It’s not just the weather that is scorching hot – scroll over the graph for the median number of days on market per price range:
Category Archive: ‘Market Buzz’
Rates are under 4.0%, no points! From MND:
Mortgage rates fell convincingly today, though not all lenders adjusted rates sheets in proportion to the gains seen in bond markets (which underlie rate movement). Those gains came early, with this morning’s economic data coming in much weaker than expected. Markets were especially sensitive to the Consumer Price Index (an inflation report) which showed core annual inflation at 1.7% versus a median forecast of 1.9%.
Core annual inflation under 2.0% is a hot topic–especially today–considering that’s one of the Fed’s main goals. This afternoon’s Fed Announcement did acknowledge the recent drop in inflation, but continued to suggest it was being held down by temporary factors. The Fed also officially unveiled its framework for decreasing the amount of bonds its buying (though it didn’t announce a start to the program yet).
Bottom line: Fed bond buying is one of the reasons rates are as low as they are. Markets know the Fed will eventually enact this plan and they’ve accounted for that to the best of their ability. But as the Fed actually goes through the steps toward enacting the plan, it causes some upward pressure for rates. That was the case this afternoon, but bond markets were nonetheless able to hold on to a majority of improvement seen this morning. As such, the day ended with most lenders offering their lowest rates in exactly 8 months (a few days following the presidential election).
From the wsj.com
Lenders say there is an untapped market among borrowers with good credit scores like self-employed workers who don’t have proper income documentation, or for responsibly made loans to borrowers with credit problems that have had bankruptcies in the past or had to sell their home for less than it was worth.
If they are successful in recruiting brokers, lenders believe the market potential for both types of loans could reach $200 billion annually.
A big hurdle: finding the right kind of brokers and instructing them in the lost art of making a subprime loan. Some are returning to the industry for the first time since the crisis. Others like Mr. Boyd have never been in it.
“I knew a mortgage was a loan for a house,” said Mr. Boyd, who was recruited by his boss, Jon Maddux, after selling him a Calvin Klein suit at a local outdoor mall. “I came in just a blank slate.”
Before he co-founded Drop Mortgage, the parent company of FundLoans, in 2014, Mr. Maddux ran the website YouWalkAway.com between 2008 and 2012. The site charged homeowners on the brink of foreclosure $995 to learn how to leave their debt behind.
Mr. Maddux said his experience advising down-and-out homeowners is today helping him pitch them loan products. Drop Mortgage and FundLoans made about $200 million in subprime and alternative documentation loans in 2016, funding them by selling them to hedge funds and other Wall Street investors.
“I’ve seen what caused these people to walk away and I don’t want to be a part of that,” he said.
Subprime mortgages are typically made to borrowers with a credit score of around 660 or lower, at interest rates ranging from 6% to 10%. Alternative documentation loans, or Alt-A loans, are made to borrowers with higher credit scores but who use bank statements or other less conventional ways to prove their income.
Read full article here:
In the future, will there be affluent millennials that will be ready, willing, and able to pay more than today’s prices? Maybe there is comfort knowing that 1/3 of millennials aren’t living paycheck to paycheck today?
So our NSDCC market is cooking….is the amount of inventory to blame?
One-third of 2017 is complete – let’s compare it to recent years:
New Listings Between January-April
Prices are at all-time highs, and FEWER people want to sell??
How can you explain it? What is different now?
Is it His Orangeness? The change in president is a notable difference between 2017 and the previous years, but there hasn’t been any specific orders directed at the real estate business, and mortgage rates have stayed about the same. He could be causing more people to hunker down, but you would think that people would be just as likely to flee!
Potential home sellers know by now what’s in store with Trump. Not much, if anything, will get done that impacts the real estate selling business.
So what is it? Why aren’t more people selling at these prices?
It’s because they have nowhere to go that is any better. The baby-boomers who own most of the coastal real estate have successfully bought one or more personal residences to get to this one, and it will do – it is their trophy property. Selling a rental property via a 1031 exchange just to avoid taxation isn’t worth the hassle – and how do you do any better than NSDCC?
There are approximately 300,000 people in our market, hopefully we will have at least 1,600 houses to sell during the first four months of every year.
It is the 10% to 20% on the fringe that make the difference.
Some years there are a few extra people who decide to list their house. In 2016 we had 7% more houses listed than the 5-year average. A surge like that can result in more sales, or cause buyers to wait-and-see – it depends on price.
Baby boomers are young enough that they can still manage to live in their long-time residences, but this really should be the peak of the low-inventory era. Don’t we have to see more boomer-owned properties coming to market as they shuffle off to the retirement home, or the Big McMansion in the sky?
Keep an eye on the fringe – the extra 10% to 20% surges in inventory is where we will see a notable change first! Until then, expect more of the same!
The market is sizzling, and it could kick up to another level if there were just more homes to sell! Here is a comparison of today’s inventory to previous years (the lower-end is selling fast!):
NSDCC Active Inventory – Second Week of April
NSDCC Pendings Today
Without more homes to sell, it’s like a freeze-dried frenzy on the lower end – very dry but it’ll keep you alive!
Anyone eager to buy a home this spring probably has reasons to feel good. The job market is solid. Average pay is rising. And mortgage rates, even after edging up of late, are still near historic lows.
And then there’s the bad news: Just try to find a house.
The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.
In markets like San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to offer more money and accept less favorable terms.
“Sellers will have the edge again this year,” said Ralph McLaughlin, chief economist for Trulia, a real estate data provider. “Homebuyers are really going to be scraping the bottom of the barrel as far as housing choice is concerned.”
The intensity of the competition this spring has surprised even sellers like Kathleen Mulcahy, a 37-year-old product manager in Seattle.
Within a week of listing her one-bedroom, one-bath condo, Mulcahy received 21 offers – all above her asking price of $398,000. Most of the offers came with built-in triggers to automatically rise in case a rival bidder sweetened a bid. In the end, she accepted an offer of $500,000 – all cash.
“A lot more than I expected,” Mulcahy said.
Yet the changed landscape cuts both ways: Facing higher prices and competition herself, Mulcahy has decided for now to put off buying another home.
“There’s very little available, and it’s just too expensive right now, so I’m going to wait,” she said. “I’ll probably rent for two or three years.”
About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months.
Read full article here:
Hat tip to Richard:
Longtime homeowners in Jersey City, N.J., are trying to put the kibosh on endless aggressive real estate solicitations sparked by a hot property market.
In response to complaints, the Jersey City Council unanimously passed a resolution creating an anti-solicitation city program referred to as a “No Knock” registry. Residents that sign up will receive “No Knock” decals for their front doors, and violators who continue to inquire at those homes can be fined up to $2,000 and sentenced to 90 days of community service.
“It’s something that we want to address and do it in a proactive way that builds community as opposed to creating conflict,” said Council President Rolando Lavarro.
The population of Jersey City, the state’s second-largest municipality, grew 6.7% between 2010 and 2015, according to the U.S. Census.
Median housing prices there have increased 17% over the last six years, to $305,000 in 2016 from $260,000 in 2010, according to RealtyTrac.
Amid the rapid residential development, longtime homeowners say that persistent offers from real-estate investors and developers have at times escalated to the point of harassment.
Assunta Folcarelli, a crossing guard who has owned her Jersey City home for 35 years, said realtors started calling her six years ago asking to buy her home. She has repeatedly declined but said solicitors continue to call, show up at her door and send her letters.
“They keep on calling up, they want my house. I say, ‘Wait a minute, where am I going to go?’” said Ms. Folcarelli, 57 years old. “It’s kind of scary.”
Michael Griffin, a lifelong Jersey City resident and local activist, supported the registry’s creation but said the city needs to do more to protect vulnerable homeowners from developers. Mr. Griffin said the city needs to educate residents about cash offers, including in several neighborhoods where many homeowners live at or below the poverty line and the old Victorian and brownstone homes are attractive to developers, he said.
“Not too many people in my community have seen that much money at one time,” Mr. Griffin said. “It may look like a sweet deal to them, but they might not be realizing the taxes involved when you take a lump sum of cash like that, or not thinking what their next move might be. Will you be able to sustain yourself just by renting? Rents in Jersey City are high.”
An article from cbsnews.com – get good help!
“Home buying is about substantive economics, but it’s also got an element of ‘animal spirits,’” said its President Steve Udelson. “In some of the hottest markets, we’ve seen a double-digit run-up in prices.”
The website surveyed 1,289 prospective buyers nationwide, and its findings suggested that most prospective homeowners already had their feet in the starting blocks for the spring selling season. More than half were willing to go beyond their budget — by an average of nearly $38,000 — to get the property they desired.
And like most competitive athletes, they were hopeful as well as scared. Not surprisingly, about 60 percent of those surveyed feared:
- Bidding wars driving up the price of their dream home.
- Losing the “earnest money” they put down when they signed a contract.
- Becoming “house poor,” that is, unable to afford amenities like a meal out in order to make the mortgage payment.
Read full article here:
We are used to headline porn, but this one sounds startling – are we having a Severe Housing Drought?
In the article, she says that nationally we have the fewest homes for sale than at any time in the last 18 years. But are they just selling faster, which would give the appearance of low inventory? If we have a similar number of houses being listed and they are selling faster, I wouldn’t consider that a drought, let alone a severe drought.
First, let’s compare the total supply and number of closed sales in 2017 to previous years – these are the numbers from January 1st to March 15th:
NSDCC (La Jolla to Carlsbad)
This year’s number of new listings is 7% below the average of the last four years, but I wouldn’t call that a drought. If I watered my grass 7% less, it wouldn’t die. Besides, 40% of all listings don’t sell, so maybe the fewer listings just means fewer OPTs? The number of closed sales is much lower than previous years, but better than 2016.
How about the rest of the county?
San Diego County
There are 10% fewer listings this year, compared to the average of the previous four years, but sales are HIGHER than any of the last three years. There isn’t a perfect relationship between listings and sales, because some of the closed sales were listed before January 1st. But the trend looks fine.
I don’t keep a record of the number of houses that are pending, but a couple of months ago we were around 300 in NSDCC (between La Jolla and Carlsbad).
Here is today’s count:
|San Diego County|
The reason we have a record-low number of homes for sale is because they are selling so fast. Severe drought isn’t the right adjective – can we call it scorching hot? Half of the pendings found a buyer in 15 days!
With half of the upcoming closed sales finding their buyer that fast, it means they probably paid the seller’s price, or close. The other half are sellers who are willing to wait until they get their price! It means the pricing trend should continue upward.
I think we’re back in the frenzy zone!
Local home prices are surging – read more of Rich’s analysis here: