Posts Tagged ‘ home buyers ’

Bidding Wars Resume in Major Markets in October

Bidding Wars Resume in Major Markets in October

BY: TORY BARRINGER

Despite a softening market, competition among buyers remained fairly fierce in October, Redfin reported in its Real-Time Bidding Wars release for the month.

Last month, 55.9 percent of offers written by the Seattle-based brokerage’s agents faced competition from other buyers, a decline from 58.3 percent in September. Bidding wars have been on a downward slope since peaking at 79 percent in February.

October was also the third consecutive month to see a drop in competition compared to the same month last year, Redfin said.

Even with the decline, though, competition last month was higher than expected, given the effects of the government shutdown on consumer confidence.

“While many Americans paused their home-buying and selling plans during the shutdown, overall demand in October was more robust than expected, with home tours and offers rebounding once the government reopened,” said Redfin analyst Rachel Musiker. “This unexpectedly strong demand paired with dwindling inventory likely kept competition from falling even further in October.”

Out of the 22 markets reporting, Boston saw the biggest drop in competition, with 61.3 percent of offers facing bidding wars—down from 70.1 percent in September. San Diego, meanwhile, experienced the biggest increase in bidding wars, with 63.0 percent of offers competing against multiple bids compared to 56.1 percent the month prior.

For the most competitive areas, interested buyers still have to adopt aggressive tactics, including offering all cash. Mia Simon, a Redfin agent operating in Silicon Valley, tells a story of a bidder vying for a home priced just above $1.4 million:

“There were only three other offers, but they were all above $1.8 million. Although my client’s offer was not the highest overall, it was the highest of the all-cash offers,” Simon said.

“Today’s Silicon Valley home buyers realize that they long missed out on the bottom of the market, but many believe that home prices will rise even more in 2014, so they will do whatever it takes to get a home under contract before the spring,” she added.

At the same time, the less competitive markets are seeing a shift in the buyer/seller dynamic. For example, in Washington, D.C.—where 44.0 percent of Redfin offers went against other bids in October—sellers are working harder to gain attention.

“I’ve recently received a few phone calls from agents whose listings I have shown to my clients,” said agent Philip Gvinter, who works in the nation’s capital. “They’re trying to gauge my clients’ interest in the home, and some simply ask what it will take to get my client to write an offer. It’s been more than a year and a half since I’ve received a call like that.”

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Housing Can’t Save the Economy

Housing Can’t Save the Economy

09/28/2012BY: KRISTA FRANKS BROCK

Both existing and new home sales are on the rise, but no amount of improvement in the housing sector will bring relief to the overall economy, which continues to struggle, according to Capital Economics.

Existing home sales rose 10 percent from January to August, and new home sales rose 30 percent over the same period.

These numbers may continue to be strengthened by the Fed’s QE3 announcements, which instigated a decline in the mortgage-backed securities yield from 2.4 percent to 1.7 percent.

Economists at Capital Economics suggest this may bring the 30-year fixed rate mortgage rate even below its most recent record-low of 3.6 percent. The economists envision a possible decline to 3.3 percent.

While this may entice more home buyers, “the bottom line is that housing is unlikely to become a significant driver ofGDP growth,” Capital Economics states.

The reason, Capital Economics points out, is that housing makes up too small a portion of GDP to have a major impact.

Residential investment made up 2.4 percent of GDP in the second quarter of this year. This is just half the long-term average and well below the 6.3 percent peak recorded at the end of 2005.

The cumulative effect of the past five consecutive quarters of residential investment growth has been a 0.2 percentage point rise in annualized GDP growth.

Thus, while the housing sector may celebrate small victories such as rising sales and an increase in housing starts, the overall economy continues to struggle with unemployment above 8 percent.

Analysis: Investors Driving Recovery as Activity Surges

Analysis: Investors Driving Recovery as Activity Surges

08/22/2012BY: TORY BARRINGER

A recent analysis from John Burns Real Estate Consulting suggests that investors may be the biggest driving force in the housing recovery.

In a report from the company, senior research analyst Erik Franks noted that investors are buying homes at an increased pace and at prices that allow for a reasonable rental return.

“Investors are buying homes at a more rapid pace than ever before, and this time their investments actually make sense,” Franks wrote.

Across the 167 metro areas analyzed by the company, investor activity as a share of all transactions rose to 29.6 percent in the first quarter of 2012, up from a low of 23.6 percent in the last quarter of 2009. Furthermore, the company’s “on the ground” research leads analysts to believe this year’s second-quarter activity exceeded the first quarter’s, with investor activity spiking 2 percent.

Investor activity has returned to Stockton, Miami, Las Vegas, Riverside-San Bernardino, Sacramento, and Phoenix, all areas investors were previously reluctant to enter after their old investments crashed. According to the report, some markets are now “completely dominated” by investors, such as Las Vegas (where investor activity makes up 50 percent of total activity) and Phoenix (46 percent).

Investors also seem to be attracted to small markets-particularly those in inland California, the report notes. Second home buyers are also making their way into smaller markets, leading to large activity increases in Naples, The Villages, Tucson, and Panama City.

While Franks conceded that these signs of increased investor interest may point to a false recovery, he said John Burns Real Estate Consulting is not concerned and welcomes the return of private capital.

“Most of these investors are paying all cash and buying homes below replacement cost,” Franks wrote. “They are helping the market recover by removing supply at the low end of the market and driving real buyers to higher price points, including new homes.”

Franks also wrote that the company doesn’t foresee a scenario in which investors dump their stock on the market unless it’s clear prices are dropping again. For now, Franks said he and his colleagues feel comfortable for the near future.

“We are hyper-focused on the potential positive result, which is that rising prices get fence-sitting consumers off the fence. We are seeing this occur in some pockets around the country.”

Customer Satisfaction with Real Estate Companies Falls to New Low

Customer Satisfaction with Real Estate Companies Falls to New Low

08/16/2012BY: RYAN SCHUETTE

There are some things we tend to take as fundamental truths.

Just a few examples might include the law of gravity or how Treasury debt – even in the face of credit downgrades – remains beyond reproach for investors. Or how, given the choice between making safely innocuous remarks and off-the-cuff zingers that land him (and his boss) in hot water, Vice President Joseph Biden will probably choose the latter, if we take one recent gaffe as proof positive of the trend.

Nowadays, people may add to their roster the idea that home buyers and sellers seem to downright dislike their real estate companies.

According to a recent report by J.D. Power and Associates, home buyer satisfaction with national real estate companies fell to its lowest level in the history of the five-year-old survey, a record low on par with mortgage rates.

The firm said that overall satisfaction slipped to 789 on a 1,000-point scale, down from 797 in 2011. Seller satisfaction followed the trend by averaging 768, down from 779 from the same time frame.

“Although home buyers and sellers are aware of continuing challenges in the real estate market, a key reason satisfaction is down is that customer expectations are not being met, either in terms of sellers having to compromise on their listing price, or for buyers who are compromising on the home’s condition and size,” Christina Cooley, senior manager of the real estate practice at J.D. Power and Associates, offered in a statement.

“This is understandably frustrating all around,” she added.

The study tied real estate companies viewed more favorably by buyers and sellers to the frequency with which these companies capture a sizeable proportion of the listing price. The firm said that sellers report obtaining 89 percent of their listing prices from their real estate companies.

Several companies withstood the test of customer satisfaction – at least by the standards of 2,990 evaluations and more than 2,790 respondents. These included Keller Williams, which J.D. Power found ranking highest in both buyer and seller categories, with lofty scores among agents and salespeople to boot.

Buyers ranked Prudential Mortgage second after Keller Williams and sellers second-placed Coldwell Banker.

According to Cooley, companies like these “set themselves apart in terms of working closely with their customers and meeting their needs,” a courtesy that she says “may play an important role in both managing expectations, but more importantly, exceeding them.”

This isn’t the first time real estate companies wallowed near the bottom of customer satisfaction surveys. ALeads360 white paper from August last year found thatonly 21 percent of mortgage lenders made an effort to follow up with borrowers.

Then again – revealing just how wishy-washy these surveys sometimes are – the same report by J.D. Powers from July tracked a jump in customer satisfaction among servicers. Which maybe means that you should get the facts and find your own truth.

NAHB – make home ownership a priority

NAHB – make home ownership a priority

 

More than 700 home builders trekked to Capitol Hill today to call on Congress to make housing and homeownership a national priority and to take concrete steps to get housing back on track in order to create jobs and keep the economy moving forward.

“Though we are seeing some hopeful signs of recovery in many markets throughout the nation, our industry still faces stiff headwinds,” said National Association of Home Builders (NAHB) Chairman Barry Rutenberg, a home builder from Gainesville, Fla.

Persistently tight lending standards for home builders and home buyers, uncertainty regarding the future of the housing finance system, ongoing threats to vital housing tax incentives, and overly burdensome regulations are hampering a housing recovery and keeping countless home building firms from constructing viable projects and hiring new workers, he added.

 

In more than 250 individual meetings with their representatives and senators, builders called on their lawmakers to:

 

– Support legislation to restore the flow of credit for new housing production. NAHB is urging the House Financial Services Committee to consider H.R. 1755, the Home Construction Lending Regulatory Improvement Act. Sponsored by Reps. Gary Miller

(R-Calif.) and Brad Miller (D-N.C.), the measure currently has

96 co-sponsors and would remove barriers to lending while preserving the regulators’ ability to assure the safety and the soundness of the financial institutions they oversee. NAHB is seeking cosponsors for similar legislation in the Senate, S.

2078, the Home Building Lending Improvement Act, sponsored by Sens. Bob Menendez (D-N.J.) and Johnny Isakson (R-Ga.).

 

– Pass comprehensive legislation to reform housing government sponsored enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Banks that provides a federal backstop to ensure a reliable and adequate flow of affordable housing credit in all economic and financial conditions.

 

– Preserve current housing tax incentives, including the mortgage interest deduction and Low Income Housing Tax Credit, as the debate on tax reform moves ahead.

 

– Support legislation to make much-needed improvements to the Environmental Protection Agency’s Lead: Repair, Renovation and Painting (LRRP) rule. Sponsored by Sen. James Inhofe (R-Okla.), the Lead Exposure Reduction Amendments Act of 2012 (S. 2148) would offer several reforms to EPA enforcement of the lead paint rule, including reinstating the opt-out provision to allow home owners without small children or pregnant women residing in them to decide whether to require LRRP compliance.

 

– Cosponsor House and Senate bills that would reduce the overreach of federal power under the Clean Water Act. House bill H.R. 4965, the Preserve the Waters of the United States Act, and its identically named Senate companion measure (S. 2245), would prevent the EPA and US Army Corps of Engineers from finalizing or implementing their draft guidance to expand the reach of the Clean Water Act to include virtually every ditch, pond and seasonal runoff ditch in the nation.

 

“In this pivotal election year, it is imperative to ensure that presidential and congressional candidates on both sides of the political aisle understand the importance of housing and homeownership,” said Rutenberg. “Today, builders from across the land reiterated this message to their legislators and reminded them that there can be no economic recovery without a housing recovery.”


Online Real Estate Firms Partner to Launch Realtor.com VOD Channel

Online Real Estate Firms Partner to Launch Realtor.com VOD Channel

05/29/2012BY: SARA ORTEGA

Move, Inc., operator of online real estate Web site Real.com, and RealBizMedia, a media content provider for the real estate industry, announced a partnership to launch the Realtor.com TV Channel which will provide millions of home listings to approximately 55 million U.S. homes.

“We’re excited to be teaming up with Realtor.com on this new venture that will help millions of people find what we hope becomes their piece of the American Dream – a home,” said Steve Marques, CEO of RealBizMedia. “Our experience in launching our propriety video platform positions RealBizMedia to leverage both organizations’

assets and provide home buyers and folks simply interested in checking out the local market with a new way to discover real estate and connect with real estate experts across the country.”

Launching the second half of 2012, the channel will begin airing on the Cox cable network as Video on Demand (VOD). By doing so, Realtor.com will reach potential homeowners on three platforms: computer, mobile, and television.

Viewers will see listing by location and price. The channel coincides with listings on the Realtor.com Web site which come directly from the more than 850 MLSs across the nation. With a few clicks of the remote, viewers will be able to connect to agents for more information.

“Realtor.com is continually improving the real estate search experience with emerging technologies to make it easier for millions of people to connect with real estate professionals ready to help them find the home that’s right for their family,” said Steve Berkowitz, Move’s chief executive officer. Move, Inc., is based in Campbell, California.

Plans for an exclusive media programs will soon be developed for advertisers. The financial terms for the agreement were not disclosed.

Buying a home may never be cheaper

Buying a home may never be cheaper

 

Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.  With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.  Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.  A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

 

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.  “This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap.

Analysts are predicting that the initial price gains will be modest, at least, in most markets.  Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012.

Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

 

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