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May 2015



 

US home construction surges to fastest pace since 2007

May 19, 2015

US homebuilding jumps 20.2 percent in April, strongest clip since November 2007.

WASHINGTON (AP) -- U.S. homebuilders ramped up construction in April to the fastest pace in nearly seven-and-a-half years, hinting at newfound momentum for an economy that has struggled in recent months.

The Commerce Department said Tuesday that housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. That pace ranks as the fastest clip since November 2007.

Builders appear to have finally shaken off a turbulent winter that shut down construction sites and hampered growth across the economy. The sharp rebound in housing starts after disappointing data in March and February indicates that economic growth might accelerate after being close to flat in the first quarter. It also suggests that builders are responding to tight inventories of existing homes and increased buyer demand due to strong hiring over the past year and low mortgage rates.

"This report should help to assuage fears over the slowdown experienced by the U.S. economy in recent months," said Michael Dolega, senior economist at TD Bank.

Housing starts surged in the Northeast, Midwest and West, while slipping slightly in the South. Construction of single-family houses climbed 16.7 percent in April, an indication that sales of new homes should also rise in the coming months. Apartment building shot up 31.9 percent.

Approved building permits rose increased 10.1 percent from March to an annual rate of 1.14 million in April.

Sales of existing homes jumped 6.1 percent in March to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors said last month. But the market has just 4.6 months of supply, compared to six months in what economists consider to be a healthy market. An upswing in housing starts in April - which would put the rate of construction at its fastest clip in three months - could signal that builders are gearing up to meet demand.

Without more inventory coming onto the market quickly, home prices will likely rise, potentially putting them out of reach for thousands of would-be home buyers.

The fast-rising prices may be destabilizing several regional housing markets, according to an analysis by Florida-based appraiser Smithfield & Wainwright.

Home values in 14 states - including Colorado, Massachusetts and Oregon - are significantly higher than both the rental income those properties could generate and the cost of rebuilding those homes.

Appraisers have historically used these two measures to assess houses. This particular mismatch suggests that home prices cost at least 10 percent more than either of these measures, a sign that home prices may be at unsustainable levels and could stagnate or even plunge.

Despite the higher prices and increased demand, homebuilder confidence has ebbed in recent months.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday slipped to 54 this month, down two points from 56 in April. Any reading above 50 signals expansion, yet the decrease suggested that builders still see would-be homebuyers as cautious.

Optimism has faded as the economy has entered into a unique predicament: hiring is solid, yet overall economic growth is feeble.

Employers added 223,000 jobs in April, causing the unemployment rate to slip to 5.4 percent from 5.5 percent. The economy has gained about 3.1 million new jobs - and paychecks - over the past 12 months.

But the economic growth that those paychecks should fuel has yet to materialize. The U.S. economy expanded at an annual rate of 0.2 percent in the first quarter. Before the release of the home construction report, growth was on track for a dismal yearly rate of 0.7 percent in the second quarter, according to estimates by the Atlanta Federal Reserve.

Article Courtesy of:  AP & Yahoo Finance

 
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Traditional Sales of Homes Highest on Record
 

 

Naples, Fla. (May 22, 2015) - What makes a room full of real estate brokers happy? Record-breaking sales! This realization surfaced during a recent meeting where 10 NABOR? brokers reviewed the April 2015 Market Report released by the Naples Area Board of REALTORS? (NABOR?), which tracks home listings and sales within Collier County (excluding Marco Island).


The report showed that traditional sales comprised 94% of all closed sales as compared to non-traditional sales (foreclosures or short sales). 


Carmen Vasquez, owner/broker U.S. Prime Realty, pointed out that, "April 2015 had 1,095 traditional sales. This is the highest number of traditional sales in a month since we started tracking the NABOR? numbers back in 2009." 

 

Veteran Broker and Principal at Naples Realty Services, Inc. John Steinwand concurred with Vasquez and illustrated further that, "Not only did April register the highest percentage of traditional sales since 2009, but the data revealed the highest total number of closed sales since July 2009, and the lowest level of distressed property closings in the past six years. Just 10 short sales and 57 foreclosed sales were closed this April versus 330 total distressed sales back in July of 2009." 


April was a remarkable month for the real estate market with notable results in pending sales (properties under contract) of condominiums in the $2 million and above price category, which saw a 58 percent increase from 12 pending sales in April 2014 to 19 pending sales in April 2015. Relative to this increase was an increase in the same category's inventory, which rose by 74 percent from 34 condos in inventory in April 2014 to 59 condos in inventory in April 2015. 


Further, the April 2015 Market Report indicated that overall closed sales had positive gains in all price categories above $300,000 with the $300,000 to $500,000 category capturing the highest gain - 21 percent from 1,787 in the 12-months ending April 2014 to 2,162 in the 12-months ending April 2015.


The overall median closed price increased 13 percent in April from $250,000 in the 12-months ending April 2014 to $283,000 in the 12-months ending April 2015. This was fueled mostly by activity on both ends of the price spectrum. Homes in the $0 to $300,000 price category experienced a 10 percent increase in median home price from $168,000 in the 12-months ending April 2014 to $185,000 in the 12-months ending April 2015, while homes in the $2 million and above price category experienced a 9 percent increase in median home price from $2,900,000 in the 12-months ending April 2014 to $3,175,000 in the 12-months ending April 2015. 

 

According to Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc., "We can see some real trends when we look at the market with an historic comparison. For example, in the fall of 2013, the median closed price for single-family homes in the $0 to $300,000 price range increased 18 percent. For April 2015, there was only a 9 percent increase from $182,000 in the 12-months ending April 2014 to $199,000 in the 12-months ending April 2015." 


The self-correcting trend became even more apparent when Carroll compared activity from the report by neighborhood, "In July 2014, the median closed price for single-family homes in the Naples Beach area increased 36 percent. In April 2015, this area saw an 11 percent increase. I think the market played catch up between 2013 and 2014 and we are seeing a tempering of it now." 


The NABOR? April 2015 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR? April 2015 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:


* Overall pending sales decreased 2 percent from 1,231 in April 2014 to 1,210 in April 2015.


* Overall closed sales remained flat with no increase or decrease reported on a 12-months ending basis.

* Overall closed sales in the $300,000 to $500,000 price category increased 21 percent from 1,787 homes in the 12-months ending April 2014 to 2,162 homes in the 12-months ending April 2015.


* Overall median closed price increased 13 percent from $250,000 in the 12-months ending April 2014 to $283,000 in the 12-months ending April 2015.

* Overall inventory decreased 3 percent from 4,157 homes in April 2014 to 4,040 homes in April 2015.



* Inventory for single-family homes increased 4 percent from 2,206 single-family homes in April 2014 to 2,289 single-family homes in April 2015.
 

* Inventory for condominiums decreased 10 percent from 1,951 condominiums in April 2014 to 1,751 condominiums in April 2015.


* Average days on market decreased 28 percent from 99 days in April 2014 to 71 days in April 2015.


"Overall, April 2015 had a 5.06-month supply of inventory compared to a 34.78-month supply in April 2007," said Bill Coffey, Broker Manager of Amerivest Realty Naples. 


Many of the brokers who analyzed the April 2015 Market Report had recently returned from the National Association of REALTORS? Legislative Meetings & Trade Expo in Washington, DC, and concurred that sales activity in the Naples area, as also reflected in the report, is in line with the national average.

 

However, the April 2015 Market Report by NABOR? showed an 18 percent decline in the days on market to 76 days from 93 days a year ago. Yet according to a REALTOR? Confidence Index report published by Lawrence Yun, Senior Vice President and Chief Economist with the National Association of REALTORS?, the national average in March 2015 was 52 days. 


When you are ready to put your home on the market, look to a REALTOR? for the experience and knowledge you need to determine whether now is the right time to sell your home and ensure your next sale or purchase in the Naples area is a success. Contact a REALTOR? on NaplesArea.com?

 

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