This Week in Real Estate: Jan. 11, 2016


This Week in Real Estate realized a strong start to 2016 fueled by a robust December jobs report and continued historically low mortgage rates. Below are a few of the highlights from the first week of 2016 that influence our business:

* U.S. Real Estate to Draw More Foreign Investors in 2016. Most foreign investors expect to put more money into U.S. property this year than they did in 2015, according to a survey by the Association of Foreign Investors in Real Estate. Sixty-four percent of respondents said they intend to make modest or major increases to investments in U.S. real estate this year, while thirty-one percent expect to maintain their holdings or reinvest sales proceeds into other U.S. assets. Sixty percent said the U.S. was the country providing the most stable and secure real estate investments and forty-six percent said the U.S. was the country providing the best opportunity for capital appreciation, according to the 24th annual survey by the group, known as AFIRE. Foreign purchases of U.S. real estate have soared since the financial crisis, jumping to $87.3 billion of completed deals last year, from less than $5 billion in 2009, according to Real Capital Analytics Inc. “The recent passage of legislation easing taxes for foreign pension funds that buy U.S. real estate¬† probably will boost investment further,” said Jim Fetgatter, chief executive of AFIRE.
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* U.S. Adds 2.65 Million Jobs in 2015 For 2nd Best Year Since 1999. The year ended with a particularly strong sprint. In December, employers hired an additional 292,000 people, the Labor Department said, and October and November were revised up by a total of 50,000, pushing the average for the last three months to 284,000. For all of 2015, the nation added 2.65 million jobs, the second best year of jobs gains since 1999. The unemployment rate stayed at 5% for the third straight month, falling by more than half since exceeding 10 percent in October 2009.
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* CoreLogic: Home Prices Surge 6.3% in November. Home prices nationwide, including distressed sales, surged 6.3% in November 2015 compared with November 2014 and increased by 0.5% in November 2015 compared with October 2015, according to the latest report from CoreLogic. Next year is projected to post similar results, with the CoreLogic HPI Forecast indicating that home prices will increase by 5.4% on a year-over-year basis from November 2015 to November 2016. “Heading into 2016, home price growth remains in its sweet spot as prices have increased between 5 and 6 percent on a year-over-year basis for 16 consecutive months,” said Frank Nothaft, chief economist for CoreLogic.
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* Black Knight: Home Prices Keep Rising, Now Just 5% off Pre-Crisis Peak. Home prices continued rising in October, marking the 42nd straight month of year-over-year home price appreciation, according to a new report from Black Knight Financial Services. According to Black Knight’s report, October’s national home price index of $254,000 puts national home prices up 26.9% since the bottom of the market at the start of 2012, and just 5.3% off the June 2006 peak of $268,000.
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Have a productive week!

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