Markets seling out fast © Andy Dean – Fotolia.com

According to the NAR, total inventory in the US fell to just 1.82 million homes at the close of 2012, 21.6% lower than December 2011. In a recent investigation, the Wall Street Journal highlighted some of the causes of falling inventories:

Sellers hesitant:

One of the most fundamental problems remains the number of homeowners that are still underwater – some 22% of those with mortgages, according to CoreLogic. Homeowners in this situation are reluctant to sell as doing so would mean taking a big financial hit. Consequently, those areas with the highest percentage of underwater borrowers have some of the lowest inventories around.

Investors change strategy:

A second problem is that investors make up a huge portion of active buyers at present. But whereas before the idea was to snap up a property, do it up and move it along, many are now changing tack, doing up the homes they buy and renting them out to feed the growing demand in this market. As a result, fewer doer-uppers are coming onto the market.

Lack of equity:

While not everyone is underwater, a great deal of homeowners lack equity in their current homes, hence they are unable to ‘trade up’ for a better home. General practice is for buyers to use the proceeds from the sale of their current home to finance a down payment on one that’s more expensive, but this is becoming less common simply because most people don’t see enough equity in their properties.

Fewer foreclosures:

Faced with more scrutiny over the way they handle foreclosures, banks are moving at a far slower pace than before when it comes to repossessing homes. As such, we’re seeing far fewer foreclosed properties come onto the market than before.

Less new homes:

It’s only recently that the new home market has shown signs of a rebound, but while the number of housing permit applications has increased recently, builders still need time to build these new developments. Between 2009 and 2011, the number of housing starts fell to record lows, hence we’ve seen little by way of ‘new’ inventory come onto the market.

The number of homes sold in October 2012 — 4.79 million — went up 10.9 percent over the October 2011 number of 4.32 million. Foreclosures and short sales made up about 24 percent of the October sales.

Lawrence Yun , NAR chief economist, said there was some impact from Hurricane Sandy. “Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country,” he said. “We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions.”

The number of houses on the market fell to 2.14 million existing homes, the lowest number since February 2006.

Meanwhile, mortgage rates continue at low levels, too. Freddie Mac says the 30-year conventional fixed-rate mortgage hit a new low at 3.38 percent in October. In October 2011, the rate was 4.07.

NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said record low mortgage interest rates shouldn’t be taken for granted. “Even with rising home prices, we’ll continue to see favorable housing affordability conditions over the coming year, but they won’t last forever,” he said.

“Inflationary pressures are expected to build during the next two years. As a result, mortgage interest rates will also rise with inflation. Buyers who are currently held back by tight mortgage credit standards should work to improve their credit scores so they’ll be able to qualify for a mortgage while conditions are still favorable.”

Although the overall market is improving, things aren’t boding as well for first-time buyers, who are making up less of the housing market. They normal comprise about 40 percent of the market but today the percentage has slipped to 31 percent of buyers, according to NAR data.

“Financing of first-time home buyers with low down payments threatens to become a significant problem in the U.S. housing market,” Thomas Popik, research director for Campbell Surveys, recently wrote.

“Fifty percent of first-time home buyers use FHA financing, but FHA insurance premiums are increasing and underwriting is becoming more strict.”

Main image: © W.Scott – Fotolia.com

Research unveiled at an industry conference last week also found the amount of time it takes to sell a house is shrinking.

“We’ve seen a tremendous increase in cash buyers since the housing downturn that we haven’t seen before in history,” said Lawrence Yun, chief economist of the National Association of Realtors®. Yun said a decade ago all-cash home purchases were less than 10 percent of the market but have increased steadily since 2008, to as much as 30 percent of sales.

Tight lending conditions have contributed to the cash phenomenon. Most of the all-cash buyers are investors, Yun said. There is also an increase in the number of international buyers. NAR research shows that 62 percent of international purchases were all cash; the percentage has continually increased since 2007.

Another segment of homebuyers that is using all cash is boomers who are downsizing. They sometimes have enough equity in the home they sell to pay all cash for a smaller home.

Cash sales often mean quick sales.

“Research shows a bias toward cash sales for newer and lower priced homes,” Dr. Grant Ian Thrall, president of the American Real Estate Society , said. “Many of those sales are occurring within the first 60 days that the home is on the market, and more than half sold within the first 120 days.”

Meanwhile Yun says the decrease in the amount of time on the market is also the result of a tightened inventory.

“Tightened inventories in some places mean homes are selling more quickly and reducing time-on-market,” Yun said. “Our research shows that last year, home buyers saw 10 homes before buying, down from 12 the year before, and more than half of buyers reported that finding the right home was the hardest part of the home search process.”

The 2012 National Association of Realtors® Profile of Home Buyers and Sellers reveals that 65 percent of all buyers are married couples. Two years ago, just 58 percent of buyers were married.

“We’ve known for some time that stringent mortgage credit standards have been holding back home sales, but these findings show single buyers have been hurt the most over the past two years,’ said Paul Bishop, NAR vice president of research. “The study is painting a clearer picture of the impact of mortgage limitations.   Total home sales would be 10 to 15 percent higher without these unnecessary headwinds.”

“The continued growth in married couples as single buyers shrink demonstrates that households with dual incomes are more successful in obtaining a mortgage.  However, given the historically favorable housing affordability conditions, most single-income buyers could also purchase a home and stay well within their means, if lending requirements were more sensible,” Bishop said.

The median age of the first-time buyer was 31 and the median income was $61,800. And what did that get them? A 1,600 square-foot home that costs $154,100. The average repeat buyer was 51, earned $93,100, and bought a 2,100-square foot home that cost $220,000.

The biggest factors influencing neighborhood choice were:

• Quality of the neighborhood, cited by 61 percent of buyers
• Convenience to jobs, 43 percent
• Overall affordability of homes, 39 percent
• Convenience to family and friends, 35 percent
• Neighborhood design and convenience to shopping, 26 percent each
• Quality of the school district, 25 percent
• Convenience to schools, 22 percent
• Convenience to entertainment or leisure activities, 19 percent

Buyers are also heavily swayed by the commute time and cost of gas from their home; 75 percent of buyers said transportation costs were important.

Some 30 percent said the biggest reason people buy a home is the simple desire to own a home of their own. That included 60 percent of first-time buyers.  The next biggest reasons for buying were desire for a larger home, cited by 11 percent of respondents; a job-related move, 9 percent; a change in family situation, 8 percent; and the affordability of homes, 7 percent.

Realtors Property Resource (RPR) – courtesy their Facebook

Realcomp, a Farmington Hills company with some eleven thousand plus members in Detroit, will now now feed RPR listings in exchange for advanced analytics for Realcomp subscibers. Realcomp II Ltd. CEO Karen S. Kage offered comment on the announcement:

“Realcomp II Ltd. is very pleased to make Realcomp MLS data available through the RPR product in order to ensure that our REALTOR® subscribers have full use of all of the technology tools and features that the product offers. Our Board of Governors approved moving forward with RPR for the benefit of its MLS Subscribers, and in line with the company’s mission to deliver first-rate data services, support, and instruction to the real estate industry.”

A subsidiary of the National Association of Realtors, RPR has MLS and commercial info exchanges reflective of NAR’s over one million members. So basically Realcomp II Ltd. has just plugged into a much more powerful network of listing and sales potential, when all is said and done. Despite criticisms RPR has not produced for the NAR revenue wise so far, it seems clear that the uptake of tech for Realtors is a slow go anyhow. Most agencies cannot even figure out Twitter let alone study advanced analytics, while it’s also clear the RPR people are tuned to SM looking at their Facebook.

Having only recently launched to support some one million Realtors nationwide, RPR is targeting monetization via their analytics. Rather than go into the specifics of RPR offerings, the video below from them explains in some detail how their historical data can fast forward agent effectiveness.

© Andy Dean – Fotolia.com

The total sales of single-family homes, townhouses, and condominiums decreased by 1.7 percent to 4.75 million in September from 4.83 million in August. The increase from September 2011 to September this year was 11 percent. Foreclosures and short sales accounted for 24 percent of the sales in September.

“Despite occasional month-to-month setbacks, we’re experiencing a genuine recovery,” said Lawrence Yun, NAR chief economist. “More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West.”

The total number of houses available for sale fell 3.3 percent from August to September and is 20 percent lower than September 2011.

“The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production,” Yun said.

Industry representatives predict 2013 to bring a recovery in the housing market.

“Now that the summer buying season is behind us, we can clearly see that the market made a significant rebound, and 2012 is definitely the year of the housing recovery,” said Margaret Kelly, CEO of RE/MAX, LLC.  “Although we still face some serious obstacles in tight lending and shrinking inventory, we believe that the housing market will continue to recover into 2013.”

The inventory of pre-owned homes on the market in North Texas has dropped almost 40 percent in the last two years, according to The Dallas Morning News. In some of those areas, the supply is at the lowest level in more than a decade.

Meanwhile, in the Portland area the number of homes on the market has gone down 26 percent over the past year, according to The Oregonian.

“You don’t get to call your folks or think on it overnight,” said Nick Krautter of Keller Williams Realty, told The Oregonian. “You have to move now. There’s definitely a sense of urgency that’s back in the market.”

Image by Art Rock (Hennie)/flickr.com

ERA Real Estate has been around for 40 years, developing consumer-oriented products and services in the real estate industry.  The ERA network includes some 30,000 brokers and sales associates and approximately 2,400 offices throughout the United States and 35 countries and territories.

“As vacations wind down after Labor Day and people become more focused, the desire to be in a new home for the holidays is a historically strong driver of fall home sales,” said Charlie Young, president and CEO of ERA Real Estate.

The ERA survey reveals 40 percent of respondents like fall for homebuying because of the “back to school” and starting fresh mentality that hits when September and October come around. Twenty percent cite wanting to be in their new home in time for the holidays. And 10 percent want to take advantage of the tax benefit of buying and owning a home.

The biggest group of fall homebuyers are first-time homebuyers at 27 percent, according to the report. Twenty percent are move-up buyers. Some 17 percent are retirees or those downsizing. The remaining 36 percent is made up of investors, military relocations, vacation home buyers, and “other.”

Fall is also a good time from a buyer standpoint as many sellers want to try to sell by the end of the year. Also, sellers in colder climates generally want to sell before the cold weather and snow hit.

How the findings will affect what happens this fall remains to be seen.

The National Association of Realtors reports pending home sales in August 2012 declined after reaching a two-year peak. But the August figures are higher than August 2011.

Lawrence Yun , NAR chief economist, said some volatility can be expected in the monthly readings. “The performance in month-to-month contract signings has been uneven with ongoing shortages of lower priced inventory in much of the country, and across most price ranges in the West, but activity has remained at notably higher levels this year,” Yun said.

Michele Dawson is a freelance writer based in Phoenix, Arizona. She spent seven years as a newspaper reporter and has written for various magazines and web sites specializing in real estate and home improvement, including Realty Times, SmartHomeowner, California Builder, and the Sacramento Business Journal.

Image/freedigitalphotos.net

Existing home sales rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July. Comparing year to year, August sales this year were 9.3 percent higher than August 2011.

Lawrence Yun, NAR chief economist, said favorable buying conditions get the credit. “The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions,” he said. “Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices.”

The national median existing-home price for all types of housing rose 9.5 percent to $187,400 from August 2011 to August 2012. The August increase was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.

Meanwhile, the NAHB reports that builder confidence in the market for new homes rose for the fifth month in a row. In September the level rose to 40, marking the index’s highest rating since June 2006.

“This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work – which would create needed jobs — and discouraging consumers from pursuing a new-home purchase.”

The survey, the NAHB/Wells Fargo Housing Market Index, conducted for the past 25 years, gauges builder perception of home sales and sales expectations for the upcoming six months. Any number over 50 indicates that more builders view sales conditions as good than poor.

And more good news for buyers: the average 30-year fixed rate mortgage dropped to 3.49 percent with a .6 point this week, according to Freddie Mac. The average 15-year fixed rate mortgage came in at 2.77 percent with a .6 point.

Michele Dawson is a freelance writer based in Phoenix, Arizona. She spent seven years as a newspaper reporter and has written for various magazines and web sites specializing in real estate and home improvement, including Realty Times, SmartHomeowner, California Builder, and the Sacramento Business Journal.

Encouraging news for US real estate © CaptainScott – Fotolia.com

First, the national median price of existing homes rose in July with five back-to-back months of year-over-year increases. The number of existing single-family homes, townhouses, condos, and co-ops grew 2.3 percent from 4.37 million in June to 4.47 million in July. When comparing this July to last July, the increase is 10.4 percent.

“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates, said Lawrence Yun, NAR chief economist.  “Combined, these factors are helping to unleash a pent-up demand,” he said.  “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”

Equally encouraging is the fact that houses are selling more quickly. In July 2011, the median time for a U.S. house to sit on the market was 98 days. For July this year, it’s about a month less at 69 days.

“Our current forecast is for the median existing home price to rise 4.5 to 5 percent this year and about 5 percent in 2013, which is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges,” Yun said.

Reports are also strong from the hardest-hit states like California, Nevada, Arizona and Florida, where home values took severe nosedives over the past five years.

For example, the California Association of Realtors reports the statewide median price of a single-family home in July 2012 shot up 12.7 percent over July 2011.

“The strong performance in the median price over the past few months reflects a sales shift away from homes in the lower price ranges of the market due to stark inventory toward sales of homes priced above $500,000,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “As an example, in July, sales of homes priced below $200,000 declined 9.4 percent from the previous year, and homes priced above $500,000 climbed 27.7 percent from a year ago.”

The Home Depot corroborates the upswing. Sales at the country’s largest home-improvement retailer jumped 12 percent in the second quarter of 2012 (April, May and June). Sales of paint, bathroom accessories and kitchen installations contributed to the boost.

Michele Dawson is a freelance writer based in Phoenix, Arizona. She spent seven years as a newspaper reporter and has written for various magazines and web sites specializing in real estate and home improvement, including Realty Times, SmartHomeowner, California Builder, and the Sacramento Business Journal.

© Rob – Fotolia.com

In October, five winners will be chosen from the 10 finalists named below and will receive a $10,000 grant for their particular community cause. They will also receive paid travel expenses to go to the 2012 REALTORS® Conference & Expo in Orlando, Fla, where the awards will be given. The national media attention they and their cause receive goes without mention…

The “honorable mentions” won’t go home empty-handed, however – they will each receive a $2,500 grant to take home to their community.

NAR President MOE Veissi, broker-owner of Veissi & Associates, Inc. out of Miami said, “Realtors® are integral to a successful community. The Good Neighbor Awards remind us of that and recognize NAR members who spend their time and energy to improve the lives of those in need. I am proud to honor these 10 Realtors® and help them grow their efforts so they can help even more people through their selfless work.”

The finalists as listed by NAR:

Rocco “Rocky” Balsamo, The Rocky Balsamo Real Estate Group/Long & Foster, Princeton Junction, N.J.

Balsamo is founding board member and volunteer executive director for Center for FaithJustice, a nonprofit that promotes volunteerism among teens and young adults. CFJ runs summer day camps and sleep away camps, as well as other year-round workshops for schools and churches. Last year, more than 900 teens volunteered more than 20,000 hours in local charities and spent a similar number of hours in education classes.

Charlene M. Brennan, Strano & Associates Real Estate, Fairview Heights, Ill.

For 17 years, Brennan has been dedicated to helping serve the Rotary District 6510’s Belizean Children’s Program. She travels to Belize once a year with physicians to identify children who will come to the U.S. for orthopedic surgery. She photographs patients, coordinates their travel, and recruits host families to care for them. While they are in the U.S., she coordinates their medical care, testing, and physical therapy until they are ready to return home to their families in Belize.

Georgia L. Butterfield, Legacy Real Estate & Associates, Fremont, Calif.

For 18 years, Butterfield has led the nonprofit Adopt An Angel, providing holiday gifts for more than 8,000 of the country’s most needy children. She helped provide gifts for 800 children in 2011 alone. The children, who are living in group homes, shelters, foster care or low-income homes, make wish lists of three gifts. Butterfield finds people to buy what’s on the list and procures donated warehouse space, and recruits volunteers to shop, wrap, tag and deliver the gifts during the holiday season.

Michael Ray Campbell, Broker Associate, Coldwell Banker Residential Brokerage, Tucson, Ariz.

Campbell is president of the nonprofit Hearth Foundation, which provides transitional housing for low-income families, typically women with young children. He is credited for reorganizing and stabilizing the organization, strengthening the board, and creating effective partnerships with other organizations to provide services to the residents. Campbell recently won a $720,000 grant, which will allow the organization to make much-needed renovations to their apartments.

Regina “Ginger” Dowdle, Sunrise Realty & Development, Statesville, N.C.

Dowdle and her husband founded The Shepherd’s Watch Ministries, which offers summer camp to the community, as well as a year-round residential program for at-risk youths ages 13-18 in foster care, on their 60-acre farm. The residential program focuses on teens who will likely age out of foster care without being adopted. The goal is to teach these youths much needed skills to help prepare them for independent living. The Dowdles have foster parented more than 20 youths since 2005, adopting two boys with another adoption in process.

Ortrud “Trudy” Harsh, Associate Broker, Long & Foster, Fairfax, Va.

Harsh founded The Brain Foundation in 2003 to address the growing need for affordable housing for mentally ill adults who might otherwise be homeless. The foundation has since purchased six homes that house 24 adults with brain diseases like schizophrenia, bipolar disorder or chronic depression. She has formed a successful partnership with another nonprofit to provide residents with services that allow them to live independently. Her model has been copied in Florida and she frequently mentors others who are trying to create similar programs.

Geoffrey W. Lavell, Better Homes & Gardens Real Estate-Desert Properties, Henderson, Nev.

Lavell devotes hundreds of volunteer hours to the Nevada Childhood Cancer Foundation. A survivor of childhood cancer himself, Lavell is a 15-year volunteer and co-director of Camp Cartwheel, a summer overnight camp for children with cancer or other catastrophic diseases and their siblings. He also leads a puppet show program that travels to schools to educate children about these illnesses and the importance of welcoming back a child who is re-entering school after a long illness.

Patti M. Miller, Tierra Antigua Realty, Sierra Vista, Ariz.

Miller is founder and president of Real Wishes Foundation. Since 2006, the organization has granted home repair wishes for the elderly and disabled as well as other wishes throughout their community.  Miller sprang into action during recent Arizona wildfires and flooding, collecting $1 million worth of food, clothes, and places to stay for victims who lost everything. The foundation, which is supported by the Southeast Arizona Association of REALTORS®, also distributed $130,000 in donations to victims to help pay for losses.

Kathleen Peck, All in One Realty Group Inc., Naples, Fla.

Peck cofounded Lighthouse of Collier, Inc., in 2009. The organization provides services to help the blind and visually impaired function more independently and improve their quality of life. Legally blind herself, Peck raises funds to provide free summer camp for blind children, counseling and skills training for adults transitioning to blindness, and support for caregivers.

Sally Rudloff, Kane & Associates, Alameda, Calif.

As volunteer president of the Alameda Boys and Girls Club, Rudloff is credited with incredible growth that will allow the club to expand from serving 1,200 children to 3,000. Rudloff led a $10 million capital campaign that built a new 25,000-square-foot youth center. She also launched a dental clinic for uninsured children, recruited math teachers for a new tutoring program, and created partnerships that provide counseling for 50 families.

Do you know of a realtor who should be on this list? Please, tell us about him or her – we’d love to showcase them (and their cause) here at RealtyBizNews!