This Week in Real Estate: Feb. 29, 2016

This Week in Real Estate was fueled by better than anticipated existing home sale numbers for January. Below are a few highlights from the fourth week of February that influence our business:

* There’s Reason to Be Excited About the U.S. Housing Market. Economic data and corporate earnings reports released on Tuesday make it easy to remember why the housing market is expected to be one of the U.S. economy’s bright spots for years to come. During an interview on Bloomberg TV, Douglas Yearly, CEO of Toll Brothers, noted that he didn’t see any recessionary conditions in the U.S. but cautioned that volatility in financial markets was beginning to weigh on deals. “There’s a real disconnect right now between the housing market and the broader markets.” While the downdraft in equity prices won’t make American’s feel any richer, home price appreciation should help cushion the blow. “Home sales are at cycle highs, but the market still seems mainly to be dominated by supply constraints. This suggests that home prices generally still continue to rise at a solid pace,” said Johnny Bo Jakobsen, chief analyst at Nordea Markets.
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* Existing Sales Advance. Existing home sales, as reported by NAR, increased 0.4% in January to the highest level since July, and are up 11% from last January. The first-time buyer share for 2015 averaged 30%, up from 29% in 2014 and 2013. Year-over-year, all regions increased, including 20.6% in the Northeast, 18.2% in the Midwest, 8.3% in the West and 5.7% in the South. Total housing inventory increased by 3.4% in January, but remains 2.2% lower than its level a year ago. January represented the 47th consecutive month of year-over-year median sales price increases. The Pending Home Sales Index increased slightly in December, and the sharp volatility in November and December existing sales was a function of implementing a new regulation. Builder sentiment remains strong, and the tight inventory homes bodes well for new single-family sales in 2016.
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* U.S. Housing Market Continues Its Steady Comeback. Freddie Mac on Wednesday released its Multi-Indicator Market Index (MiMi), showing the U.S. housing market continuing to improve with two additional states – Florida and Arizona – entering their outer range of stable housing activity. The MiMi purchase applications indicator improved by 9% in 2015, its best showing since September 2013.The national MiMi value stands at 82.7, indicating a housing market that is on its outer range of stable housing activity. On a year-over-year basis, the national MiMi value has improved 7.65% percent. On a year-over-year basis, the most improving states were Florida (+16.59%), Oregon (+15.64%), Colorado (+14.09%), Washington (+12.58%) and Nevada (+12.54%). In December, 45 of 50 states and 86 of the top 100 metro areas were showing an improving three-month trend. The same time last year, 19 of 50 states, and 49 of the top 100 metro areas were showing an improving three-month trend.
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* Appraisal Volume Records Fourth Week of Consecutive Increases. Appraisal volume recorded its fourth week of consecutive increases, with volume rising 1.9% for the week of February 14, according to the most recent report from a la mode, an appraisal forms software company that tracks appraisal volume throughout the country. Appraisal volume is an indicator of market strength and has some advantages over mortgage applications. Fallout is less for appraisals since they are ordered later in the mortgage process after credit worthiness determined and there are few multiple-orders.
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Have a productive week!



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