According to Money Magazine, the good news for housing is that price gains next year are expected to be only about half as strong as in 2013, when sellers stayed on the sidelines. Inventory is already improving: nationwide, the number of homes for sale in September rose 1.8% vs. a year earlier, according to the National Association of Realtors. That’s the first increase since late 2011.
Buyers will also enjoy an advantage next year as real estate investors are expected to be less of a factor, because in an improving market, there are fewer distressed homes, which they want. For buyers, more inventory can make sense if you have a particular home in mind. But in 2014, there will be a price for delay: 30-year fixed-rate mortgages are forecast to climb from 4.5% to more than 5%. Lead with a credible offer - at a time of multiple bids, low-balling isn’t the way to go, but you don’t want to overpay either. Even in markets that are starting to experience bidding wars, final sales prices are still typically about 1% below asking.
For owners, if you like your home and are not in a rush to sell, you have great flexibility. For instance, your rising home equity will make it easier to borrow against the property. That can help pay for maintenance or home renovations you’ve been wanting to do for years, which will only add value when you eventually put your home on the market. Take advantage of low home-equity rates. While 30-year mortgages rose nearly a point this year, rates on home-equity lines of credit have fallen a bit to 5.1%. If you’ll need to repay your loan over many years though, go with a fixed-rate home-equity loan. Today’s 6.25% average is about 0.25 points lower than a year ago, as lenders are now more interested in doing deals.
For sellers, if you list too early you’ll leave gains on the table, but wait too long and rising borrowing costs might put an end to bidding wars. You can’t time the market perfectly, but you can keep an eye on inventory trends. Once you see a big uptick in listings relative to closings, you’ll know price gains are getting ready to slow, and that it’s time to act. Price it right the first time. Don’t waste your time by listing too high only to have to wait and lower the price.
This ended a three-month slump that began in July, and provided evidence that elevated mortgage rates have not seriously hurt the housing recovery. New-home sales leaped 25.4% from September to October to a seasonally adjusted annual rate of 444,000, according to data released today by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). On an annual basis, sales of new single-family homes increased by 21.6%.
October’s new home sales were about equal to those recorded between January and June of this year, despite the fact that average mortgage rates were 60 basis points higher in October. At the same time, Trulia Chief Economist Jed Kolko cautioned not to assign too much value to the numbers, saying that month-over-month changes in new home sales are “hugely volatile” and that home sales over the last three months are only 5% higher than they were during the same period a year ago.
The Census Bureau estimated that 183,000 new houses were for sale at the end of October - that represents a 4.9-month supply of homes at the current sales rate, down sharply from the 6.4-month supply measured for September. While new-home sales increased substantially, existing-home sales in October fell for the second straight month, a decrease attributable to tight inventory, according to NAR. Month over month, they dropped 3.2% to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September, but increased by 6% on annual basis, NAR said.
Warren Buffett’s new real estate franchise brand, Berkshire Hathaway HomeServices, will convert 12 more Prudential Real Estate-affiliated brokerages, bringing the total number of firms committed to the 1-year-old network to 51. The new franchise brand gives Buffett, already a heavyweight in the residential real estate brokerage business, through Berkshire Hathaway’s ownership of the second-biggest U.S. brokerage company HomeServices of America, a new way to expand his footprint.
HomeServices of America created the new brand when it took a majority stake in the Prudential Real Estate and Real Living brands from Brookfield Asset Management in October 2012. It will eventually replace the Prudential Real Estate brand, which is slated to disappear in the 2020s as a condition of Prudential Financial Inc.’s sale of its real estate franchising business to Brookfield Asset Management in 2011.
Since HomeServices entered the franchise game, several large Prudential-affiliated firms have officially converted to Berkshire Hathaway HomeServices. So far, only Prudential-affiliated firms have committed to Buffett’s new brand.
“Momentum continues building for Berkshire Hathaway HomeServices,” said Earl Lee, CEO of HSF Affiliates LLC — the joint venture between HomeServices and Brookfield that manages the Berkshire Hathaway HomeServices, Prudential Real Estate and Real Living brands — in a statement. “Affiliates realize the strength of this new brand — inspired by the world-renowned Berkshire Hathaway Inc. — and the depth of its real estate tools, technology and services,” he continued. “They want to capitalize on our brand and all it has to offer.”
HomeServices has been aggressive in its effort to grow the new network: in August, it purchased Prudential Fox & Roach Realtors, the sixth-largest brokerage in the U.S. by closed transaction sides in 2012, which has already transitioned to the new brand.
(Lawrence Yun, NAR Chief Economist)
This aims to shed light on the characteristics that people desire in their neighborhood and the trade-offs consumers are willing to make to live in that preferred setting. At its core, the survey pits a traditional suburban community with separated-land uses necessitating driving to destinations vs. a smart growth community with a mix of land uses where walking, biking, and transit are viable for most trips. They also inquired about various transportation modes and the respondents’ use of these modes and inclination to fund various modes.
· 60%of respondents favor a neighborhood with a mix of houses and stores and other businesses that are easy to walk to, rather than neighborhoods that require more driving between home, work and recreation.
· Many Americans see the benefits of both a single-family detached house as well as a walkable neighborhood. There is a desire for the closeness and convenience that come from communities where walking is easy, and errand and commute times are short. On the other hand, Americans overwhelmingly prefer to live in single-family, detached homes – even if that means driving more and a longer commute to work.
· A majority of respondents prefer houses with small yards and easy walks to schools, stores and restaurants (55%) over houses with large yards where you have to drive to get to schools, stores and restaurants (40%).
· An even larger majority prefers houses with smaller yards but a shorter commute to work (57%) over houses with larger yards but a longer commute to work (36%).
· However, when given a choice between a detached, single-family house that requires driving to shops and a longer commute to work (57%) and an apartment or condominium with an easy walk to shops and a shorter commute to work, a strong majority prefer the single-family home even with the longer commute (39%).
With the scars of the recession still fresh, Americans place a higher priority on the availability of affordable housing than in our 2011 survey - up 8 points to 59% - and housing opportunities for people with moderate and low incomes – up 11 points to 57%.
The recently released profile produced a variety of interesting facts. When polling consumers about their home-selling experience, the NAR learned that:
• Almost half of home sellers traded up to a larger size and higher priced home and 59% purchased a newer home.
• The typical seller lived in their home for nine years. The median tenure has increased in recent years. In 2007, the typical tenure in home was only six years.
• 88% of sellers were assisted by a real estate agent when selling their home.
• Recent sellers typically sold their homes for 97%of the listing price, and 47% reported they reduced the asking price at least once.
• 13% of recent sellers had to delay or stall selling their home because the value of their home was worth less than their mortgage.
• 36% of sellers offered incentives to attract buyers, most often assistance with home warranty policies and closing costs.
The NAR report also reveals these points about individuals queried about their home search process:
• For 42% of home buyers, the first step in the home-buying process was looking online for properties and 14% of home buyers first looked online for information about the home buying process.
• The use of the Internet in the home search rose slightly to 92%.
• Real estate agents were viewed as a useful information source by 87% of buyers who used an agent while searching for a home.
• The typical home buyer searched for 12 weeks and viewed 10 homes.
• For more than half of buyers finding the right home was the most difficult step in the home buying process.
• Approximately 9 in 10 recent buyers were at least somewhat satisfied with the home buying process.
The federal government announced that it’s lowering home loan limits in many areas across the country next year. The change takes effect January 1st, the U.S. Department of Housing and Urban Development said. 650 counties nationwide will see lower limits, according to HUD, which oversees FHA. The higher limits were part of the 2008 economic stimulus package designed to help the country during the Great Recession. HUD said the lower limits were meant to take effect in 2009, but Congress delayed implementation because of the ongoing lending crisis.
"As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play," Commissioner Carol Galante said in a statement. "Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved."
FHA loans, with their low down payments, are popular with first-time homebuyers. “Anything you do to make it harder for people to get loans is going to have an impact on the marketplace,” said broker Jim Heidisch.
(Florida Sun Sentinel)
The developers who bought the building on Independence Mall in October say they plan to spend $20 million on a renovation that will include a 110-space parking garage and a restaurant with outdoor seating. Dow will lease nearly 200,000 square feet there for its headquarters. The U.S. General Services Administration will take over about 135,000 square feet in July. The chemical company would lease space for at least seven years and the government agency for at least 15.
The buyers planned to turn 55,000 square feet of basement space into public parking. Though the companies had not yet obtained the necessary permits to convert the space to parking, garage traffic is not expected to clog already busy Market Street because cars could enter from Ranstead Street. The parking would be especially geared toward tourists visiting the nearby Liberty Bell and Independence Hall.
The only space in the building available for lease is a 3,000-square-foot corner on the ground level, which might be leased to a restaurant.
615 South 6th Street, most recently known as the Antiquarian’s Delight, is currently undergoing renovations to include thirteen apartments and a leasing office. This is guaranteed to make it one of the most interesting and recognizable addresses in the neighborhood.
The building was used as office space until about a decade ago. The two lots next door, once used for parking, would also part of the deal. The PHA is willing to have a developer renovate and reuse the existing building, or tear it down and replace it with something new. They are open to all types of projects on the site, including mixed-use, residential, or commercial. The PHA plans to maintain ownership of the land upon which this new development will sit - the developer will ultimately own and operate the building they build.