Thursday, October 31, 2013

Metrostudy: Charlotte housing market’s Q3 'could not have been better' - Charlotte Business Journal

Metrostudy: Charlotte housing market’s Q3 'could not have been better' - Charlotte Business Journal

Charlotte-area homebuilders reported an increase in sales during the third quarter, even with the recent rise in interest rates, according to data firm Metrostudy.
Metrostudy’s report on residential construction this week says “new housing data for Charlotte could not have been better” in the quarter that ended Sept. 30.
“Our projected 2013 year end growth of new home starts appears to have been too conservative,” Bill Miley, regional director of Metrostudy’s Charlotte Market, says in his latest report. “Expectations are now that we will have a 30 to 40 percent increase in starts. Closings are expected to be up 25 percent over last year."
Housing starts in the area for all product types spiked 51.3 percent in the latest quarter, rising to 2,893 from 1,912 during the same period in 2012, according to Metrostudy. That’s also an increase from last quarter, when housing starts totaled 2,262.
Third-quarter closings soared 55.1 percent from a year earlier, increasing to 2,652, the report says.
Metrostudy, a national housing data and consulting firm, bills itself as having “most extensive primary database on residential construction.”
The total local inventory of homes in all stages of construction — which includes finished but vacant houses, model homes and units under construction — is 4,611, considered a nearly seven-month supply. Metrostudy considers a six- to eight-month supply of inventory as equilibrium.
During the latest quarter, the finished vacant inventory plummeted to a 1.6-months supply, Metrostudy says.
“We closed more homes than we were able to complete,” the report states.

Mortgage group: Home lending headed for big drop in '14 - Phoenix Business Journal

Mortgage group: Home lending headed for big drop in '14 - Phoenix Business Journal

A large mortgage industry group is predicting home lending to take a sizable drop in 2014.
In a statement this week, the Mortgage Bankers Association projected that the volume of all new mortgages written in 2014 will dive by nearly one-third, from $1.75 trillion this year to $1.19 trillion next year.
What will be responsible for the decline are mortgage refinacings, which have already been dropping in recent months as interest rates rise and has subsequently spurred widespread bank layoffs of thousands of mortgage-related jobs in metro Phoenix and nationwide.
The MBA predicts mortgage refinancings to plunge 57 percent year-over-year, while purchase mortgages should increase by 9 percent.
“We expect mortgage rates will increase above 5 percent in 2014 and then increase further to 5.5 percent by the end of 2015,”Jay Brinkmann, MBA’s chief economist and senior vice president for research and education, said in the statement. “As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances.”
The average rate for a 30-year fixed mortgage stood at 4.15 percent on Wednesday, down from 4.29 percent last week but still much higher than the 3.5 percent record lows that ended in early May, according to Bankrate.com.
“We are projecting home purchase originations will increase in 2014 due largely to gains in home sales and home prices,” Brinkmann said. “We expect to see a decline in the share of sales paid for with cash, and higher average (loan-to-value ratios) on purchase mortgages, due to the rise in home prices.”

Wednesday, October 30, 2013

Good schools translate in higher home prices | CharlotteObserver.com

Good schools translate in higher home prices | CharlotteObserver.com

It’s a key question for many homebuyers who have or plan to have young children: We want a house in an area with good schools, but what sort of price premium – if any – will we have to pay?
Academic research generally has found that if all other factors are held equal, you pay somewhat more for houses in highly rated school districts compared with homes in neighborhoods where the schools have lower ratings and test results.
National realty brokerage Redfin has come out with a study that purports to put hard numbers on the pricing differential. Using a huge database of about 407,000 home sales and nearly 11,000 elementary school districts in 57 metropolitan markets, the study concluded that on average, buyers pay $50 more per square foot for homes in top-rated school districts compared with homes served by average-rated schools. The study’s data came from multiple listing services plus school characteristics and test scores provided by research firms GreatSchools and Onboard Informatics.
‘Nearly identical’ except in price
The net result, according to Redfin, is that the price differentials for similar homes – same square footage, number of bedrooms and baths – that are located near each other but served by different school districts can range from tens of thousands to hundreds of thousands of dollars.
In some expensive areas, such as coastal California, “homes in the highest-ranking school zones” come with cost differentials ranging from $300,000 to nearly $500,000.
Even when similar homes are separated by just a school district dividing line from each other – half a mile to three-quarters of a mile apart – the price gaps can be significant. To illustrate the point, the study focused on five pairs of recent home sales.
One case in Alexandria, Va., involved what Redfin termed “nearly identical” homes – both had four bedrooms, three baths and 3,000 square feet of living space – located three-quarters of a mile apart. For one house, the local school ratings were high. For the other, lower. The price premium: $130,000, 16 percent.
Lower statistical rigor
The study offered parallel examples in San Diego, Seattle, Gilbert, Ariz., and Beaverton, Ore. Researchers found large pricing differences between home sales in highly rated school districts compared with average-ranked districts in major metropolitan areas from coast to coast, including Los Angeles, Boston, Miami, Washington, Charlotte, Chicago, Seattle, San Diego, San Antonio and Las Vegas, among others. The study defined top-rated schools as those with test scores in the 90th percentile and above and average schools as those in 40th to 60th percentiles, in their respective states.
But hold on. Could these apparently large pricing differences be attributable solely to school quality? Are test scores from elementary schools really so powerful that they can add such hefty premiums onto the prices of “identical” houses that are simply on different sides of a district school line?
Take another look at the Redfin study. Unlike academic studies that employ sophisticated statistical techniques to separate out multiple other variables that may be influencing the pricing disparities, Redfin did no regression analyses on its data.
Tommy Unger, the principal researcher for the study, conceded to me in an interview that “we wanted to tell the high-level story” for the homebuyer, and therefore did not analyze the data with the sort of statistical rigor that would be necessary for an academic paper designed to prove a point scientifically – in this case, how much extra buyers pay for top schools.
No true ‘comparables’
Also, although the study said the houses it used for comparison were “identical,” there was no attempt at creating true “comparables” as in an appraisal report detailing interior condition, improvements, neighborhood facilities and amenities, views and other locational pluses and minuses – all of which can affect pricing. The homes highlighted in the study were similar in numbers of bedrooms, baths and interior square footage. Potentially, that leaves out a lot.
For example, in the pair of Virginia houses selected to show a $130,000 price disparity across school lines, local real estate agents said there were important differences that the Redfin analysis missed: a community pool open to all residents in the higher-priced neighborhood, a strong sense of community involvement, and “walkability” designed into the neighborhood’s physical layout – all of which increase value.
“All the boxes are checked” to make that neighborhood more attractive and in demand, said Sue Goodhart, a broker with the McEnearney Associates Inc., a firm that specializes in the area.
“It’s just not all about the schools.”




Read more here: http://www.charlotteobserver.com/2013/10/10/4378795/good-schools-may-raise-home-prices.html#.UnE96HCX98E#storylink=cpy

Charlotte home prices up 7.3 percent in August over last year | CharlotteObserver.com

Charlotte home prices up 7.3 percent in August over last year | CharlotteObserver.com

Charlotte-area home prices rose 7.3percent in August from a year ago, as the region logged 18 months in a row of year-over-year gains, according to the Standard & Poor’s Case-Shiller index report.  Compared with July, prices were up 1 percent in the area.

Nationwide, home prices rose 12.8percent on an annual basis in 20 cities tracked by the report. From July, prices were up 1.3percent. Case-Shiller tracks existing-home sales.
But rising mortgage rates and fewer applications for home purchases continue to slow price gains in the U.S., said David Blitzer, chairman of the Index Committee for S&P Dow Jones Indices. In 16 U.S. cities, but not Charlotte, price increases from July to August were smaller than increases from June to July.
“That kind of pattern has been around for the last few months,” Blitzer told the Observer. “We’re seeing other data that suggests that the housing recovery is beginning to ease back a little bit.”
In the Charlotte area, home prices have been climbing on a year-over-year basis since March 2012. Since that time, the region had its largest year-over-year gain in May, when prices were up 7.9percent. Price gains slowed in June to 7.7percent and again in July to 7.2percent.
Hadi Atri, president and CEO of Charlotte-based Re/Max Executive Realty, attributed the deceleration in price increases to higher mortgage rates coupled with a normal housing market slowdown before the start of the school year. The lower demand dragged down prices, he said.
Home prices in Charlotte and elsewhere are being boosted in part by dwindling inventories of homes for sale. Atri said Charlotte continues to see multiple bids for some homes.
“Is it more than we used to have a year ago? Absolutely,” he said.
Multiple offers are most common in south Charlotte, the Lake Norman area and Fort Mill, S.C., he said.
“We’ve got less inventory than we’ve had since, I think, 2006. We do have a shortage,” he said.
Industry insiders say pent-up demand for homes is depleting inventories, as are purchases from large, out-of-state investors. Such investors have been buying up homes to rent them out. A report last month by RealtyTrac showed those investors are responsible for one in five Charlotte-area home purchases, making the region the second-busiest market in the U.S. for such buyers.
Last week, the chief economist for the National Association of Realtors said during a visit to Charlotte that the area and the rest of the U.S. will continue to have a shortage of homes for sale this year and into next. One factor is not enough new home construction, as small builders face challenges getting construction loans, the economist, Lawrence Yun, said.
Nationwide, average home prices are back to mid-2004 levels, the Case-Shiller report said. In Charlotte, prices have returned to levels not seen since late 2008. But home prices in Charlotte and nationwide are below the highs of 2007, just before the recession and housing downturn.
Rising mortgage rates and home prices are said to be lowering demand for homes. The average rate for a 30-year fixed mortgage was 4.13percent last week, up from 3.41percent a year ago, according to Freddie Mac.
On Monday, the National Association of Realtors said pending sales of existing U.S. homes fell for the fourth consecutive month in September, driven by higher mortgage rates and home prices. The forward-looking indicator dropped to its lowest level since December 2012.
Like some other real estate insiders, Atri, of Re/Max Executive, said he expects Charlotte’s sizable annual housing price gains to continue slowing.
“We’re not going to have the price increases that we had in 2012 and ’13,” he said. “Three to 4 percent is normal.”




Read more here: http://www.charlotteobserver.com/2013/10/29/4423888/charlotte-home-prices-up-73-percent.html#.UnE76nCX98E#storylink=cpy

Housing Prices in U.S. Cities Rise by Most Since Early 2006 - Bloomberg

Housing Prices in U.S. Cities Rise by Most Since Early 2006 - Bloomberg

Home prices in 20 U.S. cities rose in August from a year ago by the most since February 2006 as stronger demand boosted values.
The S&P/Case-Shiller index of property prices in 20 cities increased 12.8 percent from August 2012, more than forecast, after a 12.3 percent gain in the year ended in July, a report from the group showed today in New York. The median projection of 28 economists surveyed by Bloomberg called for a 12.5 percent advance.5:13

Tight inventories have boosted prices as buyers compete for a limited number of properties for sale. While housing continues to be a source of strength for the economy, higher 
mortgage rates and limited improvement in the labor market and wages risk slowing the pace of progress.“You’ve got some momentum,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who forecast a 12.9 percent increase in home prices. “The more encouraging thing is not just that prices accelerated, every area reported higher selling prices. The breadth of the increase was across the entire country.”
As of August, average home prices in the U.S. were back to mid-2004 levels, and the 20-city index was up 22.7 percent from its March 2012 low.

Retail Sales

Another report today showed retail sales excluding motor vehicles rose 0.4 percent in September after a 0.1 percent gain, indicating households were sustaining the economic expansion before the government shutdown this month shook confidence. The Commerce Department’s figures showed total sales dropped 0.1 percent, restrained by the biggest decrease at auto dealers since October 2012, as purchases early in the month were included in the August data.
Stock-index futures rose, after the Standard & Poor’s 500 Index climbed to a record, as Federal Reserve policy makers begin a two-day meeting. The contract on the S&P 500 expiring in December climbed 0.1 percent to 1,760.7 at 9:28 a.m. in New York.
Estimates in the Bloomberg survey ranged from year-over-year home-price gains of 11.6 percent to 12.9 percent. The S&P/Case-Shiller index is based on a three-month average, which means the August figure was influenced by transactions in July and June.
The July reading previously was reported as a year-over-year advance of 12.4 percent.

Monthly Gain

Home prices adjusted for seasonal variations rose 0.9 percent in August from the prior month after a 0.6 percent increase. That compares with the Bloomberg survey median of a 0.7 percent increase.
The month-over-month price gains were led by Las Vegas, followed by Los Angeles and San Diego. Property values rose in all 20 metropolitan areas.
“The monthly percentage changes for the 20-city composite show the peak rate of gain in home prices was last April,” David Blitzer, chairman of the S&P index committee, said in a statement. “Since then home prices continued to rise, but at a slower pace each month. Recent increases in mortgage rates and fewer mortgage applications are two factors in these shifts.”
Unadjusted prices climbed 1.3 percent in August from the previous month.
The year-over-year gauge, which uses records dating back to 2001, provides a better indication of price trends, according to Karl Case and Robert Shiller, creators of the index. Earlier this month, Shiller was one of three economists awarded the 2013 Nobel Prize in Economic Sciences for research on how financial markets work and assets such as stocks are priced.

All Increase

All 20 cities in the index showed a year-over-year gain, led by a 29.2 percent increase in Las Vegas. Values advanced 25.4 percent in San Francisco and 21.7 percent in Los Angeles.
Higher borrowing costs are already starting to bite. Fewer Americans signed contracts to purchase existing (ETSLTOTL) homes in September, the National Association of Realtors reported yesterday. The group’s index fell 5.6 percent, the most in more than three years and the fourth straight decline.
Existing-home sales, measured when a deal closes, also fell in September for the first time in three months, the Realtors’ group reported last week. Purchases dropped 1.9 percent to a 5.29 million annual rate.

Mortgage Rates

The average rate for a 30-year fixed mortgage was 4.58 percent in the week ended Aug. 22, the highest level since July 2011. It’s since fallen, averaging 4.13 percent for the week ended Oct. 24, according to Freddie Mac in McLean, Virginia.
Homebuilders and their suppliers are getting a lift from the housing recovery. Weyerhaeuser Co. (WY), a timber supplier and developer based in Federal Way, Washington, expects to close more than 1,100 homes in the last three months of this year, up about 35 percent from a year ago, President and Chief Executive Officer Doyle Simons said.
“We continue to be encouraged as long-term favorable housing fundamentals remain in place,” Simons said on an Oct. 25 earnings call. “With that said, the housing recovery appears to have taken a slight pause due to higher home prices, higher interest rates, although still very low by historical standards, slowing job growth and the antics of our government.”

Thursday, October 10, 2013

Fewer US homes entered foreclosure track in 3Q | CharlotteObserver.com

Fewer US homes entered foreclosure track in 3Q | CharlotteObserver.com

The number of U.S. homes set on the path to foreclosure slid to a seven-year low in the third quarter, reflecting a gradually improving housing market and fewer homeowners falling behind on mortgage payments.
Lenders initiated foreclosure action on 174,366 homes in the July-September period, the lowest level since the second quarter of 2006, foreclosure listing firm RealtyTrac Inc. said Thursday.
Foreclosure starts declined 13 percent from the previous quarter and were down 39 percent from the third quarter last year, the firm said.
The national slowdown in foreclosure starts comes as the U.S. housing market continues to recover from a deep slump, a rebound driven by rising home prices, steady job growth and fewer troubled loans dating back to the housing bubble days. Fewer homes entering the foreclosure pipeline should translate into fewer properties that eventually end up lost to foreclosure.
"It's looking really good that there are not more coming into the pipeline," said Daren Blomquist, a vice president at RealtyTrac. "Barring any other economic shock to the system, we expect that to bode well going forward."
Foreclosure starts fell on an annual basis in the third quarter in 38 states, including Colorado, Arizona, California and Illinois. They increased from a year earlier in 11 states, including Maryland, Oregon, New Jersey and Connecticut.
While fewer homes are entering the foreclosure process, lenders stepped up home repossessions, which led to a quarterly increase in homes lost to foreclosure.
Completed foreclosures rose 7 percent in the third quarter versus the April-June period, the firm said. Completed foreclosures were down 24 percent from the third quarter last year, however.
All told, 119,485 homes were taken back by lenders in the July-September quarter. That puts the nation on pace to end this year with roughly 507,497 completed foreclosures, or down about 24 percent from 2012's total.
Foreclosures peaked in 2010 at 1.05 million and have been declining ever since.
The number of homes taken back by banks in the third quarter climbed from the previous quarter in 26 states, including New York, New Jersey, Illinois and Virginia, RealtyTrac said.
Much of the quarterly increase in foreclosures came about in states where courts oversee the foreclosure process. Those courts were backed up with cases two years ago, but have been making progress working through their backlog.
Even so, it's taking longer for homes in many states to complete the foreclosure process.
In the third quarter, it took an average of 551 days, or 1.5 years, for a U.S. home to move from initial default status to ultimately being repossessed by the lender, the firm said.
That's up from an average of 526 days in the second quarter and an increase from 382 days in the third quarter of last year.
"It's a sign that we're still dealing with the wreckage of the last housing bust," Blomquist said.
In New York, it took an average of 1,037 days, or nearly three years, for the foreclosure process to run its course in the third quarter, the longest of any state. Maine clocked the shortest average time to foreclose at 160 days.
The impact of foreclosures remains sharply elevated in some states.
Florida topped the nation with a foreclosure rate of more than twice the national average in the third quarter.
Rounding out the top 10 states with the highest foreclosure rates in the July-September period were: Nevada, Maryland, Illinois, Ohio, Connecticut, Delaware, New Jersey, Indiana and South Carolina.




Read more here: http://www.charlotteobserver.com/2013/10/10/4376888/fewer-us-homes-entered-foreclosure.html#.UlZ_7NKsjPo#storylink=cpy

Charlotte foreclosure activity drops 46% in September | CharlotteObserver.com

Charlotte foreclosure activity drops 46% in September | CharlotteObserver.com

Charlotte-area foreclosure activity dropped 46 percent in September from a year ago, for a decline larger than the national rate, a report released Thursday shows.
According to Irvine, Calif.-based RealtyTrac, default notices, auctions and bank repossessions were reported on 708 properties in the metropolitan area, a 28 percent decrease from August. Nationally, foreclosure filings were reported on 131,232 properties, down 27 percent from a year ago but up 2 percent from August.
Nationwide, foreclosure activity has been falling as a result of fewer troubled loans that borrowers have struggled to pay, Daren Blomquist, vice president for RealtyTrac, told the Observer. Those borrowers have already gone into foreclosure or avoided losing their homes through refinancing their mortgage loans, leading to a drop in foreclosures over time, he said.
“I would say that is the fundamental reason that we’re seeing the foreclosures fade,” he said. “The same reason that we got into the mess is now going away.”
In Mecklenburg County, foreclosure activity fell 43 percent from a year ago and was down 29 percent from August.
But Blomquist said an improving U.S. housing market and tight supplies of homes for sale could motivate banks to push ahead with more home repossessions. Since November, the supply of for-sale homes in the Charlotte region has been below six-months’ worth, a level widely considered to be market equilibrium.




Read more here: http://www.charlotteobserver.com/2013/10/10/4377079/charlotte-foreclosure-activity.html#.UlZ_hdKsjPo#storylink=cpy

Tuesday, October 8, 2013

Charlotte home sales, prices rise in September | CharlotteObserver.com

Charlotte home sales, prices rise in September | CharlotteObserver.com

Sales of existing homes in the Charlotte region rose in September from a year ago, but inventory continued its downward trend, the Charlotte Regional Realtor Association reported Tuesday.
Closings were up 26 percent, to 2,825 from 2,243. The average sales price increased 7.5 percent, to $220,866 from $205,459.
While the market remains strong for sellers, buyers are facing a tightening supply of homes for sale. In a statement Tuesday, Eric Locher, the president of the association, warned prospective buyers about the low inventory, saying they should expect to face competing bids. As prices rise, though, that could encourage more sellers to put their homes on the market, boosting inventory levels, Locher said.
Charlotte-area inventory remains locked in what is widely considered seller’s market territory. The supply of homes for sale fell 9.7 percent from a year ago, resulting in a 5.4-month supply of homes for sale. A balanced market is generally considered one that has a six-month supply.
Sellers raised listing prices 6 percent on average, to $256,205 from $241,831. Buyers paid 94.6 percent of the listed price, up from 91.9 percent.
A low supply of homes for sale is credited for the yearly gains in home prices in the region and elsewhere. Real estate industry insiders say they expect to see home prices rising after falling steeply during the housing downturn, but many say the recent, sizable yearly increases aren’t sustainable.
Home sales could also be impacted by rising mortgage rates, which are expected to push some prospective buyers out of the market. According to mortgage giant Freddie Mac, the average rate for a 30-year mortgage in September was 4.49 percent, still a historically low level but up from 3.41 percent at the start of the year.




Read more here: http://www.charlotteobserver.com/2013/10/08/4373709/charlotte-home-sales-prices-rise.html#.UlQqI9Lrxv8#storylink=cpy

Tuesday, October 1, 2013

CoreLogic: August home prices up 7.6% in Charlotte area from year earlier - Charlotte Business Journal

CoreLogic: August home prices up 7.6% in Charlotte area from year earlier - Charlotte Business Journal

Home prices in metro Charlotte, including distressed sales, continued to improve in August, rising 7.6 percent from a year earlier, according to CoreLogic Inc.’s index report released today.
However, it’s not as big a jump as in July, when home prices grew 8.3 percent year-over-year, according to CoreLogic (NYSE:CLGX).
Month-to-month figures edged up just 0.5 percent in August from July for the Charlotte-Gastonia-Rock Hill metro area, the report says.
Year-over-year home prices look even stronger when distressed sales, such as short sales and real estate-owned transactions, are excluded. With those sales removed from the calculation, home prices in the region bumped up 9.9 percent from August 2012.
On a month-to-month basis, home prices were up 0.7 percent with distressed sales removed, according to the Irvine, Calif.-based data firm.
National figures continue to show a strong, steady rebound in residential real estate. August marks the 18th consecutive month of year-to-year increases in home prices across the country. However, the size of those increases has leveled off.
"After a strong run, the rate of home price appreciation slowed in August," says Anand Nallathambi, CoreLogic CEO and president. "In addition to normal seasonality, the recent sharp rise in mortgage rates off their historic lows was a clear driver behind the slowdown. We anticipate moderate gains in home prices over the balance of this year, supported by the recent downward trend in rates and continued tight supplies of homes in many markets."
CoreLogic’s latest Home Price Index report says August U.S. home prices —with distressed-property sales included — were up 12.4 percent year-over-year and 0.9 percent month-over-month.
With distressed sales excluded, the annual gains in national home prices were weaker, rising 11.2 percent in August. On a monthly basis, home prices were up 1 percent in August from July.
"While prices increased more than 12 percent on a year-over-year basis, the month-to-month change is more telling of this year's late summer trend," Mark Fleming, chief economist for CoreLogic, says in the report.