December 2007 Archives
Daily Real Estate News | December 31, 2007
U.S. Population to Top 303 Million on Jan. 1
The U.S. Census Bureau calculates that the nation's population will be 303.15 million on New Year's Day, up 0.9 percent from 2,842,103 registered on Jan. 1, 2007.
In 2008, the population will increase by one person every 13 seconds. That increase will be the result of one birth every 8 seconds and one death every 11 seconds and one immigrant arriving every 30 seconds.
And all these new residents have to live somewhere - a good sign for the housing market, experts predict.
Source: Reuters News (12/27/07)
Greetings -
We hope you had a very Merry Christmas and a special Holiday Season as we wish you a Healthy and Prosperous 2008.
Our new listing tours will resume on the second Thursday of January at which time we will be reporting the best new properties of the week.
Have a Great Week!
David Vail & Cindy Stahl
"Simply Your Best Choice in
Re/Max Lake Arrowhead
Direct (909) 337 - 4040
E-mail david@davidvail.com
Web Site www.davidvail.com
NAR economist underlines real estate's silver lining
Friday, December 21, 2007
By Bernice Ross
Inman News
In all the years I've been writing this column, I have never received such an outpouring of response as I did from the two November articles on how media coverage of negative housing news is hurting our industry.
In spite of gloom and doom of recent news reports on the state of the nation's housing, there is plenty of good news, the most recent of which comes from the National Association of Realtors.
Laurence Yun, the chief economist for NAR, had plenty of positive news for Realtors at last month's conference. Yun attributed much of today's subprime mortgage problem to greed. Wall Street wanted the 10-12 percent return that subprime mortgages yielded as opposed to the smaller returns from more traditional mortgage products. His take on the Wall Street types: "They gambled. They lost."
Yun's outlook for 2008 sees a shift from greedy speculators to serious homeowners. 2008 will be a year of opportunity where there will be serious, healthy business. Furthermore, Yun predicted that the market returns to normal by 2009.
According to Yun, one of the biggest mistakes that reporters make is talking about national trends. Nationally, 2007 was the fifth best year ever on record. Home prices declined about 1.5 percent after a 50 percent run up in prices.
The challenge is that national numbers are pretty much irrelevant. Yun argues that talking about national averages is about as effective as having a national weather forecast. Like the weather, all real estate markets are local. In fact, you may have a buyer's market and a seller's market operating within a single market area based exclusively upon price point. Here are the other key pieces of positive news from Yun's economic report:
1. New housing starts: Even though these are dropping, there was too much building in recent years. The market is simply adjusting to normal supply-and-demand pressures. The inventory is "being controlled which makes stabilization occur more quickly."
2. Foreclosures: According to Yun, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate purchases in Arizona, California, Florida and Nevada. The majority of these individuals are flippers whose investments did not payoff. More importantly, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.
3. Under-priced markets and superstar cities: Although the coastal markets are still overpriced, Middle America is under priced. Nevertheless, Yun cites a new trend termed, "superstar" cities. These cities will command premium prices, regardless of what the market does. There is so much wealth concentrated in these areas, that measurements are simply not predictive. In addition to London, Paris, Tokyo and New York, Yun also identified San Francisco, Miami and Seattle as potential new superstar cities.
4. The recovery has started: Other than the three states hit heavily by job losses in the automotive industry (Indiana, Michigan and Ohio), the states that first experienced a downturn in the Northeast, are now in recovery. Specifically, Connecticut, Massachusetts, New York and Rhode Island were the first to feel the slump and are now well into a recovery. Furthermore, there appears to be a pent-up demand for first-time buyer properties due to a large number of Gen Ys (born 1977 to 1994) that are now buying their first homes. Falling interest rates will motivate many of these buyers to step into the market now.
5. New jobs and corporate profits are still strong: Corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting close to record profits. Furthermore, the economy has generated 4 million net new jobs and wages are rising.
6. A weak dollar may harbinger more foreign investment in U.S. real estate
Although the decline of the U.S. dollar will end up costing us more when we go overseas or purchase imports, it has resulted in more manufacturing jobs returning to the U.S. It also may mean more foreign investment in U.S. properties as well. Just a few years ago, the Canadian dollar was only worth 70 cents in U.S. currency. Today, the Canadian dollar has been hovering at about $1.05 to $1.10 U.S. What this means is that we can expect more Canadians and Europeans to be purchasing U.S. property, because our prices are approximately 50 percent cheaper than they were just three years ago.
7. Real estate: Still the best shelter: For those agents who represent reluctant first-time buyers, Yun points to some interesting research from the Federal Reserve. Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast, the average homeowner accumulated $184,400. Furthermore, the typical homeowner holds their property for six years. Within this period of time, NAR's research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.
Bottom line: 2008 represents the best window that buyers will have to find excellent deals with excellent financing. Get the word out there. If they wait, prices and interest rates will be higher and the reluctant buyer may be forced out of the market.
Greetings -
A cold, foggy and drippy 39 degrees at
Although within our multiple listing service there are listings outside of the Arrowhead Woods, we will be reporting on properties having
27954
730 Oak Point - In beautiful Hamiltair. Lakefront home remodeled and expanded to perfection capturing one of the peninsula's most sought after lots on the north east side with private beach. There are 8 bedrooms, 8.5 baths, billiard room, wine room, big lakeviews and much more. MLS3 272553 $6,500,000.
Good luck with your property search. Contact us for home tours, questions, specific needs, and request for additional property information.
Have a great week!
David Vail
"Simply Your Best Choice in
Re/Max Lake Arrowhead
Direct (909) 337 - 4040
E-mail david@davidvail.com
Web Site www.davidvail.com
Pending-Home Sales Climb in October
December 10, 2007 10:08 a.m.
WASHINGTON -- A forward-looking indicator of home sales in the U.S. rose during October, the second climb in a row.
The National Association of Realtors' index for pending sales of previously owned homes increased at a seasonally adjusted annual rate of 0.6% to 87.2 in October from September's 86.7, the industry group said Monday. The level of the gauge was 85.5 in August and 91.4 in July. The NAR is forecasting sales and prices to drop in 2007 and rise weakly in 2008.
NAR chief economist Lawrence Yun said the worst part of the credit crunch has been accounted for in the data, and that mortgage conditions have gotten better. "Some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels," he said.
The NAR index, based on signed contracts for previously owned homes, was 18.4% below the level of 106.8 in October 2006.
The NAR's pending home sales index was designed to try measuring which way the housing market is going in the future. It is based on pending sales of existing homes, including single-family homes and condominiums. A home sale is pending when the contract has been signed but the transaction hasn't closed. Pending sales typically close within one or two months of signing.
By region, the Northeast increased 16.0% in October from September; it fell 11.1% since October 2006. The Midwest fell 1.4% in October from September; it fell 11.7% since October 2006. The South decreased 7.8% in October from September; it dropped 25.3% since October 2006. The West increased 8.4% in October from September; it plunged 16.9% since October 2006.
In its monthly forecast on the industry, the NAR projected existing-home sales at 5.67 million this year and 5.70 million in 2008. That compares with 6.48 million in 2006. Existing-home prices are expected to decline 1.9% to a median of $217,600 for all of 2007 and rise 0.3% in 2008 to $218,300, the NAR said.
A month ago, NAR projected 2007 sales at 5.67 million and 2008 sales at 5.69 million. It had forecast prices declining 1.7% to a median of $218,200 for all of 2007 and to hold essentially even in 2008 at $218,300.
Mortgage rates hit two-year lows
30-year fixed rate mortgage falls below 6 percent
Friday, December 07, 2007
Inman News
Freddie Mac is the latest group tracking loan prices to report that rates on 30-year fixed-rate mortgages have fallen below the 6 percent threshold.
The McLean, Va.-based mortgage repurchaser's weekly Primary Mortgage Market Survey showed borrowers paying an average of 5.96 percent interest with 0.4 points for a 30-year fixed-rate mortgage during the week ending Dec. 6. That's down from 6.1 percent the previous week, and has not been lower since the last week of September, 2005, when it averaged 5.91 percent.
Lower housing prices, personal spending and income are factors pushing mortgage rates down, according to Freddie Mac's chief economist, Frank Nothaft.
"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Nothaft said in a press release. He said the federal funds futures market has priced in "almost a 100 percent probability" that the Fed will lower rates at its Dec. 11 policy committee meeting.
Although fixed-rate mortgage rates are not directly tied to the federal funds rate or Treasurys, "These combined factors will likely diminish upward pressures on mortgage rates over the next few months," Nothaft said.
The Mortgage Bankers Association on Wednesday reported an average 5.82 percent rate for a similar loan with an average of 1.07 points for the week ending Nov. 30 (see Inman News story for other rates from in the MBA survey).
Freddie Mac reported that rates on 15-year fixed-rate mortgage this week averaged 5.65 percent with an average 0.5 point, down from 5.73 percent last week and the lowest rate since the second week of October, 2005 average of 5.62 percent.
Five-year hybrid adjustable-rate mortgages (ARMs) indexed to Treasurys averaged 5.75 percent with an average of 0.5 point, down from 5.86 percent a week ago and the best rate since the week ending Oct. 27, 2005, of 5.63 percent.
One-year Treasury-indexed ARMs averaged 5.46 percent with an average 0.6 point, up from 5.43 percent last week, which was also the average rate this time last year.
30-year fixed rate at 5.6%; 10-year Treasury yield at 3.86%
Tuesday, December 04, 2007
Inman News
Long-term mortgage interest rates continued their decline Monday, and the benchmark 10-year Treasury bond yield edged down to 3.86 percent.
The 30-year fixed-rate average fell to 5.6 percent, and the 15-year fixed rate dipped to 5.18 percent. The 1-year adjustable slipped to 5.45 percent.
The 30-year Treasury bond yield was down at 4.32 percent.
Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.
Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
30-year fixed rate at 5.69%; 10-year Treasury yield at 3.95%
Monday, December 03, 2007
Inman News
Long-term mortgage interest rates fell for the fifth night Friday, and the benchmark 10-year Treasury bond yield inched up to 3.95 percent.
The 30-year fixed-rate average sank to 5.69 percent, and the 15-year fixed rate dipped to 5.27 percent. The 1-year adjustable slipped to 5.47 percent.
The 30-year Treasury bond yield was up at 4.39 percent.
Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.
Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.
In other economic news, the Dow Jones Industrial Average gained 59.99 points, or 0.45 percent, finishing at 13,371.72. The Nasdaq was down 7.17 points, or 0.27 percent, closing at 2,660.96.
