WASHINGTON — Americans purchased homes in March at the fastest pace in over a decade, a strong start to the traditional spring buying season.
Sales of existing homes climbed 4.4 percent last month to a seasonally adjusted annual rate of 5.71 million, the National Association of Realtors said Friday. This was the fastest sales rate since February 2007.
The U.S. housing market faces something of a split personality: A stable economy has intensified demand from would-be buyers, but the number of properties listed for sale has been steadily fading. The result of this trend is prices rising faster than incomes, homes staying on the market for fewer days and a limit on just how much home sales can grow. It’s a situation that rewards would-be buyers who can act quickly and decisively.
The inventory shortage largely reflects the legacy of a housing bubble that began to burst a decade ago.
Foreclosed properties were snapped up by investors who turned the homes into income-generating rentals, depriving the market of supply. And many owners who escaped the downturn unharmed chose to refinance their mortgages at extremely low rates, possibly making them hesitant to move to a new house that could increase their monthly costs.
This mismatch between supply and demand can be seen in two simple figures tracked by the Realtors.
Sales have risen 5.9 percent over the past year, but the inventory of homes for sale has fallen 6.6 percent to 1.83 million properties. This means there are essentially more buyers chasing fewer properties.
The consequences can be seen in home values and days on the market. The median sales price in March climbed 6.8 percent over the past year to $236,400, significantly outpacing wage growth. And it took an average of 34 days to complete a sale, compared to 47 days a year ago. In March, sales rose in the Northeast, Midwest and South but declined in the West.
Demand might increase further as mortgage rates began to dip in recent weeks.
Home loan costs had been climbing after President Donald Trump won the November election, under the belief that the government would engage in forms of stimulus such as tax cuts and greater deficits that could cause higher levels of inflation. But major initiatives such as tax reform have stalled in recent weeks as the administration has yet to put forward a proposal, prompting more doubts as to when and whether any stimulus might arrive.
Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. The average is now at its lowest level in five months.
Growing consumer interest and demand for greener, more sustainable properties is driving a dialogue between Realtors® and homebuyers and sellers. Over half of Realtors® find that consumers have interest in real estate sustainability issues and practices, according to the National Association of Realtors®’ recent REALTORS® and Sustainability report.
The report, stemming from NAR’s new Sustainability Program, surveyed Realtors® about sustainability issues facing consumers in the real estate market and ways Realtors® are setting their own goals to reduce energy usage.
“As consumers’ interest in sustainability grows, Realtors® understand the necessity of promoting sustainability in their real estate practice, such as marketing energy efficiency in property listings to homebuyers,” said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. “The goal of the NAR Sustainability Program is to provide leadership and strategies on topics of sustainability to benefit members, consumers and communities.”
To meet growing consumer interest, more Multiple Listing Services are incorporating data entry fields to identify a property’s green features; 43 percent of respondents report their MLS has green data fields, and only 19 percent do not. Realtors® see great value in promoting energy efficiency in listings with seven out of 10 feeling strongly about the benefits in promoting those features to clients.
The survey asked respondents about renewable energy and its impact on the real estate market. A majority of agents and brokers (80 percent) said that solar panels are available in their market; forty-two percent said solar panels increased the perceived property value.
Twenty-four percent of brokers said that tiny homes were available in their market, compared to 61 percent that reported tiny homes were not yet available. When asked about involvement with clients and green properties, 27 percent of agents and brokers were involved with 1 to 5 properties that had green features in the last 12 months. Seventy percent of members worked with no properties that had green features, leaving a great deal of room for future growth.
The home features that Realtors® said clients consider as very or somewhat important include a home’s efficient use of lighting (50 percent), a smart/connected home (40 percent), green community features such as bike lanes and green spaces (37 percent), landscaping for water conservation (32 percent), and renewable energy systems such as solar and geothermal (23 percent).
When it comes to the sustainable neighborhood features for which clients are looking, 60 percent of Realtors® listed parks and outdoor recreation, 37 percent listed access to local food and nine percent listed recycling.
The transportation and commuting features of a community that Realtors® listed as very or somewhat important to their clients included walkability (51 percent), public transportation (31 percent) and bike lanes/paths (39 percent).
NAR initiated the Sustainability Program as a platform for dialogue on sustainability for Realtors®, brokers, allied trade associations, and consumers. The program’s efforts focus on coordination and articulation of NAR’s existing sustainability resources, while also supporting a growing area of interest for consumers, helping members to assist home buyers and sellers.
To further position NAR as a leader in real estate sustainability topics with consumers, Realtors®, brokers and allied trade associations, the REALTOR® Sustainability Program surveyed Realtors® pertaining to sustainability issues facing consumers and the industry. NAR plans to use this report to better benchmark Realtor® understanding of sustainability.
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U.S. home resales rose more than expected in March to the highest level in more than a decade, The National Association of Realtors (NAR) announced on Friday.
Existing home sales climbed 4.4 percent for the month, while economists were expecting a smaller increase of 2.5 percent, according to Thomson Reuters consensus estimates.
Sales have now increased to a seasonally adjusted annual rate of 5.71 million units as of last month, the NAR said. This is the highest level the gauge has seen since February 2007.
While the number of homes on the market rose 5.8 percent to 1.83 million units last month, housing inventory was down 6.6 percent from one year ago, implying that demand is outweighing supply.
Properties typically remained on the market for 34 days in March, compared to 45 days in February, the NAR added.
“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” Lawrence Yun, a chief economist for the industry group, said in a statement. “Sales will go up as long as inventory does.”
U.S. home resales fell more than expected in February amid a shortage of houses on the market, which pushed prices up and sidelined potential buyers. The NAR reported February existing home sales declined 3.7 percent, missing analysts’ estimates, to a seasonally adjusted annual rate of 5.48 million units.
Prior to that data being released, January’s sales pace remained unchanged at 5.69 million units.
The NAR’s existing home sales data measures sales and prices of existing single-family homes for the nation overall, providing breakdowns for the West, Midwest, South and Northeast regions of the U.S. These figures also include condos and co-ops.
— Reuters contributed to this report.
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The tide has turned on vacation-home purchases in the U.S. As recently as three years ago more than 1 in 5 of the homes sold in America were vacation properties, but in 2016 it was about 1 in 8, with their total dropping by 21% in a year, says a recent National Association of Realtors survey.
The number of investment properties purchased, meanwhile, was 4.5% greater last year than in 2015, and at their highest number since 2010. In a standout year for home sales, though, that was just enough to keep the share of investment properties changing hands at 19%, where it’s been since 2014.
Sales of owner-occupied residences made up the remaining 70% of 2016’s home purchases — the largest percentage since 2010.
The reasons for the decline in vacation-home sales? Fewer available homes and higher prices for those that remain, says Lawrence Yun, NAR chief economist.
“In several markets in the South and West — the two most popular destinations for vacation buyers — home prices have soared in recent years because substantial buyer demand from strong job growth continues to outstrip the supply of homes for sale,” Yun said in a news release for the 2017 NAR Investment Vacation Home Buyer’s Survey. “With fewer bargain-priced properties to choose from and a growing number of traditional buyers, finding a home for vacation purposes became more difficult and less affordable last year.
“The volatility seen in the financial markets in late 2015 through the early part of last year also put a dent in sales,” he added, “as some affluent households with money in stocks likely refrained from buying or delayed plans until after the election.”
That delay might have cost them. Prices for investment properties rose by 8%, year over year, while the cost to buy a vacation property spiked as well, but only by about half that — 4.2%. In comparing the prices of vacation and investment properties, however, the getaways averaged $200,000, which was significantly higher than the $155,000 paid for the investments.
“Sales to individual investors reached their highest level since 2012 (1.20 million) as investors took advantage of record-low mortgage rates and recognized the sizable demand for renting in their market as renters struggle to become homeowners,” Yun said in the release. “The ability to generate rental income or remodel a home to put back on a market with tight inventory is giving investors increased confidence in their ability to see strong returns in their home purchase.”
Even among buyers of vacation properties, though, the survey found that generating returns was a consideration: About 8% of them expected to see some income from them as part-time rentals, and 10% said they were motivated by “potential for price appreciation.”
And among those purchasing properties primarily as investments, 9% of survey respondents still expected to use them as a retreat for themselves or their families.
A significant share of both kinds of buyers also said they had or would attempt to rent their properties in the short term, with 29% of those who purchased vacation homes saying they did rent them for 30 days or less at a time, or will try to. Of the 44% of investors who said they had or would rent out their properties, the aim was to lease them year-round, in both the short and long term.
Some of those who bought homes as primary residences also expressed aspirations to become landlords, at least part-time — with 11% saying they intended to rent out their dwellings, with the median expected duration being three days.
Other findings of the NAR survey:
- Median square footage for vacation and investment properties were roughly the same. A vacation home averaged 1,460 square feet; it was 1,500 for an investment property. That of a primary residence was 1,900.
- The vacation-minded were more likely than either investors or buyers of primary residences to purchase in rural and resort areas, and in small towns. About 1 in 4 bought in resort locations, the same ratio as in rural communities. About 1 in 5 chose getaways in small towns.
- Beach areas were the top choice among vacation locales, with 36% of buyers in that category selecting getaways there. Lakefronts drew 21% of them, and homes “in the country” attracted 20%.
- Subdivisions or suburbs were favored by 34% of investors, with 23% opting for urban environments.
- Most of the properties in all three categories were financed with mortgages, though in the case of investments, it was 64%, compared with 72% for vacation homes and 87% for primary residences.
The NAR survey was drawn from a sample of 2,099 respondents, all of whom had purchased a type of residential property in 2016. Buyers of primary residences made up 70% of them, while 12% purchased vacation homes, and 19% had bought dwellings as investments.
MORE ABOUT THE REAL ESTATE MARKET:
CHICAGO, April 20, 2017 /PRNewswire/ — The National Association of Realtors®’ strategic investment arm, Second Century Ventures, unveiled seven organizations chosen for the 2017 class of REach®, a growth technology accelerator program helping launch companies into the real estate, financial services, banking, home services and insurance industries. The program is focused on providing early-to mid-stage companies with access to NAR’s industry expertise, influence and key relationships as companies are launched into the trillion dollar real estate space.
“As technology continues to transform real estate, NAR is leading the charge through its innovative Second Century Ventures,” said Dale Stinton, president of SCV and NAR CEO. “SCV is unique in its ability to leverage NAR’s industry connections and insights, which position REach® companies for ultimate success. This year’s class has tremendous potential to benefit Realtors® and the clients they serve, well into the future.”
The REach® program differs from other accelerators in both its vertical focus within real estate and related industries and in the growth stage at which most companies enter the program. The seven companies range from seed stage to well-capitalized startups backed by world-renowned investors; in aggregate, the class has raised over $50M in previous financings and total valuation exceeds $350M. The REach® program aims to move these organizations rapidly forward beyond their initial successes through education, mentorship and market exposure.
The companies chosen for the 2017 class:
- Centriq: The app helps solve the problem of transferring home organization, repair and maintenance knowledge from the seller to the buyer while keeping real estate professionals connected to their clients long after the transaction is over.
- HouseCanary: The most complete and accurate source of residential valuations and analytics for every block and property in the U.S., and is used by agents to become differentiated, trusted advisors to their clients.
- Notarize: A leading remote electronic notary service, which allows anyone to legally notarize a document from their mobile device or desktop 24-hours per day, seven days per week.
- Occly: A portable 2-in-1 alarm solution that keeps real estate professionals safe and properties secure.
- Pearl Certification: Certifies homes with features that contribute to its comfort, energy performance, indoor air quality and value.
- Relola: Unlocks real estate professionals’ insider knowledge with tools that digitize, amplify and market their everyday tasks.
- Trusted Mail: Protects against wire fraud and email spoofing using facial-biometrics to sign and encrypt email and attachments.
“The future of our industry increasingly depends on fast, seamless adoption of technology that benefits home buyers, sellers and investors at every step of a real estate transaction, from prospecting to closing. These companies are seizing an opportunity for rapid growth within the real estate, finance and home services industries via REach®, which will ultimately help them expand into other vertical marketplaces,” said Mark Birschbach, managing director of Second Century Ventures and REach®.
Hundreds of companies applied to REach® this year, up significantly from the number of applicants in 2016. Those chosen proved to have solid business models, executable business plans and significant potential to impact the real estate space and beyond. The seven organizations can expect significant results, as past classes have doubled, on average, their customer base and collectively raised over $60 million in financing both during and after completing the program.
Second Century Ventures is an early-stage technology fund, backed by the National Association of Realtors® that leverages the association’s 1.2 million members and an unparalleled network of executives within real estate and adjacent industries. SCV systematically launches its portfolio companies into the world’s largest industries including real estate, financial services, banking, home services, and insurance. SCV seeks to define and deliver the future of the world’s largest industries by being a catalyst for new technologies, new opportunities, and new talent.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/second-century-ventures-announces-2017-reach-accelerator-class-300442994.html
SOURCE National Association of Realtors
For the first time since the summer of 2015, Kentucky real estate saw a decrease in monthly, year over year, home sales.
The 2.2 percent decline in February (3,191 in 2017 versus 3,263 in 2016) comes at a time when housing inventories are at historical lows. The median price, however, remained strong, increasing over 5 percent to $114,298.
“Last year, the market was really hot and properties moved quick. A single month’s drop in sales isn’t indicative of a slow-down,” said Mike Becker, president of Kentucky Realtors. “In fact, it’s still a seller’s market and the hope is that to meet buyer demand, new construction will ramp up this year to supplement existing home listings.”
Year to date, homes sales are up 7.8 percent and March figures are looking strong. At the current pace, 2017 is shaping up to be another record-setting year for Kentucky. Nationally, pending home sales are at the second-highest level in over a decade, showing that demand is rising and buyers are gearing up for the busy spring and summer months ahead.
Lawrence Yun, chief economist for the National Association of Realtors, said buyers came back in force (in February) to fuel an increase in contract signings throughout the country.
“The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year,” Yun said.
For now, however, interest rates are holding in the low 4 percent range and have declined over the past month to the lowest levels of the year. Rates are still higher than they were a year ago and experts are saying they could increase by a half percent by the end of the year.
February’s inventory levels were down 8.5 percent to 5.4 months of supply compared to the same period a year earlier and days on market were down over 15 percent.
“It still remains that qualified buyers will have to decide quickly on a property if they see a home in their price range that meets their needs,” stated Becker. “And having financing in place before starting the home search process makes it easier to lock up a contract to purchase when a decision is made.”
Founded in 1922, Kentucky Realtors represents more than 10,300 realtors who are involved in all aspects of real estate, including residential and commercial real estate brokers, sales agents, developers, builders, property managers, office managers, appraisers and auctioneers.
To view housing statistics for the state, as reported to Kentucky REALTORS®, visit housingstats.kyrealtors.com.
From Kentucky Realtors Communications
Hundreds of real estate professionals from towns and cities across the country convened at the Grand Wailea Resort March 5 through 8 for the annual President’s Circle Conference hosted by the National Association of Realtors’ Realtors Political Action Committee.
This year, conference attendees packed a little something extra in their suitcases: backpacks filled with school supplies for students on Maui, Lānaʻi and Molokaʻi.
The idea to collect the school supplies was conceived by Idaho Association of Realtors President Connie Fogle after she learned about the Wishing Well for Maui Students program. Since its inception 10 years ago, the Wishing Well program has collected furniture, school supplies and other items with the goal of improving the educational experiences and opportunities for Maui County’s public school students.
Run entirely by volunteer Realtors Association of Maui members, organizers say the nonprofit organization has contributed more than $1.5 million in goods, services and cash donations to every school in Maui County.
RAM member and Wishing Well founder Sarah Sorenson was one of five recipients of Realtor Magazine’s 2016 Good Neighbor Awards. The awards program honors NAR members across the nation who have made a difference in their communities through volunteer work; Sorenson was the first winner from Hawaiʻi.
Fogle, who was in attendance when Sorenson accepted her Good Neighbor award at a convention in November, successfully rallied support for the Wishing Well program through the President’s Circle Conference. It didn’t take much convincing: Conference attendees donated 133 backpacks filled with $18,000 worth of school supplies—running the gamut from pencils and pink pearl erasers to playground balls and scientific calculators—along with $2,700 in cash and gift cards.
These contributions will go a long way for Maui County students, said Sorenson, who was surprised to learn that the Wishing Well program had been chosen as a beneficiary. “I was shocked,” she said. “I was very honored when I realized this was the first time they’d reached out to a nonprofit.”
Since 1969, the RPAC has promoted the election of pro-Realtor candidates across the US through voluntary contributions made by Realtors. RPAC enables Realtors to support candidates that support the issues that are important to their profession and livelihood. The annual RPAC President’s Circle Conference is intended to provide President’s Circle investors with the opportunity to learn and discuss policy concerns affecting the real estate community.
The Wishing Well program accepts donations year-round. Sorenson said many teachers have requested items that would help them in their classrooms, like office chairs, flat screen televisions, bookcases, gardening tools for school gardens, file cabinets, chairs, carpeting or clean area rugs so students can gather for learning or quiet time.
Organizers say that if anyone is looking to offload any new or gently used household or office items or would like to purchase school supplies for the program, they can call Sorenson at (808) 283-3969. For more information about the Wishing Well for Maui Students program visit them online at www.ILoveMauiSchools.com.
Local real estate sales continue to increase, with first quarter activity this year almost surpassing $100 million.
Individual sales remained strong, a longstanding trend as year-over-year sales activity continued to spike. Interest rates, meanwhile, are trending down.
In the first three months of 2017, realtors in Alleghany, Ashe, Avery and Watauga counties sold 394 homes worth $99.82 million. That’s a 12 percent increase in sales compared to the first quarter of 2016 (351), and 30 percent greater than 2015 (302).
The median sold price so far this year is also higher than last, with the mid-point price of all homes sold since January $206,000, according to the High Country Multiple Listing Service. The median price through the first three months of 2016 was $195,000.
Inventory is slowly growing. As of April 19, there were 2,044 active listings within the MLS. There were 2,388 a year ago, and almost 2,500 at this point in early April 2015.
The limited supply is due to an unrelenting demand, as monthly sales figures continue outpacing previous years. In March, local realtors sold 172 listings. That’s 26 percent higher than March 2016 (136) and 51 percent higher than March 2015 (114).
The total sales value for the month was $41.58 million, with a median sold price of $212,500. It was the fourth time in the past six months the median sold price surpassed $200,000.
Buyers last month encountered interest rates which have yet to stabilize since year’s start. March opened with the average rate on a 30-year mortgage at 4.1 percent. It went to 4.3 percent by mid-month, and has fallen since.
As of April 13, the average 30-year fixed rate was 4.08 percent, the lowest recorded since January 19. A year ago the rate averaged 3.58 percent, according to loan giant Freddie Mac.
The average 15-year fixed rate was 3.34 percent.
Nationally, sales are on the upswing, according to the National Association of Realtors.
“Being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt,” said Lawrence Yun, NAR chief economist.
According to the 2016 National Association of Realtors (NAR) Member Profile, Realtors are making bank, yo! It kind of goes against what I’ve been hearing ever since I started in the real estate industry, so figured I’d discuss it with you all.
Check this out:
Now, according to that, half of all Realtors are making $100K or more in gross household income. Add in the 31 percent who are making at least $50K per year and we have 81 percent of Realtors making a solid middle-class or upper middle-class income.
In fact, if we go by common definitions of income classes in the United States, here’s how things break down:
So roughly speaking, maybe half of the Realtors are in that “middle class” bucket from $41,869 to $125,609. And we know that more than 29 percent are over the $125,609 line since 29 percent are over $150,000. Think about that. Nearly a third of all Realtors can be classified as Upper Income!
What’s even more amazing is that 38 percent of new agents (under two years of experience) are making $100K or more. One out of two is in the over $250K category, and almost one in 10 are making over $200K per year.
Now, keep in mind that this is Gross Household Income — not what the Realtor made from real estate sales.
And only 48 percent of Realtors say that real estate is the primary source of income for the household. So in the vast majority of the above, we’re talking about Realtors married to or living with someone else who makes a bunch of money, too.
When I saw this, I immediately thought of the “80/20” rule, that says that 80 percent of the business is done by 20 percent of the Realtors. Maybe that’s true — and that 20 percent are the top two tiers making at least $200K a year plus a few from the $150,000-$199,999 range.
But the 31 percent who are in the $75K -$150K range? That’s actually kind of an incredible stat. Almost suggests that even those who aren’t really producing very much are still very much in the upper middle class….
There are some dark-side worries to have about this, but I’ll keep those to myself for now while I look into a few things. For now, let’s just let the numbers speak for themselves.
Robert Hahn is the Managing Partner of 7DS Associates, a marketing, technology and strategy consultancy focusing on the real estate industry. Check out his personal blog, The Notorious R.O.B. or find him on Twitter: @robhahn.
Email Robert Hahn.