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Ray Shellam's Blog

By Ray Shellam | Agent in Burleson, TX
  • Turning Point

    Posted Under: Home Buying in Burleson, Home Selling in Burleson, Rent vs Buy in Burleson  |  June 12, 2012 12:50 PM  |  263 views  |  No comments
    U.S. Housing Market Finally Reaches a Turning Point

    RISMEDIA, Monday, June 11, 2012— Home valuations will start to climb again while adjacent consumer industries will capture significant new growth opportunities in 2012 and beyond as the U.S. housing market finally turns the corner, concludes a major new study recently released by The Demand Institute. The recovery of the housing market will have far-reaching impacts in the coming years across the U.S. and international markets as U.S. consumers increase their spending on buying, renovating, furnishing and maintaining their homes.

    Launched in February 2012 and jointly operated by The Conference Board and Nielsen, The Demand Institute is a non-profit, non-advocacy organization with a mission to illuminate where consumer demand is headed around the world.

    The new report, “The Shifting Nature of U.S. Housing Demand,” predicts that average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent. From 2015 to 2017, the study projects annual increases between 3 and 4 percent. This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years.

    “In these initial years, the prime driver of recovery won’t be new home construction, but rather demand for rental properties,” says Louise Keely, chief research officer at The Demand Institute and a co-author of the report. “This is a remarkable change from previous recoveries. It is a measure of just how severe the Great Recession has been that such a wide swath of Americans had to delay, scale back, or put off entirely their dreams of homeownership.”

    “In the long-term, we don’t expect homeownership rates to change,” says Bart van Ark, chief economist at The Conference Board and co-author of the report. “Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make. What will be intriguing to watch is how their aspirations around homeownership are affected by this period of extended austerity.”

    Between 2006 and 2011, some $7 trillion in American wealth was wiped out when home prices dropped 30 percent after a dramatic climb in valuations during the housing bubble. Looking forward, the moderate growth expectations for coming years suggest a return to normalcy. As home prices continue to drop and interest rates fall further, first-time buyers and others who remained relatively cautious will be drawn back into the housing market.

    “As the U.S. housing market strengthens, almost every consumer-facing industry will be impacted in the coming years,” says Mark Leiter, chairman of The Demand Institute. “Business and government leaders will benefit by fully understanding the nature of this recovery. In doing so, they will be better able to anticipate how consumer demand will evolve and to formulate critical business and policy decisions to lead their organizations.”

    Key Findings in the Report
    -The recovery will be led by demand from buyers for rental properties, rather than, as in previous cycles, demand from buyers acquiring new or existing properties for themselves.

    -Young people—who were particularly hard hit by the recession—and immigrants will lead the demand for rental properties.

    -Rental demand will help to clear the huge oversupply of existing homes for sale. In 2011, some 14 percent of all housing units were vacant, while almost 13 percent of mortgages were in foreclosure or delinquent.

    -The average size of the American home will shrink. The size of an average new home is expected to continue to fall, reaching mid-1990 levels by 2015.

    -Despite the number of Americans who have been hurt financially by the housing crash, the desire to own a home remains strong. In fact, one survey has revealed that more than 80 percent of Americans recently thought buying a home remained the best long-term investment they could make.


    RayShellam@findmyhomerealestate.com

    Website: www.findmyhomerealestate.com



  • Rates Review

    Posted Under: General Area in Burleson, Home Buying in Burleson, Home Selling in Burleson  |  June 5, 2012 6:41 AM  |  278 views  |  No comments

    Following lower bond yields, the 15-year fixed fell below 3 percent, while the 30-year fixed set a new record-low as well, according to Freddie Mac’s Primary Mortgage Market Survey.

    The 30-year fixed-rate mortgage dropped to 3.75 percent (0.8 point) for the week ending May 31. Last week, it averaged 3.78 percent, and last year, it was 4.55 percent.

    The 15-year fixed slid into new territory, averaging 2.97 percent (0.7 point), down from 3.04 percent. A year ago at this time, the 15-year fixed stood at 3.74 percent.

    The 5-year ARM averaged 2.84 percent (0.6 point), up from last week’s average of 2.83 percent. A year ago, the 5-year ARM averaged 3.41 percent.

    The 1-year ARM remained unchanged from last week at 2.75 percent (0.4 point). The previous year, it averaged 3.13 percent.

    Frank Nothaft, VP and chief economist for Freddie Mac, pointed to market concerns over the Eurozone, which led to a decline in long-term Treasury bond yields, as one reason for the drop in fixed rates.

    “Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan,” said Nothaft.

    Bankrate.com also reported record-lows for fixed rates.

    The 30-year fixed dropped to a new low of 3.94 percent, down from 3.97 percent last week. The 15-year fixed averaged 3.15 percent, also a record low. Last week, it was 3.19 percent.

    The 5-year ARM slipped from 3.02 percent last week to 3.01 percent this week.

    Bankrate’s national weekly mortgage survey includes data from the top 10 banks and thrifts in the top 10 markets.

    Ray Shellam
    Real Estate Consultant
    Keller Williams
    308 E.Renfro,
    Suite 104
    Burleson, TX 76028
    Direct: 817-690-5155
    email:
    RayShellam@findmyhomerealestate.com
    Website: www.Findmyhomerealestate.com

  • A discussion about new home sales

    Posted Under: Home Selling in Burleson  |  May 25, 2012 3:17 PM  |  221 views  |  No comments

    Continuing good news regarding the housing market as new home sales rose in 3.3 percent in April from the prior month and up 9.9 percent from one year ago.  The improvement is roughly in line with yesterday’s figure on existing homes.

    The latest median price of newly sold homes was $235,700, which is an increase of 4.9 percent from one year ago.  New homes nearly always sell at a higher price than existing homes.  But the gap has opened wider in recent years as many existing homes, particularly the foreclosed properties, were selling below the replacement cost.  That could also imply faster price recovery in the future for existing homes.

    There are two key differences between new and existing home sales.  First, new home sales are not closings but are new contract signings.  There is no official figure on closed sales of new homes, but one would expect that all the newly built ones will eventually sell at some point despite short-term contract fallouts.  Second, new homes comprise a very small market share.  Normally, new homes would make up about 15 percent of total home sales.  In recent years, new homes have made up only 5 to 8 percent of all home sales.

    New home sales are likely to rise 25 percent this year and another 20 to 30 percent jump next year.  Inventory levels are very thin.  Housing starts suffered much more than the existing homes market and new home sales are now primed for a stronger recovery.  Unfortunately, the larger builders are likely beneficiaries at the expense of small builders because of very restrictive lending for construction loans to smaller-sized homebuilders, while the big builders can tap Wall Street funds.  Larger banks getting bigger and larger builders getting bigger at the expense of smaller players may be the unintended result of the Dodd-Frank bill.

    RayShellam@findmyhomerealestate.com
    website  www.findmyhomerealestate.com

     



  • Texas Real Estate

    Posted Under: Home Buying, Home Selling, Investment Properties  |  May 23, 2012 2:21 PM  |  231 views  |  1 comment

    The Texas real estate market gained positive momentum in the first quarter of 2012, according to the 2012-Q1 edition of the Texas Quarterly Housing Report issued recently by the Texas Association of REALTORS®. The volume of single-family home sales in Texas was 12 percent higher than the same quarter of 2011 and the median price increased by almost three percent over the same time frame.

    “The watchword for Texas real estate in 2011 was ‘consistency,’ in both sales volume and price. That allowed us to emerge from last year with stable sales volumes and strong property values,” said Joe Stewart, chairman of the Texas Association of REALTORS®. “Now, in 2012’s first-quarter results, we see a strong increase in sales volume and a meaningful increase in the median price. That indicates positive momentum for the year ahead.”

    For the period of January through March 2012, the volume of single-family home sales in Texas was 45,502, which is 12 percent more than the same quarter in 2011. The median price for Texas homes during the quarter was $147,100, which is 2.7 percent more than 2011-Q1.

    RayShellam@findmyhomerealestate.com
    Website: www.findmyhomerealestate.com

 
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