Existing-Home Sales Up in June, Unsold Inventory Shows Continued Progress

Article from the National Association of Realtors^®

WASHINGTON (July 22, 2014) – Existing-home sales increased in June and reached an annual pace of 5 million sales for the first time since October 2013, while rising inventory continues to push overall supply towards a more balanced market, according to the National Association of Realtors^®.
Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May. Sales are at the highest pace since October 2013 (5.13 million), but remain 2.3 percent below the 5.16 million-unit level a year ago.
Lawrence Yun, NAR chief economist, said housing fundamentals are moving in the right direction. “Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices,” he said. “On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages – particularly in the West – are still putting upward pressure on prices.”
Yun also noted that stagnant wage growth is holding back what should be a stronger pace of sales. “Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month,” he said. “However, the lack of wage increases is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability.”
Total housing inventory² at the end of June rose 2.2 percent to 2.30 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5 percent higher than a year ago, when there were 2.16 million existing homes available for sale.
The median existing-home price³ for all housing types in June was $223,300, which is 4.3 percent above June 2013. This marks the 28^th consecutive month of year-over-year price gains.
Distressed homes⁴ – foreclosures and short sales – accounted for 11 percent of June sales, down from 15 percent in June 2013. Eight percent of June sales were foreclosures and 3 percent were short sales.
Foreclosures sold for an average discount of 20 percent below market value in June, while short sales were discounted 11 percent.     
The percent share of first-time buyers continues to underperform historically, rising slightly to 28 percent in June (27 percent in May), but remain at an overall average of 28 percent over the past year.
NAR President Steve Brown, co-owner of Irongate, Inc., Realtors^® in Dayton, Ohio, said Realtors^® are reporting that some prospective buyers who have above average credit scores but low down payments are deterred from homeownership by the high cost of FHA mortgage insurance. “Access to affordable credit continues to hamper young, prospective first-time buyers,” added Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped for the second consecutive month to 4.16 percent in June from 4.19 percent in May, and is the lowest since last June (4.07 percent).
Properties sold faster for the sixth consecutive month in June; highlighting the fact that inventory is still lagging relative to demand. The median time on market for all homes was 44 days in June, down from 47 days in May; it was 37 days on market in June 2013. Short sales were on the market for a median of 120 days in June, while foreclosures sold in 54 days and non-distressed homes typically took 42 days. Forty-two percent of homes sold in June were on the market for less than a month.
For the third consecutive month – as well as the average of the previous 12 months – all-cash sales in June were 32 percent of transactions, up from 31 percent in June 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in June, unchanged from May; they were 17 percent in June 2013. Sixty-nine percent of investors paid cash in June.
Single-family home sales rose 2.5 percent to a seasonally adjusted annual rate of 4.43 million in June from 4.32 million in May, but remain 2.9 percent below the 4.56 million pace a year ago. The median existing single-family home price was $224,300 in June, up 4.5 percent from June 2013.
Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in June from 590,000 in May, and are 1.7 percent above the 600,000 unit pace a year ago. The median existing condo price was $215,700 in June, which is 3.2 percent higher than a year ago.
Regionally, existing-home sales in the Northeast rose 3.2 percent to an annual rate of 640,000 in June, but are 3.0 percent below a year ago. The median price in the Northeast was $269,800, slightly below (0.1 percent) June 2013.
In the Midwest, existing-home sales jumped 6.2 percent to an annual rate of 1.20 million in June, but remain 2.4 percent below June 2013. The median price in the Midwest was $177,900, up 4.6 percent from a year ago.
Existing-home sales in the South inched 0.5 percent higher to an annual level of 2.06 million in June, and are up 1.0 percent from June 2013. The median price in the South was $192,600, up 3.4 percent from a year ago.
Existing-home sales in the West rose 2.7 percent to an annual rate of 1.14 million in June, but remain 7.3 percent below a year ago. The median price in the West was $301,000, which is 7.2 percent above June 2013.
The National Association of Realtors^®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

District Stands Firm As Home Purchase Destination

Information from GCAAR:   District Stands Firm As Home Purchase Destination Prices, Condo Contracts, and Settlements Rise in June     The District of Columbia continued to be a popular destination for home buyers as prices, condo contracts, and settlements rose in June. Inventory increased for condos in the District but dropped for single-family homes compared to June 2013. Montgomery County activity slowed in all areas with the exception of home prices, which increased for both condos and single-family homes.   Washington, DC The average days on market down by 6.25% compared to June 2013. The median price for condos rose 1.2%, with single-family homes receiving a 2.7% increase. Inventory increased 21.2% for condos, but single-family inventory was down 1.8%. Condo contracts increased 9%, but dropped 2.7% for single-family homes Settlements increased 3.8% for condos, and 5.9% for single-family homes compared to June 2013.    Montgomery County The average number of days on market was up 15.15% from June 2013. Median condo prices saw a 4.4% increase, and the price of single-family homes rose by 3.3%. The amount of available inventory increased in June, with a 33.3% increase for condos and a 44.1% increase for single-family homes. The number of contracts declined, dropping 15.7% for condos and 7.3% for single-family homes.  Settlements increased for condos by 3.8%, but dropped by 1.5% for single-family homes compared to June 2013.      District of Columbia June 2014 June 2013 Change Average Days on Market: Condo & Single-Family Homes 30 32 -6.25% Condo Median Price $412,200 $407,500 1.2% Condo Total Active Listings 687 567 +21.2% New Condo Contracts This Month 410 376 9.0% Condo Settlements This Month 409 394 3.8% Condo Absorption Rate (Total Active Listings /New Contracts) 1.68 1.51 +11.3% Single-Family Median Price $607,750 $592,000 2.7% Single-Family Total Active Listings 594 605 -1.8% New Single-Family Contracts This Month 438 450 -2.7% Single-Family Settlements This Month 429 405 5.9% Single-Family Absorption Rate (Total Active Listings /New Contracts) 1.36 1.34 +1.5% Montgomery County June 2014 June  2013 Change Average Days on Market: Condo & Single-Family Homes 38 33 +15.15% Condo Median Price $224,500 $215,000 4.4% Condo Total Active Listings 589 442 +33.3% New Condo Contracts This Month 258 306 -15.7% Condo Settlements This Month 276 266 3.8% Condo Absorption Rate (Total Active Listings /New Contracts) 2.28 1.44 +58.3% Single-Family Median Price $469,990 $455,000 3.3% Single-Family Total Active Listings 2573 1786 +44.1% New Single-Family Contracts This Month 921 994 -7.3% Single-Family Settlements This Month 980 995 -1.5% Single-Family Absorption Rate (Total Active Listings /New Contracts) 2.79 1.80 +55.0%

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Housing Market Continues to Stabilize in 2014

Housing market continues to stabilize in 2014

Inventory is steadily rising, while prices have also increased   Information from Jeff Detwiler of Long and Foster

We're now halfway through 2014, and as anticipated, the market has slowed down from the brisk pace of last year. It's a stabilization of the industry that was predicted by our team here at Long & Foster, and it's attributed to a variety of developments—three of which stand out as the most significant to me. First, the mortgage industry faced a changing regulatory environment as the Dodd-Frank Wall Street Reform and Consumer Protection Act took effect in January 2014. Lenders of all sizes were faced with challenges implementing the new rules and we're just now beginning to see how it's impacted the loan business. Second, the real estate industry has seen a slowdown in investor demand, which attributed to about 1 in 5 purchases in 2013. Now, though, as financing costs and property values have increased, investors aren't as eager to buy real estate. Last, and perhaps most significant, the low interest rates of the past few years have left many homeowners unwilling to sell. The 3.5 percent mortgage rates that spurred so many refinances and purchases have placed homeowners in a situation where they don't see the financial benefit of selling. It's the downside of low mortgage rates, and it's an issue I expect we'll have to manage for years to come. Regardless, we have seen many positive developments in the market this year. For example, while inventory remains low, it's steadily increasing. The National Association of Realtors (NAR) reported a 5.6-month supply as of May, which is much closer to normal than last December's 4.6-month supply. Sales prices also have been on the rise across the country. Both NAR and the Mortgage Bankers Association predict this growth will continue through the year, and we've seen such developments at Long & Foster.   While we're down year-to-date about 6 percent in volume and 7 percent in units, our sales are quite similar to the overall market. I'm confident our performance will continue to improve, and I'm appreciative of all you've done to help Long & Foster bring the homeownership experience to buyers and sellers across the Mid-Atlantic and Northeast this year. Let's keep up the good work as we move toward the future!   By the Numbers Wrap-up for June 2014   Real Estate: More than $2.6 billion in sales volume, a 10 percent decrease from June 2013, for a year-to-date total of over $15.2 billion Real Estate: 7,181 unit transactions, an 8 percent decrease from June 2013 Property Management: Created 127 new accounts and referred 25 of our current accounts to Long & Foster Real Estate sales agents for potential sales listing in the month of June Rental Service Center: Processed 1,663 applications and paid 1,322 rental cases, which includes placing a tenant, ratifying the lease and paying the leasing commission Mortgage: 581 customers served, earning over 23 percent of Long & Foster business Title: 1,477 customers served, earning more than 48 percent of Long & Foster business Insurance: 299 new policies issued, earning almost 10 percent of Long & Foster business

Mortgage Rates for 30-Year U.S. Loans Fall for Third Week

Mortgage Rates for 30-Year U.S. Loans Fall for Third Week - By Prashant Gopal Jul 3, 2014

Interesting Article from Bloomberg - Click Here to Read

Our Monthly E-News Letter - June 2014

Click Here To View Our June E-News Letter

Congratulations To Our Grads!

  

In the midst of one of the busiest spring markets in memory (a record twelve closings in May alone) we have bigger news to share this month - THREE of our five girls graduated from college! In order below: 

• Eileen Nalls (with proud dad) Virginia Tech, BS Business (accounting) Magna Cum Laude (!)
• Adele Carnemark (with mom) James Madison, MA Exceptional Education; 
• Madeleine Carnemark (with big sisters Callie and Adele)  Tulane, BA(s) Philosophy and Environmental Studies, Cum Laude.

Just so darned proud of all three of them - actually tearing up again while I type! You GO girls!!

 

Existing-Home Sales Heat Up in May, Inventory Levels Continue to Improve

Article from the National Association of Realtors®.

 

WASHINGTON (June 23, 2014) – Existing-home sales rose strongly in May and inventory gains continued to help moderate price growth, according to the National Association of Realtors®. All four regions of the country experienced sales gains compared to a month earlier.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 4.9 percent to a seasonally adjusted annual rate of 4.89 million in May from an upwardly-revised 4.66 million in April, but remain 5.0 percent below the 5.15 million-unit level in May 2013. The 4.9 percent month-over-month gain in May was the highest monthly rise since August 2011 (5.5 percent).

Lawrence Yun, NAR chief economist, said current sales activity is rebounding after the lackluster first quarter. “Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” he said. “Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates.” 

Total housing inventory² at the end of May climbed 2.2 percent to 2.28 million existing homes available for sale, which represents a 5.6-month supply at the current sales pace, down slightly from 5.7 months in April. Unsold inventory is 6.0 percent higher than a year ago, when there were 2.15 million existing homes available for sale.

The median existing-home price³ for all housing types in May was $213,400, which is 5.1 percent above May 2013. “Rising inventory bodes well for slower price growth and greater affordability, but the amount of homes for sale is still modestly below a balanced market. Therefore, new home construction is still needed to keep prices and housing supply healthy in the long run,” Yun added.  

Earlier this month, NAR reported new home construction activity is currently insufficient in most of the U.S., and some states could face persistent housing shortages and affordability issues unless housing starts increase to match up with local job creation.

Distressed homes⁴ – foreclosures and short sales – accounted for 11 percent of May sales, down from 18 percent in May 2013. Eight percent of May sales were foreclosures and three percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in May, while short sales were discounted 11 percent.

The percent share of first-time buyers continued to underperform, representing less than one- third of all buyers at 27 percent in May, down from 29 percent in April; they were 29 percent in April 2013.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 4.19 percent in May from 4.34 percent in April, and is the lowest since June 2013 (4.07 percent).

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said housing fundamentals are showing slight improvement in markets across the country. “Many potential buyers were left on the sidelines beginning last summer as affordability declined amidst rising home prices and interest rates,” he said. “The temporary pause in rising interest rates and more homes for sale is good news – especially for first-time home buyers – who likely have a better chance in upcoming months to make a competitive offer that’s in return accepted by the seller.”

The median time on market for all homes was 47 days in May, down from 48 days in April; it was 41 days on market in May 2013. Short sales were on the market for a median of 125 days in May, while foreclosures typically sold in 57 days and non-distressed homes took 44 days. Forty-one percent of homes sold in May were on the market for less than a month.

All-cash sales comprised 32 percent of transactions in May, unchanged from last month and down from 33 percent in May 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in May, down from 18 percent in April; they were 18 percent in May 2013. Sixty-eight percent of investors paid cash in May.

Single-family home sales rose 5.7 percent to a seasonally adjusted annual rate of 4.30 million in May from 4.07 million in April, but remain 5.7 percent below the 4.56 million pace a year ago. The median existing single-family home price was $213,600 in May, up 4.9 percent from May 2013.

Existing condominium and co-op sales remained unchanged in May from April (as well as May 2013) at an annual rate of 590,000 units. The median existing condo price was $212,300 in May, which is 6.6 percent higher than a year ago.

Regionally, existing-home sales in the Northeast rose 3.3 percent to an annual rate of 620,000 in May, but are 3.1 percent below a year ago. The median price in the Northeast was $256,700, down 0.9 percent from May 2013.

In the Midwest, existing-home sales jumped 8.7 percent to an annual rate of 1.13 million in May, but are still 7.4 percent below May 2013. The median price in the Midwest was $165,900, up 4.0 percent from a year ago.

Existing-home sales in the South increased 5.7 percent to an annual level of 2.05 million in May, but are down 0.5 percent from May 2013. The median price in the South was $184,800, up 4.4 percent from a year ago.

Existing-home sales in the West rose 0.9 percent to an annual rate of 1.09 million in May, and are 11.4 percent below a year ago. The median price in the West was $297,500, which is 8.4 percent above May 2013.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

¹Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single- family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

³The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single- family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.