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By Nick Gandhi | Agent in Stamford, CT
  • Home Building Surges as Confidence Grows

    Posted Under: Market Conditions, Home Buying, Home Ownership  |  October 18, 2012 9:12 AM  |  221 views  |  1 comment

    Residential construction picked up momentum in September and now is running at its highest level in four years, a turn that could have a positive effect on the jobs market and the broader U.S. economy.

    Builders started work on new houses and apartments at a seasonally adjusted annual rate of 872,000 units last month, the Commerce Department said Wednesday, up 15% from August and 34.8% from September a year ago, far exceeding economists' expectations. The level of starts was the highest since July 2008.

    Many economists contend that the rise in construction, if sustained, could boost job creation and economic growth. The National Association of Home Builders, a trade group, estimates that each home built generates three full-time jobs and $90,000 in new tax revenue.

    "The path between here and when we get to a sustainable pace of home building, should add, cumulatively, up to two percentage points" to the nation's gross domestic product, said Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co. "It could take three or four years, but at the pace we're going at now, we might get there sooner rather than later."

    The government report showed new building was up in three of four U.S. regions. Building rose 20.1% in the West, 19.9% in the South and 6.7% in the Midwest. New construction fell 5.1% in the Northeast.

    Some economists say a continued rise in construction could further drive down the unemployment rate, which fell to 7.8% in September from 8.1% in August. Between 2007 and 2011, more than 2.1 million construction workers lost their jobs, according to the Bureau of Labor Statistics, and since then, only 273,000 have been hired back.

    The recent growth in residential building "gives some hope in the coming months for more construction jobs," said Anika Khan, a senior economist with Wells Fargo. "A lot of construction workers are the ones who have been discouraged and underemployed, on the sidelines. If these particular workers find work, it will have a big overall economic impact, because it will boost wage and salary growth and income growth."

    In September, the number of new building permits, an indication of future construction, rose 11.6% to an annualized level of 894,000, also the highest level since July 2008.

    Starts on single-family homes, which made up 69% of housing starts last month, rose 11% in September to a rate of 603,000 units, a 43% improvement from a year earlier.

    The pop in home building also suggests a divide between consumers and industry in the economic recovery.

    While businesses continue to hold back on big investments because of uncertainty surrounding the coming elections and changes to the tax code, consumers' attitudes are brightening, pushing up spending on goods such as new homes.

    "Consumption indicators seem to be pretty strong, while investment indicators seem to be pretty weak," said Paul Ashworth, chief U.S. economist for Capital Economics. "The fiscal cliff and what's happening in Europe should be driving consumption and industrial numbers in the same direction. But in this case, consumers don't seem to be as aware as businesses are."

    Craig Perry, president of Centerline Homes, a Coral Springs, Fla., builder, said in the past six months he has started construction at three developments in Orlando and Broward County in South Florida, and nearly all 136 homes in the communities are under contract.

    "We're seeing a much better attitude among buyers," Mr. Perry said. "People feel like home prices are rising, and mortgage rates are very low. So before prices rise too high, people want to get in on it."

    Another reason for the jump in new-home construction is that inventories of previously owned homes and foreclosed homes have declined, spurring some buyers to begin looking at new properties.

    The National Association of Realtors reported last month that at the current pace of sales, it would take 6.1 months to sell the listed supply of homes, down from 8.2 months of supply a year ago.

    This month, CoreLogic Inc., a real-estate data company, said the "shadow inventory," or the pending supply of homes that are delinquent or in foreclosure and could ultimately be listed for sale, fell to 2.3 million units in July, or a supply of 6.0 months, down 10.2% from a year earlier.

    Ilin Misaras, who coordinates international programs for students at North Carolina State University, and her husband recently paid $500 to a builder in Raleigh, N.C., to reserve a piece of land for a four-bedroom house to be built next year. The couple plans to pay about $245,000 for the home and aims to move in next August.

    Ms. Misaras, who is 30 years old, said she and her husband are watching their spending. They canceled a trip to England, France and Italy to put the money toward their new home—but they aren't worried about the economy.

    "We are looking at the economy, especially in our area, the Triangle, as skyrocketing right now," Ms. Misaras said.

    Once she gets a pending pay raise and her husband finishes his studies to become a registered nurse, she expects their household income will go up. "The stars are just kind of aligned for us right now," she said.

    While this year's housing starts are up from a low of 478,000 in April 2009, they are still below the historical average. Builders have started construction on about 1.5 million new homes a year since 1959, to keep up with household formation which has run at an average of 1.27 million new homes a year, according to Census data analyzed by Moody's Analytics.

    U.S. households, many of which doubled up during the economic downturn in order to save money, have been growing by just over one million a year since 2008.

    "My gut tells me it's the demographics kicking in," said Patrick Newport, an economist with IHS Global Insight. "At some point, builders are going to have to ramp up at a very steep rate. That's what's kicking in here. Construction has just been depressed for too long."

    Source : WSJ

  • Connecticut Home Sales up 12% in August

    Posted Under: General Area, Market Conditions, Home Buying  |  October 9, 2012 9:16 AM  |  230 views  |  No comments

    Sales of both Connecticut single-family homes and condominiums rose in August - posting the highest sales volume for the month since 2009, according to the latest report by The Warren Group, publisher of The Commercial Record.

    A total of 2,583 single-family homes sold in August, an 11.9 percent increase from 2,308 sales in August 2011. This is the fourth straight month sales have surpassed the 2,000 mark. Year-to-date sales have increased 12.9 percent to 16,217, compared to 14,363 during the same period a year ago.

    "Strong home sales have shown once again that the housing market's future looks promising," said The Warren Group CEO Timothy M. Warren Jr. "Even though we are comparing to a slow market in 2011, the 12 percent increase is a promising indicator."

    The median price of single-family homes statewide remained unchanged in August at $255,000. The median sales price for homes sold January through August decreased 4 percent to $240,000, down from $250,000 during the same period a year ago.

    "In past housing market recoveries, we've seen sales volume increase before prices followed," Warren said. "Perhaps these low prices will lure even more buyers into the market and bring a sustained recovery."

    In August, Connecticut condominium sales increased 15 percent. Sales statewide increased to 649 in August, up from 564 in August 2011. This is the highest number of condo sales recorded in any month this year. Year-to-date condo sales are also up 5.8 percent, increasing to 4,090 from 3,864 during the previous year.

    The median sale price of Connecticut condos decreased 11 percent in August 2012 to $160,000, down from last year's $180,000. The year-to-date median price of condos in Connecticut fell 8.6 percent to $160,000, down from $175,000 a year ago.

    Source : The Warren Group

  • Connecticut's Rise In Foreclosure Inventory Exceeds National Rate

    Posted Under: Market Conditions in Connecticut, Foreclosure in Connecticut, Home Ownership in Connecticut  |  October 7, 2012 12:53 PM  |  433 views  |  No comments

    Connecticut's percentage of homes in foreclosure rose 0.3 percent in August, and the state ranked in the middle of 24 judicial foreclosure states in the number of completed foreclosures over the past year, according to national real estate tracking firm CoreLogic.

    Connecticut's 0.3 percent bump in foreclosed home inventory was worse than the national decline of 0.2 percent, according to a recent foreclosure report from CoreLogic. With 3,578 completed foreclosures between August 2011 and August 2012, Connecticut ranked 11th out of 24 judicial foreclosure states over that period. Nationally, 781,898 foreclosures were completed in that time frame. Florida, Illinois, Ohio, Indiana and Pennsylvania represented the top five judicial foreclosure states with the highest number of completed foreclosures.

    Approximately 1.3 million homes, or 3.2 percent of all homes with a mortgage, were in the national foreclosure inventory as of August, CoreLogic said, compared to 1.4 million, or 3.4 percent, in August 2011. Month-over-month, the national foreclosure inventory was unchanged from July 2012 to August 2012. The foreclosure inventory is the share of all mortgaged homes in any stage of the foreclosure process.

    "The continuing downward trend in foreclosures and a gradual clearing of the shadow inventory are important signals that the recovery in housing is gaining traction," said CoreLogic President and CEO Anand Nallathambi said in a statement. "The reduction in foreclosure volumes is to some degree being facilitated by the rising popularity of alternative resolution methods, such as short sales and loan modifications."

    The five states overall with the highest number of completed foreclosures for the 12 months ending in August were: California (110,000), Florida (92,000), Michigan (62,000), Texas (58,000) and Georgia (55,000). These five states accounted for 48.1 percent of all completed foreclosures nationwide over that period, the company said.

    The five states with the lowest number of completed foreclosures for the 12 months ending in August were: South Dakota (25), District of Columbia (113), Hawaii (435), North Dakota (564) and Maine (612).

    "August marks the fourth month in a row there were fewer completed foreclosures, which is more evidence that the housing industry is finding its footing," said Mark Fleming, chief economist for CoreLogic. "While we are seeing improvement on a national level, there remain higher concentrations of foreclosures in some areas with five states accounting for nearly half of all completed foreclosures nationwide during the last year."

    Source : CoreLogic

  • US Foreclosures down for a 4th month in a row in August

    Posted Under: Market Conditions, Foreclosure, Investment Properties  |  October 5, 2012 10:37 AM  |  277 views  |  No comments

    The number of U.S. foreclosures dropped for the fourth month in a row in August, according to a monthly foreclosure report released today by real estate data aggregator CoreLogic.

    As of the end of August, 1.3 million homes -- 3.2 percent of all U.S. homes with a mortgage -- were in some stage of the foreclosure process, a 7.1 percent drop from August 2011.

    Not all homes that enter the foreclosure process are lost by their owners. Some are able to get current on their loans or negotiate a short sale.

    The 57,000 foreclosures completed in August brings the number of homes that have gone all the way through the foreclosure process since September 2008 to 3.8 million, the report noted.

    "The continuing downward trend in foreclosures and a gradual clearing of the shadow inventory are important signals that the recovery in housing is gaining traction," said Anand Nallathambi, president and CEO of CoreLogic.

    The report shows that nearly half (48.1 percent) of the 377,000 foreclosures completed in the last 12 months occurred in just five states: California (110,000), Florida (92,000), Michigan (62,000), Texas (58,000) and Georgia (55,000).

    States with most foreclosures in the last 12 months, August 2012

    StateNumber of foreclosures

     Source: CoreLogic

    Florida leads all U.S. states with 11 percent of its mortgaged homes in some stage of foreclosure, according to the report. The next states on the list, in order, are: New Jersey (6.5 percent), New York (5.2 percent), Illinois (4.8 percent) and Nevada (4.6 percent).

    States with highest percentage of mortgaged home in some stage of foreclosure, August 2012

    StatePercentage of mortgaged homes in foreclosure
    New Jersey6.5%
    New York5.2%

     Source: CoreLogic

  • Which President do you think will be better for Housing?

    Posted Under: Market Conditions, Agent2Agent, Home Ownership  |  October 5, 2012 9:39 AM  |  694 views  |  1 comment

    Whether you prefer President Obama or Republican nominee Mitt Romney, there’s no denying that the next president’s economic policies will be a key driver of the health of real estate for the next four years, not to mention the price of a mortgage. 

    Which President do you think will impact housing in a positive way?
  • US Home Values Rise in August

    Posted Under: Market Conditions, Home Buying, Home Ownership  |  October 3, 2012 9:02 PM  |  340 views  |  No comments

    Home prices rose in August as the housing market continued to gain traction, but recent gains could start to wane as the summer comes to an end, data analysis firm CoreLogic said on Tuesday. CoreLogic's home price index rose 0.3% from July and was up 4.6% compared with a year ago. It was the biggest year-over-year increase since July 2006.

    Excluding distressed sales, price gains were even larger. Home values rose 1 percent compared with the month before and were up 4.9% on a yearly basis.

    Homes that have been seized by banks or are in danger of being foreclosed are often sold at significantly reduced prices.

    Many economists believe the battered housing market has finally turned a corner this year as prices have stabilized.

    Still, the report forecast prices will fall 0.3% in September as the traditional summer buying boost wears off. Prices are expected to be up 5% compared with a year before.

    Stripping out distressed sales, prices are seen up 0.6% in September and up 6.3% from a year ago.

    Of the top 100 statistical areas measured by population, 20 showed year-over-year declines, down from 26 in July.

    Source : Reuters

  • Front Porches Yes! Garages No!

    Posted Under: Quality of Life, Market Conditions, Design & Decor  |  October 1, 2012 11:19 AM  |  313 views  |  No comments

    Front porches are making a big comeback.It's not quite a return to Norman Rockwell's Americana, but the rise in the number of new homes with porches hints at a shift in the way Americans want to live: in smaller houses and dense neighborhoods that promote walking and social interaction.

    Two-thirds of new homes built in 2011 had a porch, a trend that has been on a steady rise for almost 10 years, according to a Census survey of construction.

    The pace of new homes with decks and patios that are more expensive and take up more space, usually behind homes has flattened. New homes with front or rear porches has grown from 42% in 1992 to 65% in 2011, Census data show.

    The data also show that the percentage of homes built without a garage or carport is the highest since the late 1990s. At the housing boom peak in 2004, 8% of new homes had no car shelter. It hit 13% in 2010 and 2011.It's very positive " about public transportation if new construction is starting to be built closer to employment centers or transit," National Association of Home Builders' Stephen Melman says."That's what the market wants," says Christopher Leinberger, a developer outside Philadelphia.

    He says the company is building mostly townhouses with porches because that's what buyers want."The front porch acts as a social mechanism," says Leinberger, president of Smart Growth America's LOCUS, a coalition of developers and investors who promote walking over driving.

    "You sit on the porch and talk to people walking by without having to invite them in. It's outdoor space without taking up too much space."The desire for a more urban lifestyle is mounting as Baby Boomers become empty-nesters and Millennials, entering their late teens to early 30s, are sensitive to saving the environment and money.

    Source : USA Today

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