Tuesday, June 21, 2016

CURRENT REAL ESTATE NEWS ARTICLES


MarketWatch
Housing starts little changed as U.S. construction plateaus
Progress in residential real estate may be idling alongside other parts of theeconomy as builders wait to see if momentum re-accelerates before ...

Naples Florida Area Board Market Statistics
Real Estate Agent with Top Producers Realty, Inc. Krol Group International ... There is good news for buyers who previously found it difficult to find a ...

National Association of Realtors declares support for alternative credit scoring @ Naples
The National Association of Realtors sent a letter to two members of Congress this week, declaring the organization's support of alternative ...


NABOR: Home sales were down in May, but prices held steady
By June Fletcher of the Naples Daily News ... A report by the Naples Area Board of Realtors comparing May to the same month a year earlier showed ...

Housing starts little changed as U.S. construction plateaus

By Victoria Stilwell, (c) 2016, Bloomberg(c) 2016, Bloomberg
New-home construction was little changed in May, a sign the residential real-estate industry will add little to economic growth in the second quarter.
Housing starts in May fell 0.3 percent to a 1.16 million annualized rate from a 1.17 million pace the prior month, a Commerce Department report showed Friday in Washington. The median forecast of 77 economists surveyed by Bloomberg was 1.15 million. Permits, a proxy for future construction, were also little changed from April.
Progress in residential real estate may be idling alongside other parts of the economy as builders wait to see if momentum re-accelerates before breaking ground on new projects. Borrowing costs that remain attractive may help lure prospective home-buyers into the market, though stronger wage growth will be needed to enable first-timers to take the plunge.
"All along we expected this would be a pretty gradual recovery and that's largely coming true," said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida, whose forecast for housing starts was among the closest in the Bloomberg survey. "We're still very far from a boom period in housing at all here, but I think the fundamentals are still pretty good."  Estimates for housing starts in the Bloomberg survey ranged from 1.07 million to 1.2 million. The April figure was revised slightly down, leaving the rounded reading at 1.17 million.
Building permits climbed 0.7 percent in May to a 1.14 million annualized rate. Since applications trail last month's starts, it indicates there is little scope for additional gains in construction in the next month or two. They were projected to rise to 1.15 million.
Construction of single-family houses increased 0.3 percent to an 764,000 rate, the most in three months, the report showed.
Work on multifamily homes, such as apartment buildings fell 1.2 percent to a 400,000 rate. Data on these projects, which have led housing starts in recent years, can be volatile.
Two of four regions showed a decrease in starts in May, paced by a 33.3 percent drop in the Northeast, according to the report. Construction also fell in the Midwest, and climbed in the West and South, where single-family starts rose to the highest level since December 2007.
On a year-to-year basis, total housing starts were up 9.5 percent in May on a seasonally adjusted basis.
Federal Reserve policymakers this week delayed another interest-rate hike, citing mixed economic growth and other uncertainties, such as the U.K.'s June 23 referendum on membership in the European Union.
The decline in the Fed's expectations for the number of rate increases this year is keeping a lid on mortgage costs. The average interest rate on a 30-year, fixed mortgage declined to 3.54 percent in the week ended June 16, the lowest since May 2013.


Sunday, June 12, 2016

Housing economists: Expect a mixed picture over the coming year, with slower price growth.

By June Fletcher of the Naples Daily News

NEW ORLEANS — Housing economists from around the country offered forecasts Friday at the National Association of Real Estate Editors convention that are somewhat murky.

Lawrence Yun, chief economist for the National Association of Realtors, summed up the confusion by predicting two separate possible scenarios — one optimistic and one pessimistic.

On the optimistic side, he said that many drivers are likely to boost housing demand in the near future.

Since the recession, many consumers have seen their home equity rise, boosting their household wealth; seen an increase in job opportunities, and have repaired credit problems that arose during the recession.

That's bolstered pent up demand, which in turn has pushed up closed and pending sales, at least on a national level.

They're also behaving more conservatively in their spending.

"People are not doing cash-out refis," Yun said. "They're no longer using their homes as ATMs."

But on the negative side, inventory shortages, including in Southwest Florida, have pushed up prices so high that the young people, burdened by student debt, are delaying both marriage and homeownership. Although they yearn to be homeowners, "they're just not in the game yet," he said.

The new homes that are being built generally are beyond the reach of entry-level buyers, who are concentrating on the more lucrative move up market.

Since millennial buyers are now the largest chunk of the population, this inability or unwillingness to buy may have a profound impact on the ability of sellers to unload their homes, lowering the heat on the housing market.

Yun predicts existing home price increases of 4.5 percent in 2016 and 3.2 percent in 2017. Last year, prices rose 6.8 percent.

New homes also should see price growth slow, from 4.8 percent in 2015, to 2.7 percent in 2016 and 2.3 percent in 2017.

Sam Khater, chief economist of CoreLogic, also saw mixed signs in the overall market.

On the one hand, borrowers have become more faithful about repaying debt, and fewer tend to have higher credit scores than they did during the boom, making defaults less likely in a downturn.

On the other hand, home prices have risen so high that buyers are being driven into the outer suburbs, upping their commuting costs by about 20 percent, he said.

That's particularly a problem in Southwest Florida, he said, where higher land costs have driven Collier County buyers into the eastern part of the county, or north into more affordable Lee County.

In the middle-market price points, buyers nationwide are also making ever-smaller down payments, leveraging their homes at levels not seen since the housing boom.

"If they have to stretch that much, it's a problem," he said, adding he too expects price growth to slow.

Although many municipalities and nonprofits provide first-time homebuyer assistance, it's often not enough to make a difference, said Daren Blomquist, vice president of RealtyTrac.

For buyers in Collier County, average down payment assistance for entry-level buyers is about $15,000, while in Lee County, it's $19,000 over the life of a 30-year-loan — about in line with the national average of more than $17,000.

But with or without down payment help, making house payments on a median-priced house or condo takes a huge bite out of entry-level buyers' wages, Blomquist said — nearly 39 percent in Lee County, and 55 percent in Collier.

Jonathan Smoke, chief economist of Realtor.com, said increasingly the housing market is bifurcating into "haves" — those who have enough income, cash and credit to have access to a variety of homes — and the "have nots" who must sit on the homeownership sidelines and pay ever more burdensome rents.

"The No. 1 issue is can you find the home you need that's affordable," he said.

Svenja Gudell, chief economist at Zillow, noted that though rent growth has slowed by about half over the year to a "more normal" pace of 2.6 percent, high rents and stagnant wage growth still constrain many would-be homebuyers.

Consequently, many are staying longer in their apartments than they'd like to, she said.

"The first time homebuyer is older, and the time spent as a renter is much longer," she said.

And once renters decide to make the leap into homeownership, the lack of affordable supply keeps them looking longer than they have in the past, she said.

"The lines between selling seasons are starting to blur," she said.

The same constraints in terms of supply and affordability are also preventing some homeowners from making a move to another house, said Brad Hunter, chief economist of HomeAdvisor.

So he expects the number of stay-puts to increase once mortgage rates start to rise, and to spend on remodeling and home maintenance instead.

"Nesting is a powerful form of investing," he said. "This is a time of conservatism. People want a return on their money."

Saturday, June 11, 2016

10 trends that may affect real estate in Southwest Florida

1. A changing global economy. Although property in the United States is still attractive to foreign buyers, political conflicts and wars point to a slowing global economy. That translates into a slower real estate market, as well. The good news for Southwest Florida: Foreign money in commercial and residential markets is shifting away from large cities, where properties have become too expensive, to secondary and tertiary cities.

2. A retrenchment of the debt capital market. Debt markets for commercial real estate are down, and regulators are telling banks to curtail commercial real estate lending. In addition, many insurance companies that invest in real estate are approaching their allocation limits. This will be an opportunity for other types of lending to emerge for developers, like crowdfunding.

3. Shifting demographics. Boomers and millennials make up more than half of the country's population and in some places are competing for housing in the same walkable places with access to entertainment and amenities, like the Mercato. Because boomers took a financial hit during the recession, and millennials are still trying to gain a foothold in the market, both groups are showing a strong demand for rental housing. And since rents have been growing, they are becoming increasingly willing to accept smaller apartments if there are large communal spaces and plentiful amenities.

4. Higher density and urbanization. As roads become more crowded, access to transportation and live-work-play neighborhoods are becoming increasingly desirable as buyers demand cities that never sleep. "There's pressure on suburban places to become more urban," Lee said.

5. The political environment. Increasingly acrimonious political swipes on the national, state and regional level are dampening enthusiasm for buying real estate. On the flip side, localities that show political stability, invest in infrastructure and keep their tax bases low stand to profit.

6. Housing affordability and credit constraints. Stagnant wages, low inventory of affordable housing, and rising rents and home prices will continue to squeeze the workforce. Should interest rates rise, more people will be pushed out of the ranks of potential homeowners.

7. The disappearing middle class. Studies show that the median income for middle-class households fell almost 5 percent from 2000-14, while their median wealth dropped 28 percent after the housing bubble burst. To cope, more households need two incomes to make ends meet but are still falling behind. "Even educated millennials are a poorer generation than previous generations," Lee said. That's changed the face of retail, as retailers who traditionally appealed to the middle class, like Sears and Macy's, struggle. But retailers that appeal to the luxury market and at the opposite end of the spectrum, discounters, are doing better.

8. Unstable energy markets. The collapse in oil prices has threatened global economic security and decimated U.S. boom towns that were dependent on oil production. Rig counts are at their lowest levels in 50 years, Lee noted. Consequently, "alternative energy may become a more viable source of power," he said.

9. The sharing and virtual economy. From ride-sharing companies to virtual offices, the "shadow economy" is picking up steam and is weakly regulated. Some of these new enterprises are likely to muscle out traditional competitors. For instance, in some big cities, ZipCars, Uber, Lift and other new transportation choices are eliminating the need to own a car and are making garages, both public and private, obsolete. While Southwest Florida is still too car-centric for that, Lee said he expects the region's aging population will become increasingly receptive to the idea of ditching their wheels as driving becomes more difficult and the expense of car ownership more burdensome.

10. The rise of experiential retailing. As more buyers decide to buy online, malls are competing by selling experiences, such as bowling or restaurants, rather than things. Some are ditching chain department stores in favor of unique boutiques, and replacing anchor stores with food courts. Meanwhile, retailers will continue to put more effort into their online websites and use their actual stores as "showrooms and places to return things," Lee said.

Wednesday, June 1, 2016

HOUSING MARKET

Home prices rising as spring buying season begins

Staff and wires
Published: Tuesday, May 31, 2016 at 2:34 p.m.
Last Modified: Tuesday, May 31, 2016 at 2:34 p.m.

Facts

Case-Shiller Home Prices Index

Community One-year change
Portland, Oregon +11.8%
Seattle +10.7%
San Francisco +10.5%
Denver +10.2%
Dallas +9.2%
Tampa +7.4%
Detroit +7.1%
Los Angeles +6.9%
San Diego +6.9%
Miami +6.8%
Phoenix +6.1%
Las Vegas +6%
Atlanta +5.7%
Charlotte, N.C. +4.9%
Minneapolis +4.5%
Boston +3.6%
Cleveland +2.9%
New York +2.8%
Washington D.C. +2.2%
Chicago +2.1%
Source: Standard & Poor's

U.S. home prices kept climbing in March as the spring home buying season began, but so far the higher costs haven’t thwarted sales.
The Standard & Poor’s/Case-Shiller 20-city home price index increased 5.4 percent in March compared with a year earlier, according to a report released Tuesday. That is the same annual gain as in February.
Solid job growth, modest increases in wages and salaries, and low mortgage rates are fueling Americans’ willingness to buy homes. Yet there is also a limited supply of homes on the market, which pushes up prices.
David Blitzer, chairman of the S&P index committee, said the number of homes on the market is equal to less than 2 percent U.S. households, the lowest percentage since the mid-1980s.
The number of available homes fell 3.6 percent in April, according to the National Association of Realtors.
“It remains a tough home buying season for buyers, with little inventory available among lower-priced homes,” Svenja Gudell, chief economist at real estate data firm Zillow. “The competition is locking out some first-time buyers, who instead are paying record-high rents.”
Even so, sales of existing homes rose 1.7 percent in April, the second straight increase, to an annual rate of 5.45 million.
Portland, Oregon; Seattle and Denver saw the highest yearly gains. Prices rose 12.3 percent in Portland, 10.8 percent in Seattle, and 10 percent in Denver. All three cities feature burgeoning technology sectors and strong job gains.
Prices rose in all 20 cities, but at a slower pace in the Northeast and Midwest. The cities with the smallest year-over-year increases were Washington, D.C., Chicago, New York and Cleveland.
No market in Southwest Florida is included in the measure, but nearby Tampa and Miami are part of Case-Shiller. Tampa's prices rose 7.4 percent from a year ago, while Miami's increased 6.8 percent.
Data from a different source, the trade group Florida Realtors, showed that the median sale price of an existing home in the Sarasota-Manatee market jumped 12.3 percent in the first quarter, to $255,000. In Charlotte County, prices rose 12.5 percent to a median $180,000. Statewide, the median price gained 11.8 percent over the year to $203,500.
A revived housing market is helping fuel faster economic growth.
Sales of new homes jumped to their highest level in eight years in April, and home construction has also increased.
The economy is picking up after a dismal start to the year. Americans stepped up their spending in April at the fastest pace in six years, the government said Tuesday. The Federal Reserve Bank of Atlanta now expects growth to reach 2.9 percent at an annual rate in the April-June quarter, up from just 0.8 percent in the first three months of the year.
Mortgage rates remain at historical lows: A 30-year, fixed-rate mortgage averaged just 3.64 percent last week.
— Information from the Associated Press was used in this report

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