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Mortgage rates average 3.97% | Pound Ridge Real Estate

today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates ticking slightly higher for the second week in a row amid the Federal Reserve’s decision to raise short-term interest rates for the first time since 2006.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.97 percent with an average 0.6 point for the week ending December 17, 2015, up from last week when it averaged 3.95 percent. A year ago at this time, the 30-year FRM averaged 3.80 percent.
  • 15-year FRM this week averaged 3.22 percent with an average 0.5 point, up from last week when it averaged 3.19 percent. A year ago at this time, the 15-year FRM averaged 3.09 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.03 percent this week with an average 0.4 point, unchanged from last week. A year ago, the 5-year ARM averaged 2.95 percent.
  • 1-year Treasury-indexed ARM averaged 2.67 percent this week with an average 0.2 point, up from 2.64 percent last week. At this time last year, the 1-year ARM averaged 2.38 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 links for theRegional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

As of January 1, 2016, the PMMS will no longer provide results for the 1-year ARM. Additionally, the regional breakouts will not be provided for the 30-year and 15-year fixed rate mortgages, and the
5/1 Hybrid ARM.

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

“As was almost-universally expected, the Federal Open Market Committee (FOMC) of the Federal Reserve elected this week to raise short-term interest rates for the first time since 2006. We take the Fed at its word that monetary tightening in 2016 will be gradual, and we expect only a modest increase in longer-term rates. Mortgage rates will tick higher but remain at historically low levels in 2016. Home sales will remain strong, but refinance activity should cool somewhat. Novel policy approaches such as quantitative easing injected significant liquidity in the economy over the past seven years. As a result, the Fed is forced to employ some new tools, such as reverse repos, as it tightens monetary policy. We are likely to see some short-term volatility in fixed-income markets as market participants adjust to these new tools.”

 

 

 

 

Existing home sales drop 3.4% in October | Pound Ridge Real Estate

Existing home sales, as reported by the National Association of Realtors, decreased 3.4% in October, and the annual share of first-time buyers in 2015 fell to its second-lowest level since the survey was launched in 1981. Total existing home sales in October decreased to a seasonally adjusted rate of 5.36 million units combined for single-family homes, townhomes, condominiums and co-ops, down from 5.55 million units in September. October existing sales were up 3.9% from the same period a year ago.

Existing Home Sales October 2015

Existing sales were flat in the Northeast and fell 0.8% in the Midwest, 3.2% in the South 8.7% in the West. Year-over-year, all four regions increased, ranging from 8.6% in the Northeast and 8.3% in the Midwest to 2.7% in the West and 0.5% in the South.

Total housing inventory decreased by 2.3% in October, and is 4.5% below its level a year ago. At the current sales rate, the October unsold inventory represents 4.8-month supply, compared to a 4.7-month supply in September. One-third of homes sold in October were on the market for less than a month.

The distressed sales share fell to 6% in October, the lowest since the series began in October 2008. Distressed sales are defined as foreclosures and short sales sold at deep discounts. The October all-cash sales share remained unchanged at 24% in October, compared to 27% a year ago. Individual investors purchased a 13% share in October, unchanged from September but down from 15% during the same month a year ago.

The October median sales price of $219,600 declined to the lowest level since April, but was 5.8% above the same month a year ago, and represented the 44th consecutive month of year-over-year price increases. The median condominium/co-op price of $207,100 in October was up 1.6% from the same month a year ago.

 

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http://eyeonhousing.org/2015/11/existing-sales-realign/

Porcelain ceramic tile is making a comeback | Pound Ridge Real Estate

For a home builder, the holy grail of materials is one that can do everything.

For a homeowner, the holy grail of materials is one that looks really good and requires no maintenance.

Such a material is now available but virtually unknown to most builders and homeowners in the United States.

It’s not a miracle of nanotechnology or even new. It’s that old workhorse, porcelain ceramic tile, updated with modern equipment and manufacturing processes to such a degree that it may change the look of suburbia as well as our notions of what constitutes a tile.

Manufacturers can now produce porcelain tiles that are huge (5-feet-by-11-feet), really thin ( 1 /8 – to ¼-inch thick) and absorb almost no water. This latter detail means that these big tiles will not crack in freezing temperatures and can be used indoors, outdoors in temperate climates such as the Washington area’s, and for an astonishingly broad range of applications. The tiles are also made in smaller sizes, though much larger than the 4-by-4-inch ones that are standard in so many bathrooms, and they can be nearly ¾-inch thick, depending on the intended use.

The tiles are marketed in the United States by Tennessee-based Crossville, which calls its tiles Laminam, and four Spanish manufacturers. Cosentino calls its product Dekton, Grespania’s version is Coverlam, Inalco’s is Itopkerand TheSize Surfaces’s is Neolith.

Because this type of porcelain tile is so new, the industry has not yet settled on a generic name. Two terms used by the National Tile Contractors Association are “thin porcelain panels” and “thin porcelain tile.”

In keeping with designers’ preference for a “soft” palette, the offerings of these firms favor grays, “greige” (a combination of beige and gray), light and dark brown, charcoal, cream and pure white. Some of the tiles are a solid color, but others mimic wood, concrete, textile patterns, metals and natural stone. The marble lookalikes resemble the real thing so closely that even experts can be fooled.

When you see these supersize tiles in someone’s house for the first time, “great looking tile” is not likely to be your initial reaction . In fact, you probably won’t even realize that you’re looking at tile until someone tips you off. Unlike small, traditional tiles with grout lines running everywhere, big tiles have hardly any grout lines, and the few that are there are nearly invisible.

The big tiles with solid colors present a tasteful, unusual finish; the natural stone lookalikes, especially the marble ones, are stunning. Though marble has a long history in American interiors, the individual tiles have been small. To see an entire counter made of what appears to be a single slab of high-quality Calacatta marble is eye-popping.

Once you know what to look for, where might you use the supersize tiles?

They can be used to finish walls as well as for flooring, countertops in the kitchen and bathrooms, kitchen sinks and fireplace surrounds. If you want to go really crazy, the thinnest tiles can be used to finish doors, tables, desks and stairs. Capitalizing on the unusually high heat resistance of the supersize tiles, the Spanish firm Inalco is experimenting with installing burners directly into the counter, which would eliminate the need for a separate cooktop. The tiles are extremely scratch and stain resistant. Spills do not have to be cleaned up right away, an appealing feature if you’re one to leave the kitchen cleanup until the next morning after your last dinner guest leaves at midnight.

Another plus with the large tiles in the kitchen is crack resistance. Traditionally manufactured tiles can crack when heavy objects are dropped on them. These porcelain tiles, however, are manufactured with a different process that makes them extremely crack resistant. As Jacobo Pardo of Grespania explained, as long as the tile is installed properly, “you can drop a large cast iron frying pan on the counter, no problem. If you drop a big cast iron pan on the floor, it won’t crack.”

In addition to their size, another difference between these tiles and traditional ones is their surface finish, which can vary from a soft matte to a highly reflective glossy (Cosentino’s Lorenzo Marquez said his firm’s “X-Glossy” finish is so polished “you can almost see your face [reflected in] a black or white Dekton surface.”) The tiles range from a smooth surface to a “gentle relief” that feels slightly irregular, “bush hammered” with a uniform nubby surface, and “hand tooled” with deeper gauges that appear to be hand made.

read more…

https://www.washingtonpost.com/realestate/porcelain-ceramic-tile-is-making-a-comeback/2015/11/11/9da19fe8-8265-11e5-8ba6-cec48b74b2a7_story.html

Home Prices: The Tilting of America | Pound Ridge Real Estate

The chart below from Case-Shiller’s release today of its July data says it all.  Prices now are shifting a lot on a monthly basis.  The range between appreciating and depreciating markets seems to be growing and no longer do the “sand” states, judicial foreclosure states or foreclosure states or cities with the best economies and most jobs.

Rather, with the possible exceptions of Cleveland and Boston, appreciating markets are to be found west of the Mississippi and depreciating ones to the east, as if America were a great raft at sea with too much weight on one end.

These are seasonally adjusted month-over-month increases and they are particularly important because both seasonally adjusted existing sales and pending sales dropped unexpectedly in August, according to NAR.  Like Case-Shiller, NAR found annualized prices in the West (7.1%) much higher than the East (2.4%)2015-09-29_13-30-14

 

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http://www.realestateeconomywatch.com/2015/09/home-prices-the-tilting-of-america/

FHFA House Price Index Up 0.6 Percent in July | Pound Ridge Real Estate

Washington, D.C. – U.S. house prices rose in July, up 0.6 percent on a seasonally
adjusted basis from the previous month, according to the Federal Housing Finance Agency
(FHFA) monthly House Price Index (HPI). The previously reported 0.2 percent change in June
remains unchanged.
The FHFA HPI is calculated using home sales price information from mortgages sold to, or
guaranteed by, Fannie Mae and Freddie Mac. From July 2014 to July 2015, house prices were up
5.8 percent. The U.S. index is 1.1 percent below its March 2007 peak and is roughly the
same as the November 2006 index level.
For the nine census divisions, seasonally adjusted monthly price changes from June 2015 to
July 2015 ranged from -1.2 percent in the New England division to +1.6 percent in the
Mountain division. The 12-month changes were all positive, ranging from +2.1 percent in the
New England division to +9.4 percent in the Mountain division.

 

source: FHFA report

Underwater homes continue to surface | Pound Ridge Real Estate

The U.S. rate of underwater homeowners – those who owe more on their home than it’s worth – continued to drop in the first half of 2015. But condo owners are still more likely to be stuck in negative equity than people who own single-family homes.

Homes in the low end of the housing market are more likely to be underwater. Fortunately, while homes across the U.S. are appreciating, homes at the low end are appreciating faster. This is causing the negative equity rate to decline.

In the U.S., 14.4 percent of all mortgaged single-family homes are underwater, according to Zillow’s Second Quarter Negative Equity report. Condos are lagging behind in the recovery, at 19.3 percent.

Overall, more condos than homes are upside down in every large U.S. housing market except Pittsburgh, Detroit and Memphis.

Here are the top 10 markets where condos are deeper underwater than single-family homes:

  1. Jacksonville, FL. The negative equity rate for single-family homes in Jacksonville is at 21.3 percent, more than half the 41.5 percent rate for condos.
  2. Chicago, IL. 32.6 percent of condo owners in Chicago are upside down on their mortgage, and 19.2 percent of single-family home owners are upside down on theirs.
  3. Orlando, FL. Orlando comes in third with 16.8 percent of single-family homes in negative equity and 29.9 percent of condos are in the same boat.
  4. Sacramento, CA. 12.5 percent of single-family homeowners in Sacramento owe more on their home than it’s worth, compared to the 25.4 percent of condo owners.
  5. Las Vegas, NV. The negative equity rate for condo owners in Las Vegas is 36.7 percent. The rate is 23.8 percent for single-family homeowners.
  6. Providence, RI. 25.9 percent of condo owners in Providence are upside down on their mortgage. The rate drops to 14.4 percent when it comes to single-family homes.
  7. Columbus, OH. Single-family homes in Columbus have a 13.1 percent negative equity rate, compared to a rate of 24.6 percent in condos.

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http://www.zillow.com/blog/negative-equity-improving-182981/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ZillowBlog+%28Zillow+Blog%29

US Homes Sales soar in July | Pound Ridge Real Estate

Americans stepped up their home-buying for a third straight month in July, as sales accelerated to the strongest pace in eight years.

The National Association of Realtors said Thursday that sales of existing homes rose 2 percent last month to a seasonally adjusted annual rate of 5.59 million, the fastest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has declined 4.7 percent.

Steady job growth and relatively low mortgage rates have convinced current homeowners to purchase homes, while first-time buyers remain scarce. The housing market contains a mere 4.8 months’ supply of homes, meaning that prices are rising for an increasingly narrow set of properties.

The slow six-year recovery from the Great Recession has finally revitalized the housing market. Home sales have soared in recent months, as more current homeowners have returned to the real estate market for an upgrade or to downsize as they approach retirement. Yet the upswing also reflects increasing problems with affordability that have left first-time buyer on the sidelines.

“When first-time homebuyers compete with people who are more qualified borrowers that have additional cash, they tend to lose,” said Budge Huskey, chief executive of the real estate brokerage Coldwell Banker.

The median home price climbed 5.6 percent over the past 12 months to $234,000. Just 28 percent of the purchases last month went to first-time homebuyers, a group that historically accounted for 40 percent of sales. A more balanced market would contain six months’ of supply-instead of less than five-and provide potential homebuyers with a greater selection of homes.

Current homeowners with equity have been able to absorb some of that price appreciation as they’ve shopped for another home. But the recent sales explosion also reflects two critical factors: the economy adding a solid 2.9 million jobs over the past 12 months and the average, 30-year fixed mortgage rate staying around 4 percent. At roughly two percentage points below the historical level, mortgage rates have reduced monthly borrowing costs for buyers.

Still, the trajectory of mortgage rates- and sales- going forward is unclear.

It’s possible that a weakening global economy will cause more investors to buy U.S. Treasury bonds, a move that has historically held down mortgage rates. The average mortgage rate has slipped slightly as China has endured stock market volatility and reduced the value of its currency.

Yet the Federal Reserve is preparing to raise a key interest rate for the first time in nearly a decade. Economists say the Fed could lift its fed funds rate from near-zero as soon as September, an increase that would potentially cause mortgage rates to rise. When Fed officials previously announced plans in 2013 to pull back on other forms of economic stimulus, mortgage rates suddenly spiked and derailed home sales for several months.

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http://hosted.ap.org/dynamic/stories/U/US_HOME_SALES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-08-20-12-08-48

Farm real estate values decrease slightly | Pound Ridge Real Estate

The U.S. Department of Agriculture recently announced Nebraska’s 2015 farm real estate value and cash rent for cropland has decreased by 2 percent.

Allan Vyhnalek, educator at the Platte County Extension Office, said based on the changing prices of corn and soybeans, the decline in real estate value is “absolutely expected.”

In February 2015, the University of Nebraska-Lincoln published a report on farm real estate that gave specific numbers for regions within the state.

The east region, which includes Platte and Colfax counties, saw an overall decrease of 3 percent. Dryland cropland decreased by 9 percent and other types of cropland (pivoted, gravity irrigated, etc) decreased by 3 percent. However, the values of grazing land increased, tillable by 16 percent, non-tillable by 20 percent and hayland by 24 percent.

Due to the 2005 ethanol mandate, Vyhnalek said crop prices jumped to $5 to $7 a bushel for corn and $11 to $15 a bushel for soybeans. When grain prices rose, so did the cost of production and real estate. According to the 2015 UNL real estate report, over the past five years the east region’s real estate values increased by 89 percent.

Statewide, values increased by 116 percent.

Prices for corn are now around $3.41 a bushel with soybeans at $8.85 a bushel, lower than previous years.

Thomas Dobbe, regional vice president of Farm Credit Services of America, said the increased cost of equipment, fertilizer, seeds, etc., could have “acted as a damper” on the real estate market, but it’s too early to tell if this decrease is a fluke or the start of a trend.

“It may be an indication that the market will not go any higher,” Dobbe said, “or a sign that the market is taking a breather. We won’t know if it’s done going up or if it will continue to go up.”

Dobbe and Vyhnalek said the value of an individual plot of land depends more on the quality of its soil and topography than overall trends. Property taxes will continue to increase, and the value decrease is unlikely to affect rental prices.

read more,,,

http://columbustelegram.com/news/local/farm-real-estate-values-decrease-slightly/article_5aa2a5fb-19a8-5bf5-a12e-7f9662df4625.html

As housing prices skyrocket in New Orleans, miniature houses are the answer | Pound Ridge Real Estate

This house in the Irish Channel is being built on an 880-square-foot lot. It goes on sale next month.

Photo by CHERYL GERBER

This house in the Irish Channel is being built on an 880-square-foot lot. It goes on sale next month.

Tiny houses veer between fad and architectural fascination in cities across the world, but in New Orleans ­— where waterways and old plantantion lines make frequent curiosities out of the street grid — they may be finding a natural home.

With undeveloped standard-sized lots increasingly scarce among the most sought-after neighborhoods along the Mississippi River, architects and developers are looking for building opportunities on small parcels that have been overlooked until now. While planners around the country tout the urban-infill trend as a counterweight to suburban sprawl, some New Orleanians worry the smaller structures may congest their neighborhoods.

Architect Jonathan Tate and developer Charles Rutledge say they have identified more than 5,000 irregularly-shaped vacant lots traditionally seen as too tiny to be built upon. In the hopes of transforming some of these parcels into new small-but-affordable housing stock, they are building their first “starter home,” a house on an 880-square-foot lot in the 3100 block St. Thomas Street in the Irish Channel.

“The lot on St. Thomas ‘wasn’t worthy of a house’ is what the neighbors said,” Tate says.

Irish Channel real estate has skyrocketed in value over the past few years, but Tate and Rutledge say it has 20 to 30 irregularly sized empty lots that measure less than 900 square feet. They think if they could use the land to build smaller houses, they could utilize empty space and also open up an increasingly expensive neighborhood to first-time homebuyers.

“The Irish Channel is particularly interesting because the value is going way up, and it’s pushing people out,” Rutledge says. “We want to see how to make housing more affordable without cheap architecture.”

The solution on St. Thomas Street has been to buy a smaller plot of land and build a smaller house, which will have lower construction costs. The house looms tall and thin on a sliver of land between a Creole cottage and a warehouse. That’s the practice of cash house buyers in Knoxville.

“If we’re working with odd lots, we can be inventive with how we use space and [take advantage of] all parts of the lot,” Tate says. “Stylistically, its contemporary, but there’s enough familiarity to them.”

Real estate agent Tracey Moore, who will put the house on the market in August, has said the team is filling a particular niche in the real estate market that has yet to be addressed.

“Smaller lots are hard to deal with, but because they’re small, they’re still somewhat affordable,” Moore says. “Most of the time, these lots are just sitting there with grass growing or people are putting trash on them.”

Moore says for someone trying to break into the housing market in a trendier neighborhood such as the Irish Channel or Bywater, smaller lotsare the only things left. Though the thought of developing irregularly sized lots isn’t necessarily new, developers often overlook them because they may not turn as much of a profit, Moore adds. Tate and Rutledge acknowledge this, and say their first house on St. Thomas may need to sell for more to make up for the potential of losing money on the sale of future starter homes in the area.

They bought the 16-by-55-foot lot on St. Thomas for $22,000. By comparison, a regular-sized lot in the area recently sold for $285,000, and that’s not including the price of building a house. Houses in the area have sold for up to $400 per square foot. The team hopes to sell starter homes for around $200 per square foot.

“We’re trying to provide an alternative option for someone with a price point that doesn’t exist in this part of the city,” Tate adds.

Affordability is a major reason tiny houses have drawn increasing interest around the country. Gregory Paul Johnson, founder of the Small House Society in Iowa City, Iowa, told The New York Times the notion of very small houses becoming popular would have been absurd in the early 2000s.

“But there are so many powerful forces at work right now, like rising energy costs and the mortgage crisis,” Johnson told the newspaper. “I think people want small homes because they cost less to purchase, maintain, heat.”

But one person’s innovation may be another’s imposition. Several neighbors recently turned out to protest another narrow home on a small lot on Chestnut Street.

The developer, Logistics Park LLC of New Orleans, is planning a two-story home for the lot at 4621 Chestnut St. The house would be 12-feet, 10-inches wide, 65 feet long, and 28 feet tall, for a total floor area of approximately 1,500 square feet.

The lot itself measures 21 feet across, nearly half the 40 feet normally required, but the city granted a construction permit in March because “a single-family lot can be developed on by right” under usual circumstances, said Leslie Alley of the City Planning Commission. City officials, however, did not notice that the lot had been commonly owned with the neighboring lot property until just last year, Alley said, which means a variance should have been required.

When neighbors pointed out the prior common ownership of the neighboring lots, a stop-work order was issued and a hearing set before the Board of Zoning Adjustments. Anne Raymond, representing the developer, told the board that the lot width dates back nearly a century.

“The lot area and width are the historical lot area and width from 1908,” Raymond said. “It is how it is.”

The July 13 hearing also brought a number of neighbors in opposition. Justin Chopin, who lives on the Valence Street side of the block, said the lot is too small to be independently developed, and the developer should have known that when they bought it.

“They had to do so knowing it was never going to be conforming to the zoning regulations,” Chopin said. “There’s not ample parking. It doesn’t fit with the construct of the other houses.”

Lorraine Neville, whose husband is musician Art Neville, said the lot was always part of the neighboring home as a side yard.

“I know this to be true; it was never an independent lot,” Lorraine Neville said, noting that she had a letter signed by 15 adjacent neighbors opposing the construction.

 

read more…

 

http://www.bestofneworleans.com/gambit/tiny-houses-in-new-orleans/Content?oid=2724392

Susan Macarz

Too Many Listings, Too Much Time | Pound Ridge Real Estate

A new study scheduled to be published by the Journal of Housing Economics found that agents who take on too many listings sell them for about 3 percent less and it takes 129 percent longer to sell than agents with modest listing inventories.

The study looked at whether agents have an incentive to take on too many listings—at least from the point of view of their clients. Additional listings may represent additional broker commissions, but they also place greater claims on the broker’s time and energy, which in turn can have adverse sales performance consequences for their clients.

The dilution of agent effort and agency costs by very large numbers of listings adversely affects home prices and liquidity, concluded the study by economists Xun Bian, Bennie D. Waller, Geoffrey K. Turnbull, Scott A. Wentland.

‘It is clear from the results that there is a relationship between agent inventory and sales outcomes that sellers care most about: selling price and time on market. Greater agent inventory is associated with a slightly lower price and a significantly higher time on market,” wrote the authors.

While the adverse impact on price is modest, the effect of agent inventory on liquidity is substantial, the study found. The study found that adding 9 additional listings increases time on market by14%. A richer inventory measure taking into account distance-weighted overlapping listings yields a 26% effect on liquidity.

The study also compared sales of agent-owned homes versus homes owned by clients and found that agents generally sell their homes for approximately 1.6% more than client properties. Inventory competition increases the time on market by 26% for clients, but only 12% for agents. In sum, agent-owned homes still take longer to sell with additional inventory but not as long as client properties. This supports the theory that the inventory effect is driven primarily by agent incentives.

 

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http://www.realestateeconomywatch.com/2015/05/