Americans on the Move Again, Census Says

US Census BureauAfter staying in place for years, bogged down by the financial effects of the recession, Americans are finally back on the move, according to the latest U.S. Census data.

In 2012, nearly 16.9 million people moved between counties, and 7 million made long-distance moves from one state to another. For long-distance moves, that figure was nearly 5 percent higher than 2010.

The recession had the effect of “freezing people in place” as they waited out a housing and economic slump, and now there’s “at least a thawing,” Kenneth Johnson, a demographer with the University of New Hampshire, told USA Today.

The median price of an existing-home rose to $212,100 this year compared to $166,200 in 2011, the National Association of REALTORS® reports. Many home owners “didn’t want to sell a house that they viewed as a low price,” says Jed Smith, an NAR economist. “Now that the prices are up, away we go.”

Where are they going? Many people are heading to the Sun Belt states: Florida, Arizona, and Nevada, Johnson says. They’re moving from Northeastern and Midwestern cities, such as Baltimore, Philadelphia, St. Louis, Cincinnati, and New York. For example, the state of New York lost about 136,000 residents in 2012.

On the other hand, metro areas such as Miami-Fort Lauderdale, which lost residents during the recession, regained population in 2012 — particularly as housing and the economy recovers there. Las Vegas; Jacksonville, Fla.; and San Jose, Calif., are other metros gaining residents after a loss, USA Today reports.

Source: “Census: Americans are moving again,” USA Today (Oct. 26, 2013)

Appraisals Catching Up to Rising Home Values

In recent months, real estate professionals have had to hold their breath as they waited for an appraisal on a property to come back. Would it be lower than the agreed-upon selling price  — and by how much?

Many real estate professionals have blamed a high number of derailed transactions on low-ball appraisals.

But now the industry is noticing a change in appraised values: Appraisals are getting more in line with the agreed upon selling price, CNNMoney reports.

Appraisers are valuing homes at or above their selling prices as home prices nationwide climb and inventories of homes decrease, says Lawrence Yun, chief economist for the National Association of REALTORS®.

For example, in Wallingford, Wash., real estate pro Michael Ackerman told CNNMoney that he was concerned a transaction would fall apart when a buyer agreed to pay $755,000 for a home since other comparable homes in the area had sold for $690,000.

“Everybody’s jaws dropped” when the appraised value came in at the full, agreed-upon selling price,” says Ackerman.

In some cases, appraisals are even coming in higher — which was practically unheard of just a few months ago. For example, real estate pro Cara Ameer in Jacksonville Beach, Fla., says with home prices in the area rising 15 percent over the past year, she was concerned the appraisal on a two-bedroom townhouse wouldn’t reflect the current rise. A buyer offered to pay $5,000 above the $189,000 asking price. The appraisal came in above the selling price, Ameer says.

Source: “Home appraisals no longer derailing sales,” CNNMoney (May 15, 2013)

Recent Listings

 

Morningstar: 40 Months to Clear Distressed Inventory

Morningstar’s Distressed Inventory Index shows that distressed inventory dropped 19 percent nationwide, and the number of liquidations fell 14 percent.

“We estimate that it will take 40 months to clear the national distressed inventory. This is down three months from one year ago,” says Brian Grow and Becky Cao of Morningstar. “In the recent housing market we have seen rising nationwide home prices, the heightened interest in stressed properties by investors, a higher percentage of short sale liquidations, and improved loan performance.”

As of February 2013, the number of distressed properties was at 1 million, marking a 40 percent drop from the peak of 1.8 million properties reached in 2009.

Short sales have risen in 2012, which means fewer properties are being liquidated. The percentage of short sales in total distressed sales has climbed to 53 percent, from 45 percent.

“The increase in short sales has not accelerated the overall speed of liquidation. In fact, there is a noticeable decline in the liquidation rate since the third quarter of 2012, when the short sale percentage continued to rise, but the months of inventory stopped declining,” the Morningstar report states. “While there may be benefits associated with short sales, such as quicker property disposition and higher sale prices relative to foreclosure sales, short sales alone do not appear to be doing enough to speed up the resolution of distressed loans.”

Source: “Liquidation rates shrink, despite rise in short sales: Morningstar,” HousingWire (May 9, 2013)

  • REDUCED: 7202 Churchill Rd, McLean

    Open House, Sunday, 1-4 BIG PRICE DROP! 7202 CHURCHILL ROAD McLean, VA 22101 6 Bedrooms 5.5 Bathrooms 6,752 SF $1,695,000

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  • [FWD: The Empire Strikes Back Pictures]

    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

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  • Good Shepherd Housing and Family Services

    Fairfax County
    Established in 1974 with a mission to reduce homelessness, increase community support and promote self sufficiency, the Good Shepherd Housing and Family Services is operated by a multi-denominational board of directors and staff managing over 70 housing units. Good Shepherd Housing and Family Services is located in the Mount Zephyr Business Center at 8305 Richmond…

    Read More

  • Mistake 4: Acting too picky.

    We help buyers and sellers.
    While you should narrow down what you want and you list features most important to you, don’t be so inflexible that you make it impossible to find a home. If you’re too picky, you may have to continue renting when you could own a home. Be willing to compromise on some of the less important…

    Read More

Affordability Remains High, Despite Price Gains

Low mortgage rates and stabilizing incomes are keeping home affordability high and giving home buyers “ample buying power,” according to the National Association of REALTORS®.

The Wall Street Journal highlights the following example on just how affordable housing has become: “Assuming a 5 percent down payment, a 3.5 percent mortgage rate, and 25 percent of a gross income devoted to mortgage payments, a buyer would only need an income of $36,500 to buy a house at the median price. With a 10 percent down payment, the required salary falls to $34,600, and with a 20 percent down payment, it falls to $30,700.”

In the first quarter, the median family income nationwide was $62,200.

Housing affordability remains high despite recent reports that show home prices in 150 U.S. cities saw their biggest year-over-year gains in more than seven years, according to NAR’s most recent report, reflecting data from the first quarter of 2013. The median price of a single-family, existing home was $176,600 in the first quarter of this year, an increase of 11.3 percent from year ago levels, NAR notes.

Source: “Home Prices Jump but Affordability Remains in Buyers’ Favor,” The Wall Street Journal (May 9, 2013)

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Demand for Home-Purchase Loans Hits 3-Year High

Mortgage applications were on the rise last week, with applications for home purchases — viewed as a leading indicator of future home sales — moving up to their highest level since May 2010, the Mortgage Bankers Association reported.

Mortgage applications for home purchases increased 2 percent last week, while applications for refinancings, which make up the biggest bulk of the index, jumped 8 percent.

Overall, MBA’s mortgage application index increased 7 percent last week, reflecting both applications for purchase and refinancings. MBA’s index covers more than three-quarters of all mortgage applications in the country.

MBA reported that the average rate on 30-year fixed-rate mortgages fell to 3.59 percent last week, its lowest point since December.

Source: “U.S. Mortgage Applications Up 7% Last Week – MBA,” The Wall Street Journal (May 8, 2013)

  • Inlet Cove is near Fort Belvoir and Potomac Mills

    Inlet Cove outside Belvoir
    Inlet Cove is alongside Route 1 This neighborhood of townhouses is near grocers and eateries Inlet Cove is close to Fort Belvoir, Alexandria, and Potomac Mills shops, in the city of Woodbridge Interior to these properties are multilevel Inlet Cove is serene

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  • Pending Home Sales on an Upswing

    home inspector
    Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1…

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  • A Good Time to Buy a High-End Home

    Station Square
    Some of the best housing deals are on high-end homes, many over $1 million. Some of them need TLC or they aren’t in the most-coveted locations. But there are plenty of desirable properties and lots of sellers who are getting impatient. Buyers with cash have the best opportunities. Buyers who need a mortgage should move…

    Read More

  • Looking for the big price drop?

    arrow down
    If you love price drops we have good news. NesbittRealty.com now features the biggest and most recent price drops on area real estate. We have condos, townhouses and houses all with big price reductions. These HOT properties will attract a lot of attention so contact us to take a closer look. In general we look…

    Read More

  • Who is today’s homebuyer and why are they buying?

    Nesbitt Realty 703 765 0300
    The National Association of Realtors recently did a study about the characteristics of home buyers. Some of the findings might surprise you. Thirteen percent of buyers purchased a home with one or more parents and grandparents together with adult children. There were several reasons given for purchasing a multi-generational home. Cost savings; Children over the…

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4 Threats That Remain in Housing Recovery

The housing recovery appears to be on track and growing stronger. Home sales and prices are up after reaching bottom in 2010, foreclosures and mortgage delinquencies are dropping, yet housing affordability still remains high.

So why are some analysts and economists concerned?

At a recent Milken Institute Global Conference in Beverly Hills, Calif., panelists said that threats to the housing recovery still remain. The biggest threats they pointed to included:

  1. Land scarcity: Real estate developers are struggling to find desirable land to start new projects, which is limiting the supply of new homes. A few years ago, banks took ownership of land after developers had foreclosed on some projects. The land is worth less than its original price so banks are reluctant to write off additional losses by selling it too cheaply. Plus, lenders remain cautious about issuing loans for new land purchases.
  2. House flippers should be cautious: Housing affordability is high mostly due to super low mortgage rates, and investors are taking advantage with intentions of flipping homes for profit. “No doubt you can buy a house today and get a really good price and a low-interest loan,” says Jeff Greene, president of Florida Sunshine Investments. “But if you want to sell that house to somebody two or three years later and rates go up to 5 or 6 percent, how much is he going to pay for that house?”
  3. Foreign buyers potentially inflating prices: In some markets, strong demand by foreign buyers has helped home prices recover, which has made homes more expensive for Americans in some areas. Some analysts fear that it could even lead to another housing bubble if interest rates started rising quickly as well. Markets like Miami, Los Angeles, and New York are seeing strong demand among foreign buyers. Some say this is a good thing, because it reflects a strong faith in the U.S. market.
  4. A ‘patchy’ recovery: Some markets are seeing rapid increases with bidding wars, rising prices, and low inventories, while other markets are still at a standstill. For example, Miami’s housing market is “on fire” while 80 miles north in Palm Beach County there’s a “huge glut of housing,” says Greene.

Source: “5 Reasons the Housing Recovery Remains Wobbly,” U.S. News & World Report (May 3, 2013)

  • Inlet Cove is near Fort Belvoir and Potomac Mills

    Inlet Cove outside Belvoir
    Inlet Cove is alongside Route 1 This neighborhood of townhouses is near grocers and eateries Inlet Cove is close to Fort Belvoir, Alexandria, and Potomac Mills shops, in the city of Woodbridge Interior to these properties are multilevel Inlet Cove is serene

    Read More

  • Pending Home Sales on an Upswing

    home inspector
    Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1…

    Read More

  • A Good Time to Buy a High-End Home

    Station Square
    Some of the best housing deals are on high-end homes, many over $1 million. Some of them need TLC or they aren’t in the most-coveted locations. But there are plenty of desirable properties and lots of sellers who are getting impatient. Buyers with cash have the best opportunities. Buyers who need a mortgage should move…

    Read More

  • Looking for the big price drop?

    arrow down
    If you love price drops we have good news. NesbittRealty.com now features the biggest and most recent price drops on area real estate. We have condos, townhouses and houses all with big price reductions. These HOT properties will attract a lot of attention so contact us to take a closer look. In general we look…

    Read More

  • Who is today’s homebuyer and why are they buying?

    Nesbitt Realty 703 765 0300
    The National Association of Realtors recently did a study about the characteristics of home buyers. Some of the findings might surprise you. Thirteen percent of buyers purchased a home with one or more parents and grandparents together with adult children. There were several reasons given for purchasing a multi-generational home. Cost savings; Children over the…

    Read More

Home Ownership Rate Drops to Lowest Point in 18 Years

The U.S. home ownership rate has fallen to its lowest point since 1995, the Census Bureau reports. US Census Bureau

The home ownership rate dropped to 65 percent in the first quarter, down slightly from 65.4 percent a year earlier.

Housing analysts say tight credit conditions, constrained inventories of for-sale homes, and an increase in single-family rental homes have caused the home ownership rate to fall.

Paul Diggle, a property economist for Capital Economics, says he predicts the home ownership rate will likely fall for the remainder of the year.

The home ownership rate peaked in June 2004 when it stood at 69.2 percent.

Source: “U.S. Homeownership Rate Falls to Lowest Since 1995,” Bloomberg News (April 30, 2013)

 

Investors helped the market — but may be hurting its future

Real estate investors have helped the market recover. But for the long-term health of the market, maybe they should stop now.

A balcony at Watergate at Landmark
A balcony at Watergate at Landmark

(To be clear: By “investors” I mean people and companies that buy single-family homes to turn them into rentals, not house-flippers.)

Here’s what’s worth watching: When all those foreclosures went on the market at deep discounts, investors began snapping them up. That was a good thing, because there was so much inventory out there that prices were staying low.

Once most of that distressed inventory was gone, though, conventional wisdom said that investors would ease off. Prices would go up and the great deals would be gone.

That may not be the case. Investors are still buying inventory — at least, that’s what economist Tom Lawler is seeing. With the Fed keeping interest rates low, it’s apparently still a good investment, at least for larger investors.

And that may not be good for the long-term of the market.

Investors aren’t planning to sell. Ever. The homes they’ve turned into rentals are going to stay as rentals — that’s inventory being taken out of the market. When someone is looking to move up or downsize, the pool of available homes is going to be smaller.

As economist/housing guy Bill McBride puts it (emphasis mine):

This investor buying is making it very difficult for first time buyers to find a home, and this is probably keeping some potential buyers as renters — and maybe pushing up some buyers to higher price points just to buy.

In the short run (the next few years), I don’t think these institutional buyers will have a negative impact on the market.  It seems unlikely they will be large sellers, and they will probably maintain the homes that they purchase. However this could impact the housing market in the future, especially the move-up market, since the move-up market usually needs previous first-time buyers to sell their first homes. Obviously institutional sellers will not be move-up buyers.

Even worse, potentially, is that by shrinking inventory and raising prices, investors might be creating a new housing bubble. (Click here for a Bloomberg article about that very issue.) That’s still speculation, though. Old Town

What isn’t speculation is that we’re already seeing an inventory shortage as sellers stay on the fence (possibly afraid to be selling at the bottom, or maybe they’re just underwater).

Those sellers will eventually enter the market, of course, but if too much single-family housing gets into the hands of investors, inventory shortage could be a long-term problem we’ll need to keep an eye on.

Posted by Andrew Kantor

House Flipping Staging a Comeback?

More Americans are once again on the hunt to snag a home at bargain prices, fix it up, and then try to resell it for a quick profit. Home flippers mostly vanished from the market during the housing downturn a few years ago. But with home values inching up, flipping is coming back.

RealtyTrac says flipping increased for the second year in row, rising a slight 0.33 percent in 2012 from 12 percent in 2011. The company defines flipping as buying and selling a property within six months.

RealtyTrac reports the average gross profits for these types of transactions was $37,375 in 2012. According to the company, some of the best places to flip homes in 2012 were Orlando, Fla.; Richmond, Va.; Tucson, Ariz.; and Charlotte, N.C.

For example, homes flipped in Orlando were purchased for $100,397, on average, and then for $174,895 — earning a gross profit, on average, of nearly $75,000, RealtyTrac reports.

Investors are showing signs of being more cautious with flipping than they were during the housing boom. More investors are coming in with all-cash deals to purchase the homes. They also are holding onto the properties longer than they once did. On average, the flipping time from purchase to resale stands at about 106 days today, according to RealtyTrac.

“That seems to be the sweet spot for a profitable deal,” says Daren Blomquist, vice president at RealtyTrac. “Back in the housing bubble, many flippers were solely relying on price appreciation, sitting back and selling for big profits within a month or two.”

Source: “The New Rules of House Flipping,” Reuters (April 18, 2013)

Recent Listings

  • REDUCED: 7202 Churchill Rd, McLean

    Open House, Sunday, 1-4 BIG PRICE DROP! 7202 CHURCHILL ROAD McLean, VA 22101 6 Bedrooms 5.5 Bathrooms 6,752 SF $1,695,000

    Read More

  • [FWD: The Empire Strikes Back Pictures]

    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

    Read More

  • Good Shepherd Housing and Family Services

    Fairfax County
    Established in 1974 with a mission to reduce homelessness, increase community support and promote self sufficiency, the Good Shepherd Housing and Family Services is operated by a multi-denominational board of directors and staff managing over 70 housing units. Good Shepherd Housing and Family Services is located in the Mount Zephyr Business Center at 8305 Richmond…

    Read More

  • Mistake 4: Acting too picky.

    We help buyers and sellers.
    While you should narrow down what you want and you list features most important to you, don’t be so inflexible that you make it impossible to find a home. If you’re too picky, you may have to continue renting when you could own a home. Be willing to compromise on some of the less important…

    Read More

 

Barclays: Home Prices to Rise 10% This Year

Home prices will likely climb 10 percent in 2013 and 8 percent in 2014, according to Barclays analyst Stephen Kim, who recently upgraded his view of the housing market from neutral to positive. Homes by price

Kim told The Wall Street Journal recently that low mortgage rates are helping to make buying more affordable than renting in many markets.

About “18 months ago, the industry was nothing much to look at: dilapidated foreclosures were flooding the market, home equity had suffered the worst retrenchment in a generation, and housing starts and sentiment were far below historic troughs levels,” Kim notes. “But after stabilizing in 2012, both new and existing home prices are now accelerating much more rapidly than in the 1990s cycle.”

Source: “The Housing Market: Not Your Analyst’s Oldsmobile?” The Wall Street Journal (April 23, 2013)

  • Inlet Cove is near Fort Belvoir and Potomac Mills

    Inlet Cove outside Belvoir
    Inlet Cove is alongside Route 1 This neighborhood of townhouses is near grocers and eateries Inlet Cove is close to Fort Belvoir, Alexandria, and Potomac Mills shops, in the city of Woodbridge Interior to these properties are multilevel Inlet Cove is serene

    Read More

  • Pending Home Sales on an Upswing

    home inspector
    Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1…

    Read More

  • A Good Time to Buy a High-End Home

    Station Square
    Some of the best housing deals are on high-end homes, many over $1 million. Some of them need TLC or they aren’t in the most-coveted locations. But there are plenty of desirable properties and lots of sellers who are getting impatient. Buyers with cash have the best opportunities. Buyers who need a mortgage should move…

    Read More

  • Looking for the big price drop?

    arrow down
    If you love price drops we have good news. NesbittRealty.com now features the biggest and most recent price drops on area real estate. We have condos, townhouses and houses all with big price reductions. These HOT properties will attract a lot of attention so contact us to take a closer look. In general we look…

    Read More

  • Who is today’s homebuyer and why are they buying?

    Nesbitt Realty 703 765 0300
    The National Association of Realtors recently did a study about the characteristics of home buyers. Some of the findings might surprise you. Thirteen percent of buyers purchased a home with one or more parents and grandparents together with adult children. There were several reasons given for purchasing a multi-generational home. Cost savings; Children over the…

    Read More