Price it right and they will come | Mt Kisco Real Estate

No, that’s not a typo: Douglas Elliman’s profits dipped to just $100,000 during the first quarter of 2017, down from $7.1 million during the same period last year, parent company Vector Group reported Friday. The paltry sum was attributed to fewer closings at new development projects, Vector executives said.

Elliman closed sales worth $5.6 billion during the first quarter, compared to last year’s $5.7 billion, the company said. That resulted in $155.5 million in first-quarter revenue, down slightly from $157.6 million last year.

“There were less new development closings. That’s a higher-margin business so that hurt us,” said Douglas Elliman CEO Howard Lorber, during an earnings call Friday.

While the firm’s net income for the quarter was $100,000, its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $1.8 million, compared to $9.1 million in 2016’s first quarter.

Overall, Vector’s first-quarter revenue was $415.2 million, up from $380.8 million in 2016’s first quarter. Vector reported a net loss of $4.2 million compared with net income of $19.3 million during the first quarter of last year.

Lorber told investors that New Valley, the real estate investment vehicle of Vector, would continue to take an “opportunistic” approach. “If there’s something that makes sense, that’s an opportunistic type of investment or a troubled project where we think we can add value, we’re interested,” he said.

In general, he said, the New York market has picked up — a sentiment shared by others in recent weeks.

Real estate conglomerate Realogy Holdings Corp., which reported its first-quarter results on Thursday, generated $1.2 billion in revenue for the quarter, a 6 percent improvement from the prior year, the company said. New Jersey-based Realogy had an adjusted net loss of $23 million compared to an adjusted loss of $17 million in 2016’s first quarter — both attributed to low seasonal transaction volume.

During an earnings call Thursday, Realogy CEO Richard Smith said there are “early signs of stabilization” in the luxury market, with sales in the $2.5 million-and-up segment up 10 percent from this time last year. “New product in New York City continues to be particularly strong,” he said.

NRT — the division that owns the Corcoran Group, Sotheby’s International Realty and Citi Habitats — saw revenue jump seven percent year-over-year to $897 million for the first quarter.

But Smith cautioned that there isn’t enough inventory on the low end of the market, and he described a recent bidding war for a $1 million New York City apartment as an example. Some 200 people showed up at the open house, 25 of them made bids and the apartment sold for 20 percent above the asking price, he said. “Listen, we don’t see that play out in every market,” he said. “The good news is, when something is priced right… it’s selling.”

 

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https://therealdeal.com/2017/05/05/elliman-only-made-100k-in-profits-in-q1/?utm_source=The+Real+Deal+E-Lerts&utm_campaign=5e50cfa7fe-New_York_Weekend_Update_10.18.2015&utm_medium=email&utm_term=0_6e806bb87a-5e50cfa7fe-385733629

Home prices will not fully recover until 2025 | North Salem Real Estate

Check out any one of the many national home price reports, and headlines scream of new peaks and growing gains each month. Home prices are rising faster than inflation, faster than incomes and faster than some potential buyers can bear. Those reports are heavily weighted toward large metropolitan housing markets.

In fact, most of the U.S. housing market has not recovered from the epic crash of the last decade.

Only about one-third of homes have surpassed their pre-recession peak value, according to a new report from Trulia, a real estate listing and analytics company. Price growth in most markets is so slow that it will take about eight years for the national housing market to fully recover — that is, for all home values either reaching or surpassing their previous peaks.

Huge price gains during the last housing boom were juiced almost entirely by an incredibly loose mortgage lending market that no longer exists.

To say that the housing recovery has been uneven is an understatement. Some markets that have seen huge employment and population growth in the last decade, such as Denver, Seattle and San Francisco, lead the news with bubble-worthy headlines.

Not only have home prices there surpassed their recent peaks, they continue to rise at double-digit paces. Nearly all the homes in Denver and San Francisco (98 percent) have exceeded their pre-recession peak, according to Trulia. Other less obvious markets, like Oklahoma City and Nashville, Tennessee, have also seen the prices of most homes surpass their peak.

In areas hit hardest by the foreclosure crisis, fewer than 4 percent of homes have recovered to pre-recession price peaks. These include Las Vegas; Tucson, Arizona; Camden, New Jersey; Fort Lauderdale, Florida; and New Haven, Connecticut.

Rising incomes are the leading cause of home price growth, according to Trulia, which looked at four factors: job growth, income growth, population growth and post-recession housing vacancy rates. Income growth showed the greatest correlation to home price growth.

The intuition here is this: “Housing is what economists call a ‘normal good,’ so when incomes rise, households tend to spend more on housing, which pushes up prices,” wrote Ralph McLaughlin, Trulia’s chief economist, in the report.

Job growth didn’t correlate at all because more jobs don’t necessarily mean higher incomes. Of course job growth does matter tangentially, as more jobs often mean a growing population.

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http://www.cnbc.com/2017/05/03/home-prices-will-not-fully-recover-until-2025.html?__source=newsletter%7Ceveningbrief

Housing bubble, then and now | South Salem Real Estate

You can’t blame a homeowner in Fresno, California, for viewing the thriving metropolis to its northwest with both envy and dismay. While San Francisco home values have surged since the recession, Fresno’s housing market is stuck in a rut. Less than 3 percent of homes in the city and its environs have returned to their pre-recession peak, according to a new study from Trulia. Median home values are a teeth-clenching $78,000 below their pre-recession peak.

The difference between the two California markets helps explain a key dynamic of U.S. housing a decade after the foreclosure crisis. Popular measures of the landscape, like S&P CoreLogic Case-Shiller Index and the FHFA House Price Index, show the market has recovered to levels last seen before the housing market went bust. But according to Trulia, this isn’t the whole, significantly bleaker picture.

Nationally, just 1 in 3 homes are worth more now than they were at their peak. While tech hubs in the Bay Area and Denver and job centers like Dallas or Nashville have seen home values explode past earlier highs, there are more losers than winners when you look across the country, Trulia’s analysis shows. And it’s really bad news if you live in Las Vegas, Tucson—or Fresno.

Many of the losers aren’t just losing—they’re getting trounced. There were 28 metros where fewer than 10 percent of homes have recovered their value since the bubble burst. Las Vegas has seen less than 1 percent of its homes returning to or surpassing what they were worth before the recession. The median sales price there is down a full $91,000 from its peak.

“It’s a reflection of just how well a metro area has recovered, broadly speaking,” said Ralph McLaughlin, chief economist at Trulia, adding that his findings largely correlate with other measures of metro-level growth, such as gains in income and total population.

As a result, it’s tempting to view these results through the prism of the 2016 election. Many of the metropolitan areas where home values lag the most are Rust Belt towns with little prospect for an immediate comeback, or Sunbelt cities whose peak home values were a product of the bubble that preceded the collapse.

McLaughlin says a zip code-level analysis offers a more nuanced view of the haves and have-nots. In much of the middle of the country, cities have stagnated while less populated regions lead the recovery. While it’s true coastal markets have experienced the lion’s share of appreciation, the majority of homes in pricey markets like New York, Los Angeles, Silver Spring, Maryland, and Fairfield County, Connecticut, are still worth less than a decade ago.

To be sure, Trulia’s research is based on its own estimates of home values, while the big indices are based on actual sales. Other research suggests a hot economy gives rural workers more choice, causing an outflow of potential employees to better jobs, often in the cities or on the coasts, potentially speeding a decline in home value elsewhere.

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https://www.bloomberg.com/news/articles/2017-05-03/most-u-s-homes-are-worth-less-than-before-the-crash

Real state of housing market | Waccabuc Real Estate

On the third day of Mortgage Bankers Association National Secondary Market Conference and Expo in New York City, three economists took the stage to explain their view of the housing market, and their forecast for 2017.

Freddie Mac Chief Economist Sean Becketti, Fannie Mae Chief Economist Doug Duncan and MBA Chief Economist Mike Fratantoni gave their projections over the chance of a recession within the next 12 months.

Becketti emphasized that while the chance of a recession increased, it would need to be driven by a specific event.

“Recessions are event driven, the economy doesn’t just run out of gas and slow down,” Becketti said.

Fratantoni predicted a 15% to 20% chance of a recession over the next 12 months, while Duncan pushed it to a 30% chance. He listed several factors including a peak in consumer credit card usage, auto sales and corporate debt, which could point to a looming recession.

The three economists pointed out that while employment is rising, there are still gaps in the growth.

What we’ve seen has been a polarization of jobs, Becketti said. Jobs have left the mid-skill level and gone to the high-skill level, and low skill jobs have also seen growth. The reason for this shift is that mid-skilled jobs are easier to automate.

But even as jobs polarize, the growth between urban and suburban areas leveled out, becoming more equally distributed between the two areas, Duncan said. However, this leveling out in the location of jobs is creating more problems in the housing market.

“But now urban areas are the most difficult area to build entry-level housing due to cost of land,” he said.

As the year goes on, Fratantoni predicted the market will see two more rate hikes – one in June and one in September, saying the year would finish with a 30-year fixed-rate mortgage rate of 4.5%.

Becketti predicted slightly more, saying the Federal Open Markets Committee could raise rates from two to three times this year, but said the year will end with a 30-year FRM of about 4.4%.

Duncan, who predicted the highest chance of a recession in the next 12 months, agreed the Fed will raise rates twice more this year, however kept it’s rate for the end of 2017 more conservative at 4.2%.

“We’re not convinced that inflationary pressures are enough to make the Fed more aggressive,” he said.

Click to Enlarge

Economic Outlook

(Source: Freddie Mac)

But for now, the housing market continues to boom as home prices hit their previous peak nationally, and even significantly surpassed it in some states.

This map shows the states in relation to their former peak:

Click to Enlarge

Economic Outlook

(Source: MBA)

All three economists were puzzled by the substantial increase in Texas, saying they could only venture to guess that while there is plenty of land to spread out in the state, the jobs are more centered, driving home prices up in key areas, such as Dallas.

And what about the rumored housing bubble? Fratantoni asked: Is San Francisco in a housing bubble? Becketti’s answer, to put it simply, was no. He answered that the city is subject to a tech collapse, but said it will not collapse on account of affordability.

 

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HereÕ the real state of the housing market

Mortgage rates rise slightly | Cross River Real Estate

Multiple closely watched mortgage rates moved higher today. The average rates on 30-year fixed and 15-year fixed mortgages both rose. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also increased.

Rates for mortgages are constantly changing, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market for a mortgage, it may make sense to lock if you see a rate you like. Just make sure you shop around first.

30-year fixed mortgages

The average 30-year fixed-mortgage rate is 3.89 percent, up 4 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.99 percent.

At the current average rate, you’ll pay principal and interest of $471.10 for every $100,000 you borrow. That’s an increase of $2.29 over what you would have paid last week.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.10 percent, up 5 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $695 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARMs

The average rate on a 5/1 ARM is 3.16 percent, up 5 basis points over the last 7 days.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.16 percent would cost about $430 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

 

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http://www.bankrate.com/financing/mortgages/mortgage-rates-for-monday-may-1/

Cash Finances Smallest Share of New Home Sales Since 2010 | Katonah Real Estate

NAHB analysis of the most recent Quarterly Sales by Price and Financing published by the Census Bureau reveals that just 4.7% of new home sales in the first quarter of 2017 were purchased with cash—down from the most recent peak of 9.5% in the fourth quarter of 2014. In contrast, the share of new home sales financed with conventional mortgages rose to 72.0%, its second-highest share since the fourth quarter of 2014. Meanwhile, FHA loan market share continued its upward trend, rising from14.4% to 14.7%.

Census data and NAHB calculations show that new home sales backed by VA products rose to 22,000 (+4,000) in the first quarter of 2017, though market share fell from 8.8% to 8.1%. The market share of VA loans averaged just 2.9% between the 2001 recession and the Great Recession, but has averaged 9.3% since the U.S. economy came out of recession in 2009.

It is worth adopting some caution associated with the Census market share estimates. In particular, the statistical error associated with the FHA, cash, and VA sales estimates from this data set are relatively high. This reduces the reliability of measures of short-term market changes.

Mindful of this limitation, over the long run the current FHA share is roughly one-half the 28% share determined for the first quarter of 2010 but still elevated compared to the 2002-2003 average of 10%.

Although cash sales make up a small portion of new home sales, they constitute a considerably larger share of existing home sales. In February 27% of existing home transactions were all-cash sales—the highest share since November 2015—according to estimates from the National Association of Realtors.

It is also worth noting that a different measure from CoreLogic shows a higher market share for cash sales for new construction: 17.7% in January.

FHA-backed loans were responsible for 14.7% of new home sales during the first quarter of 2017. Although the share has increased in two consecutive quarters, it remains more than twice its pre-recession average of 6.4%.

Conventional financing has expanded as the housing recovery has grown. The market share of new home sales with conventional financing was 62.2% in 2009 and 72.0% in the first quarter of 2017. This share has remained between 68% and 75% over the past four years.

 

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http://eyeonhousing.org/2017/05/cash-finances-smallest-share-of-new-home-sales-since-2010/

Mortgage rates average 4.14% | Bedford Hills Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates dropping for the second consecutive week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.14 percent with an average 0.5 point for the week ending March 30, 2017, down from last week when it averaged 4.23 percent. A year ago at this time, the 30-year FRM averaged 3.71 percent.
  • 15-year FRM this week averaged 3.39 percent with an average 0.4 point, down from last week when it averaged 3.44 percent. A year ago at this time, the 15-year FRM averaged 2.98 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent this week with an average 0.4 point, down from last week when it averaged 3.24 percent. A year ago, the 5-year ARM averaged 2.90 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 link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“The 10-year Treasury yield remained relatively flat this week. The 30-year mortgage rate fell 9 basis points to 4.14 percent, another significant week-over-week decline. Despite recent mortgage rate fluctuation, new home sales far exceeded expectations in February and jumped 6.1 percent to an annualized rate of 592,000.”

U.S. pending home sales surge to ten-month high | Bedford Real Estate

Contracts to buy previously owned U.S. homes jumped to a 10-month high in February, pointing to robust demand for housing ahead of the busy spring selling season.

The report on Wednesday from the National Association of Realtors suggested higher home prices and mortgage rates were having little impact on the housing market for now, underscoring the economy’s resilience despite an apparent slowdown in growth in the first quarter.

The NAR said its Pending Home Sales Index, based on contracts signed last month, surged 5.5 percent to 112.3. That was the highest reading since April and the second best showing since May 2006.

“This bodes well for home sales this spring,” said Misa Batcheller, an economic analyst at Wells Fargo Securities in Charlotte, North Carolina.

Contract signing last month was likely boosted by unseasonably warm temperatures. The gains reversed January’s 2.8 percent drop. Pending home contracts become sales after a month or two, and last month’s surge implied a pickup in home resales after they tumbled 3.7 percent in February.

Economists had forecast pending home sales rising 2.4 percent last month. Pending home sales increased 2.6 percent from a year ago.

U.S. financial markets were little moved by the data as investors assessed comments from Federal Reserve officials on further interest rate increases this year. Chicago Fed President Charles Evans, one of the U.S. central bank’s most consistent supporters of low interest rates, said he supported additional monetary policy tightening this year.

The Fed raised its benchmark overnight interest rate by a quarter percentage point earlier this month and has forecast two more rate hikes this year. The dollar was trading higher against a basket of currencies while U.S. stocks were mixed. U.S. government bond prices rose.

TIGHT INVENTORIES

Demand for housing is being driven by a strong labor market, which is generating wage increases, as it nears full employment. Sales activity, however, remains constrained by tight inventories, which are driving up home prices.

“The good news is that warm winter weather has led to a surge in construction that will hopefully result in a bloom of new homes for sale this spring,” said Joseph Kirchner, senior economist at realtor.com.

A report on Tuesday showed home prices increased 5.7 percent in January on a year-on-year basis. The NAR expects sales of previously owned homes to increase 2.3 percent this year to around 5.57 million units.

Existing homes sales increased 3.8 percent last year. Housing market strength suggests an apparent sharp slowdown in economic growth early in the first quarter is likely temporary.

The Atlanta Fed is forecasting gross domestic product increasing at a 1.0 percent annualized pace in the first quarter. The economy grew at a 1.9 percent rate in the final three months of 2016.

Given labor market strength, economists expect only a modest impact from higher mortgage rates. The 30-year fixed mortgage rate is currently at 4.23 percent, below a more than 2-1/2-year high of 4.32 percent hit in December.

In a separate report on Wednesday, the Mortgage Bankers Association said applications for home purchase loans rose 1.2 percent last week from the prior week. It was the fourth increase in the past five weeks.

 

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http://www.reuters.com/article/us-usa-economy-idUSKBN1701XS

Home Prices in the First Month of 2017 | Bedford Corners Real Estate

S&P Dow Jones Indices released the Home Price Index for January 2017 today. The Case-Shiller U.S. National Home Price Index rose at a seasonally adjusted annual growth rate of 7.9%, slower than the 9.2% increase in December. House prices dropped to the lowest level in the first month of 2012. Five years later, house prices surpassed the pre-recession peak of 2006 and hit the highest level historically.

Along with the increases in national home prices, local home prices also increased in varying degrees in January. Figure 2 shows the annual growth rate of home prices for 20 major U.S. metropolitan areas.

Most of the 20 metro areas had positive home price appreciation, except Cleveland. Cleveland was the only one that had negative home price appreciation (-0.8%). The positive home price appreciation ranged from 5.2% to 22.6%. Seattle had the highest home price appreciation at 22.6%, followed by Chicago (16.5%) and Denver (14%). Miami had the lowest positive growth at 5.2%. Fifteen out of the 20 metro areas had the same or higher home price appreciation than the national level of 7.9%.

 

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http://eyeonhousing.org/2017/03/home-prices-in-the-first-month-of-2017/

Apartment and Condominium Market Momentum Continues | Pound Ridge Real Estate

The National Association of Home Builders’ Multifamily Production Index (MPI) increased two points to 55 in the fourth quarter of 2016. For five straight years, the MPI has been at or above 50, which indicates that more respondents report conditions are improving than report conditions are getting worse (Figure 1).

Figure 1: NAHB Multifamily Production Index (MPI) and Multifamily Starts (in thousands)

The MPI is a composite measure of three key segments of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums. In the fourth quarter, low-rent units remained unchanged at 54 while market-rate rental units rose one point to 58 and for-sale units increased three points to 53.

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry’s perception of vacancies, remained unchanged at 42, with lower numbers indicating fewer vacancies (Figure 2).

Figure 2: NAHB Multifamily Vacancy Index (MVI) and 5+ Rental Vacancy Rate

After peaking at 70 in the second quarter of 2009, the MVI improved consistently through 2010 and has been fairly stable since 2011. Historically, the MVI has shown to be a leading indicator of Census multifamily vacancy rates, which is displayed in Figure 2 as well.

 

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http://eyeonhousing.org/2017/02/apartment-and-condominium-market-momentum-continues/