Home sales jump to highest since May 2010

Home resales rose at the fastest pace in two years last month and housing prices climbed in hopeful signs that the housing market recovery is gaining traction.

The National Association of Realtors said on Wednesday that existing home sales increased 7.8 percent last month to an annual rate of 4.82 million units last month. That was the fastest annual rate since May 2010 and well above analysts' expectations of a 4.55 million-unit rate.

Nationwide, the median price for a home resale rose to $187,400 in August, up 9.5 percent from a year earlier as fewer people sold their homes under distressed conditions. The nation's inventory of homes - those for sale on the market - rose 2.9 percent during the month to 2.47 million.

"The housing market recovery is becoming much more convincing," said NAR chief economist Lawrence Yun.

The price increase is measured against August 2011, and since then distressed sales have fallen to 22 percent of total sales from 31 percent. Distressed sales also fell in August of this year compared to the prior month.

While the broader U.S. economy appears to be losing steam, housing has gained traction and has become a relative bright spot.

Still, the recovery is from a depressed level. Sales of previously occupied homes remain below the more than 5.5 million that economists consider consistent with a healthy market. And the number of first-time homebuyers, who are critical to a housing rebound, slipped to 31 percent from 34 percent.

Yun said favorable buying conditions get the credit.

Housing starts rise less than expected “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.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.60 percent in August from a record low 3.55 percent in July; the rate was 4.27 percent in August 2011.

“The strengthening housing market is occurring even with difficult mortgage qualifying conditions, which is testament to the sizable stored-up housing demand that accumulated in the past five years,” Yun added.

Regionally, existing-home sales in the Northeast rose 8.6 percent to an annual pace of 630,000 in August and are also 8.6 percent above August 2011.  The median price in the Northeast was $245,200, up 0.6 percent from a year ago.

Existing-home sales in the Midwest increased 7.7 percent in August to a level of 1.12 million and are 17.9 percent higher than a year ago.  The median price in the Midwest was $152,400, up 7.8 percent from August 2011.

In the South, existing-home sales rose 7.3 percent to an annual pace of 1.90 million in August and are 11.1 percent above August 2011.  The median price in the region was $160,100, up 6.5 percent from a year ago.

Existing-home sales in the West increased 8.3 percent to an annual level of 1.17 million in August but are unchanged from a year ago.  With ongoing inventory shortages, the median price in the West was $242,000, which is 16.3 percent higher than August 2011.

The Associated Press and Reuters contributed to this report.

Governor signs AB 1718, degree brokers bill

I have been a strong supporter of formal real estate education at the college level for many years.  I am happy to see that this clarification has been made.  On a daily basis I receive so many incomplete offer and purchase packages from real estate agents.  This change will help strengthen the quality of agents taking the next steps from Sales to Broker.  As always find a good mentor and learn like a sponge.

Gov. Brown signs bill that clarifies real estate broker applicants’ experience requirements

LOS ANGELES (Aug. 28) – A bill sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) that closes an important loophole in an applicant’s experience requirements for a real estate broker’s license has been signed into law.

Typically, in addition to meeting stringent educational requirements and passing a brokers’ exam, an applicant for a real estate broker’s license must first become a salesperson and acquire at least two years of full time experience in real estate, working under the supervision of a broker, before one can become a broker.

Existing law allows an exception to the experience requirement for a college degree, “which included a specialization in real estate.”  Over the years, the “degree broker” exception has been interpreted to apply to any degree.

Assembly Bill 1718 (Hill, D-So. San Francisco) clarifies that the degree claimed as an exception must actually include a major or minor in real estate.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

U.S. home prices make biggest jump in 6 years

Nationwide home prices shot up 3.8% in July, making their largest year-over-year leap since 2006, according to real estate data provider Core-Logic.

The gain marks the fifth straight rise in the gauge, part of a positive swing following a year and a half of slumps. The last time prices rose so much was in August 2006, when they jumped 4.1%.
Prices in California bounded up 4.4%. Without distressed sales – including foreclosures and short sales – national prices were up 4.3% compared with last July.

The report, coming as a glut of house-hunters clamor after a shrinking inventory, suggests that the real estate market is “clearly seeing the light at the end of a very long tunnel,” said CoreLogic Chief Executive Anand Nallathambi in a statement.

Compared with June, prices got a 1.3% boost in July, according to Santa Ana-based CoreLogic. The company forecasts at least an additional 0.6% monthly improvement in August, or what would be a 4.6% increase compared with 2011.

Arizona led the country in price appreciation with a 16.6% surge, followed by Idaho, Utah, South Dakota and Colorado. Delaware’s 4.8% plunge was the deepest drop-off in prices, with Alabama, Rhode Island, Connecticut and Illinois also suffering major slips.

Housing, though seemingly in a recovery, is still shaky, according to other data. Consumer confidence is up, helping to push pending home sales to a two-year high, but the job market and the overall economy continue to lag.

Five-and-Dime Tower to Become Luxury Condos

Vacant top floors of the Woolworth tower in New York City will become high-end residences by 2015.

It’s architecture for the 1 percent at its finest: Turning the Neo-Gothic Woolworth Building into luxury condominiums.

The top floors of the historic skyscraper in New York will be made into approximately 40 posh apartments, Michelle Higgins reports for The New York Times. In a deal closed in late July, an investment group led by Alchemy Properties purchased the top 30 floors from the Witkoff Group and Cammeby’s International, who will continue to lease office spaces to the lower 28 floors.

Frank Woolworth, the five-and-dime store magnate, commissioned Cass Gilbert to design the building to house Woolworth’s offices. When it opened in 1913, the tower—dubbed the “Cathedral of Commerce”- stood 792 feet high, making it the tallest building in the world.

Stripped of that title in 1930 after the Trump Building at 40 Wall Street opened, the Woolworth could make history again with the transformation of the cupola into penthouses. According to Alchemy Properties, those units could be some of the highest luxury-living spaces in the city.

Courtesy of Alexandra Rice, Builder Magazine

The S&P Case-Shiller house price index climbed 2.2% in May

The S&P Case-Shiller house price index climbed 2.2% in May after a 1.8% increase in April. April marked the first increase in seven months. But overall, the 20-city index is down 0.7% from May 2011.

The chairman of the S&P index committee David Blitzer pointed out that all 20 cities posted positive returns in May and 17 of those cities (except Boston, Charlotte and Detroit) saw their rates of change increase compared to April.

But he cautioned that housing data on sales and other indicators have been mixed lately and that home values usually trend upward in the spring and summer.

“The housing market appears to be stabilizing, but we are definitely in a wait and see mode for the next few months,” Blitzer said.

Despite the recent improvement in values, prices are still off 33% since the peak in the summer of 2006, according to the Case-Shiller HPI.

We tend to look at things on a normalized basis that way its more reflective of the current trend.  Also helps to analyze the data over extended periods of time.  It will be interesting to see if the Federal Reserve moves to create more stimulus over the next couple days.

New Home Supply Shrinks 13 Percent In One Year; Prices Rising

Homebuilder confidence is soaring -- and for good reason. In June, despite a drop in units sold on a seasonally-adjusted, annualized basis, the market for new construction remains strong nationwide.


The Census Bureau reports that 350,000 new homes were sold in June 2012, an 8 percent reduction as compared to May. A "new home" is a home that has not been previously occupied; one that's considered "new construction".


The tally fell short of Wall Street expectations but can still be considered strong.

This is because, in addition to releasing June's New Home Sales data, the Census Bureau revised higher the previously-released results for March, April and May by a collective 33,000 units.

After the prior month revisions, June's results are now the weakest since February, and the strongest of the preceding 21 months. The housing market recovery continues.


Sales of newly-built homes have climbed 15 percent since June 2011. Buyers are buying faster than builders can build, and its contributing to a shrinking national home inventory.

At the end of last month, there were just 144,000 new homes for sale nationwide. This is 13 percent fewer homes than were for sale one year ago. As a result, at the current pace of sales nationwide, the complete stock of new homes would "sell out" in 4.9 months.

This number is noteworthy because a 6.0-month supply of homes is believed to indicate a market in balance. When new home supplies fall below 6.0 months, it suggests a "seller's market", one in which home builders have pricing power over potential home buyers, plus excess leverage in negotiations.

In a seller's market, builders are less likely to offer price reductions and/or free upgrades and it's been a seller's market since October 2011. Not surprisingly, since October 2011, the average new home sale price is higher by 6%.


With mortgage rates at all-time lows and rents exceeding mortgage payments in many U.S. cities, first-time home buyers are expected to power the housing market through the rest of 2012 and into 2013. It helps that there are a bevy of low-downpayment mortgage programs, too.

For example, the FHA has a 3.5% downpayment program for purchases, and the VA and USDA both make "no money down" available to qualified buyers. Fannie Mae and Freddie Mac have downpayment options, too -- you only have to ask about them.

If you're looking at new construction, then, and have just a small amount for downpayment, take a look at today's mortgage rates and see for what you'll qualify. Purchasing power is high because of low mortgage rates. You may be surprised at how much home you can afford.

Courtesy of: Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage.
Email Dan at or click to get a free, no-obligation rate quote.

30-year mortgage rate drops to record 3.56 percent

By msnbc.com news reports
Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.56 percent. That's down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.
Last year at this time, the 30-year rate averaged 4.51 percent.

The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week's previous record of 2.89 percent. The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects and spending at a faster pace.
Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth."Following a lackluster employment report for June, long-term U.S. Treasury bond yields eased somewhat this week allowing fixed mortgage rates to reach yet another record low," said Frank Nothaft, vice president and chief economist at Freddie Mac.
Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks.
U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2 percent, the government reported last week.And the sluggish job market could deter some from making a purchase this year.

Slower job creation has caused consumers to pull back on spending.
Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.
To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans also was 0.7 point, unchanged from the previous week.
The average rate on one-year adjustable rate mortgages rose to 2.69 percent from 2.68 percent last week. The fee for one-year adjustable rate loans slipped to 0.4 point, down from 0.5 point.
The average rate on five-year adjustable rate mortgages dropped to 2.74 percent from 2.79 percent last week. The fee was unchanged at 0.6 point.
The Associated Press contributed to this report.
x