This Week in Real Estate: Aug. 1, 2016


Peaks and lows are the themes This Week in Real Estate as cash sales and first-time foreclosure starts are at their lowest levels in many, many years while the median sales price reaches an all-time high. Below are a few highlights from the final week of July that influence our business:

* U.S. Median Home Sale Price Reaches New All-Time High in June. ATTOM Data Solutions released its June and Q2 2016 U.S. Home Sales Report on Wednesday, which shows that single family homes and condos sold for a median price of $231,000 in June 2016, up 6 percent from the previous month and up 9 percent from a year ago to a new all-time high – 1 percent above the previous peak of $228,000 in July of 2005. June was the 52nd consecutive month where U.S. median home prices increased on a year-over-year basis. Since the nation’s home prices bottomed out in 2012, a total of 63 of the 130 markets analyzed (48 percent) have reached new all-time home price peaks.
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* Cash Sales This Year Lowest Start Since 2008. Cash sales made up 31.6% of total home sales in April, a decrease of 2.8 percentage points annually, according to a recent report from CoreLogic. For the first four months of 2016, cash sales averaged 33.9 percent of the market share, the lowest start of any year since 2008. Before the housing crisis, cash sales made up about 25% of the market. If cash sales continue to fall at their current rate, they could hit pre-crisis levels by mid-2018. Real estate-owned sales (bank owned) had the largest cash sales share at 56.7%, followed by resales at 31.3%, short sales at 28.6% and newly constructed homes at 14.5%. Florida had the largest cash sales share of any state at 45.5%, followed by Alabama at 45.3%, New York at 44.2%, New Jersey 38.2% and Indiana at 38%. Oregon and Washington’s cash sales share of total sales for the same time period was 27% and 23% respectively.
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* First-Time Foreclosure Starts Lowest Since 2000. It’s not news that foreclosures are declining as the housing market and economy recover. But data provider Black Knight Financial Services reported Tuesday that first-time foreclosure starts were the lowest not just since the housing bubble burst, but since 2000. There were 77,657 such starts in the second quarter, Black Knight said. That’s a 16% decline from the first quarter and 25% lower than the same time period a year ago.
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* Consumer Optimism Holds Steady in July. Consumer confidence barely moved in July, holding to June’s high level by historic standards, according to the Consumer Confidence Index released today and conducted for The Conference Board by Neilsen. The consumer confidence index decreased slightly to 97.3, down from 97.4 in June. The Present Situation index increased to 118.3 from 116.6 last month, however the Expectations Index slipped from June’s 84.6 to 83.3. In 1985, the index was set to 100, representing the index’s benchmark. This value is adjusted monthly based on results of a household survey of consumers’ opinions on current conditions and future economic expectations. “The marginal decline in the Conference Board measure of consumer confidence in July left the index still at a high level by historical standards, providing further evidence that, after what could turn out to be the biggest quarterly gain in a decade in the second quarter, consumption growth will continue at a decent pace in the third quarter,” Capital Economics Assistant Economist Andrew Hunter said.
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Have a productive week!

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