Though many home shoppers who assume they are still in a buyer’s market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory: The supply of houses for sale is down significantly in most areas compared with a year ago, sometimes dramatically so. And that is having important side impacts — raising prices and homeowners’ equity stakes, and reducing total sales.
In major metropolitan markets from the mid-Atlantic to the West Coast, the stock of homes listed for purchase is down by sometimes extraordinary amounts — 50 percent or more below year-ago levels in several areas of California, according to industry studies. In Washington, D.C., and its nearby suburbs, listings are down by 28 percent, reports Redfin, a national online realty brokerage. In Los Angeles, available inventory is 49 percent lower than it was last summer, San Diego by 53 percent. In Seattle, listings are off by 41 percent. According to the National Association of Realtors, total houses listed for sale across the country in June were 24 percent lower than a year earlier. The dearth of listings is often more intense in the lower- to mid-price ranges.
Peggy James, an agent with Erick Co. of Exit Choice Realty in Prince William County, Va., says she gets calls “all the time” from buyers asking, “Where are all the new listings? Are you agents bluffing” — holding back? But the reality is that “there just haven’t been many” listings in some high-demand price categories lately, she said. In Orange, Calif., Carlos Herrera, broker-owner of Casa Blanca Realtors, said “it’s really strange right now. We have many buyers but few sellers.”
Just south of San Francisco, Redfin agent Brad Le says inventory in Silicon Valley is down so drastically — and demand so strong — that the bidding wars are spinning off the charts. “We’re not just talking about 10 or 15” offers, he said, “but sometimes 40 and 50.” Some buyers are inserting escalation clauses into their contracts to keep pace with counter-bids, and waiving financing contingencies, inspections and even agreeing to increase their down payments to counter any differences between the accepted sale price and the appraised value. One modest, 1,700-square-foot house recently was listed at $879,000. It drew more than 50 competing offers and sold to an all-cash buyer for $1,050,000 in less than a month.
Silicon Valley is in its own special economic niche, but declining inventories are nationwide. In its latest survey of 146 large markets, Realtor.com found that 144 had lower supplies of listings last month than a year earlier. Online real estate and mortgage data firm Zillow reports that some of the steepest declines in inventory are in places that got hit the hardest during the bust, and where sizable percentages of owners still are underwater on their mortgages. In Phoenix and Miami, for example, 55 percent and 46 percent of owners respectively have negative equity.
Both cities have seen significant drops in inventory, and both are experiencing strong appreciation in home prices. According to data from research firm CoreLogic, Phoenix prices are up 14.7 percent for the year and Miami by 9.7 percent.
What’s behind the widespread declines in listings? Analysts say negative equity plays a major role — it discourages people who might otherwise want to sell from doing so. They don’t want to take a big loss, especially in a slowly improving price environment. So they sit tight rather than list. Banks with large stocks of pre-foreclosure and foreclosed properties are doing the same, creating a so-called “shadow inventory” of houses estimated to total 1.5 million units.
Where’s this all headed? Stan Humphries, chief economist for Zillow, says the likely trend is for more of the same: Constricted supplies will lead to price increases, especially in segments of local markets where demand is strongest. Longer term, price increases will gradually rewind the cycle, increasing owners’ equities and convincing more of them to list and sell. This, in turn, should put a brake on price increases.
Bottom line for anyone looking to list or purchase anytime soon: Though conditions vary by location and price segment, lower supplies of houses available for sale are putting sellers in stronger positions than they’ve been in years.
Is your glass half-empty or half-full today?
I think mine is half-empty. I’m looking at a statistic from the search engine Redfin that says one in four real estate listings comes under contract after less than 14 days on the market.
Which prompts two responses from me: First, how long does it take to move the three other houses? Second, how many of those contracts collapse under the weight of appraisals?
As of May, according to Prudential Fox Roach’s HomExpert Market Report, properties were spending an average 98 days on the market, four fewer than the same month in 2011.
In May 2010, the average was 80 days, and that was at the end of the government’s $8,000 tax-credit program for qualified buyers.
The National Association of Realtors reported in April that one in three of its members was reporting a contract cancellation. I have neither heard nor seen anything that would suggest that the situation has changed.
Before one can make blanket statements about the market, one needs to consider that houses won’t sell quickly if they are in places where no one wants to live. They also won’t sell quickly if they are overpriced.
Therefore, the one in four that reaches agreement in less than 14 days is likely to be in the right location and also properly priced.
There are some indications that the housing market is, indeed, improving. Yet Trulia, another real estate search engine, maintains that in the hardest-hit foreclosure states, housing will be an issue that could determine which presidential candidate gets the most votes.
Trulia has developed a “housing misery” index to determine how and where the candidates will focus on the issue.
These are the criteria it uses for the index: •The percentage change in home prices from each state’s own peak during the last decade’s real estate bubble until today, based on information from the Federal Housing Finance Agency. Big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery. •The percentage of mortgages either severely delinquent or in foreclosure, based on data from CoreLogic, the real estate information service.
Defaults and foreclosures damage consumer confidence in the housing recovery. Foreclosures hurt not only the people who lose their homes, but their neighbors, as well.
Four states stand out: Nevada, Florida, Arizona, and California. In those states, home prices are 40 percent or more below their bubble-era peak — almost 60 percent in Nevada. Florida also has the highest share of home loans on which borrowers are either delinquent or in foreclosure.
Things are looking up here. In all but Nevada, this misery index has fallen several points in the last year.
But housing misery has been spread out across other regions of the country, too. The index is 30 or above in Michigan and Illinois in the Midwest; Georgia in the South; Maryland and New Jersey in the Mid-Atlantic, and Idaho, Washington and Oregon in the Northwest.
At the other extreme, Texas escaped housing misery altogether. Prices are no lower today than they were during the bubble, and relatively few home loans are delinquent or in foreclosure.
How will housing play out in the presidential campaign? Trulia chief economist Jed Kolko says voters in key swing states will surely want to hear what the candidates have to say.
“And what will they say?’ Kolko asks. “As the incumbent, Obama needs to point to some clear housing-policy successes; as the challenger, Romney needs to point to some fresh new ideas about housing.”
“They’ve both got their work cut out for them,” Kolko says.
WASHINGTON (AP) — Americans signed fewer contracts to buy previously occupied homes last month, the latest sign the housing market recovery is uneven.
The National Association of Realtors said Thursday that its index of sales agreements fell 1.4 percent last month to 99.3. May’s reading was revised down to 100.7.
A reading of 100 is considered healthy. The index is 9.5 percent higher than it was a year ago. The index bottomed at 75.88 in June 2010 after a homebuyers’ tax credit expired.
Contract signings typically indicate where the housing market is headed. There’s generally a one- to two-month lag between a signed contract and a completed deal.
Joshua Shapiro, chief U.S. economist at MFR Inc., noted that even with last month’s drop, the index has risen since January and is higher than it was in April. That could translate into higher sales of previously occupied homes in July.
Most economists say the housing market is recovering, but at a slow and uneven pace.
Builders are more confident and breaking ground on more homes. Construction of new single-family homes rose to a two-year high last month. Mortgage rates are at record lows. And home prices nationwide have stabilized after losing a third of their value in the past six years.
Sales of both new and previously occupied homes fell in June, but remain higher than they were a year ago.
One trend that is holding back sales has been low inventories. There were 144,000 new homes for sale in June, just above May’s 143,000 — the lowest on records dating back to 1963.
And the inventory of previously occupied homes also fell last month, to 2.39 million. That’s a drop of more than 24 percent from last year, the Realtors’ group said last week.
It would take about six and a half months to exhaust the supply at the current sales pace. That’s close to the six months’ supply that economists consider healthy.
They are increasingly rich, hungry for the good things this country has to offer, buying high-end homes, and don’t mind paying huge amounts of cash upfront to get them without going into debt. If you don’t think this reads like a typical American story today, you’re right—these new homeowners are Chinese living in the U.S.
For a housing market just starting its recovery, foreign investment in U.S. residential real estate has been a bright spot, and there’s no sign of the trend letting up. According to data released last month by the National Association of Realtors, non-U.S. buyers accounted for $82.5 billion in residential property sales in the 12 months ended March 2012. Chinese purchasers made up 11 percent of this total, while Canadians continued to represent the largest swath at 24 percent. Perhaps even more striking is the fact that 27 percent of Realtors surveyed by the NAR reported working with international clients in the last year. Along with China and Canada, buyers from countries including Mexico, India, and the U.K. combined to make up 55 percent of purchases from abroad—mainly concentrated in Florida, Texas, Arizona, California, and New York. The fastest growth in recent years is among Chinese buyers.
The global interest is driven by several different factors, yet for the Chinese in particular, the chance to get their children into top universities is probably the largest motivation. To Chinese parents, the opportunity provides proof that their years of effort have paid off. “The Chinese work very hard—it’s part of their culture,” says Cathy Zhao, a real estate broker in Maryland who has served many wealthy Chinese clients. “For them, the most important thing is education, and with prices being very low as they are, they see a chance to get near a good school.” And once here, most international buyers want to stay, Zhao adds, because their chance of a better-paying job is still better in the U.S. than back home.
The chance to earn a prestigious degree is not the only reason Chinese buyers find the U.S. market increasingly appealing. “There is an increasing number of wealthy Chinese who are buying in the U.S. to diversify their portfolio,” says NAR economist Jed Smith, who helped compile the annual survey. “Even with the rally in recent months, homes here still look very good from an investment point of view.”
Unlike Japanese corporations in the 1980s, which bought at the top of the market in their quest for big-name commercial properties, the Chinese are more interested in good deals. With residential real estate prices still almost a third less than they were at their peak in 2007, it’s a strategy that may well pay off if job growth returns and triggers a rally in the housing market, according to Smith.
Last year the average price of a foreign-purchased U.S. home was more than $400,000, which is double the national average—so the search for good value might only extend so far. That high figure becomes even more impressive when one considers that buyers from abroad often lack credit scores and access to mortgages, and frequently opt to pay the whole price upfront. “[S]ales transactions can often be completed quickly as many Chinese purchasers prefer all-cash deals,” Pamela Liebman, president and chief executive officer of the Corcoran Group, a New York real estate firm, writes in an e-mail. Liebman also says that her company has serviced more Chinese clients this year than at any time in the past, and that their interest is not just in residential real estate but in commercial property as well. Sixty-two percent of purchases by foreign buyers last year were in cash, according to the NAR. Zhao says many of the deals are for very large homes, capable of supporting several generations under one roof, which is a preference for affluent families.
Foreign buyers still make up a small part of all U.S. sales, accounting for just 4.8 percent of the total dollar amount in the last year. While in relative terms this represents an increase, the numbers will probably not spur a nationwide real estate recovery.
“In a market the size of New York, it would take a substantial influx of any one buyer group to significantly affect market prices,” writes Liebman of Corcoran. “The number of Chinese purchasers of New York real estate has not reached the critical mass it would require to impact prices.” It’s a point echoed by Smith of the NAR. “The only thing that will really get the market back to where it was is jobs. Really it’s all about jobs in the end,” he says.
That may be true, but the pattern of recent years might allow Americans to take some solace in the fact that their country is still top of the list when it comes to places where individuals from around the world want to live and learn.
To those not in the industry,
real estate agents
may appear to have easy jobs. They ride around showing fabulous
houses, work a flexible schedule and sometimes land big commission
But the reality is that real estate agents have a much harder
job than we can imagine. Uncertainty about their income, a lack of
benefits, a decline in housing values and the risks associated with
meeting strangers in vacant homes can make real estate a stressful
and dangerous occupation.
High stress environment
For starters, working strictly on commissions is stressful
enough. Paul Wyman, owner of the Wyman Group real estate firm in
Howard County, Ind., and a regional vice president of the National
Association of Realtors, says agents don’t have a “guaranteed
paycheck” every Friday. And most don’t earn a dime until a sale
closes. There can be a lot of money riding on each transaction, he
“You end up counting on a deal and if it falls apart for any
reason, it can cause a lot of stress for the family,” says
Brad Knapp, senior vice president of Henkle Scheuler Realtors in
Lebanon, Ohio, says whether they’re working independently or for a
large firm, agents often act as their own small business. While
that can have some perks, it often has downsides like a lack of
health insurance, sick time or paid vacation. For most agents, a
lot is riding on every sale, he says.
The job is so stressful, in fact, that
Business Insider reported
that “real estate sellers are 1.38 times more likely to commit
suicide than average.”
Home prices vs. commissions
Furthermore, the average median income for
has trended downward in recent years, falling from $52,200 in 2002
to $34,100 in 2010, according to the National Association of
Realtors. However, the NAR did report that the median income for
Realtors increased $800 from 2010 to 2011.
Agent commissions vary by region and firm, but typically average
5 percent to 6 percent nationwide, according to the NAR. A typical
agent may only sell a half dozen properties per year.
“I don’t think the general public appreciates the fact that real
estate agents will show so many homes and do so much work but don’t
get paid until they’re at the closing table,” says Knapp.
Stresses exacerbated in down housing market
Agents have been hit especially hard by the recent housing
downturn. Since commissions are based on a percentage of the sales
price, commissions decline when home prices decline. According to
the latest numbers from the
SP/Case-Shiller Home Price Indices
, home prices have fallen approximately 34 percent from their 2006
The rapidly changing real estate market can also create a
disconnect between some sellers, homebuyers and agents, says Wyman.
Many sellers have unrealistically high expectations when it comes
to the price they can realistically get for their homes. Wyman says
agents today have to spend more time “educating” sellers on the
real value of their home.
“There are sellers out there that think their house is the
exception and buyers have been conditioned to give lowball offers.
It’s a challenging market and can cause real stress,” says
Furthermore, Wyman says because many agents have their own real
estate investments, either in flips or rental properties, the
downturn has been especially hard.
In past years, real estate agents have entered and exited the
profession as the housing market fluctuates. But in the past few
years, Wyman says the housing market has fallen faster than agents
are leaving the industry.
“There has been increased competition because there are just
more Realtors and fewer sales,” says Wyman.
Job can have dangers
In addition to purely being a stressful occupation, working in
real estate can also be quite dangerous. Agents must often meet
strangers alone in vacant houses and show properties in all types
Criminals have posed as would-be buyers to lure unsuspecting
agents into vacant homes and have committed theft, robbery, assault
and rape. Some have even been murdered. According to the Bureau of
Labor Statistics, 63 people employed in real-estate-related fields
(this includes property management and maintenance personnel) died
on the job in 2010. Of those deaths, 23 were murders.
Safety has become such an important issue in recent years that
the NAR has outlined tips and guides to help Realtors stay safe.
The 2011 Realtor Safety Report examined a year’s worth of attacks
on Realtors, and the REALTOR Safety program features a five-step
plan for Realtors to stay safe while conducting open houses.
While the chances of being victimized are still relatively small,
it can add an element of stress every time an agent meets with a
new potential buyer.
“You have to constantly be aware of the potential for danger.
There’s an added element of stress and potential danger when they
get a call to meet someone at a vacant house in a questionable
neighborhood,” says Knapp.
For a while now, local officials have believed smart growth makes smart policy.
But a recent survey shows a sizable percentage of county residents are on board, too.
The Lancaster County Association of Realtors, in conjunction with the National Association of Realtors, sponsored a survey of 500 county adults who were interviewed in February by American Strategies Inc. and Myers Research Strategic Services.
Half of the respondents said they like walkable neighborhoods where the homes are closer together, which is a hallmark of smart growth.
There was a clear age division, with seniors opting for walkability and convenience. Young families, on the other hand, still prefer larger homes and lots, even if it means driving to shops and restaurants.
“The crux of this survey directs us to smart growth,” said Tom Weik, treasurer of the LCAR board of directors.
And those high-density neighborhoods should be within designated urban growth boundaries where utilities and other amenities are available, he said.
Weik, broker of record for Kingsway Realty, said he was surprised at the age disparity in the survey, and that young families weren’t more interested in smart growth communities.
Jason Burkholder, sales manager of Weichert, Realtors-Engle Hambright, said the key to successful smart growth isn’t so much finding people to move into those neighborhoods as it is getting existing homeowners to accept such projects.
There’s still a lot of public reluctance, even when developers come up with good plans, Burkholder said.
Some other findings in the survey weren’t what he expected, Weik said. For example, while 32 percent of Lancaster County residents named the economy as their top concern, moral issues ranked at the bottom.
Mike Mastros, owner of Mastros Real Estate and secretary of the LCAR board, said he found it notable that “location, location, location” still trumps the size of the house as a priority for buyers, with 91 percent saying neighborhood is more important.
Weik said he made up a quiz for his agents to see if they could guess some of the percentages in the survey. Many of them underestimated the rate of homeownership, he said, which was 86 percent.
By contrast, the national homeownership rate is just 71 percent.
The survey also revealed:
• 57 percent of county residents said the quality of life here has stayed the same in the past three years, while 30 percent said it’s gotten worse. Nationally, 53 percent of the population said their quality of life is about the same.
• High-quality public schools are the most important factor people cite in deciding where to live. They also like neighborhoods with age diversity and sidewalks.
• 78 percent still prefer to live in a detached, single-family house.
• Almost half of residents describe where they live as a rural area (26 percent) or small town (21 percent).
• 35 percent would rather live in a different kind of community. Of those, 37 percent would prefer to reside in a rural area, 26 percent a mixed suburban area (with houses, shops and businesses) and 18 percent a small town.
• 79 percent said it’s important to live within a 30-mile commute to work. When asked to choose, residents prefer a smaller house with a shorter commute to a bigger home with a longer commute.
• More than one-fifth of residents either bought a new house in the past three years or are planning to buy in the next three years. Nineteen percent were thinking of moving, but the economic downturn has made that less likely.
U.S. mortgage rates dropped, with
30-year loans reaching a record low for a sixth straight week,
amid signs the housing recovery is slowing.
The average rate for a 30-year fixed mortgage fell to 3.49
percent in the week ended today, the lowest in Freddie Mac
records dating to 1971, from 3.53 percent. The average 15-year
rate declined to 2.8 percent, also a new low, from 2.83 percent,
the McLean, Virginia-based mortgage-finance company said today
in a statement.
Sluggish employment growth and tight lending standards are
limiting a recovery in the housing market even as mortgage rates
continue to fall, according to Celia Chen, an economist at
Moody’s Analytics Inc. in West Chester, Pennsylvania. Contracts
to buy previously owned homes dropped 1.4 percent last month
from a revised 5.4 percent gain in May that was less than
initially reported, data from the National Association of
Realtors showed today.
“It’s essential that the job market continues to add
jobs,” Chen said. “If things don’t improve at least a little,
yes, we do risk squashing this housing recovery.”
Private-sector employers added 84,000 jobs in June, the
weakest in 10 months, and the unemployment rate stuck at 8.2
percent, U.S. Labor Department figures showed.
Purchases of new U.S. homes dropped in June from a two-year
high, the Commerce Department reported yesterday. Sales of
existing residences also declined, to an eight-month low, the
National Association of Realtors reported.
Mortgage applications in the U.S. climbed last week as low
borrowing costs spurred refinancing. An index of applications
for refinancing increased 1.8 percent in the week ended July 20
from the previous week, the Washington-based Mortgage Bankers
Association said yesterday. The group’s purchase gauge dropped
To contact the reporter on this story:
Noah Rayman in New York at
To contact the editor responsible for this story:
Kara Wetzel at
Right from the get-go, real-estate open houses are a recipe for weird and wild stories.
As sellers or buyers, at least half of Americans give an open-house tour a try at least once in their lives, according to the National Association of Realtors.
And for many, it works. Statistics from the NAR’s 2011 Profile of Homebuyers Sellers show that more than one in 10 homeowners found their current home through an open house; 45 percent of homebuyers attended open houses during their home search.
So what could go wrong when homeowners leave their dwelling — quirks and all — in the hands of a real-estate agent so complete strangers can peruse, scrutinize and snoop?
Plenty, according to our readers.
From kitty crises to wig rooms, here are some of the stories readers shared with us. The responses have been edited for space.
Funny bird, funny bird
“My Realtor husband and I hosted an open house for a client. After getting ready to receive guests, we heard the phone ring incessantly, tried to find it to answer but couldn’t. Then we heard someone calling the cat, ‘Here, kitty, kitty.’ After we heard the toilet flushing loudly, we figured out that the owner’s bored African grey parrot was putting us on.”
— DeVonne Wells, Bremerton
A litter problem
“We were walking around the house, we kept stepping in wet spots on the carpet. Our agent finally got the nerve to get down at carpet level and smell one of the wet spots and it was urine. (We’re assuming from a cat since there were litter boxes upstairs.)
“When we got upstairs, there was a huge white board on a home office wall with a house prep ‘to-do’ list and one of the items was ‘clean out litter boxes.’ “We passed on the house.”
Sherry Clarke, Lake Tapps
A mess and a mouse in the house
“The appointment was for 10 a.m. We arrived and instead of the house being empty, the owners were there with their three kids and were still in bed.
“The house was a total mess, dishes in the sink, dirty in general. We offered to come back but they wanted to do it then. I could look past the clutter and mess, but I couldn’t ignore the haphazard, unfinished projects.
“The clincher was when we walked downstairs and found a mouse trap with the dissected remains on the stairs.”
Cyn Loy, Seattle
An open outhouse
“I was hosting an open house for a condo in Shoreline. A couple rushed in and the female ran into the bathroom. She was in there quite a while and rushed right out. She stank up the place so bad I had to shut it down.”
Kristi Hansen, Shoreline
Bring a garbage truck, too
“The Craigslist ad said ‘Bring your hammer … ‘ but it was such an amazing price. … In an amazing location … so we thought we’d give it a look. We were not prepared for what we were about to see.
“It was the home of an elderly hoarder. Rows and rows of paraphernalia filled the rooms … floor to ceiling. The lights didn’t work. And to our horror, behind one of the rows of stacks lay the hoarder … on her bed … watching soaps, while kittens played around her. It was both horrifying and heartbreaking.”
Heather Arment, Seattle
A shotgun shack
“Once (in Oklahoma) the couple my parents were considering buying the house from left a shotgun peeking out from under the master-bedroom king-size bed. That house also had converted the third bedroom into a closet/wig room. Weird.”
Layla Anson, Snoqualmie
“Perusing the bookshelves (in a Redmond condo), I picked up a Dickens book that wasn’t a real book at all. It was a fake book that contained a hollow center, apparently designed to store valuables. Inside were hundreds of dollars. I put it back, but couldn’t help wondering if everyone who visited would be as honest. I guess not many people pick up a good Dickens novel.”
Layla Anson, Snoqualmie
“I was holding an open house in the Phantom Lake neighborhood in Bellevue. I had just greeted an older couple at the door when a neighbor stepped in front of them to ask about the landscaping. I gave a listing brochure to the couple as they headed downstairs to the daylight basement.
“A few minutes, later while chatting with the neighbor, I heard a loud crash of breaking glass and ran over to the window to see below in the backyard patio that the older man was lying on his back with his hand to his bleeding forehead.
“I quickly ran downstairs to see the wife tending to her husband. The sliding glass door had been shattered. I quickly called 911. … When the ambulance arrived and was tending to the husband, the wife told me that her husband tripped on a corner of a rug and fell head first into the sliding glass door. Soon after, the man was rushed off to the hospital for stitches and I was told he was going to be fine. I closed up early and phoned the sellers telling them they should come home …
“After I updated the seller on the event, I swung by the hospital to drop off some flowers. I was shocked when the wife came out to the waiting area to tell me that their attorney would be in touch.
“In the coming weeks, the sellers’ insurance settled the matter, but the biggest shock came months later when I received a phone call from a fellow agent in town who heard about what happened. She said that something very similar happened to her and that we were most likely set up. That was 10 years ago and was the last time I hosted an open house.”
Chris White, Bellevue
The body is not negotiable
“When I saw a house I was interested in, I called my girlfriend’s Realtor and asked her to show it to us. While we were waiting for the agent, we (my girlfriend, her 5-year-old son and I) went around the outside of the house, just to check it out. … The backyard smelled weird.
“There were big horseflies and it was really hot out, which didn’t help the smell. We see this shed that was attached to the back side of the house under the porch.
“Sure enough, we (girlfriend’s son and I) opened it and it was kind of dark, so at first we didn’t see it — but there was a body about 4 feet away from us. It didn’t move, so we kind of assumed it was a dead body. … A few minutes later her real-estate agent showed up, and we went along with our business inside.
“The real-estate agent did make some calls to get the situation further investigated. We don’t know the outcome, but I do know it was creepy. That’s not what scared me away from buying the house though; it just wasn’t the right fit.”
Barry Shaw, Seattle
By The Associated Press
FEWER CONTRACTS: The National Association of Realtors said Thursday that its index of sales agreements fell 1.4 percent last month to 99.3. An index of 100 is considered healthy. The drop suggests the nascent housing recovery is still sluggish.
LEADING INDICATOR: Contract signings typically indicate where the housing market is headed. There’s generally a one- to two-month lag between a signed contract and a completed deal.
GOOD SIGNS: Still, the index is 9.5 percent higher than it was a year ago. The drop erases only part of a strong gain in May, suggesting that sales of previously-occupied homes could rise in July.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Cashing in on the real estate crash in the US, rich Indians are busy snapping up American properties. Affluent Indians are among the top five international buyers busy scouting for plum deals, confirms the US realtors association.
“During the last 12 months ended March 2012, Indians — residents and non-residents — have bought 12,000 homes in the US,” says Stephanie Singer of the National Association of Realtors (NAR), a US industry body. Leading the list of foreign buyers are Canadians, Chinese, Britons, Indians and Mexicans, with the most buys reported in Florida, California, Arizona and Texas.
US real estate prices have dipped by almost 26 per cent over the last decade. Between 2006 and 2011, the average yearly median price of US houses has declined from $222,043 to $164,542, confirms NAR data.
“The trend has become prominent for over a year now as buyers see more value for money in such buys,” says Kalpana Murthy, associate director at real estate consultancy firm Cushman Wakefield. The US market is also conducive for buyers who get home loans for as low as 3-4 per cent.
“High rental rates in the US and the growing tendency among more Indians to settle down in the US are fuelling such buys,” Ms Murthy explains. However, the trend is still restricted to affluent Indians.
There is also an emotional angle. “With my only daughter settled in Texas, we saw no reason to stay all alone in India, especially after the birth of my grandson,” says Kamala Vaidyanathan, who recently moved to the United States.