Producer Prices in February – Building Materials Prices Continue to Outpace the Rest | Eye on Housing

Producer Prices in February – Building Materials Prices Continue to Outpace the Rest | Eye on Housing

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for February. Energy prices, rising 3.0% based largely on gasoline prices, pushed the overall index up 0.7%. Food prices declined 0.5% while the core price index (i.e., excluding food and energy) was stable, rising 0.2% since last month.

While overall producer prices have been relatively stable, the prices for certain building materials have risen rapidly as the housing recovery has gained momentum since the beginning of 2012. Overall producer prices are up less than 3% while softwood lumber, OSB and gypsum prices are 30%, 80% and 26% higher than at the start of 2012.

The rising prices of these building materials represent a significant challenge for home builders as they find themselves squeezed between rising input prices and a housing market where prices are only recently recovering from their steep declines.

GenY is finally in a mood to buy (houses)

GenY is finally in a mood to buy (houses)

Housing industry, brace yourself: The Millennials are moving in.

A generation that's about 90 million strong, Millennials (or Generation Y) form the largest demographic wave in the nation's history — even larger than the Baby Boomers. And now that the oldest are in their early 30s (the youngest are 12), they're coming of age for home ownership.

It's a momentous time for an industry still reeling from bad loans, foreclosures and price collapse. Now, builders, developers and agents are gearing up for the onslaught. Just this month, PulteGroup and Better Homes and Gardens Real Estate each released a survey of what Millennials want — evidence of their impending influence.

They're not that different from their parents, except they're not as wowed by luxury and are more likely to demand technology and flexible space.

"This generation is coming at the right time," says Fred Ehle, vice president for PulteGroup. "It's the largest potential number of buyers coming in to the market."

They would've come sooner had the recession and high unemployment not deferred many Millennials' dreams. "We forget how tough it is right now for these young GenYs to have a down payment," says Greg Tsujimoto, manager at John Burns Real Estate Consulting in Irvine, Calif. "They have student debt. Another obstacle is finding and establishing their careers."

Slowing GenY's entry into the housing market: delaying moving out of Mom-and-Dad's house, delaying marriage and delaying kids.

"Right now, it's either GenXers or Boomers buying," Tsujimoto says. "It's no secret Millennials want to own a home. That hasn't changed. But there's at least a four-year delay."

The pent-up demand is starting to surface, and "that will more than offset a year or two we missed in the market," Ehle says. "As soon as we get these folks out of their parents' basement and into a job ... "

Unemployment for Millennials (born from 1982 through 2001) is just under 10%, more than two points higher than the U.S. rate of 7.7%, he says.

They will buy when they're ready, says Tommy Stephenson, broker/owner of Better Homes and Gardens Real Estate Executive Partners in Augusta, Ga. "Millennials are more well-versed and educated in regard to today's real estate industry and are prepared to buy when the time is right for them," he says.

One advantage: Most are first-time buyers not hampered by underwater mortgages or having to sell one house before buying another.

"Why waste money to rent?" says Cristin Morton, 30 and single, who bought a house late last year in North Phoenix through Better Homes and Gardens. "I'm paying less for my mortgage than I was renting."

What industry research shows:

More than half the Millennials who bought Pulte homes last year said the main reason was to invest and build equity.

Tiffany Troyer, 25, graduated in 2009 from Baylor University. She did what many of her peers did after college: moved back home. She stayed a year, got an apartment and has been renting ever since.

"My parents pressured me to look for a house the last two years," says Troyer, area director for Nitro Swimming, an Austin swimming school.

One day, she agreed to do a rent-vs.-buy spreadsheet. "Rent has increased three consecutive years," she says. "You'll never get that back. Just looking at those numbers, I could own for less than rent."

She qualified for a 3.25%, 30-year fixed mortgage with 20% down and bought a new 1,900-square-foot, three-bedroom, two-bath ranch-style house in Leander, a northern Austin suburb. Her mortgage: less than $1,500 a month, compared with $1,600-a-month rent for a 1,000-square-foot apartment.

"I get double the space," Troyer says. "My goal was to buy something that, long-term, if I have a family and kids, it's a place I can stay in."

Pulte's January online survey of 521 adult renters ages 18-34 just released found that efficient use of space is an important feature to 84%. More than two-thirds want an open layout for entertaining. Most want ample storage, and 63% want outdoor space to extend living areas.

"What may be different about this buyer is that they may have more stuff," Ehle says. "It's different kind of stuff: technological gadgets, gaming. They also do work from home."

Better Homes and Gardens' online survey of 1,000 adults ages 18 to 35 finds that Millennials are not keen on traditional floor plans or traditional rooms. They're a "fix-it" generation who would rather do home improvements themselves than ask parents for money. They want their homes to be as unique as they are and each room to represent aspects of their lives, from hobbies to gaming, the survey shows.

One in five say "home office" is a more appropriate name for their dining room, and 43% want to turn their living room into a home theater.

Morton, a medical sales consultant, lives in a 2,300-square-foot, four-bedroom house. The dining room is not a dining room but an entertainment room. "I really want to utilize every room," Morton says. "My parents have a traditional living room. Nobody ever sits there."

Miguel Berger, president and broker of Better Homes and Gardens Real Estate Tech Valley in Albany, N.Y., was showing a house to a couple recently. Their reaction: "Who uses a dining room?"

The survey shows they would rather have extra space in their kitchen for a TV than a second oven, and that tech features are more important than curb appeal. Almost two-thirds say they would not buy a house without up-to-date tech capabilities.

Yet "they're more frugal because they have lived through a recession," Berger says. "They're very concerned about value. ... They like to know the per-square-foot value."

Big Predictions for Housing for Next 2 Years

Big Predictions for Housing for Next 2 Years

Home sales are projected to post some big gains in the next two years, according to Fannie Mae’s latest monthly economic outlook. 

Fannie Mae economists predict that existing-home sales will rise by 10.5 percent this year, and by 6.2 percent in 2014. The economists made even bolder projections for new single-family home sales -- growing 15.1 percent this year and 44.1 percent in 2014.

"We expect home prices to firm further amid a durable housing recovery, continuing to boost household net worth, gradually diminishing the population of underwater borrowers, and reducing incentive for strategic defaults," according to Fannie Mae’s report.

Fannie Mae projects that mortgage rates will stay low by historical averages this year, but the 30-year fixed-rate mortgage will rise from an average of 3.5 percent during the first quarter to an average of 4 percent during the final three months of 2013. During the fourth quarter of 2014, mortgage rates are projected to tick up to a 4.5 percent average. 

Mortgage applications for purchases are projected to increase by 16.8 percent this year and by 17.1 percent in 2014. However, a decline in applications for refinancings will likely cause mortgage originations to be down 14.5 percent this year and by 31.4 percent in 2014, Fannie economists predict. 

Mecklenburg home sales off to swift spring start | CharlotteObserver.com

Mecklenburg home sales off to swift spring start | CharlotteObserver.com

Mecklenburg County’s spring homebuying season is off to a brisk start.

Cal Mitchener, who photographs Charlotte homes for real estate brokers trying to sell them, said his business has increased so much since the start of the year “I can barely keep up.”

Kina Marshall, who in late February put her home in the Stonehaven neighborhood up for sale, was shocked that, within only five days, it was already under contract.

Helen Penter, an Allen Tate Co. broker who sells homes primarily in south Charlotte, submitted a listing on a recent Friday afternoon. By the next day, the house had racked up six offers.

Some brokers say they’re seeing multiple offers more often than they did during the downturn. They say some buyers have been willing to pay more than the price at which a home is listed, a scenario unheard of a year ago.

Prices are going up, brokers say, as inventory drops. Inventory is so low in some areas that sellers, after they get rid of their homes, are opting to rent because they can’t find a home they like amid the limited selection.

Gus Faucher, senior economist with PNC Financial Services Group, said a rising stock market and the concern that mortgage rates might rise are among factors motivating potential buyers. But home prices are still attractive, he said.

He said an improving jobs market – in Charlotte and nationally – is also driving more people to consider homeownership or buy a nicer home.

Mecklenburg County’s unemployment rate rose to 9.7 percent in January from 9.2 percent in December, according to nonseasonally adjusted figures released this month by the N.C. Department of Commerce. The county’s rate was unchanged from January 2012.

To be sure, bidding wars aren’t taking place countywide, and in some pockets of the county there’s more supply than in others.

But statistics show the county’s existing-home-sales market is off to a stronger start in 2013 than last year.

The Charlotte Regional Realtor Association – which tracks sales of existing, not new, homes – reports that from February 2012 to this past February:

• Inventory – measured by the time it would take to sell all the existing homes on the market – fell from 7.9 months of supply to 3.2.

• The amount of the original list price received by sellers rose from 91.4 percent to 94.2 percent.

• The average number of days a home sat on the market until selling fell from 116 to 97.

Sales and prices were also up in February versus the same month a year ago, according to the association.

Recovery not complete

Despite the positive trends, the county’s housing market is lagging prerecession levels. Average prices were down about 7 percent in February compared with the same month in 2007.

And some people continue to have trouble selling their homes.

In July, Bob Hubbard and his wife, Nancy Milling, put up for sale the town house they own in The Lakes at Raintree neighborhood in south Charlotte.

Eight months later, the house, which they’ve been trying to sell without the aid of a broker, might finally move. Hubbard said he’s accepted an offer, but there’s a catch: The buyers, a couple also trying to sell their own Charlotte home, will purchase the Hubbardes’ town house only if their own home sells.

Hubbard said he’s contemplating turning the house over to a real estate agent.

Although appraisers, brokers and others in the county’s real estate industry are busy, Eric Locher, president of the Realtors association, said he won’t go as far as to call the county’s market a frenzy.

“It’s just a nice, good turnaround,” he said, adding that activity is differing by neighborhood.

But he points out that brokers in parts of the county are reporting things they weren’t a year ago.

“Last year we saw very, very few multiple offers,” he said.

This year, he said, “you’re seeing multiple people going for the same property. That’s very new.”

Susan Johnson, a broker with Keller Williams in the Lake Norman area, said that, at this time last year, homes would not have received multiple offers and it was “extremely rare” a year ago for buyers to be willing to pay full price.

“It’s going basically from a buyer’s market to a seller’s market,” she said.

Not every seller is receiving offers above list price.

Marshall, who’s under contract to sell her Stonehaven home, which she listed with Showcase Realty, said the buyer has offered “a couple thousand” dollars below list price.

Still, it was remarkable, she said, that a buyer came along after just five days, because some homes in her neighborhood have sat on the market for more than a year.

She added that some of those homes have recently sold – all within a couple of months.

In and around southeast Charlotte, the first three months of 2013 have Allen Tate broker Carl Richmond optimistic. “It’s a frenzy in some areas,” he said.

In a normal January, he’ll list one to two houses. But this past January, he said, he listed five – and all five have sold.

Three of the five sold in three days or less and had multiple offers, he said.

“I’ve never had that much activity in January before. That just kind of shows the pent-up demand from buyers.”

Read more here: http://www.charlotteobserver.com/2013/03/29/3948604/mecklenburg-home-sales-off-to.html#storylink=cpy

Housing's Hot Streak Continues - Business - Builder Magazine

Housing's Hot Streak Continues - Business - Builder Magazine

For 12 months in a row, housing prices, as measured by the Case Shiller Index, have increased, and in January they were a whopping 8% higher year-over-year (see chart). That's the biggest year-over-year increase since housing's mid-summer 2006 heyday. The price improvement is widespread: all 20 cities tracked by the index--even Detroit!--posted year-over-year housing price increases.

Across the board housing price increases are important, analysts says, because when potential home buyers see prices increasing they're convinced they'll keep doing so, and this in turn increases demand for housing. Analysts are also saying that prices are likely to continue to rise because housing inventories are depleted and mortgage credit is becoming relatively more available.

While prices have improved, they're only back to 2003 levels and are still some 25% below the 2006 peak. But when it comes to housing prices, up is better than down.

Plywood supplies tighten, costs surge as demand among builders gets stronger - Builder Magazine

Plywood supplies tighten, costs surge as demand among builders gets stronger - Builder Magazine

 

The Wall Street Journal's Cameron McWhirter reports that growing demand and tight supplies have pushed up plywood prices by 45% in the past year, and U.S. producers are scrambling to get back up to speed after slashing output of the basic construction material during the housing bust. Georgia Pacific on Friday will announce a $400 million investment to boost production of softwood plywood and lumber capacity by 20%. 

Mortgage Defaults Much Lower in Energy Star Homes

Mortgage Defaults Much Lower in Energy Star Homes

The risk of defaulting on a mortgage is 32% lower for people that live in energy-efficient, Energy Star-certified homes, concludes a study.

Interestingly, the more efficient the house, the lower the default risk. For each point on the Home Energy Rating System (HERS) index of efficiency, the risk of default drops.

It follows then that lenders and Congress should consider this when making mortgage loans and policy, the authors say.

"Home Energy Efficiency and Mortgage Risks" is produced by the University of North Carolina at Chapel Hill's Center for Community Capital and the Institute for Market Transformation. 

"Consumer and industry acceptance of energy efficiency is high. But the lack of broad consideration of potential energy savings in the mortgage underwriting process still prevents many moderate- and middle-income homebuyers from fully enjoying the cost savings," says Roberto Quercia, one of the authors.

This is the first academic study that analyzes the connection between home energy efficiency and mortgage risks. It looked at a sample of 71,000 single family home loans from 38 states and the District of Columbia originated from 2002-2012.

The average sale price of the homes in the sample was about $220,000, so they are not solely luxury homes.

"It stands to reason that energy-efficient homes should have a lower default rate, because the owners of these homes save money on their utility bills, and they can put that money toward their mortgage payments," says Cliff Majersik, executive director of Institute for Market Transformation. "We long believed this to be the case, and now this study proves it. Successful housing market reforms will require reconsidering the risk factors in mortgage default, including energy costs."

Could it also be something about the people who tend to buy Energy-Star homes? They likely do more research and value energy efficiency. They could be more financially astute, the authors say, the subject for another study. That too, would make buyers of these homes a lower risk to lenders.

The findings have significant policy implications:

• Lenders might allow for lower risk premiums that are associated with interest rates, a more flexible credit profile, or a higher debt-to-income ratio for people buying or refinancing efficient homes. This would increase the affordability of energy-efficient homes among many borrowers, especially in high-cost areas. 
• Lenders may want to require or strongly recommend an energy audit or energy rating during the process of mortgage underwriting. In the same way that appraisals are done to calculate the value of the home, an energy rating or audit could define other important loan characteristics.

The Energy Star label is currently on 1.4 million homes, growing by 400,000 since 2009. Many of the biggest builders in the US have pledged to build Energy Star homes.

America's Fastest- and Slowest-Growing Cities | Newgeography.com

America's Fastest- and Slowest-Growing Cities | Newgeography.com

Since the housing crash of 2007, the decline of the Sun Belt and dispersed, low-density cities has been trumpeted by the national media and by pundits who believe America’s future lies in compact, crowded, mostly coastal and northern, cities. But apparently, most Americans have not gotten the memo — they seem to be accelerating their push into less dense regions of the Sun Belt.

An analysis of population data by demographer Wendell Cox, including the Census report for the most recent year released late last week, shows that since 2000, virtually all the 10 fastest-growing metropolitan areas in the United States are located in Sun Belt states. The population of the Raleigh, N.C., metropolitan statistical area has expanded a remarkable 47.8% since 2000, tops among the nation’s 52 metro areas with over 1 million residents. That is more than three times the overall 12.7% growth of those 52 metro areas.

Austin, Texas, and Las Vegas also expanded more than 40%, putting them second and third on our list. The populations of the other metro areas in the top 10 all expanded by at least 25%, or twice the national average. This jibes nicely with domestic migration trends and growth in the foreign-born population, both of which have been strongest in many of these same cities.

The most recent numbers, covering July 2011 to July 2012, also reveal some subtle changes in the Sun Belt pecking order. Over the 2000-2012 period, the growth winners   included places like Las Vegas, Riverside-San Bernardino and Phoenix, all of which suffered grievously in the housing bust. Although they all clocked population growth better than the national average over the past year, none, besides Phoenix, ranked in the updated top 10.

Growth momentum has shifted decidedly toward Texas. Austin’s population expanded a remarkable 3% last year, tops among the nation’s 52 largest metro areas. Three other Lone Star metropolitan areas — Houston, San Antonio and Dallas-Ft. Worth — ranked in the top six and all expanded at roughly twice the national average. The other fastest-growing metros over the past year include Raleigh, Orlando, Phoenix, Charlotte and Nashville. One unexpected fast-growth area has been Oklahoma City, which ranked 20th between 2000 and 2012, but notched the 12th spot last year, with a growth rate 60% above the national average.

What explains these subtle shifts? Some of it can be traced, of course, to the stronger growth in energy-rich areas such as Texas as well as Oklahoma City. The differences are particularly striking when looking at varying economic growth rates among the country’s largest regions. In 2011 theHouston metro area, whose population is up by 1.4 million since 2000, also enjoyed the fastest GDP growth, at 3.7%, of any of the nation’s top 20 regions. Dallas-Fort Worth clocked a respectable 3.1%.

In contrast, the GDP growth rates for the hip, dense metro areas lagged behind. Among the elite cities, the tech hubs of San Francisco , Seattle and Boston have done the best, posting GDP growth around 2.5%. But the economies of New York, Los Angeles, Philadelphia and, surprisingly, Washington D.C., grew at roughly half the rate of Houston.

But it’s not just economic factors at play. One remarkable similarity in all the fastest-growing areas is their relatively low population densities. Although Raleigh and Austin are held out as “hip” cities, they have very low-density urban cores. Not one of the top 10 growth cities for 2010 to the present, or last year, had urban core densities more than a half of those of places like Boston (40th for 2000 to the present), New York (41st),  Los Angeles (42nd) or Chicago (43rd).

At the same time, we have to consider the issue of housing affordability, something that rarely comes up among proponents of “cool” cities. In contrast to slower-growing San Francisco, New York and Los Angeles, most of the fastest-growing cities have lower housing prices relative to income. Particularly notable are the low prices in areas such as Austin, Raleigh, Houston and Dallas-Fort Worth, where housing costs are half or less than in the more highly regulated “cool” cities.

Lower housing costs also seem to impact another critical growth component: family formation. Immigrants and domestic in-migrants are important to population growth but equally critical is whether longtime residents in a region choose to have children. Virtually all the top 10 metro areas, both last year and since 2000, have also ranked among the fastest growing in terms of the population under 15; Raleigh’s child population alone has expanded by almost 45% since 2000, compared to 2% nationally;  Austin’s toddler population surged a remarkable, 38%. The child populations of Houston, Dallas-Fort Worth, Atlanta, Phoenix, Las Vegas and Orlando all  increased by 20% or more.

In contrast, none of the hip cities posted under 15 population growth better than 5%. The number of children has actually declined in many, including New York, Los Angeles, Boston, San Francisco and Chicago. Even with substantial influxes from abroad, particularly in New York, it’s difficult for these areas to sustain population increases when the number of children keeps dropping.

The problem may be even more intense in Los Angeles and Chicago, whose economies continue to lag further behind. But the demographic challenges of the Big Orange and the Windy City pale compared to those faced by many cities in the old industrial Rust Belt, which have either lost population or posted only weak increases.

Cleveland’s population is down 3.9% since 2000, the worst performance among the nation’s biggest metro areas apart from disaster-struck New Orleans. Cleveland lags in both family formation and has seen strong outmigration, but also attracts few foreign-born residents. Much the same can be said of Providence, R.I., Pittsburgh, Buffalo and Detroit. Nor do things seem to be improving with time; these areas continued to inhabit the nether regions in the most recent Census reports.

So what do these trends tell us about the demographic evolution of our major metropolitan areas? Certainly sustained economic growth, low density and more affordable housing all clearly continue to push the center of population gravity toward certain Sun Belt cities, primarily in the Southeast and Texas. It turns out that neither the Great Recession, the housing bust or a much hyped preference for dense urbanity is turning this around.

Major Metropolitan Areas (Over 1,000,000) Population
Ranked by Population Change Percentage: 2000-2012 (2013 Geography)
Rank	Metropolitan Area	2000	2012	2000-2012 Growth	2000-2012 %	2011-2012 %
1	Raleigh, NC	804,436	1,188,564	384,128	47.8%	3.3%
2	Austin, TX	1,265,715	1,834,303	568,588	44.9%	3.1%
3	Las Vegas, NV	1,393,370	2,000,759	607,389	43.6%	3.1%
4	Orlando, FL	1,656,835	2,223,674	566,839	34.2%	2.5%
5	Charlotte, NC-SC	1,729,023	2,296,569	567,546	32.8%	2.4%
6	Riverside-San Bernardino, CA	3,277,578	4,350,096	1,072,518	32.7%	2.4%
7	Phoenix, AZ	3,278,661	4,329,534	1,050,873	32.1%	2.3%
8	Houston, TX	4,716,964	6,177,035	1,460,071	31.0%	2.3%
9	San Antonio, TX	1,719,262	2,234,003	514,741	29.9%	2.2%
10	Dallas-Fort Worth, TX	5,239,149	6,700,991	1,461,842	27.9%	2.1%
11	Atlanta, GA	4,297,419	5,457,831	1,160,412	27.0%	2.0%

Vital Signs Chart: More Good News for Housing - Real Time Economics - WSJ

Vital Signs Chart: More Good News for Housing - Real Time Economics - WSJ

The housing market continues to show improvement. Existing-home sales rose 0.8% in February to a seasonally adjusted annual rate of 4.98 million, their highest level in more than three years. The month’s tally was up from January’s total of 4.94 million. As the housing market slowly but steadily recovers, some homes are selling faster and are commanding higher prices.

Hard to see ‘green’ on resale homes | CharlotteObserver.com

Hard to see ‘green’ on resale homes | CharlotteObserver.com

When it comes to energy efficiency and “green” features in homes, there’s a chasmic disconnect in the marketplace among consumers, real estate appraisers and the nation’s realty sales system.

On the one hand, prospective buyers routinely tell researchers that they place high priority on energy-saving and environmentally friendly components in houses. The presence of high-efficiency systems in a home makes shoppers more interested in buying because they’ll save money in the long run.

On the other hand, the vast majority of multiple listing services (MLS) – the organizations that compile listings of local homes for sale – do not yet include so-called “green fields” in their data search forms to facilitate consumer shopping for homes with high-performance features. Plus most real estate appraisers do not yet have training in the valuation of green homes and often do not – or cannot – factor in the economic values of expensive but money-saving components such as solar photovoltaic panels.

Two new research studies document consumers’ strong appetites for energy efficiency and green features. A survey of 3,682 actual and prospective purchasers by the National Association of Home Builders found that 94 percent of respondents rated Energy Star appliances as among their top several “most wanted” items out of 120 they could choose from. Ninety-one percent said the same for new houses that came with Energy Star certifications on the total structure.

Energy Star is a federally backed set of energy-saving performance standards for a wide range of products including appliances, lighting, windows, doors, electronics, heating and cooling systems all the way up to and including newly built homes. The study also found that buyers would be willing to pay an additional average of $7,095 in the upfront cost of a house if that investment saved them $1,000 a year in utility expenses.

Meanwhile, a survey of buyers and sellers conducted by the National Association of Realtors found that 87 percent rated energy efficiency in heating and cooling as “very” or “somewhat” important to their choice of a home. Seventy one percent said the same for energy-efficient appliances. The newer the house, the more important were energy-saving and green components.

Now here’s the disconnect: While most new homes come with energy certifications and ratings, the overwhelming majority of resale homes do not. For shoppers and purchasers who prefer to save on energy outlays, there’s often little information in the formal listings search data on MLS systems to highlight houses with extensive green components.

Of the 860 multiple listing services nationwide, according to industry estimates, only about 210 have gone green – that is, included distinct sections of their standard listing formats for high-performance and sustainable features. Though there is an industry effort under way to “green the MLS” by including green fields as standard sections in MLS listings, adoption has been slow.

The lack of green fields, in turn, not only hampers buyers. Appraisers who search for “comps” – recently sold comparable houses – often are unable to readily distinguish those with significant energy efficiency investments from ordinary energy-guzzling homes. Worse yet, say industry critics such as Sandra K. Adomatis of Punta Gorda, Fla., most appraisers have no specific training in valuing high-performance or green features and tend to ignore them or undervalue them in their appraisal reports to lenders. This hurts sellers and buyers alike.

To help bridge the information gap, the country’s largest appraisal professional group, the Appraisal Institute, recently released an updated “green addendum” that realty agents and sellers can use to call attention to the energy saving features of homes, especially in areas where the local MLS provides no separate green fields. Appraisers can attach the addendum to their standard appraisal reports as a way to justify additional value assigned to the house because of the cost-saving improvements.

Of special note, given the fast-growing popularity of solar panels and arrays, is a special section within the addendum that provides the appraiser access to an online tool – a “PV value” calculator developed by Sandia Labs and Energy Sense Finance – that estimates the incremental value the photovoltaic installation adds to the property based on a discounted cash flow model.

Bottom line for sellers with significant energy conservation investments: Make sure your realty agent gets them highlighted in the MLS listing. And make sure that the appraiser who is sent to value your property uses the green addendum and has adequate training to do the job. Otherwise the money you spent may not get the fair treatment it deserves in the valuation.

The addendum is available at www.appraisalinstitute.org.

Read more here: http://www.charlotteobserver.com/2013/03/22/3930785/hard-to-see-green-on-resale-homes.html#storylink=cpy

U.S. homes sales highest in more than 3 years | CharlotteObserver.com

U.S. homes sales highest in more than 3 years | CharlotteObserver.com

WASHINGTON U.S. sales of previously occupied homes rose in February to their fastest pace in more than three years, and more people put their homes on the market. The increases suggest a growing number of Americans believe the housing recovery will strengthen.

The National Association of Realtors said Thursday that sales increased 0.8 percent in February from January to a seasonally adjusted annual rate of nearly 5 million. That was the fastest sales pace since November 2009, when a temporary home buyer tax credit had boosted sales. The February sales pace was also 10.2 percent higher than the same month a year ago.

Steady hiring and near-record-low mortgage rates have helped boost sales and prices in most markets. The Realtors’ group says the median price for a home sold in February was $173,600. That’s up 11.6 percent from a year ago.

More people are also starting to put their homes on the market, which could help sales in the coming months. The number of available homes for sale rose 10 percent last month, the first monthly gain since April. Even with the gain, the inventory of homes for sale was still 19 percent below a year ago.

Jeff Kolko, chief economist at Trulia, said the increase in houses for sale is a good sign. It suggests more homeowners are gaining confidence in the recovery. That could end an inventory squeeze that has held back sales in many markets.

“Tight inventory has been a critical issue for the housing market. The limited supply of homes has fueled bidding wars and has meant that buyers have little to choose from and agents have little to sell,” Kolko said.

By region, sales of previously owned homes were up 2.6 percent in the South and the West. Sales fell 3.1 percent in the Northeast and 1.7 percent in the Midwest, possibly in part because of adverse weather.

Even with the gains, sales nationally remain below the 5.5 million that economists associate with healthy markets.

One concern is that few first-time buyers, who are critical to a sustainable housing recovery, are entering the market. They made up only 30 percent of sales in February. That’s well below the 40 percent typical in a healthy market.

Since the housing bubble burst more than six years ago, banks have imposed tighter credit conditions and required larger down payments. Those changes have left many would-be buyers unable to qualify for super-low mortgage rates. First-time buyers have been hit particularly hard by the changes.

The average rate on the 30-year fixed mortgage dropped in November to 3.31 percent, the lowest on records dating back to 1971, and they have remained near that record low this year. This week the rate on the 30-year loan was 3.54 percent.

Read more here: http://www.charlotteobserver.com/2013/03/21/3930919/us-homes-sales-highest-in-more.html#storylink=misearch#storylink=cpy

Spike in University City home sales could boost economy | CharlotteObserver.com

Spike in University City home sales could boost economy | CharlotteObserver.com

It’s no secret that real estate sales in Charlotte have been less than robust during the past four years. But after years of slow activity, the market may be making a rebound, according to UNC Charlotte economist John Connaughton.

“Home sale prices are up 7.3 percent, which is the best news I’ve heard in five years,” he said. “This is the light at the end of the tunnel we’ve been waiting on.”

If sales continue at that pace for the next three months, Connaughton said, it could be a good sign for the economy.

“This is our first indication the housing market might participate in the recovery of the economy,” he said. “If we could get at least three months of growth, it could change the economy significantly.”

According to the Charlotte Regional Realtor Association’s February report, closed home sales in northern Mecklenburg County are up 20 percent since February 2012. The average home sale price in that area is up 23.3 percent, from $143,740 to $177,244.

“A 20 percent increase in homes sold, February 2013 compared to last February, is good news for the area,” said Eric Locher, president of the Realtor association and of Carolina Multiple Listing Services Inc. “In looking a bit closer at the area’s pending contracts, demand is up 36.1 percent in February 2013 compared to last February.

“This is a strong indicator,” Locher said, “that northern Mecklenburg continues to be a strong attraction for homebuyers, possibly drawn to live near the numerous companies that are located in the University Research Park area and a growing UNC Charlotte.”

Locher also said he thinks many graduates of the university are staying in the area, increasing home sales.

“Charlotte is known as a great place to live for young professionals,” he said. “And though there has been slowed growth since the recession, Charlotte and the University area continued to experience growth. I imagine that many of the graduates of the university find Charlotte an attractive place to put down professional roots.”

Locher said he believes the rebound in the market is partly the result of supply and demand.

“Research shows that homebuyers increasingly want to live, work and play in the same areas, and University City certainly offers diverse retail and amenities, recreation and a variety of homes at varying price points,” he said. “Inventory is at equilibrium (about 5 months’ supply) across the region.

“However, northern Mecklenburg has become more of a seller’s market, with 3.4 months’ supply of homes remaining on market in February. This time last year there was almost eight months’ supply of homes in the University area, which made the area a solid buyer’s market. Decreasing supply puts upward pressure on pricing.”

Bill Scurry, broker and agent with Allen Tate Realtors, agreed that real estate activity in University City is picking up.

“There’s a low inventory of houses (for sale), as low as it’s ever been,” Scurry said. “Because the market’s been down so long, there’s a lot of pent-up demand. People want to buy homes again, but there’s not a lot to choose from. The ones that are selling are going fast.”

Scurry said homes in University City are selling much like the rest of the homes in Charlotte. The recent surge of home buying is affecting sales, turning it from a buyer’s to a seller’s market.

“The last house I sold got three offers in one day,” he said. “Sellers are getting the asking price, and sometimes more, because of the bidding wars.”

Read more here: http://www.charlotteobserver.com/2013/03/22/3930771/spike-in-university-city-home.html#storylink=cpy

Allen Tate Co.'s Pat Riley: 'Lowest inventory in history' for Carolinas - Charlotte Business Journal

Allen Tate Co.'s Pat Riley: 'Lowest inventory in history' for Carolinas - Charlotte Business Journal

Allen Tate Co. President and Chief Operating Officer Pat Riley says all signs point to a powerful second quarter when it comes to home sales in the Carolinas.

Riley says it’s now a seller’s market in many areas. Buyer activity and pending home sales are up, and inventory is at an all-time low.

“Home appreciation continues and properties that are memorable and priced right are selling with multiple offers, due to the lowest inventory in history,” he says.

His company is selling an average of 80 homes per day across all its markets in the Carolinas. Listings are averaging 56 per day.

The improvements in homes sales are under way in counties that are also seeing an increase in jobs, Riley says.

Population growth and corporate relocations continue to drive demand for rentals, he says, as does the number of individuals who are working to restore their credit. Construction of new homes has been minimal during the past four years, As a result, Riley says, the trend is for institutional investors to buy single-family homes costing less than $300,000 as rental properties, with the intent to sell in four to six years.

Riley's comments come from the recent edition of the Carolinas Market Update, a video series produced by Allen Tate.

Bank of America, JPMorgan Chase foresee rising home prices - Charlotte Business Journal

Bank of America, JPMorgan Chase foresee rising home prices - Charlotte Business Journal

Bank of America Corp. and JPMorgan Chase & Co. are forecasting steady increases in housing prices for years to come, Bloomberg reports.

Last week, JPMorgan Chase (NYSE:JPM) more than doubled its forecast for U.S. home price gains to 7 percent by the end of 2013, and it anticipates prices will increase by more than 14 percent through 2015.

Meanwhile, BofA (NYSE:BAC) in a recent report predicted an 8 percent spike in housing prices this year. The title of Bank of America's report: "Someone say house party?"

Charlotte, NC Housing Data for Builders and Housing Market Intelligence - Housing Prices, Home Permits, and Economic Trends for Charlotte, North Carolina - Builder Magazine

Charlotte, NC Housing Data for Builders and Housing Market Intelligence - Housing Prices, Home Permits, and Economic Trends for Charlotte, North Carolina - Builder Magazine

New Home Sales and Prices Both Increase in Charlotte According to Freshest Data

Posted on: Mar 07, 2013 07:06:31 AM

New home closings in the Charlotte, NC market jumped year-over-year in December, and the percentage boost was better than November 2012, suggesting the market may be strengthening. Closings rose 38.0% from a year earlier to 581, compared with a 30.5% hike in November from the year earlier.

A total of 5,256 new homes were sold during the 12 months that ended in December, up from 5,096 for the year that ended in November.

Of 2,658 total closings, 581 were of new homes. This is a gain from 16.7% of closings a year earlier. For new and existing homes, closings rose year-over-year in December after also increasing in November year-over-year.

Pricing and Mortgage Trends

The average price of new homes increased year-over-year 10.0% in December to $250,029 per unit. This rise is smaller than the 10.9% hike in November year-over-year.

The average mortgage size on newly sold homes saw a rise year-over-year along with new home prices. It rose to $218,985 in December, an 8.1% rise. In November 2012, average mortgage size increased 6.9% from a year earlier. Of the overall sale price, the percentage that was being financed dipped 1.5 percentage points year-over-year to 87.6% in December 2012.

Other Market Trends

The percentage of new home closings belonging to single-family homes has risen from last year while the portion of new home closings belonging to attached units has dropped. The share of new home closings belonging to single-family homes rose from 90.3% in December 2011 to 97.1% of closings in December 2012. Meanwhile, attached units as a percentage of all new home closings fell to 2.9% of closings from 9.7% of closings.

The average unit size of newly sold homes sank 28.4% year-over-year to 1,706 square feet in December 2012. For newly sold homes, an average size fall contrasting with an average price rise was also seen in November 2012 when the average size of newly sold homes declined 32.0% to 1,723 square feet.

Foreclosures and real estate owned (REO) closings remained a drag on the market. Out of all existing home closings, foreclosures combined with REO closings accounted for 48.2% of closings. In December 2011, they made up 53.6%. The percentage of existing home closings involving foreclosures slid to 19.6% in December from 33.3% a year earlier while REO closings as a percentage of existing home closings rose to 28.6% from 20.4%.

Please refer to the ABOUT THIS MSA tab to learn more about geographic coverage and data availability in the Charlotte, NC area.

Source: Housing Intelligence

 

CoreLogic: Home prices continue upward trend in Charlotte area, nationwide - Charlotte Business Journal

CoreLogic: Home prices continue upward trend in Charlotte area, nationwide - Charlotte Business Journal

The latest Home Price Index report fromCoreLogic Inc. shows year-over-year increases for the Charlotte area and most national markets in January.

For the Charlotte-Gastonia-Rock Hill metropolitan statistical area, home prices were up 5.8 percent in January from a year earlier with sales of distressed residential properties included. That represents a continuation of an upward trend seen in December and in November, when home prices were up 7.5 percent and 5.1 percent, respectively, from the same month in 2011.

Local home prices were up 6.4 percent in January from the previous year when distressed sales are left out of the equation.

Distressed properties include short-sale and real estate owned transactions.

However, area home prices stayed flat in January from December, rising a mere 0.1 percent when counting distressed sales, says Irvine, Calif.-based CoreLogic (NYSE:CLGX). The increase seen locally was 1.5 percent without distressed sales included.

Nationally, home prices with distressed-property sales included were up year-over-year by 9.7 percent in January, representing the largest annual increase since April 2006. Not counting distressed sales, home prices were up 9 percent from a year earlier.

January marked the 11th month of nationwide home-price increases, and all but two states, Delaware and Illinois, experienced gains.

“Home prices continued to gather steam across a broad swath of the country in January, continuing the positive trend we saw during most of 2012,” Anand Nallathambi, president and chief executive of CoreLogic, states in the report. “Many states across the western U.S. and along the East Coast saw average price gains of more than 6 percent, which is likely to boost home sale activity into the first half of 2013.”

U.S. home prices including distressed sales were up 0.7 percent in January from December, according to the CoreLogic report released Tuesday. Without distressed sales, January saw a 1.8 percent increase over the previous month.

Consumers' outlook on home prices hits record high, Fannie says - The Tell - MarketWatch

Consumers' outlook on home prices hits record high, Fannie says - The Tell - MarketWatch

Consumers are increasingly likely to expect that home prices will grow in the next year, even as fewer believe that their personal finances will improve, according to data released Thursday by mortgage buyer Fannie Mae.

A record high share of respondents — 48% — said in February that they believe home prices will increase in the next 12 months, according to Fannie’s monthly housing survey. That share is up from 41% in January, and far higher than 27% in February 2012.  The data go back to June 2010. Fannie FNMA  polled 1,008 respondents between Feb. 2 and 21.

“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”

However, fewer consumers expect that their personal financial situation will improve over the next 12 months, and there was a decline in the percentage of respondents who said the economy is on the “right track.” In February, 41% of consumers said they expect their personal finances to improve over the coming year, down from 43% in January, and below 45% in February 2012.  Meanwhile, only 38% of respondents said in February that the economy is on the “right track,” down from 39% in January, but up from 35% in February 2012.

It’s unsurprising that consumers aren’t particularly cheery. Real weekly earnings have seen a lackluster performance over the past year, rising less than 1%, after adjusting for inflation. Meanwhile, the economy has continued to expand, but eked out a measly annual growth rate of 0.1% in the fourth quarter.

However, consumers’ cheerier outlook on home prices follows a year that saw large gains. Prices in December were up 6.8% from the same period in the prior year, the largest year-over-year gain since July 2006, according to the widely followed S&P/Case-Shiller index that tracks 20 major metropolitan regions. Despite that growth, prices remain 29% below a 2006 bubble peak.

Low inventories have exerted upward pressure on prices. Couple that trend with interest rates hovering near record lows and pent-up demand, and some areas have turned into sellers’ market. Still, the housing market’s recovery faces headwinds — unemployment remains high and fiscal uncertainty persists — and analysts say that another year of outsized-price growth may be unlikely in 2013. Read more about home prices.