Pending Home Sales Jump 8.2%
home sales
The National Association of Realtors (NAR) in it’s just released report said its pending home-sales index rose to 97.6 from a downwardly revised 90.2 reading in January.
“Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home-buyer tax credit,” the NAR said.
New Home Sales Rise 5% In The West
new home sales
Yesterday the National Association of Realtors reported that existing home sales for December were off 16.7% month-to-month. If that’s not bad enough, today the Census Bureau said new home sales plunged to a 9-month low in December.
These results are the weakest since March. Indications are that demand remains sluggish despite newly expanded tax incentives to spur sales.
The good news in this report is that new home sales in the west actually rose 5 percent On the other hand, the Midwest saw sales of new homes plummet by 41 percent. In the south, sales were off 7 percent.
San Diego real estate agent
Existing Home Sales Declined in August
home sales
The National Association of Realtors said existing home sales declined 2.7 percent in August compared with a 7.2 percent rise in July. Economists had been expecting a fifth straight increase, so the results surprised most analysts, who had expected sales to rise.
Here in San Diego, it seems that almost all the buying activity is in the lower price range of under $400,000. First-time buyers have purchased almost one in three homes in August. Together with investors snapping up foreclosures, they have provided most of the momentum in the market this year.
In the West, sales of homes under $100,000 were up 150 percent from a year ago. Sales of homes priced at over $250,000 were down nationally, with the biggest drop of nearly 40 percent coming among homes priced over $2 million. Orange County real estate
Median Price for a Single-Family Home in Q1 was 13.8% Lower
The National Association of Realtors (NAR) reported that the median price for a single-family home in Q1 was 13.8% lower than in Q1 a year ago. But first-time buyers represented half of all purchases and many went for foreclosures and short sales. These “typically are selling for 20% less than traditional homes,” according to the NAR, and this skews median prices downward. On a hopeful note, 18 of the 152 metro areas in the survey reported PRICE INCREASES.
Equally hopeful was the fact that in many areas, the number of homes for sale continued to drop in April. Some analysts see this as a sign the housing market is nearing a bottom, especially since inventories have historically increased in April.
Finally, at last week’s NAR conference, the CEO of the International Council of Shopping Centers pointed out that demographics are in our favor. The high school graduating class in 2010 will be the biggest in our country’s history. As that huge cohort moves forward, it will generate lots of economic prosperity, beginning in the near future.
>> Review of Last Week
LET’S TAKE OUR GAINS… Well, we had a nice two-month rally in which the Dow headed north eight out of nine weeks, so it wasn’t surprising that a slew of investors finally sold off their holdings and took their gains. This of course drove prices down, so last week the stock market indexes went lower across the board.
It wasn’t just profit taking that sent stocks down. Wednesday, April Retail Sales came in at –0.4%, which investors didn’t much like. But if they had looked more closely, they would have seen the decline was mostly in two categories – gas stations and grocery stores, where experts don’t expect weakness to persist. Take out these sectors and retail was down just 0.1%.
For the rest of the week, the Consumer Price Index (CPI) came in flat, which shows inflation is in check, but the Core CPI number was up a little more than expected. Industrial Production was down for April, though better than expected. The NY Empire State Index, a good measure of manufacturing, shot up for the second month in a row, hitting its highest level since last August. University of Michigan Consumer Sentiment came in higher than anticipated. Finally, the President of the Dallas Federal Reserve averred that “the U.S. economy has pulled back from the edge of the abyss.”
Nonetheless, the Dow slipped 3.6% for the week, to 8268.64; the S&P 500 dropped 5.0%, to 882.88; and the NASDAQ slid 3.4%, to 1680.14.
Even though stocks were falling, things weren’t all that terrific in the bond market, though prices held on well enough. The FNMA 30-Year 4.0% bond, a mortgage backed security closely tied to mortgage rates, closed Friday at $100.12, down only 12bp. Mortgage interest rates were largely unchanged for the week, remaining at historically low levels.
>> This Week’s Forecast
HOUSING PLUS A FEW OTHER ITEMS… They’ll be taking the temperature of our favorite industry once again with April Housing Starts and Building Permits on Tuesday morning. Wednesday we’ll have the minutes from the Fed’s April 29 meeting. Thursday the Philadelphia Fed Index gives a pretty good read on manufacturing.
Corporate earnings reports for Q1 have slowed to a crawl, but Hewlett-Packard, Target, Deere and Home Depot will be interesting to watch.
This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego real estate
Existing-Home Sales Up – Home Prices Fall
The National Association of Realtors reported that existing home sales rose 5.1% in February. This was the largest percentage gain since July 2003. Sales of foreclosed properties or short sales accounted for about 45% of transactions last month.
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For the week of March 9, 2009 – Vol. 7, Issue 10>> Home Base
INFO THAT HITS US WHERE WE LIVE Last Tuesday, the National Association of Realtors said their Pending Home Sales Index for January dropped 7.7% from December and was down 6.4% year-over-year. But an NAR index that tracks housing affordability rose to a record level in January. This was because the combination of mortgage rates, family income and home prices in January were "the most favorable since tracking began in 1970," according to the group.
The NAR also forecasted that existing home sales would rise 0.3% this year, then 5.8% in 2010. The median price would fall 4.9% this year, but rise 3.9% in 2010. New home sales would be down over 39%, with the slowdown in building and the need to trim inventory. But the median price for new homes would drop only 3% this year, then rise 4.2% in 2010. All these facts, figures and forecasts point to one thing. If people find good value and a good mortgage rate on a home they love, this is the year to buy.
Wednesday, the US Treasury released the guidelines f or its Making Home Affordable programs. The Home Affordable Refinance program will help 4 to 5 million homeowners get into a fixed rate mortgage at today's lower rates, even though their homes have lost value. The Home Affordable Modification program will help 3 to 4 million at-risk homeowners avoid foreclosure by reducing their monthly mortgage payments. Both programs will help keep people in their homes and stabilize prices. I have a summary of the guidelines and I'm happy to help people through them.
>> Review of Last Week
ROUGH RIDE… It was another week when all the major stock market indexes took a bumpy trip down, with the S&P500 at its lowest level in 12 years. The reasons were familiar…concern about the financials and uncertainty about when things will turn around for the credit markets and the economy.
The week got started with big financial player AIG owning up to a big $61 billion Q4 loss. The US Treasury responded by saying it will provide another $30 billion if needed. We also had a couple of big banks cutting dividends to save capital (actually a rather rational move in today's environment). A bunch of retailers reported declining same-store sales for February, but Wal-Mart's same-store sales rose 5.1% and they raised their dividend! We wound up the week on=2 0a disappointing February jobs report, with the unemployment rate now at 8.1%, a tad higher than expected.
It wasn't that hard to spot positive signs, although neither Wall Streeters nor the media seemed to pay much attention. Consumer spending rose in January, as did personal income. In fact, after-tax, inflation-adjusted income has now gone up three straight months. No one thinks consumer spending will explode, but the worst may be over in that department. Meanwhile, the personal savings rate increased to 5% in January, its highest level since 1995.
For the week, the Dow fell 6.2%, to 6626.94; the S&P 500 went down 7.0%, to 683.38; and the NASDAQ slid 6.1%, to 1293.85.
This time around, the bad week in stocks gave us a good week in bonds, so the benchmark 10-year Treasury's price went up. Its yield, which runs counter to price, went back down below the 3% threshold, settling at 2.823%. The mortgage rate situation continues to be very very appealing.
>> This Week’s Forecast
ALL EYES ON WASHINGTON… This Thursday the House Financial Services Committee will meet on mark-to-market accounting. Many analysts and industry groups feel that suspending mark-to-market accounting could ease capital concerns at banks. This would give them increased capacity to lend, which economists feel is key to our recovery. The cost to taxpayers? Nothing. The government suspended mark-to-market accounting in 1938 and did not reinstate it until right when this crisis began in late 2007. Hmmmmm…
Not much in the way of corporate earnings and just one significant economic report – Retail Sales on Thursday.
>> The Week’s Economic Indicator Calendar
Economic Calendar for the Week of Mar 9 – Mar 13
|
Date |
Time (ET) |
Release |
For |
Consensus |
Prior |
Impact |
|
W |
10:30 |
Crude Inventories |
3/6 |
NA |
NA |
Moderate |
|
Th |
08:30 |
Initial Jobless Claims |
3/7 |
NA |
639K |
Moderate |
|
Th |
08:30 |
Retail Sales |
Feb |
–0.4% |
1.0% |
HIGH |
|
Th |
08:30 |
Retail Sales ex-auto |
Feb |
–0.2% |
0.9% |
HIGH |
|
Th |
10:00 |
Business Inventories |
Jan |
–1.1% |
–1.3% |
Moderate |
|
F |
08:30 |
Trade Balance |
Jan |
–$38.2B |
–$39.9B |
Moderate |
|
F |
10:00 |
U of Mich Consumer Sentiment-Prelim |
Mar |
56.3 |
56.3 |
Moderate |
This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego homes for sale
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Commercial Real Estate the Next Bailout?
With all the focus on residential real estate, very little attention is being paid to the commercial real estate market.
In a report by the National Association of Realtors, it said in part:
The fundamentalists in commercial real estate are feeling the stress of a slowing economy and troubled credit markets. Job growth, particularly in office-using industries, has been declining. Vacancy rates are expected to rise in all sectors due to decreased demand. The financial decline is squeezing credit availability for commercial projects. As a result, transaction activity is down over 50 percent compared with last year.
With the economy in a trail-spin, it seems that almost daily we hear about major retail stores going out of business or closing many stores. This is the major problem for commercial real estate. If 'anchor' stores in shopping centers close, the 'traffic' to an individual center is drastically impacted. Therefor, the impacted centers' smaller, remaining tenants, could see their sales drastically decline. Thus, not only the value for an entire shopping complex can be affected, but it's very existence could be at stake. San Diego income property
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No Positive Spin From The National Association of Realtors
Just released (see prior post) May pending home sales were the third lowest on record. But, the real story was that even Yun could not come up with the usual positive spin. Mr. Yun said, "The overall decline in contract signings suggests we are not out of the woods by any means".
I recall Mr Yun was saying just a few months ago that the second half of this year would see a rebound in the real estate markerts. Wait, I guess he must have ment 2010 or 2011 or 2012 would see a rebound. Oh, I miss the good old days of all the San Diego real estate 'insiders' saying "What bubble"?
Does the National Association of Realtors really need an economist?
I've been a member of the National Association of Realtors (NAR) for over 30 years and I'm hard-pressed to remember the Association forecast being anything but overly optimistic.I'm also a member of the San Diego Association of Realtors and the California Association of Realtors. I have nothing against realtor associations but I do have an issue with these associations putting out an economic forecast. How can any forecast done by an economist who is an employee of a trade association, whose mantra is “It's always a good time to buy real estate," possibly put out an accurate forecast for real estate trends if those trends are anything other than positive.So is the association actually benefiting, or for that matter, providing proper guidance to the general public by issuing continued rosy forecasts.
Only occasionally are the forecasts sprinkled with a milk-toast opinion of possible market slowing.The real estate-buying public is becoming more sophisticated and is able to access multiple sources of information through the Internet. It's my opinion that the constant overly optimistic outlook of the National Association of Realtors’ chief economist is making the association and all its members look foolish to say the least.
In February of 2005, then NAR chief economist Mr. Lereah published a book with an exceedingly long title. This book is titled: “Are you missing the real estate boom? The boom will not bust and why property values will continue to climb through the end of the decade — and how to profit from them.” Shortly after the publication of this book, many real estate markets including San Diego's, took a decidedly downward trend which has continued through to today.NAR’s December 2005 forecast for 2006 said existing home sales would fall 3.7% and new home sales would fall by 4.8%. What actually happened, from data released in December 2006, existing home sales fell 8.6%, more than twice the NAR is forecast, and new home sales fell 17.8%, which was almost 4 times more than the predicted forecast.
In December 2006 the chief economist for the NAR said: “Most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards.” It was stated in this report that existing home sales were expected to be off 1% and new home sales to fall 9.4%. What actually occurred for 2007 was that existing home sales took a fall of 12.3%, and not the 1% predicted by the NAR. New home sales were down about 25%, again, off from the original 9.4% decline projected by the National Association of Realtors.
Now for 2008, the NAR is projecting existing home sales will rise very slightly, and the median home price should also rise. Also projected is that new home sales will continue to fall sharply in the range of about a 12% drop. The report also speculates that for the largest part of the market, existing home sales, the bottom has come, and 2008 will be a turning point.
Is the NAR's current projection, likely to occur? With the Fed dropping interest rates hand over fist, I think there is a 50-50 possibility that finally NAR’s forecast may be close to reality. If the housing market numbers for 2008 come anywhere close to NAR’s projection, will it vindicate the necessity for the association having an economist on staff? To me it's kind of like a broken clock; it will be correct at least twice during a 24-hour period.
Personally I believe the NAR should leave the forecast up to the government and the Wall Street economists and just report the actual housing numbers. Let's face it; it's not always a good time to buy real estate. Let's try to enhance the general public’s perception of Realtors by sticking to the facts, and leaving the projections and forecast to others. San Diego California Realtors