Central Virgina Real Estate Roundup

Here are the latest resale home sale numbers straight from the horse’s mouth.  The National Association of Realtors being the horse.  The problem is that NAR gave bad data from their economics department for the past several years where they significantly overstated the actual number of resale home sales.   I am not sure if the current data is from the Front end of the horse or the Back end of the Horse.  So I will take it with a grain of salt.  HOWEVER, IF I USE ANECDOTAL EVEDINCE BASED ON MY BUYER CLIENTS SINCE EARLY NOVEMBER it does seem that there is a lot of looking and plenty of buying going on.  So maybe the front end of the NAR horse is finally doing the talking without feeling that they have to give every benefit of the doubt to fluff up the home sale numbers.  JUST BECAUSE YOU WISH YOU WERE IN KANSAS DOESN’T GET YOU THERE IMMEDIATELY.  TORNADO’S ARE RARE IN CENTRAL VIRGINIA AND I HAVE YET TO FIND A YELLOW BRICK ROAD AROUND THESE PARTS.

OPTIMISTS AND PESSIMESTS ALL, FEEL FREE TO READ THE LATEST NATIONAL SALES DATA
FOR RESALE HOMES BELOW.  THIS TIME I CHOOSE TO LOOK AT THIS DATA FROM AN OPTIMISTIC
PERSPECTIVE BECAUSE I FINALLY AM SEEING THE TINMEN, SCARECROWS, LIONS AND EVEN
THE WICKED WITCHES OUT LOOKING AND BUYING  HOMES. 

Existing-Home Sales Continue to Climb in November Washington, DC, December 21, 2011 Existing-home sales rose again in November and remain above a year ago, according to the National Association of Realtors®. Also released today were periodic benchmark revisions with downward adjustments to sales and inventory data since 2007, led by a decline in for-sale-by-owners.

Although rebenchmarking resulted in lower adjustments to several years of home sales data, the month-to-month characterization of market conditions did not change. There are no changes to home prices or month’s supply. The latest monthly data shows total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010.

Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market. “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.” According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.99 percent in November from 4.07 percent in October; the rate was 4.30 percent in November 2010; records date back to 1971.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said housing affordability conditions have set a new record high. “With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” he said. “With consumer price inflation rising by more than 3 percent this year, consumers are looking to lock-in steady payments by taking out long-term fixed-rate mortgages. However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today’s market by the overly restrictive mortgage underwriting situation,” Veissi said.

An elevated level of contract failures continues to hold back a broader sales recovery. Contract failures2 were reported by 33 percent of NAR members in November, unchanged from October but notably above a year ago when it was 9 percent. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including lower conforming mortgage loan limits, home inspections and employment losses.

Also released today are benchmark revisions3 to historic existing-home sales. The 2010 benchmark shows there were 4,190,000 existing-home sales last year, a 14.6 percent revision from the previously projected 4,908,000 sales. For the total period of 2007 through 2010, sales and inventory were downwardly revised by 14.3 percent. The revisions are expected to have a minor impact on future revisions to Gross Domestic Product. “From a consumer’s perspective, only the local market information matters and there are no changes to local multiple listing service (MLS) data or local supply-and-demand balance, or to local home prices,” Yun explained. A divergence developed over time between sales reported by MLSs and sales determined by a U.S. Census benchmark; the variance began in 2007. Reasons include growth in MLS coverage areas from which sales data is collected, and geographic population shifts. “It appears that about half of the revisions result solely from a decline in for-sale-by-owners (FSBOs), with more sellers turning to Realtors® to market their homes when the market softened. The FSBO market was overwhelmed during the housing downturn, and since most FSBOs are not reported in MLSs, national estimates of existing-home sales began to diverge based on previous assumptions,” Yun said. NAR consumer survey data in 2000 showed FSBOs accounted for a 16 percent market share, which fell to a record low 9 percent in 2010. “In essence, Realtors® began to capture a greater market share. In addition to a decline in FSBO transactions, more builders began marketing new properties through real estate brokers that weren’t completely filtered from the existing-home data,” Yun said. “Some property listings on more than one MLS, and issues related to house flipping, also contributed to the downward revisions.”

The new independent benchmark was discussed with government agencies and outside housing market experts, and will allow for annual revisions in the future. Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7.0-month supply4 at the current sales pace, down from a 7.7-month supply in October. “Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels,” Yun said. The national median existing-home price5 for all housing types was $164,200 in November, down 3.5 percent from a year ago. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29 percent of sales in November (19 percent were foreclosures and 10 percent were short sales), compared with 28 percent in October and 33 percent in November 2010.

All-cash sales accounted for 28 percent of purchases in November; they were 29 percent in October and 31 percent in November 2010. Investors make up the bulk of cash transactions. Investors purchased 19 percent of homes in November, little changed from 18 percent in October and 19 percent in November 2010. First-time buyers accounted for 35 percent of transactions in November, up from 34 percent in October and 32 percent in November 2010. Single-family home sales rose 4.5 percent to a seasonally adjusted annual rate of 3.95 million in November from 3.78 million in October, and are 12.9 percent above the 3.50 million-unit level in November 2010. The median existing single-family home price was $164,100 in November, down 4.0 percent from a year ago. Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 470,000 in November and are 6.8 percent higher than the 440,000-unit pace one year ago. The median existing condo price6 was $164,600 in November, which is 0.2 percent below November 2010.

Regionally, existing-home sales in the Northeast jumped 9.8 percent to an annual pace of 560,000 in November and are 7.7 percent above a year ago. The median price in the Northeast was $240,200, which is 0.1 percent below November 2010. Existing-home sales in the Midwest rose 4.3 percent in November to a level of 960,000 and are 15.7 percent higher than November 2010. The median price in the Midwest was $133,400, down 4.0 percent from a year ago. In the South, existing-home sales increased 2.4 percent to an annual pace of 1.74 million in November and are 12.3 percent above a year ago. The median price in the South was $143,300, which is 2.1 percent below November 2010. Existing-home sales in the West rose 3.6 percent to an annual level of 1.16 million in November and are 11.5 percent higher than November 2010. The median price in the West was $195,300, down 8.4 percent below a year ago. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries. # # #

I always get excited to see the results of the Monthly Fannie Mae Housing Survey. 

Consumer Concerns Stabilize in November; Downward Slide of Consumer Sentiment Appears to Have Halted

Home Price Expectations Improve While Other Indicators Show Little Change in Trend

Pete Bakel

202-752-2034

WASHINGTON, DC – Amid a spate of positive economic news during the November survey period, consumer sentiment appears to have stabilized from previous levels, with only incremental improvement in the deeply negative housing market sentiment witnessed this summer. According to results from Fannie Mae’s November National Housing Survey, home price expectations moved from negative to positive territory for the first time in six months, with respondents expecting home prices to increase by 0.2 percent over the next year.  Overall, trends demonstrate that consumers are in a “wait and see” pattern as we move into 2012. This places consumer sentiment in line with Fannie Mae’s Economics & Mortgage Market Group’s November forecast of temporary economic improvement during the third and fourth quarters of 2011 leading into a slower economic growth path in 2012.

“Though their home price expectations have become slightly positive, consumers remain concerned about the direction of the economy and continue to view their household finances as being relatively flat,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Most Americans expect no improvement in their personal financial situation in the next 12 months and will likely remain wary about undertaking the significant financial obligation associated with homeownership until their view of their income, expenses, and job security heads in a more positive direction.”

SURVEY HIGHLIGHTS

Homeownership and Renting

• Twenty-two percent of respondents expect home prices to increase over the next year (up 3 percentage points since last month), while 22 percent say they expect home prices to decline, down 1 percentage point since last month. 53 percent say prices will stay the same, a 2 percentage point drop from October.
• Thirty-three percent of Americans say that mortgage rates will go up over the next 12 months, down 3 percentage points from October and a return to the level seen in September.
• Sixty-eight percent of respondents say it is a good time to buy a home (down by 1 percentage point since last month), and just 10 percent say it is a good time to sell, which is unchanged from the previous two months.
• On average, Americans expect home rental prices to increase by 3.2 percent over the next year, a 0.1 percent decrease from October.
• Just 6 percent expect a decline in home rental prices (unchanged since last month), while 41 percent of respondents believe that home rental prices will increase in the next 12 months.
• Thirty-two percent of Americans say they would rent their next home, while 63 percent say they would buy, down 3 percentage points since last month and a return to the level seen in September.

The Economy and Household Finances

• Seventy-five percent of Americans say the economy is off on the wrong track (down 2 percentage points since October), while just 16 percent think the economy is on the right track, unchanged since September and tying the all-time low number.
• The number of respondents expecting their personal financial situation to worsen over the next 12 months has stayed at 18 percent since October.
• Sixty-six percent say their income is about the same, the highest number ever to report this. Sixteen percent of those surveyed say their household income has increased over the past 12 months (down 2 percentage points since October) while 18 percent say that their income has declined significantly.
• Fifty-four percent report that their expenses are about the same compared to 12 months ago (up 3 percentage points versus October). Eight percent say their household expenses have decreased over the past 12 months (down 3 percentage points since October), while 37 percent say their expenses have increased significantly.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,002 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.

For detailed findings from the November 2011 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site.  Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The November 2011 Fannie Mae National Housing Survey was conducted between November 1, 2011 and November 25, 2011. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.