Friday, March 21 2014
Veteran housing economist David Berson, formerly of Fannie Mae and PMI Group, shares his thoughts on what the public needs to know about the housing market this year. First, he predicts that 2014 will be the strongest year for housing activity since prior to the recession. Most economists expect an improved job market in the months ahead, with employment growth accelerating and the jobless rate continuing to fall. This will be the key factor improving housing demand in 2014, even if mortgage rates climb and affordability declines. Additionally, demographics should start to favor housing activity. To this end, the demographic factor most affecting the residential property sector is household formation. "Household formations are affected by the job market, as people 'double-up' when worried about their job and income-earning prospects," Berson writes. "The Great Recession and the modest job recovery in the years following induced many people who might have lived independently to move in together." Berson and colleagues estimate the economy is short by more than 3 million households. If the economy expands at a faster clip in 2014, bringing a more rapid rate of job creation, that should translate into more households, which in turn should raise housing demand. Finally, Berson says mortgage availability should not worsen between now and the end of December and may actually expand. Source: http://realtormag.realtor.org/daily-news/2014/03/20/economist-what-2014-holds-for-real-estate Monday, February 20 2012
The question at the top of Evansville homebuyers and Evansville sellers is familiar: where are home prices heading? Realistically, the truth this February is the same as always: it is no less risky to predict the real estate market than it is to predict the stock market.
Nonetheless, keeping up with national trends and the media chatter means staying abreast of the factors that ultimately affect Southwest Indiana home prices. And a few smiles are appearing on the faces of those who have waited a very long time to read anygood news.
The backdrop was not pretty. No one could miss the majority of last month’s End Of Year headlines. Last year finished with reports of a steeper-than-expected drop in home prices in November despite a steady rise in consumer confidence. In fact, Reuters reported that prices in 20 metro areas dropped 0.7 percent for the second month in row, which was 0.2 percent greater for November than economists had predicted. But increasingly, spots of optimism are appearing in the national press. The Wall Street Journal recently quoted Capital Economics’ economist Paul Dale’s comments on the 5% month-over-month gain in December. To Dale, “it is clear that a housing recovery is now well underway.” Then, by the start of February, Nielsen reported that consumer confidence had jumped six points to 83. Another measure that seems to argue for a strengthening future is the inventory of previously owned homes. At the end of the year, 2.38 million homes were listed. That is the equivalent of a 6.2 months’ supply -- within hailing distance of the 6 months that is considered a healthy level.
Adding to that view is The National Association of Home Builders/First American Market Index which shows that the number of improving local markets doubled from December 2011 to January 2012. Even keeping in mind where these markets had started from, the direction is the right one.
The National Association of Realtors is not alone in pointing out the special opportunities that now exist for both buyers and sellers. First-time buyers know that today they stand to benefit by purchasing at record lows. Move-up buyers are more able to take a price hit on the homes they are selling because of the low prices and substantial interest rate savings at the other end of the transaction.
Of course, home prices are only one factor in a sale, as are the compensating intangibles like comfort and lifestyle. If you are thinking of buying or selling a property, call me today for a complimentary consultation. You can reach me on my cell phone at 812-499-9234 or email me
Tuesday, November 22 2011
The square feet of new homes is expected to continue its decline in future years. The National Association of Home Builders predicts that U.S. houses will average 2,152 square feet in 2015, which will be down 10 percent compared to last year.
Smaller homes near restaurants and retail may be the most in demand as the housing market crawls out of its slump, housing experts say. McMansions--which are at least 2,600 square feet--were popular during the years of the housing boom, but now are only desired by 18 percent of households today and is expected to drop more, according to a survey by Trulia. "Baby boomers are trading down. They don't need the McMansion, and they don't want to drive as much," Jed Kolko, Trulia’s chief economist, told Money Magazine. Source: “A Smaller House Will Make a Big Difference,” Money Magazine (Nov. 14, 2011) Saturday, April 10 2010
Economist Says, Foreclosures Notwithstanding, Housing Inventory Isn't Keeping Up With Population Growth Privately owned housing starts in December 2009 were at a seasonally adjusted annual rate of 557,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4% less than where it was in November, which had 580,000 housing starts. Housing completion numbers also contribute to this dire picture, with December 2009 privately owned housing completions reaching a 768,000 seasonally adjusted annualized rate. That's down 11.2% from the 865,000 completions in November and down 25.3% from the 1,028,000 completions in December 2008. Some people might shrug these statistics off considering the number of foreclosures in the market. To them, Wesbury told Steve Forbes, "Yes there's foreclosures coming into the market, but we're only starting right now ... We're starting one-third of the houses we need just to keep up with population growth, and that can't last." There were 315,716 properties last month with foreclosure filings according to RealtyTrac. These filings include default notices, scheduled auctions and bank repossessions. Though last month's filings were 15% more than a year ago, it was 10% less than December's. Privately owned housing starts in December 2009 were at a seasonally adjusted annual rate of 557,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4% less than where it was in November, which had 580,000 housing starts. Housing completion numbers also contribute to this dire picture, with December 2009 privately owned housing completions reaching a 768,000 seasonally adjusted annualized rate. That's down 11.2% from the 865,000 completions in November and down 25.3% from the 1,028,000 completions in December 2008. Some people might shrug these statistics off considering the number of foreclosures in the market. To them, Wesbury told Steve Forbes, "Yes there's foreclosures coming into the market, but we're only starting right now ... We're starting one-third of the houses we need just to keep up with population growth, and that can't last." There were 315,716 properties last month with foreclosure filings according to RealtyTrac. These filings include default notices, scheduled auctions and bank repossessions. Though last month's filings were 15% more than a year ago, it was 10% less than December's. Aspiriant Chief Investment Officer Jason Thomas doesn't see the foreclosure situation getting better until the labor market picks up. "So many people are getting to a point where they just can't hold on anymore and we may see another wave of that if we don't see a pretty robust turnaround in the labor market," he says. | |||||||
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