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Realtors' group sees ‘slow, sustainable growth' in sales activity NEW YORK - Better news from the U.S. housing industry sent stocks higher Tuesday, including an increase in the number of people with contracts to buy homes. The National Association of Realtors, a trade group, said its index of sale contracts rose 1 percent in December. It was the ninth improvement over the past 10 months as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November. "It's a slow, sustainable growth," said Daniel Penrod, senior industry analyst for the California Credit Union League. "Most people would prefer a quick rebound but that's not likely to happen." The home sales report was the latest bit of encouraging news on the economy. Stocks rose on Monday after a surprisingly strong reading on the manufacturing sector, and on Friday the government reported that the U.S. economy grew at an annual rate of 5.7 percent in the final three months of 2009, a faster pace than expected. Homebuilder stocks rose sharply after D.R. Horton Inc. posted its first profit since 2007 during its fiscal first quarter. Much of its $192 million profit during the October-December period came from a tax gain, but its revenue rose because of a 36 percent jump in home sales. Orders increased 45 percent. The reports brought a positive tone to the market, which stumbled in late January as concerns arose that the recovery might be stalling and that the market's 10-month advance was running out of gas. The Standard & Poor's 500 index fell 3.7 percent in January, its worst month since hitting a 12-year low nearly a year ago. According to preliminary calculations, the Dow rose 111.32, or 1.09 percent, to 10,296.85. The S&P 500 index rose 14.13, or 1.30 percent, to 1,103.32, while Nasdaq composite index advanced 18.86, or 0.87 percent, to 2,190.06. Bond prices inched higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 3.64 percent from 3.66 percent late Monday. Click here for the rest of the article. Story by Associated Press
Sales of existing home sales in Central Texas rose 5 percent in December from the previous December, bringing total sales for 2009 to 19,005, down 6 percent from 2008, the Austin Board of Realtors reported. The median price was up 6 percent in December, to $194,000, but throughout 2009 it slipped 1 percent, to $188,480, the board said. Sales climbed dramatically in October and November as buyers rushed to take advantage of the original Nov. 30 deadline for first-time homebuyer tax credit, which has since been extended and expanded to repeat buyers through April. "However, increases in sales volume beyond November and figures that have improved steadily throughout the year indicate that, while some demand was driven by the tax credit deadline, a sustainable recovery is also underway in the real estate market," said John Horton, the board's chairman. "We're seeing encouraging news from many sources that 2010 will be an improvement over 2009, and I think this report is one more indicator the outlook is beginning to brighten." Homes stayed on the market longer in December, an average of 88 days compared with 85 in December 2008. The number of homes on the market declined, with December's 8,079 listings down 5 percent from the previous December. from Statesman.com
Austin-area home resales jumped 58 percent last month from November 2008 as buyers scrambled to take advantage of low mortgage interest rates and a tax credit for first-time buyers. But local experts don't expect those big percentage gains to continue. Sales could slow next year, they said, anticipating rising mortgage interest rates and the end of the tax credit, which Congress recently extended through April and expanded to additional buyers. November's percentage increase was the biggest in more than a decade and followed a 38 percent jump in October, according to the Austin Board of Realtors. However, the 997 sales in November 2008 were unusually low, reflecting the worsening economic downturn at the time. Last month, 1,576 homes were sold, the board said. The median price was $179,900, down 2 percent from a year ago. "The numbers are certainly welcome news," said David Reed, a senior loan officer with Austin-based Land Mortgage. "Fifty-eight percent is huge, even if you factor in the extra selling days in November compared to last year." With the median price holding relatively steady, "it's even better news still," Reed said. But the market isn't in the clear yet. More challenges are ahead because of "minimal prospects for short term improvement in the local economy and our job market," said Eldon Rude, local director for Metrostudy, a housing research firm. He said he doesn't expect the market to show strong growth "until the employment picture brightens and consumer confidence strengthens." Rude said the sharp increase in November resales "was definitely tied to the availability of the tax credit but was also related to the significant slowdown in sales activity late last year as the U.S. recession took hold." With the extension, first-time buyers may still qualify for up to $8,000, but other buyers can get up to $6,500. Buyers must have a house under contract by the end of April and close on the sale by the end of June. Year-over-year sales were up 31 percent in the Dallas area, also one of the biggest increases on record; 32.8 percent in Houston; and 52 percent in San Antonio. Reed said he thinks the tax credit alone wasn't enough to spur the Austin area's November surge. He said that interest rates of less than 5 percent also were a factor, as was the specter of rising rates. Reed predicted that interest rates will move into the mid- to high 5 percent range by the end of next year's first quarter. Some real estate agents voiced optimism about 2010. "It just seems like the numbers are going steadily up, along with the economy," said Nell Hurtado, an agent with JB Goodwin Realtors. "People have a different attitude. They're more upbeat about the economy." Reed said he still foresees "a positive year for sales growth in 2010 - just nothing like a robust November we just had." From statesman.com snovak@statesman.com; 445-3856
Tax credit for buyers, low mortgage rates lead to biggest surge in 4 years.By Shonda Novak
AMERICAN-STATESMAN STAFF
Thursday, November 19, 2009 Central Texas existing-home sales jumped nearly 38 percent in October as buyers took advantage of a federal tax credit for first-time homeowners and favorable mortgage interest rates. It was the biggest year-over-year percentage gain in more than four years and encouraging news for a housing market that struggled for much of 2009. But one housing expert cautioned that the market will remain challenging until the region starts growing jobs again. "We're still in an environment where the Austin region is losing more jobs than are being created," said Eldon Rude, local director for Metrostudy, which conducts housing research in Austin and 32 other markets nationwide. "There remains a lot of uncertainty out there." The Austin Board of Realtors reported Wednesday that 1,823 single-family homes were sold last month, compared with 1,322 in October 2008. Pending sales - transactions expected to close in November - were up 47 percent, an indicator of another strong month. D'Ann Petersen, an economist with the Federal Reserve Bank of Dallas, said the $8,000 tax credit "likely has a lot to do with the large increase, and we may be accelerating sales that would have occurred in the spring" into this year. "Still, it is a positive sign and confirms some bottoming out that we've seen in housing statistics and have been hearing from in our anecdotal surveys," she said. Much like the Cash for Clunkers rebate program spurred car sales earlier this year, the tax credit has drawn hundreds of thousands of first-time buyers nationwide into the market. The credit was set to expire Nov. 30 but recently was extended through April 30, with a new provision that allows a smaller credit for some move-up buyers. Last month, 64 percent of sales were for homes priced between $100,000 and $249,999 - a typical range for first-time buyers. The median price was $182,000, down 5 percent from a year earlier. Experts say the tax credit, along with low mortgage rates, will continue to feed sales in the coming months. "Home prices have softened a tad, but I think people are also looking at current interest rates," said David Reed, senior loan officer with Integrity Home Mortgage. "In October 2008, buyers were seeing mortgage rates of nearly 7 percent. October 2009 buyers could find 4.875 percent at most any lender. That's a huge difference." And Reed said that Austin continues to do better than many other cities. Dallas-area home sales were up only 11 percent last month, for example, the first gain since September 2008. After being down sharply in the first half of the year, Austin-area home sales have been improving since July. But some experts are cautious about the Austin economy. Major high-tech employers have cut manufacturing jobs. And construction jobs have disappeared with the slowdown in commercial development. Rude noted that traffic from relocation buyers - people moving to Austin for new jobs - is down significantly. While the expanded tax credit widens the pool of potential buyers, Rude said, "until we see a resumption of positive job growth, we don't expect the (housing) market to show real signs of strengthening." from statesman.com
Posted by: gardnergroup in Home Selling, Finance on
Oct 15, 2009
Realtors' index rises 6.4% in August for 7th straight gain as tax credit deadline boosts activity. By Les Christie, CNNMoney.com staff writer Last Updated: October 1, 2009: 10:45 AM ET NEW YORK (CNNMoney.com) -- Homebuyers signed more sales contracts in August than in any month this year, boosted by the looming expiration of a homebuyers' tax credit, according to an industry report released Thursday. The August Pending Home Sales Index from the National Association of Realtors (NAR) surged 6.4%, the seventh straight month-over-month improvement in the indicator. The increase far exceeded economists' expectations -- a panel of analysts surveyed by Briefing.com had forecast a 1% rise. Pending home sales rose 3.2% in July. Pending sales are considered a forward indicator of housing market health since contract signings precede actual closings, which typically occur two to three months later. August contract signings show up in October and November NAR statistics as existing home sales. Housing markets have gained some ground recently as a tax credit for first-time homebuyers -- which is scheduled to expire Nov. 30 -- stimulated sales of starter, and other, homes. "No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month," said Lawrence Yun, NAR's chief economist. One problem in extrapolating future closings from contract signings, however, is that there are continuing problems obtaining mortgages that may scuttle many deals, according to Yun. "The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules," he said. Those issues also could also lead to some double counting of previous pending sales as buyers whose earlier deals fell through may return to the market and sign new contracts. Still, the oversized gain in pending sales will surely translate into some increase in closings, and the report added to several other positive recent indicators that housing markets are at least stabilizing, if not in full-blown recovery. Not all economic and housing indicators have been pointing up. Initial jobless claims climbed this week, according to a Labor Department report, after three weeks of declines. Foreclosure filings are still well above normal and they threaten to go far higher as the terms of many toxic mortgages, such as interest-only loans and option ARMS, reset over the next six to 12 months and send the monthly mortgage payments of homeowners soaring. Another housing market question mark is the status of the tax credit for first-time homebuyers, with the industry fearing that home sales could drop sharply if it's allowed to expire. There are, however, several efforts in Congress to extend the credit and even to expand it to all homebuyers, not just first-timers. That could turbo-charge home sales if it goes through.  from cnn.com
from Forbes.com Though home prices in many areas still have room to drop, economists say some of the country's real estate markets are showing early signs of repair. A two-year slide in values has eased its stomach-turning pace, and some analysts expect the national market to bottom out by mid 2010. That's the good news. But just as subprime lending, the housing bubble and the country's subsequent wave of foreclosures had distinct consequences in separate areas of the country, the recovery will also look dramatically different by region. When prices do rise, they'll inch, rather than soar, and some areas won't match their pre-bubble prices for a decade, according to home price forecasts by Moody's Economy.com. Read the rest of the article here
Posted by: gardnergroup in Home Selling on
Sep 08, 2009
Index jumps by 3.2% in July, beating estimates and marking its longest streak on monthly increases on record. By Julianne Pepitone, CNNMoney.com staff reporter Last Updated: September 1, 2009: 12:18 PM ET NEW YORK (CNNMoney.com) -- More Americans signed sales contracts to buy homes in July than in June, marking the longest streak of monthly increases on record, said a report released Tuesday. The pending home sales index from the National Association of Realtors rose 3.2% in July after rising by 3.6% in June. That's 12% higher than July 2008, and it marks the sixth straight increase since record-keeping began in 2001. The reading far exceeded forecasts of economists surveyed by Briefing.com, who predicted a 1.5% increase. Signed real estate contracts often take many weeks or months to complete, so they are considered a forward-looking indicator. A new direction Momentum in the housing market has clearly turned for the better, said NAR chief economist Lawrence Yun, in a written statement. "The recovery is broad-based across many parts of the country," Yun said. "Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit." The first-time home buyers tax credit, passed earlier this year as part of the economic stimulus package, is worth 10% of the home purchase price up to $8,000. People who have not owned a home in the previous three years are eligible for the credit. However, the tax credit expires on Nov. 30 and it usually takes about 90 days to close on a house after a contract is signed. As of Sept. 1, there were only 90 days left before the credit ends. Housing affordability has also improved, the NAR said. The average middle-income family can now spend less than 25% of monthly income to buy a median-priced home, Yun said, adding that housing payments as a percentage of income in 2009 are at a record low. "As long as home buyers stay within their budget, mortgage payments will be very manageable," Yun said. Regional sales The pending home sales index is broken down by regions. The West soared above the rest, jumping 12.1% in July, while the South saw pending home sales activity rise 3.1% for the month. In the Northeast, activity fell 3%, and in the Midwest saw a decline of 2%.
The director of the Real Estate Center at Texas A&M University said it appears Texas has reached the bottom of the housing market. Mark Dotzour said the inventory of unsold new and existing homes around the state is in good shape. "I feel now is the time to buy a house in most Texas cities," said Dotzour, in the center's online newsletter, RECON. "Housing affordability has never been higher, and I never thought I would see 5 percent mortgages in my lifetime. If you plan to live in the house for at least two or three years, now is the time to buy." The economist also said the time is right to build a house because construction costs are low, mortgage money is cheap and there are plenty of contractors available to do the work. Dotzour predicts mortgage rates will remain low as long as the federal government keeps purchasing most of the residential mortgages. However, he said the housing recovery could be adversely affected by Washington's intervention in the areas of health care, taxation, cap and trade and the rewriting of accounting and legal standards. Austin Business Journal - by Jennifer Dawson Houston Business Journal
Posted by: gardnergroup in Home Selling on
Aug 11, 2009
WASHINGTON - Pending U.S. home sales rose in June for the fifth straight month, another encouraging sign of life for the embattled U.S. housing market, the National Association of Realtors reported Tuesday. To read more, visit http://www.msnbc.msn.com/id/32283222/ns/business-real_estate/
By Alan Zibel, Alex Veiga
ASSOCIATED PRESS
Tuesday, July 28, 2009 WASHINGTON - New home sales rose last month at the fastest clip in more than eight years as buyers eagerly took advantage of bargain prices - a clear sign, economists said, that the real estate market may finally be bouncing back. Historically low interest rates and a federal tax credit for first-time homeowners also helped push home sales to their highest level since November, the Commerce Department reported Monday. While home prices are still falling around the country, sales have now risen for three months in a row. Construction of homes is at the busiest level since last fall. And home resales rose in June for the third straight month. "The worst of the housing recession is now behind us," said David Resler, chief economist at Nomura Securities. But as with the overall economy, he said the recovery is likely to be slow and arduous. Put in perspective, the improvement in sales is modest. The pace of sales for new homes in June was still 72 percent below the peak of four summers ago, and an enormous inventory of homes is still on the market. "There's been signs of improvement, but we're a long ways off from being back to a normal market," said Corey Barton, president of CBH Homes in Meridian, Idaho. Sales there were up in June, but Barton said, "It wasn't our biggest jump in eight years." But there were clear signs the housing market is showing more life than at any point since the recession began. Keystone Custom Homes of Lancaster, Pa., which was founded in 1992, had its best June ever. July looks good, and president Larry Wisdom expects an even stronger August. "We doubled our sales in May, and then in June it took off," he said. New home sales for June came in at a seasonally adjusted annual rate of 384,000, blowing past the expectations of economists surveyed by Thomson Reuters, who were looking for 360,000. The figure is up 11 percent from May, and May's number of 346,000 was higher than previously thought. The increase is the largest since December 2000, when investors scarred by the tech-stock bubble were looking for more stable places to put their money. Sales were strongest in the Midwest, where they jumped 43 percent from May. Sales climbed 29 percent in the Northeast and 23 percent in the West. They declined slightly in the South. The median sales price was $206,200, down from $234,300 a year and $219,000 in May. Economists expect home prices to fall until the competition from low-priced foreclosures ebbs sometime next year. To drum up sales, CBH Homes has slashed prices up to 10 percent from last year's levels. The homes CBH builds have to compete with the glut of foreclosures, which are drawing many first-time homebuyers. In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. The closing must occur by Dec. 1 for buyers to take advantage. "There's definitely more first-time homebuyers in the market than what we've seen in the last several years," Barton said. Fallout from the housing crisis played a central role in the U.S. recession, the longest since World War II. Mortgages went bad, homebuilders pulled back and fired thousands of workers, foreclosures spiked, and lenders were shuttered by the dozen. Although the real estate market appears to be starting a recovery, that doesn't mean it will instantly become an economic engine. Construction is weak because builders have too many unsold homes. At the current pace, the new homes for sale would last nearly nine months. That's slightly less time than in May but still much longer than the six-month mark that indicates a balanced market. Austin upbeat, too Austin's market for new homes is showing its own signs of a rebound. New-home starts in the second quarter were 53 percent higher than in the first quarter. Because builders have pulled back in the past year, there is only a three-month supply of new homes on the market. The shortage of new homes has led to a pickup in the resale market, which had its best month in a year in June. From http://www.statesman.com/search/content/news/stories/nation/2009/07/28/0728econ.html
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