Tuesday, February 28, 2017

Top impact on 2017 housing market? Rising mortgage rates

Top impact on 2017 housing market? Rising mortgage rates

 
NEW YORK – Feb. 27, 2017 – Increasing mortgage rates and their impact on affordability will be the most significant force driving the 2017 housing market, according to the latest Zillow Home Price Expectations Survey.
The quarterly survey, sponsored by Zillow and conducted by Pulsenomics LLC, asked more than 100 housing experts and economists what factors would have the greatest impact on U.S. housing this year. The most frequent answer was rising mortgage rates and their impact on mortgage affordability, with more than half of panelists selecting it.
The survey respondents ranked low inventory and shifting demographics, as millennials age into their prime home-buying years and the housing needs of aging baby boomers change, as the next most important factors for the 2017 housing market.
Buyers and homeowners have been able to take advantage of historically low mortgage rates on purchase or refinance loans for the past several years, but rates jumped following the presidential election in November, and have since hovered around 4 percent. In December, the Federal Reserve voted to raise the federal funds rate – which can influence mortgage rates – by 25 basis points for the second time in the last decade and set expectations for the possibility of a more aggressive rate hike cycle throughout 2017. Similarly, home price appreciation accelerated at the end of the year, and income growth is not keeping pace.
With both mortgage rates and home values rising, paying for a home with a mortgage becomes more expensive and requires a larger percentage of income each month. But since mortgage rates have been at historical lows for several years, and recent increases have been relatively small, they have not yet had significant effects on home value appreciation. For buyers of the median U.S. home, valued at $193,800, an increase from 4 percent to 4.25 percent would only increase their monthly mortgage payments by $23.
As rates rise, though, monthly payments for homes will increase, and buyers’ budgets will be more strained.
Since 77 percent of buyers use a mortgage to finance their purchase, this will affect the majority of buyers, and the market will not be able to sustain the more rapid home value appreciation we have seen in the past few years. Most experts believe there won’t be a significant slowdown in appreciation until rates reach 5.5 percent, which isn’t likely to happen this year. Zillow expects the conventional 30-year fixed mortgage rate to be closer to 4.75 percent by the end of 2017.
“Rising mortgage rates, inventory shortages and demographic shifts will be the main drivers of the U.S. housing economy this year, especially for first-time buyers who will face tougher competition for entry-level homes and often operate with a tighter budget than move-up buyers,” said Zillow Chief Economist Dr. Svenja Gudell. “When you combine higher mortgage rates with increasing home values, mortgage affordability starts to suffer, and buyers will have to spend more and more on their monthly payments. This makes it even more important for buyers to prepare their finances, and shop around to make sure they are getting the best possible rate.”
Another potential effect of rising mortgage rates is their influence on current homeowners, who may decide not to sell their homes to avoid needing a new mortgage at a higher rate, leading to more constrained inventory. More than half of the respondents (56 percent) in this survey said this “mortgage rate lock-in” is already or will have a meaningful impact on the housing market.
Home values rose 6.8 percent in 2016. Overall, the experts surveyed predict home prices will rise 4.6 percent in 2017, then slow to 3 percent annual growth by 2019.
“Compared to their outlook in our previous survey just a few months ago, most of our panelists now expect somewhat stronger home value appreciation this year and next, as tight inventory conditions persist,” said Pulsenomics founder Terry Loebs. “However, longer-term, the consensus still calls for decelerating prices, with the most pessimistic quartile of experts continuing to project negative inflation-adjusted returns for U.S. housing beyond 2017. The specter of rising mortgage rates and other affordability hurdles are clearly impacting these home value projections.”

Friday, February 24, 2017

NAR predicts stable commercial market in 2017

NAR predicts stable commercial market in 2017

 
WASHINGTON – Feb. 23, 2017 – Steered ahead by strengthening demand in smaller markets, the commercial real estate sector should remain on stable ground in 2017 and offer decent returns for investors, according to the latest National Association of Realtors® (NAR) quarterly commercial real estate forecast.
National office vacancy rates are forecast to retreat 1.1 percent to 12.1 percent over the coming year as job growth in business and professional services brings increased need for office space. The vacancy rate for industrial space is expected to decline 1.3 percent to 7.1 percent, and retail availability to decrease 0.7 percent to 11.2 percent.
Only the multifamily sector is predicted to have little change to its vacancy rate over the next year as new apartment completions keep openings mostly flat at 6.5 percent.
"Last year was the 11th year in a row of subpar GDP growth, but renewed corporate optimism leading to a focus on investment and a desperately needed boost in residential construction should pave the way for modest expansion this year of around 2.4 percent," says Lawrence Yun, NAR chief economist. "Steady hiring and low local unemployment levels are finally supporting higher wages and increased spending, which in turn bodes well for sustained demand for all commercial property types."
The apartment sector is expected to preserve its status as a top performer this year, simply because ongoing supply and affordability challenges are keeping the nation's low homeownership rate from seeing meaningful improvement. Even with a small uptick in the vacancy rate as new building completions catch up with demand, rents will likely maintain their solid growth in most of the country.
"Especially in the costliest metro areas, higher home prices and mortgage rates are squeezing the budget for many renters looking to buy and inevitably forcing them to sign a lease for at least another year," says Yun.
According to Yun, commercial property prices – especially in Class A assets in larger markets – surpassed pre-crisis levels last year because of aggressive bidding and lower inventory levels. However, with the Federal Reserve expected to raise short-term rates three times in 2017, a minor price correction may be in store this year as cap rates move higher.
"Similar to the biggest ongoing challenges in the residential market, supply and demand imbalances continue to put upward pressure on commercial property prices as investors search for yield in smaller markets," says Yun. "Realtors are increasingly citing inventory shortages as their top concern as the pace of new projects slows in large cities, and middle-tier and smaller markets see a growing appetite for space."
The latest NAR Commercial Real Estate Market Survey found strong underlying demand for commercial properties up to $2.5 million, where most transactions from NAR's commercial members reside. Compared to a year ago, sales volume rose 12.9 percent, prices increased 5.5 percent and the average transaction value equaled $1.1 million.
NAR's December Business Creation Index (BCI) also found a positive trend for smaller commercial businesses. Created to monitor local economic conditions from the perspective of NAR's commercial members, Realtors reported more business openings and fewer closings over the past year in their market.
The possibility of a more tax-friendly business environment combined with the positive benefits of 1031 exchanges could quicken the pace of economic growth and support stronger commercial market fundamentals, Yun says.
The industrial sector – already enjoying increased demand from the soaring popularity of e-commerce – could see a further decline in vacancy rates if increased manufacturing comes to fruition and accelerates the need for more warehouse space.
"The positive direction for commercial real estate this year will be guided by the steadily expanding U.S. economy, which has legs to grow and continues to be one of the top economic performers and safest bets in the world," concludes Yun.
© 2017 Florida Realtors  

Thursday, February 23, 2017

Fla.’s Housing Market: More​ Sales,​ Rising Prices in January

Good morning, I read this article this morning and wanted to pass it along to you. Good Florida real estate news for both Sellers and Buyers. For Sellers, their real estate investment(s) continue to grow in value. For Buyers, interest rates still are very affordable, but projected to rises a couple of times this year.

If you are looking for a beautiful southwest Florida home please give me a ring. I am highly skilled, an expert at locating, negotiating and facilitating Florida real estate property sales. I can and will find the perfect southwest Florida home for you and your family. If you are ready to see some magnificent SWFL homes, lets set a time and date to go preview some of your favorites. 

Enjoy the information below and of course, call or send me any question you may have.

Kind regards,


Terence Trombetti Realtor® 
​​Call or Text (239) 560-1574
​Florida Complete Realty​
​3624 Del Prado Blvd., Suite A,
Cape Coral, Florida 33904
​​
Florida Real Estate Professional Since 2004


​​
Fla.’s Housing Market: More​ Sales,​ Rising Prices in January

 
ORLANDO, Fla. – Feb. 22, 2017 – Florida's housing market reported more closed sales, higher median prices, increased pending sales and more new listings in January, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide totaled 16,779 last month, up 5.2 percent from January 2016.
"Florida's housing market continues to show positive momentum," says 2017 Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. "While existing inventory remains tight, Realtors across the state are reporting interest from both buyers and sellers – and with interest rates expected to rise over the next few months, now is certainly a good time to take action. On the buyer front, new pending sales for existing single family homes in January increased 3.8 percent year-over-year; pending sales for townhouse-condo units increased 6.5 percent. On the sellers' side, new listings for single-family homes rose 7.6 percent year-over-year, while new townhouse-condo listings ticked up 0.9 percent.
"When market conditions are tight, consumers can get ahead by working with a Realtor who's an expert in the local area," Wells says. "A Realtor will have the knowledge needed to help both buyers and sellers through the complex home buying process."
Home sellers continued to get more of their original asking price at the closing table in January: Sellers of existing single-family homes received 95.6 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.6 percent.
The statewide median sales price for single-family existing homes last month was $220,000, up 10.1 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in January was $161,000, up 6.6 percent over the year-ago figure. January marked the 62nd month in a row that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the
​ ​
national median sales price for existing single-family homes in December 2016 was $233,500, up 3.8 percent from the previous year
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the national median existing condo price was $221,600.In California, the statewide median sales price for single-family existing homes in December was $509,060; in Massachusetts, it was $355,000; in Maryland, it was $269,319; and in New York, it was $240,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 7,209 last month, up 6.2 percent compared to January 2016. Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 47.7 percent while short sales for single-family homes dropped 36.3 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
"Florida's markets for existing homes are off to a good start in 2017," says Florida Realtors Chief Economist Dr. Brad O'Connor. "Throughout much of this housing cycle, growth in single-family home sales has outpaced that of condos and townhouses, but in January – for the first time since November 2015 – this was not the case, though one month's worth of data alone doesn't indicate a long-term trend.
Also, new listings of single-family homes were up in January compared to last year, including in the $150,000 to $250,000 range where inventory is sorely needed throughout the state. That said, inventory was still down overall in this range, as this segment of the market remains in high demand throughout the state."
Inventory dipped to a 4.2-months' supply in January for single-family homes and was at a 6.4-months' supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.15 percent in January 2016, up significantly from the 3.87 percent average recorded during the same month a year earlier.
For the full statewide housing activity reports, go to Florida Realtors Research and Statistics on floridarealtors.org.
© 2017 Florida Realtors®

Real Estate Data for Cape Coral

Cape Coral market trends indicate an increase of $10,150 (5%) in median home sales over the past year. The average price per square foot for this same period rose to $133, up from $127.
Median Sales Price - $200,000​​
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Real Estate Data for Fort Myers

Fort Myers market trends indicate an increase of $13,490 (7%) in median home sales over the past year. The average price per square foot for this same period rose to $134, up from $125.
Median Sales Price - $200,000
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Real Estate Data for Naples

Naples market trends indicate a decrease of $7,000 (-2%) in median home sales over the past year. The average price per square foot for this same period fell to $213, down from $214.
Median Sales Price - $300,000
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