Jobs and interest rates have always been two key indicators in determining current real estate market conditions as well as forecasting the future market. Equally important is consumer confidence. The Conference Board released This Week in Real Estate it’s August index, which rose to its highest level since October 2000. Below are a few highlights from the last week of August that influence our business:
* Consumer Confidence Pops in August to Highest Level Since October 2000. Consumer confidence rose in August to its highest level since October 2000, building on July’s solid result. The Conference Board’s index climbed to 133.4 in August. August saw that optimism increase among consumers, the Conference Board found, with the percentage of consumers expecting business conditions will get better over the next six months increasing to 24.3 percent from 22.9 percent. “These historically high confidence levels should continue to support healthy consumer spending in the near-term,” said Lynn Franco, director of economic indicators at The Conference Board.
Full Story… https://www.cnbc.com/2018/08/28/august-consumer-confidence.html?__source=realestate%7Cnews%7C&par=realestate
* NAR Sees Overheated Housing Market Starting to Cool. NAR’s July Pending Home Sales Index (PHSI) came in at 106.2, down from an upwardly revised (from 106.9) 107.0 in June, a decline of 0.7 percent. The decrease put the PHSI 2.3 percent behind its level in July 2017. It was the seventh straight month the NAR’s leading indicator for existing home sales has trailed on an annual basis. Lawrence Yun, NAR chief economist, says the housing market’s summer slowdown continued in July. “Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” he said. “It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.” Yun added, “The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.” There has been some increase in listings of available homes in some large metro areas, especially those in the West and Yun said this may help cool price growth and make homes more affordable going forward. Listings were up in several areas which have been especially “hot” including Denver, Nashville, Portland Oregon, and the California metro areas of Santa Rosa and San Jose. “Rising inventory levels – especially if new home construction finally starts picking up – should help slow price appreciation to around two-and-four percent, which will help aspiring first-time buyers, and be good for the long-term health of the nation’s housing market,” said Yun. In its July existing home sales report NAR put the year-over-year appreciation at 4.5 percent.
Full Story… http://www.mortgagenewsdaily.com/08292018_pending_home_sales.asp
* Lot Size Remains Record Low. The median lot size of a new single-family detached home sold in 2017 stands at 8,560 square feet, or just under one-fifth of an acre. This is just 2 square feet smaller but statistically not different from the 2016 median. In 2015, the median lot size fell under 8,600 square feet for the first time since Census Bureau’s Survey of Construction (SOC) started tracking the series for single-family detached homes. It remained in this record low territory ever since. While nation’s lots are getting smaller on average, the regional differences in lot sizes persist. Looking at single-family detached speculatively built (or spec) homes started in 2017, the median lot size in New England is twice as large as the national median. The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.15 acres.
Full Story… http://eyeonhousing.org/2018/08/lot-size-remains-record-low/
Have a productive week.