZAUwH7oUCG.99

Loan officers, banks tighten FICO standards | Mt Kisco NY Real Estate

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Obtaining a mortgage with a FICO score in the 620 range is more difficult in today’s lending environment, the Federal Reserve concluded in its April survey of loan officers and bank lenders.

The Federal Reserve polled a little under 100 banks and found 32 of respondents are less likely to approve a borrower with a FICO score of 620 and a down payment of 10%.

Even with a higher 20% down payment, 18 banks remained skeptical about originating a mortgage.

However, when a FICO score reaches 680, banks differ on the outcome. With a 10% down payment, 16 banks remain less likely to approve the borrower, but another 8 banks said they’re now more likely to bite with this FICO-LTV combination in effect.

If you throw in a 20% down payment and a 680 FICO, only 8 banks said they’re less likely to approve the borrower, while 16 are now more likely.

Meanwhile, the subprime market is still around, but lenders tend to avoid it with tighter FICO requirements and more regulations stifling interest.

Ten banks said demand for subprime mortgages remains the same, while another two banks claim consumer activity in the space has grown somewhat stronger in the past three months.

Despite the slim change in the subprime market, 59 of the surveyed banks still avoid subprime lending.

 

 

http://www.housingwire.com/news

KB Home CEO: We’re in the right markets | Cross River Real Estate

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KB Home’s chief executive officer sees a housing recovery taking hold in certain markets and feels well-positioned to capture some of the business.

“Across this country, we’re in the right markets,” said Jeff Mezger, president and CEO of KB Home ($32.67 0%) at the builder’s 2013 analyst conference.

Mezger addressed the crowd Tuesday, speaking to the recent growth and success of the homebuilder over the past year. Between investments, revenue generation and cost reduction, the average sales price for the company increase 24% year-over-year in the first quarter.

On top of that, 60% of deliveries were to first-time buyers, noted Mezger, who adds that today’s first-time homebuyers are bringing in more income and buying homes in better communities.

We have focused on both the long term and the short term, said Mezger, who adds the company’s stock over the last four months has been the top performer.

“We’re in the right markets today; it’s the right time,” added Mezger. “We like where we’re at.” Currently, the company is working in some of the strongest markets in the country: Arizona, California, Colorado, Florida, Metro D.C., Nevada, New Mexico North Carolina and Texas.

According to Mezger, 49% of KB Home’s ($24.67 0%) revenue in 2012 came from California; in the first quarter that increased to 51%. Texas is the biggest market by unit sales for the homebuilder.

Mezger noted that the builder likes its footprint and has no immediate plans to expand. “We will at some point, but it’s not necessary today,” he said.

How to score seller clients when inventory is low | Waccabuc NY Real Estate

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Loads of agents know firsthand that an uptick in buyer activity and some loosening of lending purse-strings can result in a particular flavor of supply-demand imbalance we call “a seller’s market.”  A recent Truliastudy proved this market season is just that: 75% of surveyed consumers said it’s better to buy a home now than a year from now.

But the same study revealed that there’s also pressure from the other end of the market – only one in three consumers said it would be better to sell now than a year from now. These patient would-be sellers have pushed inventory to a 12-year low.

Trulia ($34.34 0%) provides a number of ways that agents can grow their seller clients while so many are wanting to hold out another year.

http://www.housingwire.com/fastnews

Zillow survey: 5% home value growth expected in 2013 | South Salem NY Real Estate

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With more than 100 forecasters predicting Zillow’s Home Value Index could end the year up an average of 5.4% from last year, fears of a market bubble resurfaced.

According to the latest Zillow ($62.94 0%) Home Price Expectations Survey, the median U.S. home value is expected to rise to $165,280, on average by the end of 2013.

At the end of 2012, the U.S. Zillow Home Value Index stood at $156,800.

In the latest survey, conducted in late February, respondents reported they expected average home value growth of just 4.6% in 2013. In 2014, respondents predicted average home value appreciation of 4.4%, up from prior expectations of 4.2%.

While panelists were more skeptical on near-term value appreciation this year and into 2014, their expectations for nationwide home value growth in 2015, 2016 and 2017 were slightly more pessimistic than in prior surveys.

Panelists said on average they expect annual home value growth between 3.5% and 3.7% from 2015 through 2017. This is a modest drop from previously expressed expectations in the 3.6% to 3.8% range.

Cumulatively, respondents anticipate home values to rise 22.3% through 2017, on average.

“The panel’s expectations of near-term home value appreciation remaining above historic norms are consistent with a market struggling to satisfy strong demand from buyers attracted by rock-bottom interest rates and improving economic conditions,” said Zillow Chief Economist Stan Humphries.

Humphries added, “But looking further out, that appreciation will have to moderate as interest rates rise, or else homes that seem affordable today – despite rapidly rising values – are going to look very expensive relative to people’s incomes as it gets more costly to finance a home. How the Federal Reserve handles the eventual winding down of its policy of quantitative easing will be critical in determining if the current period of rapid appreciation is a benign bounce off the bottom, or a more dangerous bubble being re-inflated.”

The more optimistic quartile of panelists predicted, on average, a 6.6% rise in home values in 2013. However, the pessimistic bunch expects an average increase of only 4.2%.

 

 

http://www.housingwire.com/fastnews

Charlotte housing market gains momentum | Katonah NY Real Estate

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CoreLogic, an Irvine, Calif.-based company that provides monthly reports on housing prices, said Charlotte rose 7% in the Charlotte-Gastonia-Rock Hill area in March from the same month a year ago.

Also, the Charlotte Regional Realtor Association reported that Charlotte-area home prices increased by 1.1% on average in April from the same month last year, as inventory continues to dwindle.

According to the preliminary data from the association, the average sales price in April rose to $217,166 from $214,739 in April 2012. The number of sales increased 34% year-over-year, to 2,915 from 2,168, writes the Charlotte Observer.

 

 

http://www.housingwire.com/fastnews

Alabama coach Nick Saban lists house for $11 million | Bedford Hills NY Real Estate

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The home, however, was not lived in by Saban himself. If you buy this house, not only are you buying a wonderful estate, but you’re buying an estate that’s located near Nick Saban’s vacation home. That’s right, you’ll be neighbors with Nick Saban, writes CBS Sports.

“My family and I own another home on the lake, which we have enjoyed for 12 years, so I was excited when this very special lot came available to develop with Jim [Suddes],” Saban told the Atlanta Business Chronicle. “Lake Burton is our favorite getaway. It’s a beautiful, hidden gem, where we find great peace and seclusion.”

 

 

http://www.housingwire.com/fastnews