Housing Market Builds A Solid Foundation

Housing Market Builds A Solid Foundation

Key economic data in the past week has encouraged the idea that a housing recovery is alive and well.

The parade started with news that sales of previously owned homes surged in May, buoyed in part by the return of younger buyers who had long struggled to find a path into the market.

The pace of existing-home sales rose 5.1 percent during May to a seasonally adjusted rate of 5.35 million, the strongest since November 2009, according to the National Association of Realtors, as cited by the Wall Street Journal.

“We’re moving back toward a more normal housing market,” Stephen Stanley, chief economist at Amherst Pierpont Securities, told the Journal.

First-time buyers rose to 32 percent of all existing-home buyers from 27 percent a year ago, NAR said. Historically, first-time buyers have made up about 40 percent of the market.

New-home sales figures also released last week echoed the upbeat theme,. They increased 2.2 percent over the month of May to an annual rate of 546,000, according to the Commerce Department. That marked the best month of sales since February 2008.

Purchases of new homes are only about a tenth of all home sales, and the data is turbulent, the Journal pointed out. But the latest such statistic comes amid a flurry of other signs that more Americans are buying homes after a run of strong job growth, buoyed by slightly looser lending standards and historically low mortgage rates.

The housing recovery hat trick was completed earlier this week, with the National Association of Realtors announcing that its index of pending home sales increased 0.9 percent to a seasonally-adjusted 112.6, the highest level since April 2006. The index tracks contract signings, which usually close within two months.

“The market is kind of slow and steady,” Andrew Carmody, president of the residential division at Crescent Communities, a developer, told the Journal. “We definitely think it’s going to be choppy but if you string that together over many months we’re optimists that the recovery is continuing to gain momentum.”

Optimism over recent housing data has coincided with the relative outperformance by housing-related stocks. The Housing Recovery motif has gained 2.9 percent in the past month. In that same time, the Standard Poor’s 500 has fallen 2.2 percent. Over the past 12 months, the motif has declined 3.2 percent, and the SP 500 is up 7.1 percent.

The Journal pointed to the prospect of mortgage rates rising as the Federal Reserve moves to raise a key interest rate as the one big threat looming over the housing industry. Many market observers expect the central bank to start raising that rate from near zero as early as September. However, the Fed has indicated any rate increases will be small and gradual.

Further, the Journal reported that many economists say continued growth in the labor market coupled with demographic shifts—younger Americans starting families, for example—could enable the housing market to overcome that obstacle.

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Housing should be booming, so what’s going on?

MIAMI — Given that mortgage rates continue to hover around historic lows and we’re seven years out from the housing bust, the housing market should be booming — but it isn’t.

That’s according to economists who spoke Friday on a panel at the National Association of Real Estate Editors (NAREE) conference.

Things are getting better, they said. Frank Nothaft, chief economist for real estate data and technology firm CoreLogic, expects a 5 percent gain in home sales next year and noted that consumer confidence is at its highest level in eight years.

National Association of Realtors Chief Economist Lawrence Yun anticipates home prices will return to their 2006 peak sometime this year, though home sales will remain 25 percent below peak. Nothaft was not quite so optimistic, pegging …

Realtors® Applaud CFPB Extension of TRID Implementation

WASHINGTON, D.C. – June 18, 2015 – (RealEstateRama) — National Association of Realtors® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., released the following statement in response to the Consumer Financial Protection Bureau’s announcement of a two-month delay for the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation.

“The action announced today by the CFPB is a welcome step. NAR has long advocated the need to avoid implementing the new regulation during the peak summer selling season.
“NAR appreciates the CFPB’s extension to October 1, 2015 as well as the earlier “sensitivity” they offered to companies making a good-faith effort to comply with the new TRID regulation.

“NAR will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation.
“The CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers.”

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.

MEDIA CONTACT: SARA WISKERCHEN / 202-383-1013

Awards, honors given to Lehigh Valley residents

Treasure Signorelli, a sixth-grader at South Mountain Middle School in Allentown, was awarded with the Outstanding Middle School Student with a Visual Impairment award during the 2015 Blindness Awareness Expo.The event is held every year in Harrisburg and sponsored by the Pennsylvania Department of Labor and Industry and the Office of Vocational Rehabilitation.

Renters feel the squeeze

The gap between rental costs and household income is widening to unsustainable levels in many parts of the country, and the situation could worsen unless new-home construction meaningfully rises, according to new research by the National Association of Realtors

NAR reviewed data on income growth, housing costs and changes in the share of renter and owner-occupied households during the past five years in metropolitan statistical areas across the U.S. The findings reveal that renters are being squeezed in many metro areas throughout the country due to the disproportionate growth in rental costs to incomes. New York, Seattle and San Jose, Calif. are among the cities where combined rent growth is far exceeding wages.

Lawrence Yun, NAR chief economist, says the disparity between rent and income growth has widened to unhealthy levels and is making it harder for renters to become homeowners. “In the past five years, a typical rent rose 15 percent while the income of renters grew by only 11 percent,” he said. “The gap has worsened in many areas as rents continue to climb and the accelerated pace of hiring has yet to give workers a meaningful bump in pay.”

According to the U.S. Bureau of Labor Statistics, actual market rents paid by individuals who do not own the home they live in rose by 3.4 percent in January from January 2014, the 10th consecutive month of growth above 3 percent.

According to Yun, the share of renter households has been increasing and homeownership is falling. Those financially able to buy a home in recent years were insulated from rising housing costs since most take out 30-year fixed-rate mortgages with established monthly payments. Furthermore, a typical homeowners’ net worth climbs because of upticks in home values and declining mortgage balances. The result has been an unequal distribution of wealth as renters continue to feel the pinch of increasing housing costs every year.

“Meanwhile, current renters seeking relief and looking to buy are facing the same dilemma: home prices are rising much faster than their incomes,” adds Yun. “With rents taking up a larger chunk of household incomes, it’s difficult for first-time buyers — especially in high-cost areas — to save for an adequate downpayment.”

The median existing-home price for all housing types in January was $199,600, which is 6.2 percent above January 2014. NAR’s research analyzed changes in the share of renters and homeowners, mortgage payments, median home prices, median household income for renters and the rental costs in 70 metro areas.

The top markets where renters have seen the highest increase in rents since 2009 are New York (50.7 percent), Seattle (32.38 percent), San Jose, Calif., (25.6 percent), Denver (24.14 percent) and St. Louis (22.26 percent).

Looking ahead, Yun says a way to relieve housing costs is to increase the supply of new home construction – particularly to entry-level buyers. Builders have been hesitant since the recession to add supply because of rising construction costs, limited access to credit from local lenders and concerns about the re-emergence of younger buyers. Yun estimates housing starts need to rise to 1.5 million, which is the historical average. Housing starts have averaged about 766,000 per year over the past seven years, according to U.S. Census Bureau data from 2008 to 2014.

“Many of the metro areas that have experienced the highest rent increases are popular to millennials because of their employment opportunities,” adds Yun. “With a stronger economy and labor market, it’s critical to increase housing starts for entry-level buyers or else many will face affordability issues if their incomes aren’t compensating for the gains in home prices.”

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.

South Florida’s Commercial Market Attracting Investors, Developments

Demand in South Florida’s commercial real estate market is producing low vacancy rates and a number of major developments in an array of sectors

MIAMI – July 2, 2015 – (RealEstateRama) — Demand in South Florida’s commercial real estate market is producing low vacancy rates and a number of major developments in an array of sectors, according to local experts at the third annual Miami Association of REALTORS® Commercial Alliance Midyear Update that took place recently in Coral Gables. Five of South Florida’s top real estate professionals discussed Miami’s booming retail market as well as local developments in the multifamily, capital markets, industrial, and office sectors in an event presented by the MIAMI Association of REALTORS, the nation’s largest Realtor group with 36,000 members.

“South Florida’s diversified economy as well as its reputation for being one of the world’s top global cities is encouraging more investors and global financiers to create leading commercial projects here,” said Barbara Tria, 2015 commercial president for the MIAMI Association of REALTORS. “The speakers at the third annual RCA Miami Midyear Commercial Update showed just how strong our local commercial market is performing, and where it will be in the coming years.”

Beth Azor of Davie-based Azor Advisory Services analyzed Miami’s booming retail market. Miami has the 15th lowest retail vacancy rate among major U.S. cities, according to a recent National Association of Realtors (NAR) and Reis, Inc. report. The local market’s 6.3 percent retail vacancy rate is lower than the national average (9.6).

Gerard Yetming, CBRE’s senior vice president of investment properties and multi-housing, said statistics show more than 360,000 residents located to South Florida between 2010 and 2014, making it the sixth-fastest growing metropolitan area. In the first quarter of 2015, Miami-Dade County had a 3.4 percent vacancy rate in apartments with a year-over-year rental rate increase of 5.9 percent. The current rate of condo completion is well below that of the peak in 2008 while values of condos have returned to peak levels, Yetming said.

Manny de Zárraga, the executive managing director for Holliday Fenoglio Fowler, spoke about capital markets and how high demand for quality assets combined with low interest rates continues to compress cap rates. South Florida is seeing additional demand for assets from global markets. Several sovereign wealth funds, including China, have a mandate to invest in American real estate, Zárraga said. The Miami hospitality market continues to be strong, with record sales of hotels. Miami has the nation’s second-best performing hotel industry behind New York City.

Christopher Sutton, Flagler’s vice president of business development, discussed escalating demand in the local industrial market. Miami’s industrial vacancy rate of 5.3 percent in May 2015 is the third-lowest in the nation among major cities, according to NAR and Reis. Only Orange County (Calif.) and Los Angeles performed better, registering rates of 3.4 and 3.6 percent, respectively.

Diana Parker, CBRE’s senior vice president of brokerage and office properties, showed how local office vacancy rates have dropped to 13.5 percent in the first quarter of 2015. Overall rental rates increased 3.5 percent in the first six months of 2015. Miami’s office market is seeing significant new demand from technology businesses. An increasing number of companies, including Microsoft, are working to turn Miami into America’s next tech hub and the results are beginning to be seen in the office market, Parker said.

Greater Wilkes-Barre, Greater Hazleton Realtor associations to merge next year – Wilkes Barre Times




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By Jerry Lynott

jlynott@timesleader.com

KINGSTON — The Greater Wilkes-Barre Association of Realtors will mark its 100th anniversary in October and prepare for a name change next year.

It will merge with the Greater Hazleton Association of Realtors on Jan. 1 and form the Luzerne County Association of Realtors.

“It’s a consolidation more or less,” Charles Adonizio, president of the Greater Wilkes-Barre Association, said.

The merger follows a trend to join forces and meet the mandates of the National Association of Realtors to provide members with most professional services; something Adonizio said was a challenge for smaller associations.

The Greater Hazleton group has 125 members and it was considering raising dues, Adonizio said.

Gerald McGuire, president of the Greater Hazleton group, was on vacation and unavailable for comment.

“We already have over 400 members. We already have critical mass,” Adonizio said.

The Greater Wilkes-Barre group has two full-time staff and its own office building on Pierce Street, Kingston. “We give our membership that high level of service that the National Association requires,” Adonizio said.

The Greater Wilkes-Barre group traces its beginnings to 1915 and Wilkes-Barre Real Estate Exchange. “We’re celebrating our 100th anniversary as an association on Oct.1. In doing so this will be the last anniversary we’re going to celebrate,” said Adonizio, whose two-year term as president ends at the end of the year.

“They approached us and in early 2015 we had a few meetings,” Adonizio, said. The Greater Wilkes-Barre group did its due diligence before its membership overwhelmingly voted last month to merge, said Adonizio, who also operates Atlas Realty Inc. in Plains Township. The Greater Hazleton group will dissolve and give back its charter.

The groups work in Luzerne County, can cross county lines and use the Multiple Listing Service to list properties for sale. In some states there is only one MLS, Adonizio said.

“We’re doing more business regionally. We’re all licensed in the state of Pennsylvania,” Adonizio said. He used as example the Greater Scranton Board of Realtors, Inc. which covers Lackawanna, Wyoming and Susquehanna counties.

“It’s time to change. It’s time to grow,” he said.

He wouldn’t be surprised to see more regionalization in the future, he said.

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NAR’s property data tool adds new features

Realtors Property Resource (RPR), a subsidiary of the National Association of Realtors that provides data on 166 million properties and data tools to all Realtors free of charge, has added new features to make it easier for users to generate market reports, identify distressed listings and learn about training classes offered by RPR.

Realtors can click new tabs in RPR’s mapping tool to generate a neighborhood or market report. RPR also now offers a new chart on the charts tab of a property that highlights the inventory of distressed listings.

Realtors Property Resource’s click-to-create report tool.

Those listings “are now marked as short sales matched against the inventory of distressed properties that could be in any stage of foreclosure as identified through public recor…

Volume Of Home Sales Up, says NAR

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US New Home Sales Rise To Highest Level In Seven Yearsmore big

Last Monday, June 29, the National Association of Realtors (NAR) reported an increase in the number of homes sales for the fifth consecutive month. This is based on the NAR’s Pending Home Sales Index covering the month of May, which tracks contract signings for existing single-family homes, condos, and co-ops.

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According to the Realtor, the NARs report shows that the Pending Home Sales Index has risen to a level of 112.6, marking a 0.9% increase in May and the fifth consecutive month of home sale gains.  The level is 10% higher than in May 2014, and the highest level of activity since April 2006, when the index was at 113.7. 

Realtor’s chief economist Jonathan Smoke mentioned that the index represents an enormous increase in activity year on year, adding that the past spring is the “healthiest and best overall spring since the peak of the housing boom.”  Smoke further said, “Our report shows that the trends continued in June, which should lead to continued good news through June and into the summer.”

The continued rise in pending sales suggests a healthy demand for homes, states Forbes.  While builders are trying to meet the market’s growing demand, the supply of houses is low.  Two weeks ago, the U.S. Commerce Department announced that groundbreaking for new homes fell 11.1% in May compared to April, but building permits hit a new eight year high.   And with the tight demand on supply, prices are increasing.  According to NARs, sale of previously owned houses rose in May, with prices up by 7.9% year-over-year.

Lawrence Yun, NAR’s chief economist said, “Housing affordability remains a pressing issue, with home-price growth increasing around four times the pace of wages.  Without meaningful gains in new and existing supply, there’s no question the goalpost will move further away for many renters wanting to become homeowners.”

The report also showed a jump in home sales across the region, but were down in the Midwest and South.  According to NAR, sales in the Northeast area rose 6.3% to 93.9, while in the West, the index rose 2.2% to 104.5.  Meanwhile, the report marked a decline in the South and Midwest, decreasing 0.8% to an index of 127.8 and 0.6% to 111.4, respectively.  But when tracked against year-on-year performance, all regions increased contract signing for the month of May:  Northeast by 10.6%, Midwest by 7.8%, South by 10.6%, and West by 13%.


West, Northeast drive spike in home sales activity

Pending home sales activity hit a nine-year high during May, according to the National Association of Realtors.

Sales volume increased by 0.9 percent in May when compared to April and by 10.4 percent when compared to May 2014. Activity has now increased on a year-to-year basis for nine straight months, with month-to-month increases occurring each of the last five months.

Jonathan Smoke, chief economist at realtor.com, says this data suggests that further increases in new- and existing-home sales will occur during June and the rest of the summer.

“We’re finally beginning to see an uptick in supply as sellers become more confident about home prices,” Smoke said. As supply expands, Smoke predicts an increase in the number of first time homebuyers – a larger percentage of whom…