condo management Archives

Inventory Grows Faster in Larger Metros

Market conditions will differ from one neighborhood to the next. That’s why it’s said that real estate is all about location. One area can be hot with buyers while another sees falling prices and little interest. These days, inventory is the primary factor determining what conditions look like in a particular market. In neighborhoods where there are an increasing number of available homes for sale, home prices are beginning to soften. Where inventory is lagging, prices are still headed upward. One recent report says that the distinction is clearest when looking at larger, more expensive metro areas and comparing them to smaller, affordable locations. For example, the number of available homes for sale is up 9 percent in the country’s largest metros, while only rising 4 percent overall. In other words, larger cities and their surrounding suburbs are seeing more new listings, which is leading to more price cuts. In fact, 40 of the top 45 markets saw an increase in price reductions year-over-year. On the other hand, the cities with the highest year-over-year gains in median listing price are smaller markets like Indianapolis, Milwaukee, and Memphis. More here.

Taking The Long View Of The Housing Market

When you’re in the middle of something, it can be hard to see things clearly. Only after you’ve gained some perspective and had time to reflect do things become clearer. Hindsight, after all, is 20/20. This is also true when it comes to the housing market. Each month, more data is released and compared to the previous month’s data. And, if you follow along, it’s easy to get the feeling that things are worse and/or better than they actually are. But taking a step back can help put things in context. Perhaps that’s why Lawrence Yun, the National Association of Realtors’ chief economist, recently said that he’s very optimistic about the housing market’s long-term outlook. When compared to historical data, conditions look pretty good. As an example, Yun says home sales are now around the same level they were in 2000 but a comparison of fundamentals shows we’re in much better shape now than we were then. “Mortgage rates are much lower today compared to earlier this century, when mortgage rates averaged 8 percent,” Yun said. “Additionally, there are more jobs today than there were two decades ago. So, while the long-term prospects look solid, we just have to get through this short-term period of uncertainty.” More here.

How Student Loan Debt Impacts Home Buyers

Young Americans want to own a home. Research consistently shows large majorities who say they aspire to one day become homeowners. And yet, the number of first-time home buyers active in the market has been lower than what is historically normal for several years. So why aren’t more young Americans buying houses? Well there are a number of factors at play but, among them, student loan debt is a big one. According to one recent study, the average monthly student debt payment for current renters who say they’d like to buy a home in the next year is $388. Naturally, an extra $400 a month to devote to a mortgage payment could go a long way. In fact, with that money, a buyer could afford a house that cost almost $100,000 more. But though that may seem discouraging, the same report also found that prospective buyers with student loan debt can still afford 52.3 percent of homes currently listed for sale. And, in areas where there are more affordable homes available for sale, it’s even easier to find something in a price range that works. In St. Louis, for example, a buyer with student loan debt can still afford nearly 75 percent of currently listed homes. More here.

Number Of Listings With Price Cut Up In October

One good way of measuring where home prices are headed is to look at how many homes for sale have had to adjust their initial listing price. If there are a lot of homes in your area with price reductions, it could be a sign that the local market is softening. And, according to one national report, it likely is. That’s because, new numbers show 31.3 percent of homes for sale in October had at least one price cut of more than 1 percent. By comparison, last year at the same time just 25 percent of homes had previously dropped their price. That means an increasing number of homeowners with homes for sale are adjusting their price to attract home buyers. Whether this is due to a seasonal slow down, a reaction to recent mortgage rate increases, or the beginning of a better balanced market remains to be seen. But with fewer than half of the metro areas included in the report showing month-over-month price gains, it’s definitely good news for prospective home buyers this fall and winter. More here.

Majority Of Recently Sold Homes Were Affordable

Naturally, affordability is a big consideration for anyone buying a home. After all, it’s a significant purchase and you want to be sure you’re getting a good deal. For that reason, recent reports of higher prices and rising mortgage rates may give you the impression that buying a house is out of reach. But new data from the National Association of Home Builders shows otherwise. That’s because, their Housing Opportunity Index found that the majority of “new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $71,900.” In fact, 56.4 percent of homes sold during the third quarter were affordable. But, though that’s encouraging news, it is down from the previous quarter when 57.1 percent of the homes sold were considered affordable. Robert Dietz, NAHB’s chief economist, said the economy is helping keep homes within reach of the typical buyer but affordability trends are still a concern. “Ongoing job and economic growth provide a solid backdrop for housing demand amid recent declines in affordability,” Dietz said. “However, housing affordability will need to stabilize to keep forward momentum from diminishing as we move into the new year.” More here.

Number Of Equity Rich Properties Hits New High

Homeownership isn’t a get rich quick scheme. So you shouldn’t buy a house expecting its value to skyrocket and your wealth to instantly rise. The housing market will have its ups-and-downs and there are no guarantees. Which means, you probably shouldn’t buy a house hoping it’ll make you rich. And while that’s generally good advice, it doesn’t mean owning a home won’t benefit your bottom line. For example, according to ATTOM Data Solutions’ Q3 2018 U.S. Home Equity & Underwater Report, there are now nearly 14.5 million equity rich properties across the country. Equity rich refers to when the amount owed on the mortgage is less than 50 percent of a property’s market value. And the new numbers are not only good news, they represent a new high and an increase of 433,000 from one year ago. Daren Blomquist, senior vice president of ATTOM, says part of the improvement is the fact that people are staying in their homes longer. “As homeowners stay put longer, they continue to build more equity in their homes despite the recent slowing in rates of home appreciation,” Blomquist said. In other words, the longer you stay in a house, the more likely you’ll see a return on your investment. More here.

Young Adults Saving Early For Homeownership

First-time home buyers are important to the health of the housing market, since they typically account for around 40 percent of the homes sold. And though that number has fallen in recent years, a stronger economy and job market has led to increasing demand among younger buyers. In fact, according to one recent survey, an overwhelming majority of Americans between the ages of 18 and 34 say they want to own a home, if they don’t already. And while that’s not that surprising, the fact that the youngest respondents were among the most enthusiastic is. Generation Z – which includes Americans between the ages of 18 and 24 – were more than twice as likely to have started, or plan to start, saving for a home before the age of 25 than previous generations. Two in five Gen-Z participants said they hope to become homeowners by that age. But while they want to become homeowners, they may not have the same motivations as previous generations. Fewer of them said they wanted to become homeowners to live the American Dream or because they think real estate is a good investment. Instead, 61 percent said they want to own a home because they want to customize their own space. More here.

The Winter Market May Be Good For Buyers

Typically, spring and summer are thought of as the prime times to buy or sell a home. There are a number of reasons for this, including weather and the end of the school year. But whatever the reason, there are usually more homes for sale and more active buyers during what is typically the busiest sales season. Fall and winter, on the other hand, are the time of the year when the housing market slows down. The approaching holidays and colder temperatures across much of the country mean fewer Americans are in the mood for a move. But that can mean opportunities for buyers who are. A recent analysis looked at the country’s largest metro areas and compared typical affordability levels, projected rent increases, and the share of listings with a price cut to determine where buyers might have the best chances in the coming months. The results showed conditions in hot markets like Orlando, Boston, Seattle, and Las Vegas are becoming more favorable as the end of the year approaches. That means, interested buyers may be in a better position this fall and winter than they will be next spring when things begin to heat back up. More here.

How Affordable Is The Typical New Home?

Generally speaking, there are two types of homes available to buyers. There are previously owned homes and there are new homes. Which one you choose comes down to a couple of factors. The first is personal preference. Some people prefer the quirks and character of an older home, while others like the comfort of knowing everything in their house is brand new. But though it’d be nice if it was, preference isn’t usually the deciding factor. Ultimately, your decision will come down to budget and affordability. New homes tend to be more expensive than existing homes. Which means, whether or not you consider buying new might be determined by your price range. So how affordable is the typical new home? Well, according to the most recent numbers from the U.S. Census Bureau and the Department of Housing and Urban Development, they’re becoming more affordable. In September, for example, the median sales price of new homes sold was $320,000, which is down from $331,500 last year at the same time. More here.

Pending Home Sales Increase In September

When an offer on a home has been accepted, that home’s sale is considered pending. It isn’t final until closing, which typically takes place a few weeks later. But, because most accepted offers result in completed sales, the National Association of Realtors tracks contract signings as an indicator of what sales should look like in the near future. In September, the NAR’s Pending Home Sales Index showed a slight increase from the month before, though it’s still below where it was at the same time last year. Lawrence Yun, NAR’s chief economist, says the month-over-month increase is a good sign. “This shows that buyers are out there on the sidelines, waiting to jump in once more inventory becomes available and the price is right,” Yun said. In other words, though tight inventory and the end of the summer season may lead to slowing sales in the near term, home buyer demand remains elevated. Additionally, Yun points out that compared to data going back to the year 2000, affordability levels are favorable and should help keep housing demand steady in the coming months.