Category Archives: Housing Market

The Influence of Buyers & Sellers on Supply & Demand
No matter what industry you look at, supply and demand always plays a large role. This is especially true of real estate and home prices. When there is a large inventory of homes for sale, pricing declines, while a lack of inventory will drive up pricing. This is usually how supply and demand works. However, there are times when a large supply of highly desirable inventory is paired with a large demand. When this happens, pricing may also rise. There are many factors that can play into this, such as the location of the homes. The more desirable an area, the more people will want to buy a home there, and even if there is a large amount of inventory, there will still be competition to buy the best of that inventory. Another influence on supply and demand in the housing market is the type of people...
Housing Market Hopes on the Rise
Last summer existing home sales reached a peak of 5.38 million, but according to the seasonally adjusted rate basis (SAAR) reported in January, they have since declined to 4.62 million.  This 14% decline has left the market feeling a bit weak, but there is some good news on the horizon, as many experts predict this weakness to be only temporary. What is causing the Weakness? There are several factors causing the ups and downs of the housing market. From increased mortgage rates and prices, to a decrease in available distressed sales and investor buying. Another theory being discussed among those is real estate, is the influence of the Polar Vortex, which has gripped most of the country this winter. With so many people not really being able to go outside because of bitter cold temperatures, it makes searching for a new home less of a priority. There may not...
Foreclosure Rates Still High in Some Florida Cities
The real estate market might be on the rebound for most of the United States, but in some cities foreclosure rates are still on the rise. According to the January 2014 U.S. Foreclosure Market Report™ recently released by RealtyTrac®, default notices, scheduled auctions and bank repossessions were up by 8 percent. While this is an increase from December 2013, it is still lower than it was in January 2013. It is no surprise that foreclosure activity would rebound in January, since things tend to become quiet over the holidays. However, RealtyTrac reported that the 8 percent increase seen in January is the largest since May 2012. Even with this increase, the foreclosure rates for the entire country is still on the decline and has been for the past 40 months. Florida One of Top States for Foreclosures While the population in Florida may be growing, so are its...
What Do the Next Five Years Hold for Home Pricing?
The days of home prices reaching levels seen during the real estate bubble seems to be over. Though pricing in 2013 was down 20% compared to its 2006 summer highs, the S&P Index Committee did report that prices were up 23% from their March 2012 lows in both the 10 and 20 city indexes. While 2013 proved to be a banner year for the housing market, with an appreciation rate of 6.4 percent, experts do predict that prices will cool somewhat due to rising mortgage rates, less inventory and a lack of good bargains. In fact, most economist, real estate experts and real estate investment strategist predict a moderate annual rise in prices of 3.7% over the next five years. This translates to a cumulative change in home value of 19.7% by the end of 2018. This housing market pricing picture is based on a recent study...
If You Want to Predict The Housing Market, Go West
Back in 2007, it seemed as if the housing market crash would never end, and that foreclosures and decreased home values were to become the new norm. No place was this more apparent than in California, where home prices plummeted by about 42%. Slowly, though, the market began to recover, and California, as well as the rest of the country, began to see an upturn in the housing market. Today, however, affordable housing in California is harder and harder to find. It is estimated that only about a third of the population in California is now able to afford the costs of buying a new home. Why is this concerning for the rest of the country? Because California is actually one of the biggest indicators and predictors of what will happen in the housing market across the country. In other words, if housing prices are too high...
As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
With Homes for Sale in Short Supply, Prices Rise
Home prices increased 12.5% this October over last October, according to a report from Case-Shiller, which also reveals that the increase is likely due, not to a reduction in foreclosures, but a tight supply of unsold inventory. Home price gains are the strongest in eight years, according to the National Association of Realtors, rising in 88% of metro markets, and encouraging real estate investors. Among individual states, home prices rose 25.9% in Nevada, 22.4% in California and 14.2% in Georgia, considered the hottest market because this percentage represents the smallest gap across all states, and is only two percentage points away from the highest year-over-year price increase in thirty-five years. Cities posting growth of 10% or higher include Las Vegas, Los Angeles, Atlanta, Phoenix, Detroit, and Miami, among others. And there is more good news. The Case-Shiller report lists twelve US cities with double-digit annual returns, along...
Risks That Crouch Hidden In the Grass
“As prudent investors and managers, we must be aware of the realities we face.” ~ John Mauldin No one would argue that there has been plenty of time for discussion of the 2008 financial crisis among central bankers. But coming up with answers, well, that’s a different crouching tiger. Central bankers have accepted no responsibility for ignoring the warning signs of excessive debt, keeping interest rates too low for too long, ignoring housing market bubbles, or failing to regulate banks properly. In fact, they were hugely rewarded with money, power, and prestige, leaving taxpayers to foot the bill for bailouts. Does this point to the need to remove banking supervision from central banks? Or to put politicians in charge of setting interest rates? Clearly, reform of the Federal Reserve is sorely needed. However, more rules and regulations are not needed - rather, holding the feet of central...