Monday, April 25, 2005
Existing-home sales rose to near-record levels in March
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 1.0 percent in March to a seasonally adjusted annual rate* of 6.89 million from an upwardly revised pace of 6.82 million in February. March sales were the third highest level on record, and were 4.9 percent above the 6.57 million-unit pace in March 2004. The record was a sales rate of 7.02 million in June 2004, followed by 6.98 million in November 2004.
David Lereah, NAR’s chief economist, said economic improvements have been supporting the housing sector. “With mortgage interest rates remaining historically low, gains in the labor market and economic growth appear to have lifted the confidence of home buyers,” he said. “There’s no question there is a strong demand for housing from a growing population.”
The national median existing-home price for all housing types was $195,000 in March, up 11.4 percent from March 2004 when the median price was $175,000. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said this is the third consecutive month in which home prices have experienced double-digit annual gains. “Although there are solid fundamentals underlying the strength of the housing market, we’d really like to see a bigger supply of homes so people don’t feel pressured when making purchase decisions or contract offers,” he said. “Since housing is a long-term investment, it’s important for buyers to work with a professional who can guide them through the transaction process with a full understanding of all of the alternatives.”
Total housing inventory levels fell 0.2 percent at the end of March to 2.33 million existing homes available for sale, which represents a 4.0-month supply at the current sales pace.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.93 percent in March, up from 5.63 percent in February; the rate was 5.45 percent in March 2004.
Existing condominium and cooperative housing sales slipped 0.1 percent to a seasonally adjusted annual rate of 845,000 units in March from a level of 846,000 units in February. Last month’s sales activity was 7.0 percent above the 790,000-unit pace in March 2004. The median condo price was $206,800, up 15.9 percent from the same month a year ago. Condo sales last month accounted for 12.3 percent of market activity.
Single-family home sales rose 1.2 percent in March to a seasonally adjusted annual rate of 6.04 million from a level of 5.97 million in February. Last month’s sales activity was 4.5 percent above the 5.78 million-unit pace in March 2004. The median single-family home price was $193,600 in March, up 11.3 percent from a year earlier.
Regionally, total existing-home sales in the Midwest rose 2.0 percent to an annual rate of 1.55 million units in March, and were 3.3 percent above March 2004. The median price in the Midwest was $159,000, up 11.2 percent from a year earlier.
Existing-home sales in the West increased 1.9 percent to an annual rate of 1.63 million units in March, and were 5.8 percent higher than the same month a year ago. The median existing-home price in the West was $289,000, up 18.9 percent from March 2004.
The home resale pace in the South rose 0.4 percent from February to an annual rate of 2.57 million units in March, and was 4.9 percent higher than March 2004. The median price of an existing home in the South was $169,000, which was 7.0 percent higher than a year ago.
Existing-home sales in the Northeast held even at an annual pace of 1.14 million units in March, and were 5.6 percent above the level of a year ago. The median existing-home price in the Northeast was $242,000, up 14.7 percent from March 2004.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions that are fairly common in the new-home sales series.
Existing-home sales for April will be released May 24. The next Pending Home Sales Index will be on May 2 and the forecast will be revised May 9.
Wednesday, April 06, 2005
Existing-home sales slipped in February
Total existing-home sales, including single-family, townhomes, condominiums and co-ops, were down 0.4 percent in February to a seasonally adjusted annual rate* of 6.79 million from an upwardly revised pace of 6.82 million in January. Last month’s sales activity was 6.1 percent above the 6.40 million-unit pace in February 2004.
David Lereah, NAR’s chief economist, said the housing market appears to be in the early stages of settling down. “In essence, home sales were surging at unprecedented levels for most of last year,” he said. “The cooling we expect in sales this year means we’ll be transitioning from a white-hot housing market into a very strong market that still favors home sellers, but should become more balanced as the year progresses.”
The national median existing-home price for all housing types was $191,000 in February, up 11.0 percent from February 2004 when the median price was $172,000. The median is a typical market price where half of the homes sold for more and half sold for less.NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said there simply aren’t enough homes available for sale. “The supply of homes on the market is tight, so prices continue to rise faster than historic norms,” he said. “The long-term population growth and demographic trends show the fundamental demand for housing will remain historically strong going forward, so housing will continue to support the U.S. economy and will remain the soundest investment most families will ever make.”
Total housing inventory levels rose 10.7 percent at the end of February with 2.38 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace – January was a record low 3.8-month supply. For a market to be fairly balanced between buyers and sellers, a supply in the range of 6 months is required.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.63 percent in February, down from 5.71 percent in January; it was 5.64 percent in February 2004.
Condominium and cooperative housing sales last month accounted for 12.5 percent of market activity. Existing condo sales slipped 1.2 percent to a seasonally adjusted annual rate* of 848,000 units in February from a record level of 858,000 units in January. Last month’s sales activity was 10.4 percent above the 768,000-unit pace in February 2004. The median condo price was $210,700, up 20.5 percent from the same month a year ago.
Single-family home resales eased 0.3 percent in February to a seasonally adjusted annual rate* of 5.94 million units from a level of 5.96 million in January. Last month’s sales activity was 5.5 percent above the 5.63 million-unit pace in February 2004. The median single-family home price was $188,200 in February, up 9.4 percent from a year earlier.
Regionally, total existing-home sales in the Northeast rose 4.6 percent from January to a pace of 1.14 million units in February, and were 4.6 percent above the level in February 2004. The median existing-home price in the Northeast was $251,000, up 18.4 percent from a year ago.
Existing-home sales in the Midwest increased 2.0 percent to an annual rate of 1.50 million units in February, and were 4.2 percent above a year earlier. The median price in the Midwest was $156,000, up 9.1 percent from February 2004.
The home resale pace in the West held even at an annual rate of 1.59 million units in February and was 6.7 percent stronger than February 2004. The median existing-home price in the West was $279,000, up 16.7 percent from the same month a year ago.Existing-home sales in the South fell 3.4 percent from January to an annual rate of 2.56 million units in February, but were 8.0 percent higher than a year ago. The median price of an existing home in the South was $164,000, which was 7.2 percent higher than February 2004.
Tuesday, March 15, 2005
Home Sales to Stay in Record Territory
Sales of existing-homes, including single-family, condo and co-op, are expected to decline 3.2 percent to a total of 6.57 million* in 2005 from a record 6.78 million last year. New-home sales are seen at 1.13 million this year, 5.9 percent below a record of 1.20 million in 2004; the projections for both new- and existing-home sales in 2005 would be the second best on record. Housing starts are forecast to slip 0.7 percent to 1.94 million units in 2005.
David Lereah, NAR's chief economist, said home sales are starting to ease to more sustainable levels. "After setting four consecutive record years, the housing market is due for a breather," he said. "As mortgage interest rates creep up and home sales slow a bit, we should see a better balance between home buyers and sellers – that will take some of the pressure off of home prices."
Lereah expects the 30-year fixed-rate mortgage to gradually increase to 6.7 percent by the end of the year; for all of 2005 the rate should average 6.2 percent.
The national median existing-home price for all housing types should grow 5.6 percent this year to $195,500. The median new-home price is expected to rise 3.9 percent in 2005 to $228,300. Appreciation last year was 9.3 percent for all existing homes, and 12.6 percent for new homes.
"In January we set a record low for the supply of existing homes available for sale," said Al Mansell, NAR president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City. "Until the market gets closer to equilibrium between home buyers and sellers, prices will continue to rise faster than normal." Typically, home prices rise at the rate of inflation plus 1 to 2 percentage points.
Inflation should stay modest with the Consumer Price Index rising 2.6 percent in 2005. The U.S. gross domestic product is expected to grow 4.0 percent this year, while the unemployment rate should average 5.1 percent.
Inflation-adjusted disposable personal income is forecast to grow 3.8 percent in 2005, while the consumer confidence index should rise to 107 during the second half the year.
Monday, February 28, 2005
Sales Hold Steady for January '05
Total existing-home sales, including single-family, townhomes, condominiums and co-ops, slipped 0.1 percent in January to a seasonally adjusted annual rate* of 6.80 million units from a level of 6.81 million in December. Last month's sales activity was 13.7 percent above the 5.98 million-unit pace in January 2004.
David Lereah, NAR's chief economist, said January home sales were buoyed by the condo sector. "A slight decline in single-family home sales was offset by a record monthly level of condo sales, which just came off its ninth consecutive record year," he said.
Lereah noted this is the first monthly report in the revised existing-home sales series. "NAR took the initiative to update and improve the modeling for the existing-home sales series to more accurately reflect the growth and changes in the housing market," he said.Monthly revisions have been made back through the benchmark year of 1999, with additional revisions made back to 1989 using improved methodology. In addition to better modeling, some of the changes result from previously overestimating the number of for-sale-by-owner transactions (FSBOs), which have shown a sustained decline.
"These changes help to make the existing-home sales series a better measure of actual marketplace activity," he said. "When the existing-home sales series was created in 1968, condos weren't even on the horizon in terms of an important market share. In fact, we didn't start tracking condos until 1981 after baby boomers started to fuel demand for them in the late 1970s."
When it was decided to improve the methodology for reporting home sales, following revisions by the U.S. Census Bureau and with input from the Federal Reserve Board, it was only natural to add condo sales.
As a result of the changes, the series for existing single-family sales was revised downward by 10.6 percent for the benchmark year of 1999 – these changes affect the entire series from 1989 though 2004. For example, single-family sales originally were reported at 6,675,000 for 2004; the improved methodology now shows a total of 5,964,000, still a record. Although data has been downwardly revised, the overall characterization of the resale market in terms of historic comparisons and relative changes are consistent with previously reported data. Major government indicators undergo similar periodic changes.
The national median existing-home price for all housing types was $189,000 in January, up 10.5 percent from January 2004 when the median price was $171,000. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said strong price growth is being driven by a shortage of homes available for sale. "The demand for homes remains in record territory, but the supply of homes on the market set an all-time low in January," he said. "The growth in home equity is adding to housing wealth and helping the overall economy, yet low mortgage interest rates are keeping homes within reach of buyers in most of the country."
Total housing inventory levels declined 5.8 percent at the end of January with 2.09 million existing homes available for sale, which represents a 3.7-month supply at the current sales pace – a record low.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.71 percent in January, down from 5.75 percent in December; it was 5.71 percent in January 2004. "Aside from a handful of months over the last two years, you have to go back to the mid-1960s to see mortgage interest rates where they are today," Mansell said. January was the sixth-lowest month on record since Freddie Mac started tracking interest rates in 1971.
Condominium and cooperative housing sales accounted for 12.6 percent of transactions in January. Existing condo sales rose 2.3 percent to a record seasonally adjusted annual rate* of 858,000 units in January from a level of 839,000 in December. Last month's sales activity was 22.4 percent above the 701,000-unit pace in January 2004. The median condo price was $203,700, up 15.1 percent from the same month a year ago.
Single-family home resales declined 0.5 percent in January to a seasonally adjusted annual rate* of 5.94 million units from a level of 5.97 million in December. Last month's sales activity was 12.5 percent above the 5.28 million-unit pace in January 2004. The median single-family home price was $186,900 in January, up 9.8 percent from January 2004.
The home resale pace in the West rose 0.6 percent to an annual rate of 1.59 million units in January and was 16.9 percent stronger than January 2004. The median existing-home price in the West was $277,000, up 16.4 percent from the same month a year earlier.In the Northeast, existing-home sales declined 3.5 percent from December to a pace of 1.09 million units in January, but were 11.2 percent above the level in January 2004. The median existing-home price in the Northeast was $231,000, up 9.5 percent from a year ago.
Homes in the Midwest were reselling at an annual rate of 1.47 million units in January, down 5.2 percent from December, but were 10.5 percent above January 2004. The median price in the Midwest was $151,000, up 8.6 percent from a year earlier.
Thursday, February 24, 2005
Sales of existing condominiums and cooperatives hit record
Sales of existing condominiums and cooperatives hit their ninth consecutive annual record in 2004, while the pace of sales activity in the fourth quarter eased but remained the third highest quarter on record, according to the National Association of Realtors®. There were a total of 970,000 existing condo and co-op sales last year, up 8.0 percent from the previous record of 898,000 units in 2003.
The sales pace slipped 3.0 percent in the fourth quarter to a seasonally adjusted annual rate* of 972,000 units from a 1.00 million-unit pace in the third quarter. Sales were 3.4 percent above the 940,000-unit level of sales activity in the fourth quarter of 2003; quarterly records were set in the second and third quarters of 2004.
David Lereah, NAR's chief economist, said the sales performance underscores the significance of condo sales in the overall housing market. "The condo market has clearly matured over the last decade, accounting for a market share almost as big as the new home market, and has been appreciating faster than single-family homes," he said. Given this growth, NAR will now include condo sales in its monthly track of overall existing home sales, beginning with the January report.
In the fourth quarter, the median existing condo/co-op price was $203,200, which is 16.7 percent higher than a year ago. The median is a typical market price where half of the units sold for more and half sold for less. By comparison, the typical single-family home cost $187,500 in the fourth quarter, 8.8 percent higher than a year earlier.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said the reputation of condos as an investment has changed dramatically. "In much of the 1980s and early 90s, condos earned a reputation for slow price growth, in many cases because there was an oversupply on the market," he said. "With the maturation of this market segment, condos have been appreciating faster than single-family homes for the last four years. In the past, affordability was a bigger factor in condo sales – now, lifestyle choices have emerged as a driving force in their growing popularity."
For all of 2004, the median existing condo price was $193,600, up 17.0 percent from a median of $164,100 in 2003. At the same time, the typical single-family resale home price rose 8.3 percent to $184,100.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.73 percent in the fourth quarter, down from 5.89 percent in the third quarter; it was 5.92 percent in the fourth quarter of 2003.
In the Northeast, condo/co-op resales rose 1.2 percent between the third and fourth quarters to a 168,000-unit pace, and were 9.1 percent above the fourth quarter of 2003. The median price in the Northeast was $234,800, up 23.0 percent from a year ago.
Existing condo and co-op sales in the Midwest held steady in the fourth quarter at a level of 121,000 units, unchanged from the third quarter, and were 8.0 percent higher than a year earlier. The median resale condo price in the Midwest was $185,700, up 7.6 percent from the fourth quarter of 2003.
In the South, condo/co-op resale activity slipped 2.9 percent in the fourth quarter to a 442,000-unit pace; however, this was 2.8 percent higher than the same quarter in 2003. The median price in the South was $172,000, which was 23.0 percent higher than a year ago.
In the West, the sales pace of condos and co-ops fell 7.3 percent from the third quarter to an annual rate of 241,000 units in the fourth quarter, and was 1.2 percent below the sales rate during the same period in 2003. The median price in the West was $246,100, up 14.5 percent from a year earlier.
"Condo sales in the West suffered from an unusual shortage of units available for sale," Lereah noted. "Without this inventory problem, national sales may have held up in the fourth quarter."
Sunday, February 20, 2005
The 9 Step System to Get Your Home Sold Fast and For Top Dollar
Selling your home is one of the most important steps in your life. This 9 step system will give you the tools you need to maximize your profits, maintain control, and reduce the stress that comes with the home-selling process:
1. Know why you’re selling, and keep it to yourself.The reasons behind your decision to sell affect everything from setting a price to deciding how much time and money to invest in getting your home ready for sale. What’s more important to you: the money you walk away with, or the length of time your property is on the market? Different goals will dictate different strategies.
However, don’t reveal your motivation to anyone else or they may use it against you at the negotiating table. When asked, simply say that your housing needs have changed
2. Do your homework before setting a price.Settling on an offering price shouldn’t be done lightly. Once you’ve set your price, you’ve told buyers the absolute maximum they have to pay for your home, but pricing too high is as dangerous as pricing too low. Remember that the average buyer is looking at 15-20 homes at the same time they are considering yours. This means that they have a basis of comparison, and if your home doesn’t compare favorably with others in the price range you’ve set, you won’t be taken seriously by prospects or agents. As a result, your home will sit on the market for a long time and, knowing this, new buyers on the market will think there must be something wrong with your home
3. Do your homework.(In fact, your agent should do this for you). Find out what homes in your own and similar neighborhoods have sold for in the past 6-12 months, and research what current homes are listed for. That’s certainly how prospective buyers will assess the worth of your home
4. Find a good real estate agent to represent your needs.Nearly three-quarters of homeowners claim that they wouldn’t use the same realtor who sold their last home. Dissatisfaction boils down to poor communication which results in not enough feedback, lower pricing and strained relations. Another FREE report entitled 10 Questions to Ask Before You Hire an Agent” gives you the straight, to-the-point questions you should be asking when you interview agents who want to list your home. You can obtain a FREE copy of this report from my website
5. Maximize your home’s sales potential.Each year, corporate North America spends billions on product and packaging design. Appearance is critical, and it would be foolish to ignore this when selling your home
You may not be able to change your home’s location or floor plan, but you can do a lot to improve its appearance. The look and feel of your home generates a greater emotional response than any other factor. Clean like you’ve never cleaned before. Pick up, straighten, unclutter, scrub, scour and dust. Fix everything, no matter how insignificant it may appear. Present your home to get a wow” response from prospective buyers
Allow the buyers to imagine themselves living in your home The decision to buy a home is based on emotion, not logic. Prospective buyers want to try on your home just like they would a new suit of clothes. If you follow them around pointing out improvements or if your decor is so different that it’s difficult for a buyer to strip it away in his or her mind, you make it difficult for them to feel comfortable enough to imagine themselves an owner.
6. Make it easy for prospects to get information on your home.You may be surprised to know that some marketing tools that most agents use to sell homes (eg. traditional open houses) are actually not very effective. In fact only 1% of homes are sold at an open house.
Furthermore, the prospects calling for information on your home probably value their time as much as you do. The last thing they want to be subjected to is either a game of telephone tag with an agent, or an unwanted sales pitch. Make sure the ads your agent places for your home are attached to a 24 hour prerecorded hotline with a specific ID# for your home which gives buyers access to detailed information about your property day or night 7 days a week without having to talk to anyone. It’s been proven that 3 times as many buyers call for information on your home under this system. And remember, the more buyers you have competing for your home the better, because it sets up an auction-like atmosphere that puts you in the driver’s seat.
7. Know your buyer.In the negotiation process, your objective is to control the pace and set the duration. What is your buyer’s motivation? Does s/he need to move quickly? Does s/he have enough money to pay you your asking price? Knowing this information gives you the upper hand in the negotiation because you know how far you can push to get what you want.
8. Make sure the contract is complete.For your part as a seller, make sure you disclose everything. Smart sellers proactively go above and beyond the laws to disclose all known defects to their buyers in writing. If the buyer knows about a problem, s/he can’t come back with a lawsuit later on.
Make sure all terms, costs and responsibilities are spelled out in the contract of sale, and resist the temptation to diverge from the con-tract. For example, if the buyer requests a move-in prior to closing, just say no. Now is not the time to take any chances of the deal falling through.
9. Don’t move out before you sell.Studies have shown that it is more difficult to sell a home that is vacant because it looks forlorn, forgotten, simply not appealing. It could even cost you thousands. If you move, you’re also telling buyers that you have a new home and are probably highly motivated to sell fast. This, of course, will give them the advantage at the negotiating table.
Tuesday, January 11, 2005
Existing-Home Sales Hit Record in November
Low interest rates helped the market for existing single-family home sales to set the highest monthly pace on record in November, according to the National Association of Realtors®.
Existing-home sales increased 2.7 percent to a seasonally adjusted annual rate* of 6.94 million units in November from an upwardly revised pace of 6.76 million units in October. Last month's sales activity was 13.2 percent above the 6.13-million unit level in November 2003. The previous record was 6.92 million in June 2004.
David Lereah, NAR's chief economist, said low interest rates get much of the credit. "Mortgage interest rates dropped a quarter of a percentage point in late summer and then stabilized," he said. "Coupled with a growing labor market and a rising economy, this created optimal conditions for the housing sector."
Lereah expects economic conditions in 2005 will be comparable with this year. "Our forecast for the housing market is for a continuation of strong home sales, although down a little from the record-setting pace of 2004," he said. "We think slower sales will help to create a better balance between home buyers and sellers, but with tight inventories of homes available for sale, price appreciation hasn't slowed yet."
The national median existing-home price was $188,200 in November, up 10.4 percent from November 2003 when the median price was $170,500. The median is a typical market price where half of the homes sold for more and half sold for less.
Housing inventory levels at the end of November rose 2.1 percent from October to a total of 2.48 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said the good news is that mortgage interest rates remain historically low. "Although mortgage interest rates should rise modestly over the course of the next year, they'll stay low enough to preserve favorable market conditions," he said. "Low interest rates are helping new buyers to enter the market. This growth in homeownership is stimulating all steps of the housing ladder by creating a ready market for existing owners wishing to make a trade, and underscores the value of housing as an investment."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.73 percent in November, almost unchanged from 5.72 percent in October; it was 5.93 percent in November 2003.
Regionally, existing-home sales in the West jumped 6.5 percent to a record annual rate of 1.97 million units in November, and were 16.6 percent higher than November 2003. The median existing-home price in the West was $274,000, up 13.3 percent from the same month a year earlier.
The home resale pace in the South rose 1.8 percent in November to a record level of 2.83 million units, and was 15.5 percent above a year ago. The median price of an existing home in the South was $170,000, which was 10.1 percent higher than November 2003.Existing-home sales in the Midwest increased 0.7 percent in November to an annual rate of 1.39 million units, and were 9.4 percent above November 2003. The median price in the Midwest was $151,200, up 6.6 percent from the same month a year earlier.
Existing-home sales in the Northeast declined 1.3 percent in November to a pace of 740,000 units, but were 4.2 percent higher than a year ago. The median existing-home price in the Northeast was $226,700, up 17.3 percent from November 2003.
