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US home prices rise in May by most in 7 years | Armonk Homes

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U.S. home prices jumped 12.2 percent in May from a year ago, the most in seven years. The increase suggests the housing recovery is strengthening.

Real estate data provider CoreLogic said Tuesday that home prices rose from a year ago in 48 states. They fell only in Delaware and Alabama. And all but three of the 100 largest cities reported price gains.

Prices rose 26 percent in Nevada to lead all states. It was followed by California (20.2 percent), Arizona (16.9 percent), Hawaii (16.1 percent) and Oregon (15.5 percent).

CoreLogic also says prices rose 2.6 percent in May from April, the fifteenth straight month-over-month increase.

Steady hiring and low mortgage rates have encouraged more Americans to buy homes. Greater demand, a limited number of homes for sale and fewer foreclosures have pushed prices higher. Prices are still 20 percent below the peak reached in April 2006, according to CoreLogic.

Sales of previously occupied homes topped the 5 million mark in May for the first time in 3 ½ years. And the proportion of those sales that were ‘‘distressed’’ was at the lowest level in more than four years for the second straight month. Distressed home sales include foreclosures and short sales. A short sale is when a home sells for less than what is owed on the mortgage.

Home sales are expected to increase in the coming months. That’s because the number of people who signed contracts to buy homes rose in June to the highest level since December 2006. There’s generally a one- to two-month lag between a signed contract and a completed sale.

One worry is that higher mortgage rates could slow the housing recovery. Still, rates remain low by historical standards. And increases in rates could boost home sales. That’s’ because many Americans may act to lock in the lower rates before they rise further.

A survey by the University of Michigan released last week found more Americans believe it is a good time to buy a home because both rates and prices are just starting to rise.

Rates have been trending higher for two months. And the average rate on a 30-year fixed mortgage leapt to 4.46 percent last week, according to mortgage buyer Freddie Mac. That’s the highest in two years and a point more than a month ago.

Mortgage rates surged after Federal Reserve chairman Ben Bernanke said last month that the Fed could scale back its bond buying later this year and end it next year if the economy continued to strengthen. The bond purchases have kept long-term rates down.

Westchester Real Estate Prices Gain, But Lag Behind U.S. Trend | Armonk Homes

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Existing home prices surged more than 12 percent in a one-year period ending in April, but the increase in Westchester County and New York prices was far lower.

Standard & Poor’s Case-Shiller Index, which was released this week, showed a 12.1 percent increase for 12 months ending in April for existing homes in 20 United States metropolitan areas. The increase in New York, however, was only 3.1 percent, the smallest rise of the municipalities in the index.

“What that reflects is that other cities in the country experienced a much more volatile market,’’ said Joe Rand of Better Homes & Gardens Rand Realty. “They had more dramatic increases and decreases. Values went up 10 percent where they had gone down 50 percent. In New York, prices never really went down.”

Home prices are rising in Westchester County, as is the sale of homes. New home sales rose 2.1 percent in May, according to figures released by the Commerce Department, and that figure was the highest level since July 2008.

According to the Case-Shiller index, homes in New York increased 3.2 percent in value from April 2012. Property values climbed the most in San Francisco (23.9) followed by Las Vegas (22.3) and Phoenix (21.5).

“I think over the last five or six years, I’ve gotten used to the Case-Shiller report acting almost as an exaggerated indicator,’’ Rand said. “I don’t think it’s an accurate indicator of the local market. We’re not seeing the double digit increases in Westchester County. I think the way the report is constructed tends to juice it. When prices falling, Case-Shiller was saying it was double digit declines and we were seeing one or two percent. The only thing that concerns me is you’ll have people say it’s going up 10 percent, let me raise the price of my home.”

Rand said sales of existing homes that are properly priced are brisk. Most followers of real estate believe the industry has taken a positive turn after a long period of decline.

 

 

Westchester Real Estate Prices Gain, But Lag Behind U.S. Trend | The White Plains Daily Voice.

Despite Lower Prices, 40 Million Households are Burdened by Housing Costs | Armonk Real Estate

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Since 2007, the number of households are paying more than half of their income for housing despite the crash in home values and bottom basement interest rates has increased by 2.6 million.

As of 2011, over 40 million households were at least moderately cost burdened (paying more than 30 percent of their incomes for housing), including 20.6 million households that were severely burdened (paying more than half of their incomes for housing), according to the State of the Nation’s Housing 2013 released yesterday by the Joint Center for Housing Studies at Harvard University.

The latest increases in the number of severely burdened households represent a jump of 347,000 from 2010, 2.6 million from 2007 when the recession began, and 6.7 million from a decade ago.

The most recent increases were almost entirely among severely burdened renters, whose numbers soared by 2.5 million from 2007 to 2011, pushing the share to 27.6 percent. While up only 173,000 over this period, the number of cost-burdened homeowners had already surged by 2.7 million in 2001-07 amid the sharp rise in house prices and the widespread availability of easy mortgage credit.

However, the incidence of cost burdens has not fallen much more dramatically among owners despite the substantial decline in home prices and low interest rates. Indeed, the share of severely burdened owners rose from 12.1 percent in 2007 to 12.6 percent in 2011. The lack of progress reflects the difficulties that many owners locked into excessive mortgage debt face in attempting to refinance and the still-weak state of the economy. In fact, the overwhelming majority of underwater homeowners continue to make payments on mortgages that exceed the present value of their homes, the report said.

While increasingly prevalent at all income levels, severe hous­ing cost burdens are much more common among households with the lowest incomes. Nearly seven out of ten households with annual incomes of less than $15,000 (roughly equivalent to year-round employment at the minimum wage) are severely burdened. With income inequality worsening over the past decade, the share of households with these low incomes has continued to grow.

Meanwhile, the stock of low-cost housing that these households can afford continues to shrink. Between 2007 and 2011, the number of renter households with extremely low incomes (less than 30 percent of area medians) increased by 2.5 million. Over the same period, the number of available housing units that households at this income level could afford to rent declined by 135,000. As a result, the gap between the supply of affordable housing and demand from extremely low-income renters dou­bled in just four years to 5.3 million units. Given that the typical unit completed in 2012 rented for $1,100 per month, new hous­ing development is unlikely to alleviate this affordability gap.

The dramatic increase in the burden of housing costs was one of a number of topics discussed at a webinar that originated at the Center’s offices in Cambridge.

 

Despite Lower Prices, 40 Million Households are Burdened by Housing Costs | RealEstateEconomyWatch.com.

Saving the Diamonds in the Rough – historic preservation | Armonk Real Estate

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Yesterday, the Pearlroth House, also known as the Double Diamond House, designed by Andrew Geller and built in Westhampton in 1963, was moved. As we noted in March, the Pearlroth house has unfortunately deteriorated over the years. The owner, Jonathan Pearlroth, the son of the original owners, wants a larger house for his family, so the house is now about 40 feet away from its original site.

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Reinhardt / O’Brien Contracting, best known for the Houses at Sagaponac, moved the house, with Jake Gorst, Andrew Geller’s grandson, and Jonathan Pearlroth present. Reinhardt / O’Brien are building Jonathan a new 3500sf modern house designed by New York-based Cook + Fox Architects. The builders will now restore the Double Diamond house, after which it is planned to be opened as a museum.
· Pearlroth House [Official Site]
· Previous coverage of Pearlroth House [Curbed Hamptons]

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Saving the Diamonds in the Rough – historic preservation – Curbed Hamptons.

Housing Market: From Recovery to Bubble–Already? | Armonk Real Estate

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Only a year after the housing market bottomed, “bubble” talk has surfaced as soaring, double-digit price gains sweep markets across the country.

An open house in Cheviot Hills—a neighborhood in West Los Angeles—attracted 150 people and brought in 14 bids before the home sold for 7 percent above the listing price at $2.9 million.

A loft in Manhattan’s SoHo district recently sold for $3.25 million after a bidding war pushed the price 10 percent above the asking price.

In Chicago’s Wrigleyville area, a two-flat greystone was bid up to $850,000, 6 percent above asking price, and sold to a single-family home converter who plans to add another floor and put it back on the market for $1.8 million.

“Prices in some areas are just out of control,” said Scott Tamkin, an agent with Keller Williams Realty in Los Angeles. “As soon as a good property comes on the market at a reasonable price—bam! It’s gone in multiple offers, often times in cash.”

U.S. home prices surged 12.1 percent in April from the same period a year ago, the biggest jump since February 2006 and the second straight month of double-digit gains, CoreLogic reported at the start of June.

Tight inventories, cheap money, and investor appetite are driving prices through the roof in some cities; particularly in hard-hit markets such as Phoenix and Las Vegas.

To be sure, not all areas are overheated nor have some even recovered since the downturn. But in most big cities, demand is hot, deals are quick, and many properties are getting bid up before selling for cash.

And even though home values are still a far cry from their peak in 2006, economists caution that prices in some areas have risen too far, too fast.

“It’s clearly not sustainable,” said Stan Humphries, chief economist at Zillow.

Wells Fargo Senior Economist Mark Vitner seconded that: “If investors don’t back off soon, it could lead to a bit of a price bubble.”

Prices have risen despite a lack of major improvement in fundamentals—namely jobs growth and incomes.

“Home prices need to moderate,” said Lawrence Yun, chief economist at the National Association of Realtors. “It’s bad news in terms of affordability and certainly not sustainable for prices to rise and incomes to lag.”

 

Housing Market: From Recovery to Bubble–Already?.

Connecticut Warns Of Possible Unsafe Water Conditions After Heavy Rains | Armonk Real Estate

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Water conditions in rivers and streams may be unsafe due to recent heavy rains throughout Fairfield County and the rest of the state, the state warns.

Many of Connecticut’s rivers and streams are experiencing higher than normal water levels and faster than normal currents, so anyone near the water or planning to go into the water needs to be aware of the conditions and use caution, according to the Connecticut Department of Energy and Environmental Protection.

“This weekend’s weather forecast is for beautiful weather, and we encourage everyone to get out and safely enjoy Connecticut’s outdoors,” said DEEP Deputy Commissioner Susan Whalen. “Unfortunately, we have had incidents in recent days where people have been tubing or rafting on a fast-moving river and have gone missing. The state has experienced heavy rains in recent days, which mean that our rivers and streams are high and running fast, so everyone near the water needs to be extra careful.”

Canoeists and kayakers should scout all waterways before attempting to run the swollen rivers or streams, DEEP said on its website. Waterways may have dramatically changed since the last time it was traveled due to high water, strong currents and moved debris. Debris in swift moving water may catch a boat and force it and its passengers under the water, causing serious injuries or drowning, DEEP said.

Boaters on larger bodies of water and especially on rivers should also keep a sharp eye out – debris may lay just under the surface of the water and can be very difficult to spot in the muddied waters, DEEP said.

Tubing and rafting safety tips:

  • DEEP strongly recommends that everyone wear a life jacket – Connecticut law requires children under the age of 13 wear a properly fitting U.S. Coast Guard-approved life jacket at all times unless below deck or in an enclosed cabin.
  • Avoid consuming alcohol while engaging in water-related outdoor activities.
  • Know how to swim if entering the water.
  • Know the condition of the water and know your abilities – if there is any doubt about the water conditions – do not go.
  • Wear water shoes – especially if the waterbody is known to be rocky.
  • Never raft alone and always let someone know where you are going to and where and when you plan to return.
  • Check the weather forecast for your area and for areas upstream before departing for your trip.

Basic water safety tips:

  • Learn to swim – the best thing anyone can do to stay safe in and around the water is to learn to swim.
  • Never swim alone – always enter the water with a companion.
  • Supervise children at all times – even at areas with lifeguards.
  • Select an area that has good water quality and safe natural conditions.

 

Connecticut Warns Of Possible Unsafe Water Conditions After Heavy Rains | The Greenwich Daily Voice.

Intolerable neighbors may affect home value | Armonk Real Estate

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CNNMoney writes that Omaha real estate appraiser John Bredemeyer claimed a few years ago he saw a house in his area sell for 8% less than comparable homes nearby, owing largely to the large, snarling dogs next door. “Raising kids there?” he says. “I don’t think so.”

So what’s your recourse? “You can move to the woods,” Borzotta says. “Or you can expect issues and learn how to deal with them properly.” See what CNNMoney suggests when facing intolerable neighbors.

 

Intolerable neighbors may affect home value | HousingWire.

Inventory Increases Threaten Price Appreciation | Armonk Real Estate

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The inventory deficit that jump started the recovery is now filling up fast with new listings as home sellers get the message. But are just hastening the day prices slow down?

The current January to April year-to-year to date increase in the supply of existing homes is the third highest in nearly 30 years writes CoreLogic Deputy Chief Economist Sam Khater in the current issue of CoreLogic’s Market Pulse newsletter.

“How much further can the rapidly appreciating markets go?” he asked, noting that most states are currently close to their fundamental long-term price trends relative to long term inflation-adjusted trend.

Khater suggested that the “invisible lid that has been on supply” is in the process of being removed. A key factor has been the fact that more homeowners not only are above water but also have reached or exceeded their “reservation price”-the price lowest price at which an owner is willing to sell. “For homeowners with positive equity, the reservation price condition is met when their willingness to sell is at a higher price than the market currently supports.

 

Inventory Increases Threaten Price Appreciation | RealEstateEconomyWatch.com.

Is Investing in Housing a Losing Proposition? | Armonk Homes

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Last week two Federal Reserve researchers answered that question with an analysis of returns on investment since 1926 and their findings won’t make the housing industry happy.

If a home is purchased only as an investment and not as a place to live, a comparison of average annual returns clearly shows that though most homeowners make a positive return, investing in equities offers favorable returns more often than investing in housing. That’s the bottom line from Ellyn Terry and Jessica Dill, two economists at the Atlanta Federal Reserve, in a working paper published June 12.

The two researchers set out to answer the questions: With average returns so close to zero, just how often has the housing market produced losers? And how does investing in housing compare to investing in equities? They did not look at the “buy and hold” strategies popular among investors seeking cash flow from rents, but only at appreciation.

They computed the average annual return of home prices across all possible combinations of start and stop points using the Shiller house price series from 1926 to 2012. The distribution depicts returns concentrated around zero with some skewness to the right. Eighty percent of all start-stop point observations experience some degree of positive return.

To take into account the duration of ownership, they assumed that the average homeowner lives in his or her home for 13.3 years, based on analysis by Paul Emrath at the National Association of Home Builders. They found the average annual returns for an asset held for a period of 13 or more years is substantially less volatile than for an asset held for fewer than 13 years, and those investing for the longer term were much more likely to have positive returns.

“We compute that 40 percent of homes owned for less than 13 years have negative average annual returns, compared to 12 percent of homes owned for 13 years or more. Interestingly, while a much greater portion of those owning for 13 or more years obtain positive returns, the average annual return was actually slightly higher for those owning fewer than 13 years (0.95 percent versus 1.03 percent),” they found.

They applied weights for average length of ownership. Using the weights, we recomputed average annual returns across all possible combinations of start and stop points for average length of ownership. The distribution continues to show that returns are concentrated around zero with skewness to the right; two-thirds of all investors in this distribution experience some degree of positive return.

Is Investing in Housing a Losing Proposition? | RealEstateEconomyWatch.com.

Rising rates bad news for builders | Armonk Real Estate

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The most well known home builders are now trading at valuations that fully account for the recent rebound in the housing market. These stocks are vulnerable to a significant decline as mortgage rates pressure the industry. The Motley Fool recommends locking in any gains in the sector today, and selling these stocks before they sustain further declines.

 

Rising rates bad news for builders | HousingWire.