This Week in Real Estate: Dec. 14, 2015


Solid growth in consumer spending in November coupled with a good jobs report and an uptick in the consumer sentiment index all but ensures the Federal Reserve will increase rates This Week in Real Estate. Below are a few of the highlights from the second week in December that influence our business:

* Homeowners Reap Remodeling Benefits Whether Selling or Staying. The 2015 Remodeling Impact Report, the first of its kind from NAR that examines personal satisfaction from remodeling projects, surveyed Realtors, consumers who have completed remodeling projects, and members of the National Association of the Remodeling Industry. “Remodeling projects can greatly improve both the value of and satisfaction with one’s home, which are great things no matter the reason for the project,” says Judy Mozen, president of the National Association of the Remodeling Industry. “This report highlights the best projects to consider in either situation and showcases just how much of a difference a good and professional remodel can make in real numbers.” NAR President Tom Salomone says it’s important that the report not only assist homeowners who are preparing to sell in choosing the best projects to attract buyers, but also helps those looking to get more personal satisfaction out of their homes. Report Attached.
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* Consumer Spending Reaffirms Likelihood of December Interest Rate Hike. Consumer spending reported solid growth in November, giving another positive sign to the industry that the Federal Reserve will likely raise interest rates next week for the first time in nearly a decade. The outlook for consumer spending, which accounts for more than two-thirds of economic activity, got a lift from other data on Friday showing consumer sentiment nudged up in early December. The University of Michigan’s consumer sentiment index rose to 91.8 early this month from a reading of 91.3 in November. Consumers’ attitudes toward purchases of major household items were the strongest since 2005.
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* U.S. Foreclosure Starts at Lowest Level in More Than 10 Years. RealtyTrac released its U.S. Foreclosure Market Report for November 2015 this week, which shows foreclosure filings were reported on 104,111 U.S. properties in November, a decrease of nearly 10 percent from the previous month and down more than 7 percent from a year ago. The 10 percent monthly decrease in overall foreclosure activity was caused largely by a 15 percent monthly drop in foreclosure starts, with 41,208 properties starting the foreclosure process for the first time in November, the lowest monthly total since May 2005. Foreclosure starts have decreased on a monthly basis for seven of the last eight months and November was the fifth consecutive month where national foreclosure starts decreased on a year-over-year basis.
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* Appraised Values Remain Slightly Lower Than Homeowner Expectations. The average appraisal in November was 1.87 percent lower than the value the homeowner expected, according to Quicken Loans’ national Home Price Perception Index (HPPI). The difference between the values was slightly higher in October, making November the third consecutive month the gap between values has narrowed. Overall, November marks the 10th straight month homeowners’ expectations of their home’s value exceeded the appraisers’ valuation. Appraised values rose an average of 1.08 percent since October, and have increased 4.84 percent year-over-year. “The variation in HPPI values across the country is a reminder of how localized real estate truly is,” says Bob Walters, Quicken Loans Chief Economist. “While home values continue to make leaps forward on the west coast, it takes time for the homeowner to recognize those gains. In the same vein, home value increases are moderating in much of the country, causing homeowners to be overly optimistic about their property’s value.”
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Have a productive week!


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