Two things of note from NAR’s August existing home sales report: First-time buyers make up about 31% of the market, and distressed sales (foreclosures and short sales) only make up about 22%.
(Note: Just in case it’s not clear, those numbers are mutually exclusive. They overlap, but there’s no way to know by how much.)
Why is this interesting?
First, the first-time-buyers number is about what it was a year ago — it’s down one percent, but that’s pretty much statistical noise. And the number of investors buying is down from 22% in August 2011 to only 18% this year.
Interesting post over at the Progressive Policy Institute entitled “Rising Home Prices May Not Spell Recovery.” Interesting, but — to be overly blunt — wrong.
The argument by author Jason Gold is that, although it seems home prices have hit bottom, we may not be in a true recovery for several reasons, which he then explains.
And which I’m going to debunk. :)
The August 2012 Virginia Home Sales Report has been released and yet again, most state-wide indicators show an improved housing market in the Commonwealth.
As shown below, the pace of home sales in August 2012 (8,679) marked a 7% improvement over the same month one year earlier (8,125). Furthermore….
- Virginia’s median sales price increased 3% in August 2012.
- Virginia’s total sales volume increased 10% in August 2012.
- Virginia’s average days on market decreased 12% in August 2012.
Read more inside the complete August 2012 Virginia Home Sales Report.
Fannie Mae and Freddie Mac will raise their single-family-mortgage guarantee fees by an average of 10 basis points — aka, 1/10 of a percent — by the end of the year. So called g-fees are essentially insurance against borrower defaults. (For comparison’s sake, F&F raised their g-fees by 26 basis points in 2010 and 28 basis points in 2011.)
Two reasons for the raise: First, to increase the cost of GSE loans closer to that of private ones, hopefully encouraging lenders to enter the market. Second, to help pay for tax cuts — essentially raising a fee to lower a tax.
CoreLogic is reporting that its July home price index was up 3.8 percent from July 2011 — that’s the biggest increase since 2006, and July is the fifth consecutive month with an increase. So good news there.
This is interesting: When you take distressed sales out of the mix, home prices were up more — 4.3 percent from July to July.
It seems that distressed sales are having a greater influence on prices in 2012 than they were in 2011.
That means one of two things: Either there are more short sales and REOs this year than last, or the prices of those distressed homes are noticeably lower (or both).
VARbuzz: "Shadow consumers": Why the housing market is going to bounce back faster than people expect
We all know the real estate market has been improving steadily for the past, oh, six or eight months. Here’s my prediction: It’s going to start improving much more quickly in the next two to three years.
The reason is simple, as you’ll see. But first…
U.S. homeownership is at its lowest rate in 50 years — so says National Mortgage Professional magazine. It looked at the official Census Bureau number (65.5% of households are in homes owned by one or more members) and then subtracted households that were 90 or more days delinquent.
The result: 62.1% of American households are owners, and the rest are renters or “renters in waiting.”
This isn’t good news, except for me. Because this low number means my prediction has a greater chance of coming true.
Writing on Barry Ritholtz’s The Big Picture blog, real estate and mortgage researcher Mark Hanson has a different view of what a 0.5% rise in Case-Shiller’s quarterly report on home prices means.
Background: That half-percent year-over-year rise is the first one since September 2010, and that’s good news, especially because every market Case-Shiller surveys saw price gains.
But Hanson has a different view. His take is that even this small across-the-board gain is exaggerated.
In a Wall Street Journal piece, Nick Timiraos says he thinks rising real estate prices are a result of fewer distressed homes (short sales and foreclosures) on the market.
Prices have risen this summer for a simple reason: more buyers have chased fewer properties. But the drop in supply and the boost in demand isn’t the only reason that Case-Shiller is now turning positive. Another related factor is that the share of non-distressed home sales is rising and the share of distressed sales—foreclosures and short sales, mostly—is falling.
The June S&P/Case-Shiller home price index shows that home prices have risen nationwide — in every one of the 20 metro areas covered by the index. Nationwide it’s up a half percent. That’s not much, until you consider that this is the first time since September 2010 that it increased — and 9/’10 was smack in the middle of the homebuyer tax credit bump.
Also: This is the second time that every city in the index has shown a month over month gain.
Writes CNBC: “The increase is the latest evidence of a nascent recovery in the housing market.” At this point, I think we’re past using the word “nascent.” The recovery has been going on for quite a while, even if CNBC didn’t notice it till recently.
The latest quarterly commercial real estate forecast from NAR has zero surprises (and that’s just fine). It says that yes, the CRE market is recovering with the rest of the economy, “but a slowdown in job creation and ongoing tight loan availability has tempered growth in some areas.”
Hard to argue.
Jobs are growing, but never as fast as we’d like. Loans are available, but lenders are still cautious, and that caution is making it harder for businesses, especially smaller ones, to get loans.