Daily Archives: December 22, 2015

Luxury Dips While Mid-tier Zips | Cross River Real Estate

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Call it poetic justice.  While median home prices continue their upward climb, in the third quarter luxury prices stumbled and fell for the first time in over three years.  Redfin reported prices of luxury homes fell 2.2% on a yearly basis, while prices for the rest of the market rose 3.8 percent in the same period.  (Luxury homes are defined by Redfin as the priciest 5% of all homes.)

The Institute of Luxury Home Marketing (ILHM)  reported a similar dip in July and August in its weekly market report.  But prices picked up in the fall to reach $390 a square foot, only to fall with the advent of Thanksgiving and the holiday season.  Currently ILHM reports the median luxury price to be $1,406,319 and the market definitely favors buyers over sellers. Properties in its survey have been on the market for an average of 156 days, (ILHM’s survey tracks homes listed for at least $500,000 in the top 10 zip codes for 31 major metro markets around the county.)

Though Redfin compared luxury price trends to market medians, Nela Richardson, Redfin’s chief economist, recognized how different the luxury is from the rest of real estate.

“High-end buyers are usually not weighed down by rates, mortgages or competition from other buyers, but they do look for deals,” she said in a news release. “It’s a bellwether of slowing price growth for the rest of the market.”

2015-12-08_15-23-20Redfin reported a dramatic divergence and luxury price trends from the rest of the market in the third quarter.

It’s also the most difficult segment of the market to track due the tendency for as many as a third of all sellers in high cost areas to market through pocket listings that keep their homes off the MLSs and the preponderance of 12 nondisclosure states that limit the disclosure of sales prices.

Redfin said luxury home prices fell at the sharpest rate in Scottsdale, Ariz. and Boca Raton, Fla. Both saw 15% declines on a yearly basis. Fort Lauderdale, Fla., reported a 14% decline. Redfin speculated that the declines in Boca Raton and Fort Lauderdale were due to a wave of luxury condos hitting the market at the same time. Washington, D.C.; Denver; Delray Beach, Fla.; and Bend, Ore., all saw double-digit increases in luxury home prices in the same third quarter.

2015-12-08_15-37-42ILHM reported prices dipped in the summer but rebounded before Labor Day, and now are down again with the advent of the holidays.

 

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http://www.realestateeconomywatch.com/2015/12/luxury-dips-while-mid-tier-zips/

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

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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/

Existing home sales down 10.5% in November | Waccabuc Real Estate

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Sales of existing homes fell short of expectations in November, hitting the slowest sales pace in 19 months after new mortgage rules hit the market, realtors said.

Existing home sales fell 10.5 percent to 4.76 million homes in November, the National Association of Realtors said Tuesday.

Analysts polled by Thomson Reuters expected to see existing home sales in November hit 5.35 million units, about the same as the 5.36 million the previous month.

The sales represent a 3.8 percent year-on-year decline for the indicator, a barometer of the American real estate market.

The Midwest led declining sales, seeing a 16.4 percent drop in sales of existing homes, followed by the West at 13.9 percent and the Northeast at 9.2 percent.

The median home prices was $220,300, up 6.3 percent from this time last year. Inventories are currently at 5.1 month supply of homes, tighter that the 6 months considered balanced.

 

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cnbc.com