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Pending Home Sales Rise 4.5%
Pending home sales in January were up 4.5 percent month-over-month, and that was above expectations for a rise of 1.9 percent.
Pending home sales were up 10.4 percent on a year-over-year basis, beating expectations for a rise of 8.2 percent.
January’s number was also revised up to reflect a 1.9 percent decline, from the initial reading of a 4.3 percent decline.
Regionally, in the Northeast the pending home sales index (PHSI) were up 8.2 percent on the month, in the Midwest sales were up 4.5 percent on the month, in the South sales were up 5.9 percent, and in the West it was up a marginal 0.1 percent, and down 1.5 percent from a year ago.
In a press release, Lawrence Yun, NAR’s chief economist said, “Favorable affordability conditions and job growth have unleashed a pent-up demand. Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country. It’s also why we’re experiencing the strongest price growth in more than seven years.”
These recent pending home sales figures show that existing home supply is tight, especially in the West which is why home price increases in the region are increasing the most. Yun said he now expects 5 million home sales in 2013, down from 5.1 million.
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Home Buyers Wants Have Changed
What home buyers want when looking for their perfect abode have changed, according to a new study by the National Association of Home Builders.
The study found that home buyers are overwhelmingly much more cautious and sensitive to prices than before, but what’s really interesting is what tops buyer’s lists of must-haves in their new home.
It’s probably not a surprise to learn that energy efficient homes are priority number one for the vast majority of home buyers. The NAHB found that Energy-star appliances are essential number one in the eyes of many buyers, followed by energy efficient laundry rooms.
High-end amenities were cited by 62% of home buyers as being more important to them than available living space – in other words, most people are more than willing to sacrifice that extra bedroom or go with a smaller living room in order to get their hands on the latest hi-tech gizmos like wireless home security and Wi-Fi controls for their utilities.
Home buyers also want style over substance, preferring French doors over regular doors, and they want luxuries like a double sink in the kitchen, and a hot tub and shower in the bathroom.
Luxuries like a golf course community and an elevator have gone out the window in the eyes of many home buyers. Consumers don’t see the need for laminate countertops, nor do they have a use for wine cooler refrigerators anymore. Mind you, they’d like some outdoor space – but an outdoor kitchen is probably a little too excessive for most.
What most people are looking for is access to the right kinds of amenities and they prefer to live outside of cities and live in the suburbs. Watch a video on the NHB report.
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Bernanke: Housing Market Has Hit Bottom
Federal Reserve chief Ben Bernanke gave a cautiously optimistic view of the U.S. housing market recently, saying evidence suggested the market had hit the bottom over the last year and was recovering.
Mr. Bernanke was testifying before the House Financial Services Committee when he said the Fed’s bond buying program appeared to be having a positive early impact on the housing market, helping homeowners refinance existing loans or buy new homes.
Bernanke said house prices had dropped 30% nationwide from their peak since the beginning of the financial crisis, but said prices of homes had crept up over the last year.
The number of foreclosures, while still too high, are declining as are the number of homeowners who are underwater, a term meaning they owe more on their mortgages than their homes are now worth.
Bernanke said the continuing improvement in the housing market would have a positive impact on the employment picture, both by directly creating more jobs in home construction and factories that make home goods, and also indirectly by improving peoples’ sense of wealth.
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Home Buyers May Find Themselves in a Seller’s Market
Home buyers who have been sitting on the sidelines watching as the real estate market tanked, may soon find themselves right smack back in the middle of a sellers market. As we wrote in the May issue of this newsletter, some markets are already experiencing what may be the beginning of this very thing, believe it or not, where buyers are finding themselves caught in bidding wars for homes for sale.
Sales of previously owned homes rose at a robust clip in April, and prices jumped, the latest indications that the hard-hit housing market is recovering.
Existing home sales were up 3.4% from March, and if that pace holds up, 2012 could be the strongest year for home sales since 2007, just after the housing boom. The median home price, meanwhile, increased 10.1% from a year ago, the strongest year-to-year gain since January 2006.
Even more recent data shows that sales of newly built homes rose 3.3% in April from the March figures, and 9.9% from a year ago.
Home buyers would be wise not to sit and wait much longer, or they’ll find themselves suddenly in a seller’s market again like many homebuyers found themselves prior to the housing crisis. When sellers once again have the upper hand in negotiations because the market has turned in their favor, buyers will be kicking themselves for waiting so long and missing the bottom.
As most experts will tell you, cashing in on the bottom of any market, be it real estate, or any other, is a crapshoot. You’re playing a form of Russian Roulette with your finances to even try to time the bottom of the housing market.
With mortgage rates still breaking records, and the apparent bottom of the housing market either here, or already gone, now is the time to get into the real estate market and find your dream home, before it’s too late.
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Problem to Avoid When Buying a Home
There are all sorts of things you need to watch for when looking for a home. Since sellers often fail to disclose all the facts about their home, you need to have a watchful eye whenever you walk into a prospective property. If you could hire a home inspector to look over everything on each home you’re considering, you’d be keenly aware of most problems, but that of course is not financially feasible.
So we’ve put together this list of “Problems to Avoid When Looking for a New Home” to help you spot problems that may be lurking and waiting for you. Here they are, in no particular order:
1-Poor Upkeep
Look for the obvious signs that the current owners are not keeping up with maintenance. Things like a neglected lawn, gutters that are full of leaves and debris, paint that is peeling or in need of repair.
2-Foundation Damage
Glance at the slope of the yard and driveway. Does it slope towards, or away from the house? If it slopes toward the house, it could present a problem with water seeping into the foundation walls and basement area (if your area has basements). These problems can be expensive to repair, so look at the foundation of any home you’re considering for signs of buckling or cracking.
3-Archaic Wiring
You may not be a licensed electrician, but take the time to check switches and outlets. Make sure they are all in working order. Check to see if any of the switchplates are warm to the touch. If so, this could be a sign of wiring problems and you’ll want that checked before you buy.
4-One Newly Painted Wall
A fresh coat of paint can be a good thing, IF it’s the entire room. But if you detect one wall of a room with a fresh coat of paint, that could be a sign that the seller is trying to hide a problem like water damage, mildew, or mold. If you see any signs of water staining or sagging walls or ceilings, have a professional home inspector check that out.
5-Peculiar or Foul Odors
If you notice any peculiar or foul odors inside or outside the home, there could be a serious problem causing the smells. If you notice smells and you can’t figure out where they’re coming from, it could be serious. Don’t discount what your nose may be trying to tell you. Likewise, if you detect a strong scent of air freshener, this could be the sellers trying to cover up an issue.
6-Locked Doors
When you’re walking thorugh a home for sale, the sellers should never have any doors, closets or storage areas locked. If you encounter restricted areas, ask the sellers to open up. If an area is locked, there may very well be something the owner doesn’t want you to see.
7-Major Renovations
While additions may be nice, and renovations may have been made to modernize things, use caution here. If you detect that a home has had any major renovations, like a floor or structural wall removed or changed, proper adjustments may not have been made to ensure the home is sound. This could shift weight to other areas and repairs to fix this could be costly. If you suspect that any major renovations have been made, secure a structural engineer to check the home for safety.
While this list is far from complete, keeping these items in mind when looking for a home for sale could save you money after the purchase. And as always, we strongly recommend you get a complete home inspection on any home you are serious about buying, and make a satisfactory home inspection a contingency of your home purchase.
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Welcome to Another Hurricane Season
June 1st means the start of yet another Atlantic hurricane season. And even though tropical cyclone activity doesn’t usually peak until late summer/early fall, we’ve already had two named storms (Alberto and Beryl) this year before the season even officially begins. Next up is Chris.
Does this mean we’re in for a stronger storm season this year because of all the activity already?
According to the preseason forecast, we’re expected to get 11 named storms, 6 hurricanes, and 2 major hurricanes. These forecast numbers are below the long-term average from 1950-2011. However, don’t let your guard down. Forecasts simply cannot accurately predict critical details like, where or how many landfalls will occur.
Fewer hurricanes doesn’t necessarily mean less damage and destruction. In 1992, there were only 5 named storms. However, one of those was Hurricane Andrew, a Category 5 hurricane that devastated South Florida. In 1983 there were only 4 named storms. One of those was Alicia, a Category 3 storm which pounded the Houston-Galveston area and caused almost as many fatalities there as Andrew did in South Florida.
There are six lists of hurricane names that continue to rotate. The lists only change when there is a hurricane that is so devastating, the name is retired and another hurricane name replaces it. As there were no significant hurricanes in 2006, the 2012 hurricane name list is exactly the same as the 2006 hurricane name list.
Now is the time to make sure you have proper insurance coverage, because once a storm forms and is named, most insurance companies stop writing any new insurance coverage. Flood insurance has a 30 day waiting period before it goes into effect, so if you don’t have flood insurance, now is the time to be checking into that.
The Atlantic basin is not the only activity center for hurricanes, as many storms form in the Pacific as well. So no matter where you are along any of our U.S. shorelines, you are not 100% safe from the wrath of mother nature in the form of a hurricane or tropical cyclone. Be prepared.
The 2011 National Association of Realtors® (NAR) Profile of Home Buyers and Sellers surveyed 5,708 home buyers and sellers and found that home buyers who use the web in their home search differ in other behaviors and demographics than buyers who do not use the web and the findings may surprise you.
It is no surprise that the typical buyer who used the Internet is younger, averaging 42 years of age with non-web searchers averaging 60 years of age. What is surprising however, is that buyers who used the web are actually more affluent, despite the assumption that an older buyer is more affluent – the typical buyer who used the Internet in their home search has a median household income of $83,700 compared to those who did not use the web whose median household income is $60,300.
Buyers who used the Internet to search for a home searched double the length of time than those who did not incorporate the Internet in their search. Buyers who did not use the net used fewer sources in their search, as buyers who did use the net to search for a home used various sources with higher frequency with 56 percent also using yard signs (compared to 46 percent of buyers who didn’t use the net), while 46 percent of web searchers used open houses as an additional source (compared to only 34 percent of buyers who didn’t use the web).
Buyers who search the Internet are more likely to go to open houses and call on yard signs, contrary to the popular belief that web searchers stick to the net – the research shows that typically, buyers who search via the Internet have an inherent interest in researching deeply.
Bottom Line: Internet Users Are More Valuable
The icing on the cake is that 90 percent of buyers who used the web to search for homes use a real estate agent as opposed to the 70 percent of buyers who didn’t use the net. The standard belief is that tech savvy shoppers are often anti-agent because of various startups that have launched over the years to supplant real estate brokers and agents, but it hasn’t worked, in fact, the opposite has occurred.
The bottom line is that Internet users are extremely valuable – they earn more money, are more likely to look at offline marketing, are more likely to go to an open house and above all, they are much more likely to actually hire an agent.
What about you? Obviously if you’re reading this story, you’d fall into that “Internet User” category. Do you feel these statistics from the NAR survey are true, or not? We’d love to hear your opinion. Just click the comment link below and tell us your feelings about this survey.