News Summary: US home sales dip 1.7 percent

SALES DIP: U.S. home sales dropped 1.7 percent in September to a seasonally adjusted annual rate of 4.75 million, the National Association of Realtors said. That’s down from a rate of 4.83 million in August, which was the highest in more than two years.

UPWARD TREND: Sales are up 11 percent from a year earlier, a sign of the housing market’s steady recovery. Still, they remain below the more than 5.5 million that economists consider consistent with a healthy market.

FUTURE GAINS LIKELY: Economists expect sales will likely rebound in October. Mortgage applications picked up in September after falling in the previous month.

US Home Sales Slow in September, Yet Enjoy Biggest Median Price Increase …

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According to the National Association of Realtors (NAR), September existing-home sales declined modestly, but inventory continued to tighten and the national median home price recorded its seventh back-to-back monthly increase from a year earlier.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August, but are 11.0 percent above the 4.28 million-unit pace in September 2011.

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Lawrence Yun

Lawrence Yun, NAR chief economist, said the market trend is up.  “Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” he said.  “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest.  Rather, inventory shortages are limiting sales, notably in parts of the West.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.47 percent in September from 3.60 percent in August; the rate was 4.11 percent in September 2011.

The national median existing-home price for all housing types was $183,900 in September, up 11.3 percent from a year ago.  The last time there were seven consecutive monthly year-over-year increases was from November 2005 to May 2006.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 24 percent of September sales (13 percent were foreclosures and 11 percent were short sales), up from 22 percent in August; they were 30 percent in September 2011.  Foreclosures sold for an average discount of 21 percent below market value in August, while short sales were discounted 13 percent.

Total housing inventory at the end September fell 3.3 percent to 2.32 million existing homes available for sale, which represents a 5.9-month supply4 at the current sales pace, down from a 6.0-month supply in August.  Listed inventory is 20.0 percent below a year ago when there was an 8.1-month supply.

“The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production,” Yun said.

The median time on market was 70 days in September, unchanged from August, but down 30.7 percent from 101 days in September 2011.  Thirty-two percent of homes sold in September were on the market for less than a month, while 19 percent were on the market for six months or longer.

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Moe Veissi

NAR President Moe Veissi, broker-owner of Veissi Associates Inc., in Miami, said some buyers who could easily afford a mortgage can’t assume they’ll get one.  “Home buyers need to be more focused on the mortgage process in the current environment where lenders and banking regulators are being risk averse,” he said.  “Shopping for competitive mortgage terms is a good idea, but it may be more important to find a bank that is willing to work with you given your credit history.  Realtors® can often recommend lenders that may have more reasonable underwriting standards.”

First-time buyers accounted for 32 percent of purchasers in September, compared with 31 percent in August; they were 32 percent in September 2011.

All-cash sales were at 28 percent of transactions in September, up from 27 percent in August; they were 30 percent in September 2011.  Investors, who account for most cash sales, purchased 18 percent of homes in September, unchanged from August; they were 19 percent in September 2011.

Single-family home sales declined 1.9 percent to a seasonally adjusted annual rate of 4.21 million in September from 4.29 million in August, but are 10.8 percent higher than the 3.80 million-unit level in September 2011.  The median existing single-family home price was $184,300 in September, up 11.4 percent from a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 540,000 in September, but are 12.5 percent above the 480,000-unit pace a year ago.  The median existing condo price was $181,000 in September, which is 10.0 percent higher than September 2011.

Regionally, existing-home sales in the Northeast fell 6.3 percent to an annual level of 590,000 in September but are 7.3 percent above September 2011.  The median price in the Northeast was $238,700, up 4.1 percent from a year ago.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.10 million but are 19.6 percent higher than a year ago.  The median price in the Midwest was $145,200, up 7.0 percent from September 2011.

In the South, existing-home sales increased 0.5 percent to an annual level of 1.93 million in September and are 14.2 percent above September 2011.  The median price in the region was $163,600, up 13.1 percent from a year ago.

Existing-home sales in the West fell 3.4 percent to an annual pace of 1.13 million in September but are 0.9 percent above a year ago.  With continuing inventory shortages in the region, the median price in the West was $246,300, which is 18.4 percent higher than September 2011.

Economy Briefs: Home sales dip 1.7% on tight inventory

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U.S. sales of previously occupied homes fell in September after hitting a two-year high in August, in part because there were fewer homes available for sale.

The National Association of Realtors said Friday that sales dipped 1.7 percent to a seasonally adjusted annual rate of 4.75 million. That’s down from a rate of 4.83 million in August, the highest rate in more than two years.

Sales are still up 11 percent from a year earlier. They remain below the more than 5.5 million that economists consider consistent with a healthy market.

TELECOMMUNICATIONS

Cablevision, AMC reach deal with Dish Network

NEW YORK — Cablevision Systems Corp. and AMC Networks say they reached a settlement with Dish Network related to Voom HD Holdings.

As part of the settlement, Dish Network will pay $700 million in cash to Cablevision and AMC Networks, $80 million of which is in consideration for the purchase of Cablevision’s multichannel video- and data-distribution services licenses in 45 metropolitan areas in the U.S.

It also stipulates that Dish enter into a long-term distribution agreement with AMC Networks to carry AMC, IFC, Sundance Channel and We TV and with the Madison Square Garden Co. to carry Fuse on it satellite service.

Cablevision had sued Dish for more than $2.5 billion in damages for cutting short a deal to carry AMC’s Voom TV service.

ENERGY

BP swaps Russia stakes to cut troublesome ties

LONDON — The board of U.K. energy company BP PLC has struck a deal to swap its troublesome Russian oil venture TNK-BP for a big stake in Rosneft, the Kremlin-controlled energy company, a person familiar with the matter said Sunday.

The person said that the sale of BP’s half of TNK-BP was expected to net the company between $10 billion to $15 billion in cash as well as a 15 percent to 20 percent stake in Rosneft, Russia’s largest producer of oil. The person, speaking on the condition of anonymity, said that the ranges were approximate because the parameters of the deal were still being worked out.

Such a deal would allow BP to exit its contentious partnership with the consortium of billionaires that controls the other half of TNK-BP while keeping a presence in Russia, a country responsible for producing nearly 10 million barrels of crude every day.

From wire dispatches and staff reports

Realtor earns certifications

Ramon Davenport Rogers of Lompoc, with Prudential California Realty, has earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of Realtors offers the SFR certification to Realtors who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many real estate professional, short sales and foreclosures are the new “traditional” transaction.

Realtors who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buys pursue short sale and foreclosure opportunities.

The certification program included training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, limit risk, and provide resources to help Realtors stay current on national and state-specific information as the market for these distressed properties evolves.

Maine home sales up in September


SOUTH PORTLAND, ME —

Statistics from the Maine Real Estate Information System show that the number of homes sold and the median price both grew in September in the state.
    
The statistics from September show sales of single-family existing homes in Maine grew 8.48 percent from the year before, and the median sale price grew by 6.92 percent to $170,000. The National Association of Realtors says the sales were up 10.8 percent and the median price was up 11.4 percent.
    
The Maine statistics show increases in the number of homes sold in all counties except Somerset, which saw an 11.5 percent decline, and Oxford, which was flat.

In Amendment 4 Campaign, Real Estate Agents Raise $4 Million

John Sebree of the Florida Association of Realtors said Amendment 4 will help stimulate Florida’s economy. (Photo from Florida Association of Realtors video.)

By Ashley Lopez
Florida Center for Investigative Reporting

Real estate agents have raised $4 million to support Amendment 4, which if passed will enact property tax limitations that could shrink the revenues Florida counties and municipalities need for services.

Amendment 4 would cap the assessed values of homes and lower property taxes for investors, businesses, and owners of rental properties and second homes. It will also increase the number of people eligible for homestead exemptions. In their efforts to pass Amendment 4 on Nov. 6, real estate agents have raised more money than any other campaign for or against a ballot measure this year.

These real estate agents say the amendment will improve the state’s faltering housing market, which will in turn boost the state economy.

The primary opponents of Amendment 4 are Florida’s local counties and cities, which are prohibited from spending money to influence the outcome of ballot measures. The leaders of these local governments, concerned they will not be able to fund services properly if Amendment 4 passes, have resorted to passing resolutions opposing the ballot measure — one of the few actions local governments can take against Amendment 4.

Lakeland, Gainesville, Marianna, North Port, and Palm Beach are among the Florida municipalities that have announced opposition through these resolutions.

Public officials in Florida fear Amendment 4 will raise taxes for homeowners who live in their homes year-round and lower taxes for investors and snowbirds — all while resulting in substantial cuts to local government services such as police, fire and waste management.

Bill Horne, Clearwater’s city manager, estimates that Amendment 4 would take more than $414,000 out of his city’s coffers in 2013.

“I can’t tell you where I am going to get savings,” Horne said. “Our only options are to reduce staffing and services.”

Supporters of the amendment, however, believe it will jumpstart the state’s housing market, which will in turn increase tax revenues.

“We may take $40 million out of local government by passing something that benefits a taxpayer, but the true impact of it will be a positive because its spurs economic growth,” said John Sebree, senior vice president of public policy of the Florida Association of Realtors. “It creates jobs. It allows people to spend more money.”

Florida TaxWatch, an independent public policy group in Tallahassee that has not taken a position on the ballot measure, estimated that Amendment 4 would create as many as 383,810 additional home sales over the next decade.

How Amendment 4 Works

If passed, Amendment 4 would cap assessed home values, lower property taxes for investors, businesses, and owners of rental properties and second homes, as well as increase the number of people eligible for homestead exemptions.

Ken Small, a finance expert at the Florida League of Cities, said the impact of these new rules would devastate local governments, because some real estate owners will eventually pay little or nothing in property taxes.

“If the economy picks back up again,” Small explained, “it will take probably decades before the taxable value of counties and cities gets back to a level where they had been, because [this] cap will hold it down.”

While some residents will get new property tax breaks, Small said, others will have to pay more because local governments will be forced to raise millage rates to pay for basic services or find ways to decrease government services.

Cities such as Clearwater, in Pinellas County, have already made cuts in the past few years as the state’s plummeting housing market and struggling economy pushed down tax revenues. These cities have only begun to recover, and Horne and Small agreed that Amendment 4 would likely set that recovery back.

“It’s a frustration when trying to come up with a way to deal with these cuts,” said Horne, Clearwater’s city manager. “We think things are getting better moving forward, but with these amendments, we are going to go back to where we were.”

In Pinecrest, a wealthy suburb in Miami-Dade County, Village Manager Yocelyn Galiano Gomez estimates that Amendment 4 would create a $1.9 million tax loss over a five-year period.

While worried about how Amendment 4 will affect Pinecrest, she is even more concerned about other, more urban municipalities in Miami-Dade County.

“Those cities with larger commercial areas, such as Doral and Hialeah, will stand to lose much more,” Gomez said.

The Big Push

Real estate agents say Amendment 4 will revive the state’s struggling housing market by giving people an incentive to purchase homes.

The Florida Association of Realtors and the National Association of Realtors together have raised $4 million on a pro-Amendment 4 campaign. The ballot measure, if passed, would likely mean better business for real estate agents and property investors.

Mailers sent statewide and paid for by this campaign are promising more jobs, increased home sales and accelerated economic growth if Amendment 4 passes.

Sebree, of the Florida Association of Realtors, said cities would only have to cut services if they plan to spend more in the future than they are spending now.

“I think local governments want to always be able to increase their spending based on a formula,” Sebree said. “You know, they want to spend more this year than they did last year … This isn’t going to cut that — it just puts a cap on assessment increases.”

Conflicting Studies

The net effect of Amendment 4 is debatable because reports and studies conflict.

A June 2012 Florida TaxWatch report estimated Amendment 4 would create 19,483 private-sector jobs over the next decade. A March 2010 report from the same group, however, claimed that tax assessment caps would deliver “fewer jobs” because they are an “impediment to a vibrant economy.”

The state’s Office of Economic and Demographic Research estimates that statewide revenue cuts would be $118 million the first year and swell to $321 million in the third year if millage rates remain the same.

Cragin Mosteller, a spokeswoman for the Florida Association of Counties, said the boon to real estate agents would end up hurting others in the state. She also said county governments are concerned that it will cap the ability for communities to invest in themselves.

“I think the Realtors are trying to sell it as a first-time homebuyer tax cut, but that’s really not fair,” Mosteller said. “It’s a tax cut for our snowbirds and investment property owners — you know, those guys that flip real estate — but it will also be a cost shift to Florida residents.”

U.S. Home Sales Dip 1.7 Percent on Tight Inventory

WASHINGTON (AP) — Americans bought fewer previously occupied homes in September after hitting a two-year high in August.

The National Association of Realtors says sales dipped 1.7 percent to a seasonally adjusted annual rate of 4.75 million. That’s down from a rate of 4.83 million in August, which was the highest in more than two years.

Sales are still up 11 percent from a year earlier, further evidence that the housing market is slowly recovering. But sales remain below the more than 5.5 million that economists consider consistent with a healthy market.

The inventory of homes for sale fell in September to 2.32 million. It would take 5.9 months to exhaust the supply at the current sales pace, the lowest sales-to-inventory ratio since March 2006.

Many households can’t afford median-priced home

“Despite all of the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households,” said Mike Sante, managing editor of Interest.com, in a news release. “Even after years of declining home prices and record-low mortgage rates, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas that we looked at.”

Read more Real Estate news in this week’s pages, including how to find down-payment assistance funds and why wealthy home buyers may be returning to adjustable-rate mortgages.

For affordability ratings for all 25 cities in the report, visit Interest.com.

Amy Hoak, Real Estate writer

Down-payment money there for the taking

One of the most common reasons given for why people can’t buy a home in this market is the down payment. But down-payment assistance money is out there, even though many people who would qualify don’t know the programs exist. Down-payment money there for the taking.

Wealthy home buyers return to risky ARMs

Luxury-home buyers are returning to adjustable-rate mortgages, despite pitfalls that pushed many homeowners into foreclosure during the housing bust. Wealthy home buyers return to risky ARMs.

Will housing ‘misery’ swing the election?

Pay Dirt: Three swing states with weak housing markets are battlegrounds for November. Will housing ‘misery’ swing the election?

Sales of existing homes drop in September

Sales of existing homes fell in September, with declines in all regions but the South, while longer-term trends show growth, according to data released Friday. Sales of existing homes drop in September.

Housing’s better, but how good will it get?

Yes, housing is recovering — that much is clear from months of positive data on indicators including home sales, prices and new construction. Housing’s better, but how good will it get?

U.S. home construction surges in September

Government data show U.S. home builders broke ground at the fastest pace in more than four years last month, accelerating by 15% as building permits also rose sharply.U.S. home construction surges in September.

For appliances, does energy efficiency sell?

Experts say many consumers care less about Energy Star ratings, more about features that happen to be “green.”For appliances, does energy efficiency sell?

Builder sentiment edges up to six-year high

Builder confidence in October edged higher to mark the sixth gain in a row and the top reading in more than six years, a trade group said Tuesday.Builder sentiment edges up to six-year high.

US home sales dip 1.7 percent on tight inventory

WASHINGTON (AP) — U.S. sales of previously occupied homes fell in September after hitting a two-year high in August, in part because there were fewer homes available for sale.

The National Association of Realtors said Friday that sales dipped 1.7 percent to a seasonally adjusted annual rate of 4.75 million. That’s down from a rate of 4.83 million in August, which was the highest in more than two years.

Sales are still up 11 percent from a year earlier. They remain below the more than 5.5 million that economists consider consistent with a healthy market.

Still, the housing market is recovering after a six-year slump. Economists expect sales will rebound in October, noting that mortgage applications have picked up after falling in August.

“We view the dip (in sales) as a pause in an otherwise improving trend,” Jonathan Basile, an economist at Credit Suisse, said in an email to clients.

Sales have improved from last year, helped by record-low mortgage rates and steady gains in home prices in most metro areas. Home prices are more stable because there are fewer foreclosures and a low supply of homes has some markets more competitive.

The inventory of homes for sale fell in September to 2.32 million. It would take 5.9 months to exhaust the supply at the current sales pace, the lowest sales-to-inventory ratio since March 2006.

Economists noted that rising prices could spur more homeowners to put their homes on the market, which could fuel more sales.

“Persistent news of rising home prices should help the recovery…as selling conditions continue to improve and sellers become more confident they can get bids closer to the price they are offering,” Basile said.

Sales rose slightly in the South last month, compared to August. They fell in all other regions. In the past year, sales have risen at a healthy pace in the Northeast, South and Midwest. They have risen only slightly in the West, where inventories are particularly tight.

The market is still being constrained by tougher lending standards. Many would-be buyers, particularly first-time buyers, are having difficulty qualifying for a mortgage or can’t afford the larger down payments that many lenders want.

A low supply of previously occupied homes has also given a boost to the new-home market.

Builders broke ground on homes and apartments at the fastest pace in more than four years last month. The jump could help boost the economy and hiring. Still, the pace of construction is roughly half of what is associated with a healthy market, and new-home sales are coming off depressed levels.

Builders are more confident because they are seeing more prospective buyers visit properties. The National Association of Home Builders/Wells Fargo builder sentiment index, released Tuesday, rose this month to the highest level in more than six years.

There are also signs that the economy is improving. Retail sales rose at a solid pace in September, reflecting growing confidence among consumers. A measure of consumer confidence released last week reached a five-year high.

A recent report from data provider CoreLogic showed that the so-called “shadow” inventory of homes fell 10 percent in July compared with a year ago. The shadow inventory consists of homes in foreclosure or with seriously delinquent mortgages.

Existing home prices rose 11.3% in September biggest jump since 2005

Here was more good news about the economy. The National Association of Realtors (NAR) announced Friday that the average price for an existing home rose 11.3% in September, the seventh straight month of back to back increases over the previous year. The 11.3% increase in September was the largest since 2005—before the housing bubble burst.

As a result of the price increase, sales of existing homes dropped slightly in September. This was expected because inventory is down, prices are higher, new home starts have increased, and many are now holding on to their homes waiting for higher prices. Nevertheless, the number of sales in September was still 11% above last year according to the NAR.

What does this mean? It means that average Americans are now re-gaining some of their net worth that was lost in the Bush recession. For most middle class families, the bulk of their net worth and retirement income is in their home. When home values plummeted in the recession, those families saw their wealth go down the drain.

In his weekly address Saturday, President Obama asked Congress to help responsible homeowners refinance their home loans at lower interest.

Many Americans lost their homes because they could not refinance an underwater mortgage, and could not afford the payments either because they lost their job, or because their adjustable interest rate sky rocketed. The glut of foreclosures and the dwindling number of home buyers caused prices to fall and remain that way for several years. This caused those who still had their homes to lose equity.

The good news is that home values are on the rise.

Lawrence Yun, chief economist of the NAR said in a news conference as the figures were released:

“Certainly we have broken out of the slump. Prices are now showing an accelerating trend. This is a reflection of low inventory. The market trend is up. Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery. More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”

In September, Fed Chairman Ben S. Bernanke called housing “one of the missing pistons in the engine” as he announced the third round of large-scale asset purchases intended to push down long-term interest rates and spur growth. This news, plus the news earlier in the week about home starts and permits rising to a 4-year high, indicates that piston may be starting to crank.

The NAR reported that first-time buyers accounted for 32% of purchasers in September, compared with 31% in August; they were 32% in September 2011.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 540,000 in September, but are 12.5% above the 480,000-unit pace a year ago. The median existing condo price was $181,000 in September, which is 10% higher than September 2011.

The median price in the Northeast was $238,700, up 4.1% from a year ago. The median price in the Midwest was $145,200, up 7.0% from September 2011. In the South, the median price in the region was $163,600, up 13.1 % from a year ago. With continuing inventory shortages in the region, the median price in the West was $246,300, which is 18.4 % higher than September 2011.

In his Saturday radio address President Obama said that Congress needs to do more to help homeowners who make their payments re-finance their homes at today’s lower interest rates saving the average homeowner $3,000 a year. That is money they can spend on other things, which will help the U.S. economy and the homeowner’s economy.

Congress is not expected to do anything when it returns. Mitt Romney is not likely to do anything along these lines should he win the election because he said that homes should just go into foreclosure. He believes that is the free market approach. That may be good for bottom feeder investors; it is not good for home owners or for home prices.

Let’s hope the housing recovery continues.

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