Existing-Home Sales Retreat 1.8% in June

Posted on July 26, 2017 by Debbie Prosser

WASHINGTON (July 24, 2017) — Existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only the Midwest saw an increase in sales last month.

Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

Added Yun, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”

The median existing-home price2 for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64th straight month of year-over-year gains.

Total housing inventory3 at the end of June declined 0.5 percent to 1.96 million existing homes available for sale, and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.

First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90 percent in June from 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.

“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown, a Realtor® from Alamo, California. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”

All-cash sales were 18 percent of transactions in June, down from 22 percent both in May and a year ago, and the lowest since June 2009 (13 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.

Distressed sales5 – foreclosures and short sales – were 4 percent of sales in June, down from both May (5 percent) and a year ago (6 percent) and matching last September as the lowest share since NAR began tracking in October 2008. Three percent of June sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales

Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6 percent above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6 percent from June 2016.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6 percent higher than a year ago. The median existing condo price was $245,900 in June, which is 6.5 percent above a year ago.

Regional Breakdown

June existing-home sales in the Northeast fell 2.6 percent to an annual rate of 760,000, but are still 1.3 percent above a year ago. The median price in the Northeast was $296,300, which is 4.1 percent above June 2016.

In the Midwest, existing-home sales rose 3.1 percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7 percent from a year ago.

Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.

Existing-home sales in the West declined 0.8 percent to an annual rate of 1.21 million in June, but remain 2.5 percent above a year ago. The median price in the West was $378,100, up 7.4 percent from June 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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You Could Be Wrecking Your Home & Not Know It

Posted on July 20, 2017 by Debbie Prosser

First-time homeowners often make these 9 common — and avoidable — mistakes. Don’t be one of them.

You haven’t felt like this since you were a teenager. You have a crush on your new house. (You’re officially a home buyer — wait — owner!)

It’s soooooo great. You love its quirks. It’s your very first home, and you want to do everything right.

The feeling is fun, but also scary: You remember too well how badly you screwed up that first crush as a teenager (so embarrassing. Don’t ask).

Could you screw this up too?

No need to freak out. You can make this love a lasting one. For now, keep an eye out for these common no-nos that can result from good intentions.

#1 Using Bleach as a Cure-All

If bleach is your chicken soup for whatever ails your home, proceed with caution.

Bleach can:

  • Eat through the sealant on stone surfaces like granite
  • Discolor laminate and colored grout
  • Fade enamel and acrylic tubs
  • Dissolve vinyl and linseed-based flooring like linoleum
  • Corrode seals within the disposal

In addition, bleach kills mold on non-porous surfaces, but can feed future mold growth on absorbent and porous materials, like grout. Yep, whitening grout with bleach creates a mold feeding ground. Whoops.

Better options? Water and vinegar are all you need for most cleaning jobs. If you’ve got a heftier mold or mildew issue, apply a commercial anti-fungal product.

And to clean your disposal, just dump cold water and ice cubes down the hatch.

#2 Training Ivy to Climb Your House

You’ve dreamed of living in an ivy-covered English cottage since childhood. Well, sorry for this, then:

“Anything that climbs on the house will damage it,” says Marianne Binetti, a speaker and author who leads garden tours around the world.

The horticulture expert made the mistake herself.

“It looked cool for a while, but it dug into the siding so even when we pulled it off, it left damage. And it climbed up the drain pipe and tore the gutter off the house,” she says.

By sending roots beneath siding and shingles, ivy enlarges tiny cracks in brick and wood, introducing entrances for moisture and insects, says Jay Markanich, a certified home inspector based in Bristow, Va.

#3 Relying on Chemical Drain Cleaners

Clogged sink! Again! Pay a plumber more than $100, or grab a $10 product at the store? You can totally handle this one yourself, right?

Possibly. But the most common active ingredients in these solutions, hydrochloric acid and sulfuric acid, can erode your pipes.

Even the old baking-soda-and-vinegar medley can result in cracked pipes, as the reaction causes a build-up of pressure.

Old-fashioned “mechanical” methods — your plunger, a drain snake, or a handy $2 gadget called the Zip-It — are safer and more effective, according to “Consumer Reports.”

And if that fails, that call to the plumber doesn’t sound so bad compared to an eroded or busted pipe, no?

#4 Using Glass Cleaners on Mirrors

Your newfound house crush has you scrubbing and spritzing everything. Look at you being so lovingly domestic!

But be cautious with your mirrors. Spraying can lead to what’s ominously called “black edge” — created when a liquid seeps beneath the reflective backing and lifts it.

Instead, clean mirrors with a lint-free microfiber cloth, dampened with warm water — especially mirrors in expensive, installed items like vanities and closet doors.

Avoid the edges and dry immediately with a second cloth.

#5 Planting Trees ThisClose to Anything

Kind of like adopting an adorable, tiny piglet on a whim, you’ve got to remember how a baby tree is going to grow, and what it’s going to require at maturity.

You probably don’t want a 70-pound pig digging up your daisies, and you definitely don’t want a tree root pushing through your driveway, sidewalk or — so much worse! — your foundation.

And watch out for evergreens. If planted too close to the house, they cast too much shade, encouraging mold growth, Binetti says.

Position trees according to its maximum height, crown size, and root spread. For perspective, even a small tree reaching less than 30 feet tall needs at least 6 feet of clearance from any exterior wall, according to the Arbor Day Foundation.

#6 Using the Wrong Caulk

As a dutiful homeowner, when you see failing caulk, you fix it. But the term “caulk” is as broad as the word “glue.”

There’s kitchen and bath caulk, concrete caulk, gutter caulk, mortar caulk — and that’s just the tip of the caulk-berg. And just like you’d never fix broken pottery with a glue stick, you don’t want to pick the wrong caulk either.

Markanich sees plenty of damage done when the wrong caulk is used. Such as using silicone caulk (totally great on non-porous surfaces like bathtubs) on concrete or brick or other porous surfaces. It won’t adhere, and moisture can seep in, compromising the bond and the structure.

Before heading to the store, check an online buying guide to find the right match for the project you’re doing. Odds are there’s a specific caulk just for it.

#7 Over-Sealing Countertops

Take care of your countertop, but don’t smother the darn thing.

Applying sealant too frequently can create a cloudy or streaky appearance on surfaces like natural stone, concrete, butcher block, and glass, which typically only require occasional resealing to resist stains. (Quartz, laminates, and solid surfaces like Corian are best left sans-sealer.)

How to know it’s time to reseal? Drip some water on a high-use area of the countertop. If the water doesn’t remain beaded after 15 minutes, consider resealing.

But always defer to your manufacturer’s recommendations. Different materials can have different needs.

#8 Over-Mulching

Nothing feels closer to giving your home a hug than being elbow deep in a landscaping project. But when it comes to mulch (which is so great, for so many reasons), it turns out elbow deep is a little too much love.

A layer thicker than 3 inches can suffocate plants and prevent water from reaching roots, so spread thoughtfully.

#9 Piling Firewood Next to Your Exterior Wall

Your fireplace is the highlight of your home. You love it. That’s why you keep your firewood right outside the back door, for easy access.

Oops. Storing firewood against your home’s exterior walls is akin to opening a B&B for termites.

In fact, “anything that creates a dark, climate-controlled area near the house will invite termites” and other pests into your home, Markanich says.

In one of the worst termite cases he’s seen, he found an enormous termite colony on an exterior wall in a bathroom, which got its foothold in a pile of bricks outside.

Twenty feet is a safe distance from home for firewood — and still not too far to go to fuel your awesome fireplace.

Visit HouseLogic.com for more articles like this.  Reprinted from HouseLogic.com with permission of the National Association of Realtors®.

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Mortgage Rates Push Above 4% Average

Posted on July 14, 2017 by Debbie Prosser

Daily Real Estate News | Friday, July 14, 2017

Average mortgage rates are moving up, posting increases for the second consecutive week.

“After fully absorbing the sharp increases in Treasury yields over the past couple of weeks, the 30-year mortgage rate has cleared the psychologically important 4 percent mark for the first time since May,” says Sean Becketti, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending July 13:

  • 30-year fixed-rate mortgages averaged 4.03 percent, with an average 0.5 point, increasing from last week’s 3.96 percent average. Last year at this time, 30-year rates averaged 3.42 percent.
  • 15-year fixed-rate mortgages averaged 3.29 percent, with an average 0.5 point, increasing from last week’s 3.22 percent average. A year ago, 15-year rates averaged 2.72 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.28 percent, with an average 0.5 point, rising from last week’s 3.21 percent average. Last year at this time, 5-year ARMs averaged 2.76 percent.

Source: Freddie Mac

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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84% of Americans See Homeownership as Good Investment

Posted on July 13, 2017 by Debbie Prosser

 WASHINGTON (July 12, 2017) — According to the National Association of Realtors®’ 2017 National Housing Pulse Survey, concerns over housing affordability show clear demographic divides especially among unmarried and non-white Americans. More than five out of 10 unmarried and non-white Americans view the lack of available affordable housing as a big problem, compared to only 40 percent of married and white Americans.

The survey, www.nar.realtor/reports/housing-pulse-surveys, measures consumers’ attitudes and concerns about housing issues in the nation’s 25 largest metropolitan statistical areas and found that 84 percent of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007. Yet six in 10 said that they are concerned about affordability and the rising cost of buying a home or renting in their area. Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.

Nationally, 44 percent of respondents categorized the lack of available affordable housing as a very big or fairly big problem. In the top 25 densest markets, more than half see the lack of affordable housing as a big problem, an increase of 11 percentage points from the 2015 National Housing Pulse Survey. Low-income Americans, renters and young women most acutely feel the housing pinch. There is also greater concern about affordable housing among the working class (65 percent) than for public servants such as teachers, firefighters or police (55 percent).

“Despite the growing concern over affordable housing, this survey makes it clear that a strong majority still believe in homeownership and aspire to own a home of their own. Building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood remain the top reasons to own a home,” says NAR president William E. Brown, a second-generation Realtor® from Alamo, California and founder of Investment Properties.

Eight out of 10 believe that the most important financial reason to own a home is that the money spent on housing goes towards building equity rather than to a property owner. Paying off a mortgage and owning a home by the time you retire is the next most important financial reason for buying a home followed by ownership being a good investment opportunity to build long-term wealth and increase net worth.

When asked about the amount of down payment needed for a mortgage, four in 10 respondents believe that a down payment of 15 percent or more is necessary. Seventy percent feel that a reasonable down payment should be 10 percent or less, according to the survey. Misperceptions about higher down payment requirements were most prevalent in bigger cities and by older adults.

Apparent confusion about down payment requirements most likely added to non-owners concerns about affordability. NAR’s Profile of Home Buyers and Sellers found that the median down payment for first-time buyers has been 6 percent for three straight years and 14 percent for repeat buyers in three of the past four years.

Over 50 percent of respondents strongly agree that homeownership helps build safe and secure neighborhoods and provides a stable and safe environment for children and family members.

The survey also found that four in 10 Americans say paying their rent or mortgage is a strain on their budget. Those most likely to say their mortgage is a strain have incomes under $60,000, are residents of New York City or the Pacific coast, are under the age of 50 and non-white. Just over half, 51 percent, of respondents said they were willing to strain their budget for a better living environment and would pick a neighborhood with better schools and job opportunities even if housing prices are a bigger strain on their budget. Those most willing to strain their budget are disproportionately married, upper income and living in the suburbs. Overspending on homes is more prevalent in Northeastern cities (36 percent), the Mountain West (34 percent) and the Pacific coast (33 percent).

The 2017 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program, which aims to position, educate and help Realtors® promote housing opportunities in their community, in both the rental and homeownership sectors of the market. The telephone survey polled 1,500 adults nationwide and has a margin of error of plus or minus 2.5 percentage points.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

 

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4 Things Home Inspectors Don’t Often Check

Posted on July 5, 2017 by Debbie Prosser

Daily Real Estate News | Wednesday, July 05, 2017

Most home inspectors carefully scrutinize a house from top to bottom, many with checklists that contain more than 1,600 features to evaluate. But some items require a specialist for a more thorough evaluation.

The fireplace and chimney

Inspectors often open and shut dampers to make sure they’re working properly. They may shine a flashlight up the chimney to look for any obstructions. But for anything further, buyers likely will need to hire a fireplace inspector to look for things like soot and creosote buildup, which are possible fire-starters. Those extra inspections could cost anywhere from $80 to $200.

Foundation issues

A geotechnical or structural engineer may need to be brought in if a buyer has concerns about the ground underneath the home, such as whether any shifting, tilting, or sinkholes have caused damage. Professionals will test the soil for several potential problems. Basic testing likely will cost between $300 and $1,000, while more invasive testing can cost upwards of $5,000. Buyers on a budget might consult a free site called  PlotScan, which reveals any history of sinkholes and other natural catastrophes in the vicinity of the home, to better understand whether they need further inspection help.

Well and septic systems

Some home inspectors trained to evaluate septic systems may be willing to do an extra inspection for an added fee to test a home’s well water and septic system. Otherwise, buyers will have to hire a well inspector. These professionals will collect water samples to test in a lab for coliform, arsenic, and other harmful bacteria and chemicals. They’ll also make sure that seals, vents, and screens have been properly maintained and that the well and pump are producing enough water. That typically will cost about $250 for an inspection.

Roof

“We’ll go up on roofs if it’s safe,” says Frank Lesh, executive director of the American Society of Home Inspectors. “But if it’s raining or it’s too high, we’re not able to get to it.” A specialized roof inspection, which costs about $500 to $750, offers a closer look. Some roof inspectors will even do an initial consultation for free. Those who don’t go on the roof can sometimes conduct an infrared inspection to look for any temperature differences along the roof to see where heat or air conditioning might be escaping.

Source: “6 Shocking Things Your Home Inspector Won’t Check,” realtor.com® (June 28, 2017)

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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4 Curb Appeal Projects to Max Out Your Home’s Value

Posted on June 30, 2017 by Debbie Prosser

The yard of your dreams just might be more achievable than you thought.

You’ve been spending so much time on projects inside your home (like that new shower you have to drag yourself out of), that your front yard is starting to scream for a bit of attention.

Poor neglected, thing.

You know your yard has some super curb appeal potential, but where to begin?

Check out the National Association of REALTORS®’ 2016 Remodeling Impact Report: Outdoor Features (full disclosure: NAR is HouseLogic’s sponsor). It’s got some interesting data on how landscaping affects home value, especially those with tons of curb appeal. They beat out all indoor projects when it comes to adding value to your home!

Below are four projects with so much curb-appeal juice, any money you invest in them is likely to pay you back much more.

#1 Add or Replace a Few Design Basics

Every few years, you overhaul your closet, replacing your worn-out basics with a few new pieces to ramp up your wardrobe. Why not do the same with your yard? Give it a basic makeover so it has some good, classic, value-boosting “bones” to build upon.

Nicely landscaped front yardImage: Night and Day Landscape Design

Landscape design basics like:

  • A winding flagstone walkway
  • A couple of stone planters (6 feet by 2 feet)
  • A few flowering shrubs
  • A deciduous tree about 15 feet tall
  • Quality mulch

Why you can’t go wrong: The median cost for this makeover is $4,750. But the recoup (how much more your house would sell for after doing this project) is $5,000! Pretty sweet, right?

Experts call it “softscaping.” But basically, it’s adding plants in a designed, intentional way that makes your yard interesting to look at year-round.

It’s a great project if your yard is already in pretty good shape with some basic design elements mentioned above.

A typical softscaping project includes:

  • Five trees
  • 25 shrubs
  • 60 perennials
  • Natural edging
  • Boulder accents

Why you can’t go wrong: You’ll invest about $7,000, but you could recoup every cent in home value, according to the Report. Plus, here’s what the report doesn’t include: You’ll get super energy savings.

Who doesn’t love lower utility bills?

Just three trees in the right location can save up to $250 a year in heating and cooling costs, says the source for energy-saving stats: the U.S. Department of Energy.

Shade trees help boost curb appealImage: Robin Zebrowski

#3 Build a Deck or Patio if You Don’t Have One

If you’re spending sunny days admiring the great outdoors from indoors, it’s time for a change to get you outside… like finally building that deck or patio you’ve been dreaming of.

#4 Heap Loads of Love on Your Lawn

Yep, you read that right. Especially if you know you’re going to sell in the next year or so.

It’s the easiest project to do — and it has a whopping ROI of 303%!

  • Fertilize
  • Aerate
  • Weed
  • Rake

Why you can’t go wrong: It’s the cheapest project to do with an annual cost of only $330. Every year, you’ll reap the benefits of a lush, barefoot-friendly lawn.

(But note that unlike the other landscaping features listed in this article — deck, patio, hardscaping, trees, etc. — you’ll only get that fabulous 303% ROI on your maintenance costs for the year right before you sell. That’s because lawn maintenance has to be repeated annually, unlike the other projects).

is a Virginia-based writer who’s looking for a historic property to call her first home – the creakier the wood floors, the better.

Visit HouseLogic.com for more articles like this.  Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®

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Air in Green Homes May Be A Health Risk

Posted on June 27, 2017 by Debbie Prosser

Daily Real Estate News | Tuesday, June 27, 2017

Energy-efficient homes built too tightly have building experts warning about the potential health impact on owners. A home sealed efficiently can be great for reducing heating and cooling costs and managing its environmental impact. But the home itself still needs to breathe, some experts warn.

“Many homeowners are now having trouble with their more tightly built houses because the homes lack the ventilation necessary to get the stale inside air to the outside of the house and bring fresh air inside,” Remodeling writes.

Bryan Henson, president of Allen Construction in Santa Barbara, Calif., says a house that’s sealed up completely would become a toxic environment to humans.

The World Health Organization estimates that 4.3 million people worldwide die each year from indoor air pollution. Cases of asthma are on the rise, and asthma can be triggered by indoor contaminants such as mold, dust, and dander.

More homeowners are questioning their indoor air quality and its impact on their health, sparking a growing interest in the “healthy home” concept. Healthy home systems tend to focus greatly on indoor air quality by providing filtered fresh air into the home.

For healthier air, homeowners need to consider their home’s air flow. In some homes, the air may be pushed down through the attic into the home or come out from a crawlspace through the living area and out the attic. The problem with crawlspaces, building experts note, is that they often contain moisture, soil gases, and even rodents and their droppings. Indoor air space needs to be properly sealed off from the crawlspace and attic, and older homes may need more sealing off because of their older toxicity, such as lead paint, says Henson.

To help gauge how healthy a home is and find areas worth improvement, homeowners can take a quiz made by Hayward Healthy Home. The Pharos Project lists different products and includes their chemical ingredients and potential hazards to homeowners’ health. More resources for improving a home’s health and indoor quality include The Healthy Building Network, the Environmental Protection Agency, and the Indoor Air Quality Association.

Source: “Breathing Easy: An Introduction to Healthy Homes,” Remodeling (June 22, 2017)

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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10 Biggest Threats Facing Real Estate

Posted on June 22, 2017 by Debbie Prosser

Daily Real Estate News | Friday, June 16, 2017

Global uncertainty and political polarization are the top issues facing the housing industry in 2017 and 2018, according to The Counselors of Real Estate’s annual list of the Top 10 Issues Affecting Real Estate. The list was compiled using feedback from 1,100 real estate advisers from around the world who met at a recent CRE conference.

Many of the issues are interconnected and reflect disruption in the economy and multiple real estate sectors, says 2017 CRE Chairman Scott Muldavin. “Despite this unsettling environment, opportunity remains embedded in every issue on the list,” the CRE report notes. Here are the top 10 issues cited in the report.

1. Political polarization and global uncertainty. “Uncertainty about changes to trade, travel, and immigration policy threaten cross-border investing, hospitality properties, retail, and manufacturing supply chains, among other effects,” the report notes. “Rising interest rates and retail inflation will make middle-class homeownership that much more difficult. Longer-term implications could be much more severe, as polarization prevents long-term fixes to issues such as infrastructure, affordable housing, local and state pension liabilities, and education.”

2. The technology boom. An unprecedented wave of commercial real estate technology innovations are expected to change the way real estate is bought, sold, and managed. Investments in commercial real estate tech startups hit $2.7 billion in 2016. About 1,600 of these startups now exist worldwide. Robots, big data, autonomous vehicles, and online retail are also expected to have a major impact.

3. Generational disruption. “Boomers’ and millennials’ divergent views of where they live, work, and play increasingly impact the property markets,” the report notes. “The generations are crossing paths everywhere: in the workplace, in housing, and at the local bar and grill, intersecting and sharing spaces despite their often disparate priorities when it comes to the built environment.”

4. Retail disruption. “The trend toward transforming retail into ‘experiences’ continues to develop and is offsetting shrinkage in the physical bricks-and-mortar consumer-goods platform,” the report says. “‘Experiential’ retail drives customer traffic to a more diverse and highly participatory environment targeted to a variety of age groups and interests. This sector has transitioned into a kind of ‘Omni Channel’—encompassing e-commerce, reduced or repurposed physical elements, and a host of previously unforeseen spaces, both physical and virtual—with a current emphasis evolved from bricks-and-mortar shopping to the timely, efficient transfer of goods from source to inventory to consumer.”

5. Infrastructure investment. The private sector is directing significant funds to infrastructure projects, recognizing the need and long-term rewards of investing in roads, bridges, tunnels, ports, and airports. Investors now oversee $376 billion in U.S. infrastructure dollars. “It is clear that the need for infrastructure investment is critical,” the report says. “The movement of goods, which involves everything from ports to airports to warehouses to roads, highways and railroads, is further straining an aging and highly vulnerable interior framework. Add to this the need for pipelines, electricity transmission, and water distribution, and the immediacy of infrastructure needs becomes even more pronounced.”

6. Housing disparity. “Safe, decent, affordable housing has been shown to have a stabilizing effect on urban economies, crime, and public health,” according to the report. “A current lack of inventory has generated a spike in home prices and, as a result, declining affordability for many home buyers, particularly those in lower-income sectors.  A critical disparity exists between housing needs and housing supply.” The report cites a growing affordability gap and limited availability of housing in locations with significant job growth, such as major cities and coastal regions.

7. Threats to the middle class. In 2007, the average middle-class income was $57,403. Now it hovers below inflation-adjusted levels from nearly two decades ago at $57,909. These income levels have yet to return to their pre-recession highs, and stagnant income growth will continue to press on the middle class.

8. Emerging role of healthcare in real estate. The nation spends more than $3 trillion each year on healthcare costs—about $10,000 per person—which is double the average for developed countries worldwide. “The real estate industry has emerged as a major player to cost-effectively improve people’s health,” the report notes. “Building occupants are increasingly demanding that the space they inhabit be designed, constructed, and operated in ways that advance positive health outcomes.” A growing focus on healthy buildings is emerging, as people spend about 90 percent of their time indoors. Research from the Mayo Clinic shows that healthcare contributes 20 percent to maintaining people’s health, while environmental and behavioral factors account for 40 percent.

9. Immigration. As the Trump administration seeks to enact more restrictive immigration laws, some housing leaders are growing concerned about labor shortages in homebuilding. Demographers note that immigrant groups are a source of household formation. “New immigrants tend to rent, boosting demand for multifamily housing, especially in gateway cities,” according to the report. “Recent surveys suggest that immigrant populations aspire to own homes and to move relatively freely from cities to suburbs and back in the search for employment. Labor mobility and homeownership rates will be constrained by limiting immigration.”

10. Climate change. The National Oceanic and Atmospheric Administration released a report this year that shows sea level rises are expected to more than double from 2013 forecasts—to between 6.6 and 8.6 feet by 2100. “While a potential rise of sea level may seem far in the future, NOAA also estimates that annual frequencies of disruptive and damaging flooding would increase 25-fold with only a 14-inch increase in local sea level rise,” according to the report. “Major cities such as Miami, New York, New Orleans, Tampa, and Boston are projected to have the most costly problems, with South Florida and most coastal areas all exposed to differing levels of sea rise risk and cost. The implications of potential sea level rise and related flooding on real estate values is positioned to explode due to dramatic increases in the volume and accessibility of information on the consequences of sea rise.”

Source: “Political Polarization, Global Uncertainty Top CRE 2017-2018 Top 10 Issues Affecting Real Estate List,” The Counselors of Real Estate (June 14, 2017)

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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Existing Home Sales Rise 1.1% in May; Median Sales Price Ascends to New High

Posted on June 21, 2017 by Debbie Prosser
WASHINGTON (June 21, 2017) — Existing-home sales rebounded in May following a notable decline in April, and low inventory levels helped propel the median sales price to a new high while pushing down the median days a home is on the market to a new low, according to the National Association of Realtors®. All major regions except for the Midwest saw an increase in sales last month.
Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April. Last month’s sales pace is 2.7 percent above a year ago and is the third highest over the past year.
Lawrence Yun, NAR chief economist, says sales activity expanded in May as more buyers overcame the increasingly challenging market conditions prevalent in many areas. “The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” he said. “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.
“The median existing-home price2 for all housing types in May was $252,800. This surpasses last June ($247,600) as the new peak median sales price, is up 5.8 percent from May 2016 ($238,900) and marks the 63rd straight month of year-over-year gains.
Total housing inventory3 at the end of May rose 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago.  “Home prices keep chugging along at a pace that is not sustainable in the long run,” added Yun. “Current demand levels indicate sales should be stronger, but it’s clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions.
“Properties typically stayed on the market for 27 days in May, which is down from 29 days in April and 32 days a year ago; this is the shortest timeframe since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 94 days in May, while foreclosures sold in 48 days and non-distressed homes took 27 days. Fifty-five percent of homes sold in May were on the market for less than a month (a new high).Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in May were Seattle-Tacoma-Bellevue, Wash., 20 days; San Francisco-Oakland-Hayward, Calif., 24 days; San Jose-Sunnyvale-Santa Clara, Calif., 25 days; and Salt Lake City, Utah and Ogden-Clearfield, Utah, both at 26 days.
“With new and existing supply failing to catch up with demand, several markets this summer will continue to see homes going under contract at this remarkably fast pace of under a month,” said Yun.
According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage decreased for the second consecutive month, dipping to 4.01 percent in May from 4.05 percent in April. The average commitment rate for all of 2016 was 3.65 percent.
First-time buyers were 33 percent of sales in May, which is down from 34 percent in April but up from 30 percent a year ago. NAR’s 2016 Profile of Home Buyers and Sellers — released in late 20164 — revealed that the annual share of first-time buyers was 35 percent.
Earlier this month, NAR hosted the Sustainable Homeownership Conference at University of California’s Memorial Stadium in Berkeley. A white paper titled, “Hurdles to Homeownership: Understanding the Barriers,” (link is external) was released, which honed in on the five main reasons why first-time buyers are failing to make up a greater share of the market.
“Of the barriers analyzed in the white paper, single-family housing shortages will be the biggest challenge for prospective first-time buyers this year,” said President William E. Brown, a Realtor® from Alamo, California. “Those hoping to buy an entry-level, single-family home continue to see minimal choices. The best advice for these home shoppers is to know what you can afford, lean on the guidance of a Realtor® and act fast once an ideal property within the budget is listed.”
All-cash sales were 22 percent of transactions in May, up from 21 percent in April and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 16 percent of homes in May, up from 15 percent in April and 13 percent a year ago. Sixty-four percent of investors paid in cash in May.
Distressed sales5 — foreclosures and short sales — were 5 percent of sales in May, unchanged from April and down from 6 percent a year ago. Four percent of May sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value in May (18 percent in April), while short sales were discounted 16 percent (12 percent in April).

Single-family and Condo/Co-op Sales

Single-family home sales increased 1.0 percent to a seasonally adjusted annual rate of 4.98 million in May from 4.93 million in April, and are now 2.7 percent above the 4.85 million pace a year ago. The median existing single-family home price was $254,600 in May, up 6.0 percent from May 2016.Existing condominium and co-op sales climbed 1.6 percent to a seasonally adjusted annual rate of 640,000 units in May, and are 3.2 percent higher than a year ago. The median existing condo price was $238,700 in May, which is 4.8 percent above a year ago.

Regional Breakdown

May existing-home sales in the Northeast jumped 6.8 percent to an annual rate of 780,000, and are now 2.6 percent above a year ago. The median price in the Northeast was $281,300, which is 4.7 percent above May 2016.In the Midwest, existing-home sales fell 5.9 percent to an annual rate of 1.28 million in May, and are 0.8 percent below a year ago. The median price in the Midwest was $203,900, up 7.3 percent from a year ago.

Existing-home sales in the South rose 2.2 percent to an annual rate of 2.34 million, and are now 4.5 percent above May 2016. The median price in the South was $221,900, up 5.3 percent from a year ago.
Existing-home sales in the West increased 3.4 percent to an annual rate of 1.22 million in May, and are now 3.4 percent above a year ago. The median price in the West was $368,800, up 6.9 percent from May 2016.The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.  5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

“Copyright National Association of REALTORS®. Reprinted with permission.”

 

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