Monthly Archives: February 2014

Home Shoppers Should Have Easier Time This Spring

Could home buyers have less competition and an easier time to find the home of their dreams as the home shopping season begins to heat up? The answer is yes.

According to data from the latest Zillow Home Price Expectations Survey, which surveyed 110 economists, real estate experts and investment and market strategists, it found that investors — both individuals and companies who bought up lower priced and foreclosed homes throughout the recovery — are expected to take a step back in their activity.

What this means for home buyers is that the level of competition may ease up a bit.

“Buyers entering the market in the next few months will not be competing with cash-rich investors like they were last year, which should be some small solace given the higher prices and mortgage rates that they will encounter,” said Zillow Chief Economist Dr. Stan Humphries.

During the depth of the housing recession, when few home buyers were active in the market, investors purchased thousands of homes nationwide, fixing many of them up and keeping them in their portfolios as rental properties. This activity helped put a floor under sales volumes. But as the recovery progressed, investor demand created competition for many would-be buyers and contributed to rapid price spikes in some areas.

“Real estate investors, both large and small, played a crucial role in helping to stabilize markets during the darkest days of the housing recession, but a decline in investor activity now isn’t necessarily a bad thing, and could have real benefits for buyers,” said Humphries.

Humphries explained that the gradual decline of investor activity should be seen as another sign of the market slowly returning to normal. However, he agreed with the survey panelists that there wouldn’t necessarily “be a rush for the exit by institutional investors.”

In regards to home values, panelists said they expected an average home value appreciation of 4.5 percent nationwide through the end of this year, a pace that exceeds historically normal annual appreciation rates of around 3 percent. This appreciation is expected to slow to roughly 3.8 percent in 2015 and 3.3 percent by 2018 — rates much more in line with historic norms.

Based on current expectations for home value appreciation during the next five years, panelists predicted that overall U.S. home values could exceed their April 2007 peak by the first quarter of 2018, and may cross the $200,000 threshold by the third quarter of 2018.

Panelists were also asked when the Federal Reserve should end its ongoing stimulus efforts, known as “quantitative easing.” Since September 2012, the Fed has been purchasing tens of billions of dollars worth of Treasury bonds and mortgage securities each month, which has helped keep mortgage interest rates low and stimulate demand. The program is now being wound down, and more than 70 percent of panelists said they would like to see it end before the end of the year.

Source: Cory Hopkins / Bloomberg.com / February 21, 2014
Link to article.

Advertisements

A Quick Review of U.S. Tax Breaks for Homeowners

Calling all homeowners! With tax season rapidly approaching, it’s time to get your paperwork in order and consider all the ways to minimize your tax liability. Whether you’ve got a single-family home, a town house, condo, or even a floating home, there are various home-related expenses that you should be sure to deduct. We suggest starting with these:

The mortgage interest deduction has long been the most-beloved tax benefit of homeowners since it’s such a big money saver (especially in the early years of a home loan). In fact, Americans save around $100 million every year by claiming this deduction, which you can take on both your primary and secondary homes, providing your loan is less than a million dollars, and providing you itemize your return.

The IRS sees points — percentage-based fees which a lender charges to originate a loan — as form of mortgage interest paid in advance. Assuming you meet certain requirements, you can therefore deduct these points, in full, in the year that they were paid. So, for example, if you paid two points on a $250,000 mortgage in 2013, you can write off $5,000 on your 2013 tax return. What if you refinanced a mortgage last year? Then, you would have to deduct the points over the life of the loan. That means you can deduct 1/30th of the points a year if it’s a 30-year mortgage. Granted, that’s only $33 a year for each $1,000 of points you paid, but every little bit helps.

Once you see what you, (or the holder of your escrow account), paid in property taxes in 2013 — (find that number by looking at the annual statement you recently received from your lender; or if your taxes aren’t included in escrow payments made with your mortgage payments, then look at your cancelled checks) — enter that amount on your Federal form. Property taxes must be taken as an itemized expense. The tax you pay – each year – is deductible, for as long as you own the home. See Schedule A, line 6.

In what may be considered a sign of market confidence about the long-term prospects for the recovery, homeowners took on all sorts of remodeling projects last year. Chances are, you did, too. Whether you added square footage, put on a new roof, or made other “capital improvements” to your home, know that the money you spent on these projects — which increase your home’s value (as opposed to non-eligible repairs which just return something to its original condition) — can help lower your tax bill when you sell your home. Try using a free tool like Zillow Digs to get a sense for how much a remodeling project will run you and whether it will be a good return on your investment.

And as always, save your receipts!

Source: Vera Gibbons / Bloomberg.com / February 20, 2014
Link to article.

January home sales and price report

Constrained housing inventory flattens January home sales

LOS ANGELES (Feb. 19) – A limited supply of available homes for sale continued to hamper California housing sales, which were essentially flat in January, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported.

“The underlying fundamentals for housing demand exists, however, constrained inventory is holding back a stronger recovery as affordability becomes an issue for current homeowners who are reluctant to move due to less attractive mortgage rates and more restrictive lending standards,” said C.A.R. President Kevin Brown.  “Supply conditions in the lower-priced segment were especially tight as inventory for homes priced below $300,000 fell 13.4 percent from the previous year, while inventory for homes priced $1 million and higher increased 11.1 percent from last year.”

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 363,640 units in January, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  January marked the third straight month that sales were below the 400,000 level and the sixth straight decline on a year-over-year basis.  Sales in January inched up 0.3 percent from a revised 362,430 in December but were down 13.8 percent from a revised 421,780 in January 2013.  The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the January pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home fell 6.2 percent from December’s revised median price of $438,090 to $410,990 in January.  January’s price was 22.1 percent higher than the revised $336,650 recorded in January 2013, marking 23 consecutive months of year-over-year price increases and the 19th straight month of double-digit annual gains, as sales of higher priced homes made up a larger share of the market compared to a year ago.  The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

“The decline in the January median price was the largest in a year but is typical between December and January, with that decline averaging nearly nine percent over the last six years,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “The statewide median price was pulled down by a change in the mix of sales, as sales in higher-priced areas such as the Bay Area, Los Angeles, Orange, San Diego, and Ventura counties fell much sharper than in lower-priced areas.”

Other key facts from C.A.R.’s January 2014 resale housing report include:

• Housing inventory improved in January as home sellers geared up to sell their homes for the spring home-buying season.  The available supply of existing, single-family detached homes for sale rose in January to 4.3 months, up from December’s Unsold Inventory Index of 3 months. The index was 3.5 months in January 2013.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A six- to seven-month supply is considered typical in a normal market. • The median number of days it took to sell a single-family home also increased to 44.3 days in January, up from 40.2 days in December and from a revised 36.7 days in January 2013.
• Mortgage rates dipped in January, with the 30-year, fixed-mortgage interest rate averaging 4.43 percent, down from 4.46 percent in December but up from 3.41 percent in January 2013, according to Freddie Mac.  Adjustable-mortgage interest rates in January averaged 2.55 percent, down from 2.56 in December and down from 2.58 percent in January 2013.

 

 

 

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only.  County sales data are not adjusted to account for seasonal factors that can influence home sales.  Movements in sales prices should not be interpreted as changes in the cost of a standard home.  The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold.  Due to the low sales volume in some areas, median price changes may exhibit unusual fluctuation. The change in median prices should not be construed as actual price changes in specific homes.

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 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

January 2014 County Sales and Price Activity (Regional and condo sales data not seasonally adjusted)

January 2014 Median Sold Price of Existing Single-Family Homes Sales
State/Region/County Jan-14 Dec-13   Jan-13   MTM% Chg YTY% Chg MTM% Chg YTY% Chg
CA SFH (SAAR) $410,990 $438,090 r $336,650 r -6.2% 22.1% 0.3% -13.8%
CA Condo/Townhomes $331,980 $338,570 r $265,540 r -1.9% 25.0% -22.6% -2.4%
Los Angeles Metropolitan Area $387,740 $400,160 r $319,780 r -3.1% 21.3% -21.7% -14.9%
Inland Empire $267,200 $271,920 $207,530 -1.7% 28.8% -17.3% -15.8%
S.F. Bay Area $630,470 $666,760 r $548,890 -5.4% 14.9% -26.5% -2.7%
 
S.F. Bay Area
Alameda $600,960 $609,380 $520,680 -1.4% 15.4% -36.7% -9.1%
Contra-Costa (Central County) $608,610 $711,310 $592,100 -14.4% 2.8% -16.6% 30.7%
Marin $960,000 $893,750 $799,110 7.4% 20.1% -22.5% 11.1%
Napa $515,620 $476,000 r $411,110 8.3% 25.4% -32.7% -10.3%
San Francisco $781,250 $884,760 $687,500 -11.7% 13.6% -33.7% -19.2%
San Mateo $943,500 $1,000,000 $695,000 -5.7% 35.8% -24.8% 0.8%
Santa Clara $731,000 $768,000 $652,500 -4.8% 12.0% -35.2% -9.3%
Solano $296,120 $293,520 $243,520 0.9% 21.6% 0.3% 1.0%
Sonoma $469,830 $464,190 $367,780 1.2% 27.7% -18.8% -2.6%
Southern California
Los Angeles $423,570 $439,830 r $349,720 -3.7% 21.1% -21.2% -13.3%
Orange County $653,850 $677,660 $566,500 -3.5% 15.4% -29.5% -19.1%
Riverside County $314,070 $310,020 $244,780 1.3% 28.3% -16.9% -11.4%
San Bernardino $190,540 $198,890 $154,500 -4.2% 23.3% -18.1% -22.9%
San Diego $479,340 $479,690 $390,890 -0.1% 22.6% -22.7% -21.9%
Ventura $533,730 $535,180 $440,670 -0.3% 21.1% -27.8% -9.0%
Central Coast
Monterey $428,500 $438,500 $339,500 -2.3% 26.2% -29.0% -31.1%
San Luis Obispo $455,810 $484,480 $398,980 -5.9% 14.2% -10.9% 12.0%
Santa Barbara $698,860 $701,920 $510,710 r -0.4% 36.8% -21.9% -15.8%
Santa Cruz $608,620 $608,000 $482,000 0.1% 26.3% -10.3% 14.0%
Central Valley
Fresno $184,120 $190,350 $151,450 -3.3% 21.6% -27.1% -25.6%
Glenn $180,000 $190,000 $150,000 -5.3% 20.0% 9.1% 20.0%
Kern (Bakersfield) $195,250 $208,000 $164,200 r -6.1% 18.9% -6.5% -14.3%
Kings County $160,000 $154,280 $153,330 3.7% 4.4% 14.8% -3.1%
Madera $160,000 $160,000 $98,330 0.0% 62.7% 30.0% -16.1%
Merced $149,330 $160,000 $137,000 -6.7% 9.0% -20.4% -7.5%
Placer County $360,980 $361,150 $292,710 0.0% 23.3% -25.7% -15.2%
Sacramento $242,510 $250,370 $201,010 -3.1% 20.6% -24.9% -17.5%
San Benito $404,000 $410,000 $310,500 -1.5% 30.1% 2.6% -13.0%
San Joaquin $234,090 $248,820 $182,430 -5.9% 28.3% -15.0% -9.9%
Stanislaus $205,900 $220,640 $155,450 -6.7% 32.5% -19.7% -18.5%
Tulare $162,860 $160,910 $137,240 r 1.2% 18.7% -30.0% -35.8%
Other Counties in California
Amador $180,000 $192,000 $184,000 -6.3% -2.2% -29.4% -42.9%
Butte County $250,000 $244,440 $208,930 2.3% 19.7% -31.1% 1.2%
Calaveras $207,700 $215,000 $185,250 -3.4% 12.1% -24.7% -14.7%
Del Norte $130,610 $130,000 $155,000 0.5% -15.7% -6.7% 55.6%
El Dorado County $335,000 $360,580 $283,570 -7.1% 18.1% -23.2% -5.3%
Humboldt $270,590 $254,170 $234,720 6.5% 15.3% -28.6% -19.5%
Lake County $160,000 $165,000 $134,440 -3.0% 19.0% -54.1% -50.7%
Tuolumne $215,380 $209,090 $175,000 3.0% 23.1% -3.8% -3.8%
Mendocino $292,860 $278,570 $245,000 5.1% 19.5% -4.8% 37.9%
Nevada $275,000 $310,000 NA -11.3% NA -21.4% NA
Plumas $246,000 $249,000 NA -1.2% NA -44.0% -39.1%
Shasta $194,620 $184,710 $173,890 r 5.4% 11.9% -14.4% -13.9%
Siskiyou County $156,670 $160,000 $106,670 -2.1% 46.9% -14.7% -3.3%
Sutter $195,000 $189,000 NA 3.2% NA -7.0% NA
Tehama $158,000 $137,500 $88,330 14.9% 78.9% 8.7% 66.7%
Yolo $289,060 $308,060 $260,940 -6.2% 10.8% -35.9% -24.2%
Yuba $210,000 $202,000 NA 4.0% NA 0.0% NA

r = revised NA = not available
January 2014 County Unsold Inventory and Time on Market (Regional and condo sales data not seasonally adjusted)

January 2014 Unsold Inventory Index         Median Time on Market        
State/Region/County Jan-14 Dec-13   Jan-13   Jan-14 Dec-13   Jan-13  
CA SFH (SAAR) 4.3 3.0 3.5 44.3 40.2 36.7 r
CA Condo/Townhomes 4.0 2.7 3.3 47.3 41.7 39.4
Los Angeles Metropolitan Area 4.5 3.3 3.5 50.7 45.8 43.6 r
Inland Empire 5.1 3.9 3.8 49.8 43.6 41.6
S.F. Bay Area 2.8 1.6 r 3.1 47.1 44.2 45.4
 
S.F. Bay Area
Alameda 2.3 1.2 2.2 64.3 54.4 68.2
Contra-Costa (Central County) 3.1 1.4 2.8 58.7 54.9 69.7
Marin 3.8 2.3 4.7 67.1 52.6 76.3
Napa 5.1 2.9 5.1 93.9 74.8 87.8
San Francisco 3.3 1.9 4.4 33.3 33.6 37.0
San Mateo 2.1 1.3 2.5 22.8 24.2 23.3
Santa Clara 2.4 1.3 2.2 22.7 23.2 23.4
Solano 2.6 1.9 3.4 42.5 41.2 51.5
Sonoma 3.5 2.2 4.3 57.7 54.4 27.6
Southern California
Los Angeles 4.0 3.0 3.0 46.6 41.0 38.6
Orange County 4.6 2.9 3.5 62.0 58.6 55.1
Riverside County 5.3 4.0 3.9 51.6 45.0 44.6
San Bernardino 4.8 3.6 3.6 46.4 40.6 36.5
San Diego 5.2 3.6 4.1 35.0 34.4 37.7
Ventura 4.4 2.8 4.7 61.4 52.1 56.2
Central Coast
Monterey 5.5 3.4 3.8 33.8 38.9 27.4
San Luis Obispo 4.9 3.9 5.1 46.3 46.7 42.0
Santa Barbara 4.8 3.5 4.6 45.8 24.4 33.4
Santa Cruz 3.2 2.6 3.9 43.9 27.6 39.9
Central Valley
Fresno 6.0 4.0 4.3 31.1 28.2 26.6
Glenn 5.6 5.8 6.7 61.0 35.8 121.0
Kern (Bakersfield) 3.5 3.1 r 3.4 r 29.0 26.0 21.0 r
Kings County 4.1 4.6 3.5 55.5 42.0 42.2
Madera 3.6 4.6 2.6 31.0 31.0 29.1
Merced 3.6 2.4 3.4 31.0 29.5 27.4
Placer County 4.3 2.8 2.8 39.7 27.5 23.9
Sacramento 3.7 2.5 2.4 27.0 25.2 21.3
San Benito 2.9 3.2 2.3 25.2 26.7 28.8
San Joaquin 3.3 2.4 2.8 25.8 22.9 21.8
Stanislaus 3.5 2.6 2.3 23.8 23.1 20.9
Tulare 6.9 4.3 3.4 r 45.0 27.9 27.8
Other Counties in California
Amador 6.8 4.5 5.4 49.1 56.4 57.9
Butte County 5.0 3.2 4.4 63.6 46.7 42.4
Calaveras 7.1 5.0 NA 66.5 64.0 NA
Del Norte 9.9 8.6 17.0 98.5 91.0 135.0
El Dorado County 5.4 3.8 4.5 53.1 44.4 41.4
Humboldt 6.8 4.6 4.7 57.8 63.6 70.1
Lake County 10.1 4.1 5.4 80.3 88.3 75.5
Tuolumne 7.1 6.5 5.8 45.5 70.2 61.0
Mendocino 7.1 6.2 10.1 126.8 91.0 94.6
Nevada 5.6 5.7 NA 62.0 45.0 NA
Plumas 22.3 9.7 12.3 234.0 245.0 NA
Shasta 6.1 4.9 4.4 r 39.5 44.9 34.6 r
Siskiyou County 10.3 7.9 9.9 r 75.5 98.3 64.6
Sutter 3.4 2.7 NA 35.0 15.0 NA
Tehama 7.6 8.0 11.5 73.4 98.3 61.0
Yolo 4.3 2.5 2.9 22.3 29.3 24.7
Yuba 4.7 4.2 NA 20.0 32.0 NA

r = revised NA = not available

Source: California Association of REALTORS® / February 19, 2014
Link to article.

Housing Inventory Continues Fall in January

Housing inventory declined more than 9 percent over the month of January in the 19 markets in which online real estate brokerage Redfin has a presence, according to the company’s Real-Time Price Tracker for January. The decline marks the fourth consecutive monthly drop in inventory, according to Redfin.

“A year ago, we didn’t think inventory could go any lower, yet we’re beginning 2014 with another disappointment,” Redfin stated in its January report.

With the caveat that “it is too soon to tell,” the brokerage did offer some optimism regarding inventory in coming months, revealing “Redfin agents report that most of their home selling clients are planning to list between March and May.”

Sellers say they believe they will receive better offers during spring home buying season, and they believe when they do list their homes, they will sell easily and quickly.

The report also indicates the market is in somewhat of a catch-22: Sellers are reluctant to list their homes for sale while inventory is so low, as they are unsure they will be able to find and afford a new home, according to Redfin.

Home sales declined closely in line with inventory, falling almost 10 percent in January. However, Redfin explains this is no surprise, as January’s home sales result from offers made during the holiday season, often “the lowest point of the year.”

Home prices in Redfin’s 19 markets increased 14.3 percent year-over-year in January, similar to last January’s 14 percent year-over-year increase. Price appreciation, which accelerated over the first half of the year, slowed in the second half but ticked up again in December and January, according to Redfin’s data. In April, prices rose 18.7 percent over the year. In October, price appreciation was down to 12.6 percent.

West Coast markets experienced the greatest price appreciation in January, according to Redfin’s observation of its markets. Prices rose most in Las Vegas, Nevada (24.6 percent); Ventura, California (21.1 percent); and Riverside, California (21 percent).

Of the 19 markets, inventory dropped most in Boston, Massachusetts (-31.8 percent); Chicago, Illinois (-25.6 percent); and Portland, Oregon (-24.4 percent).

Source: Krista Franks-Brock / DSnews.com / February 14, 2014
Link to article.