Wednesday, July 20, 2011

Housing Starts Surge 9 Percent; Signal A Strong Fall Season

by Chris Brown on Wednesday, July 20, 2011 at 8:46am
Builders are busy once again.
According to the Census Bureau, Single-Family Housing Starts rose to 453,000 on a seasonally-adjusted, annualized basis in June – a 9 percent spike from the month prior and the highest reading in 3 seasons.
A “Housing Start” is defined as a home breaking ground on new construction.
June’s reading is largest one-month jump since June 2009. The reading surprised Wall Street despite that the Homebuilder Confidence survey may have foreshadowed the results.
Monday, the National Association of Homebuilders reported that builders are more confident about the future of the new home sales market, and forecast a large increase in sales over the next 6 months.
For buyers of new construction, the news is mixed. Rising confidence may mean that builders in Orlando are less willing to negotiate on upgrades and/or price, but rising construction levels add inventory to an already fragile market.
Adding to the nation’s home supply without a corresponding increase in buyer demand shifts negotiation leverage away from builders.
The Census Bureau also reported on Building Permits.
In June, permits for single-family homes rose by 1,000 units nationwide on a seasonally-adjusted, annualized basis. This, too, bodes well for housing because 89 percent of homes with permits start construction within 60 days.
Momentum should carry forward into fall.
If you’re buying new construction in Florida , ask your real estate agent about local home supply, and how the market is trending. With mortgage rates low and the fall buying season approaching, you may find some of your best deals in the next few weeks.

Wednesday, July 13, 2011

Wealthy Americans upgrade to pricier Primary Homes

NEW YORK – July 13, 2011 – Amid still-depressed housing numbers that dominate headlines, a new survey by the independent New York City-based Luxury Institute and the Institute for Luxury Home Marketing finds that high net-worth U.S. homeowners are taking advantage of the downturn and trading up into higher-priced primary residences.
Lured by lower prices, one in four U.S. consumers with an annual income of $150,000 or more have bought a residential property since 2008 at a median purchase price of $509,000 – an increase of 3.2 percent from the 2005 to 2007 period.
Most new residences (83 percent) are single-family homes and two-thirds of those are in suburban settings. Seventeen percent plan to purchase additional property this year, while 23 percent of those younger than 50 plan to buy in 2011.
More than one-third (37 percent) of the wealthy value their homes at $1 million or higher, while 32 percent assess their primary residence to be worth $500,000 or less.
Seventy percent of wealthy homebuyers used a real estate agent to help with their property purchase, and two-thirds of that group says they would work with the same agent again.
“Luxury is the good news story in real estate,” says Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing. “The number of wealthy households has jumped back to pre-recession levels and affluent home buyers are actively purchasing.
The National Association of Realtors’ statistics show that national home sales at $1 million and above were up more than 18 percent year-over-year in 2010. Strong activity continues this year as well.”
For complete details from this WealthSurvey on wealthy homebuyer attitudes, plans and marketing preferences, visit
© 2011 Florida Realtors®

Monday, July 11, 2011

Florida Mortgage rates moved slightly higher.

Keeping you updated on the market! For the week of July 11, 2011
The past week was slow on housing news, which is understandable given the Independence Day weekend. Mortgage rates moved slightly higher, and it's possible they could start trending higher through the month.
One reason is hiring, which is on the rebound. ADP's National Employment Report showed that private sector employment rose to 157,000 new jobs in June, nearly triple May's rate and well-ahead of the consensus estimate of 68,000 from Reuters. June’s employment figures suggest the economic recovery, which slipped in the spring, has found new traction. New traction, in turn, could pressure interest rates to move higher.
Real estate research firm DataQuick reported that sales of existing homes in Phoenix reached a six-year high of 9,837 in May. This regional piece of housing news is important for the economics lesson it imparts. We've noted many times in the recent past that lower prices stimulate sales and are the most efficient, most expedient means of clearing high inventory. The Phoenix market is proving that to be true.
DataQuick also reported that 40 percent of the Phoenix sales were for homes less than $100,000, which is a 40 percent increase from year-ago sales. The median price of a home in Phoenix stayed consistent at $120,000, which is actually a good sign: increased demand is causing more distressed inventory to hit the market that needs to be cleared. With both supply and demand increasing, prices are likely to hold steady going forward. Once the excess supply is absorbed, prices can then start moving higher.
Many of the homes sold in Phoenix were investment rental property. This makes sense; many people are still shut out from the mortgage market due to either bad credit or insufficient down payment. This is producing a renaissance in rental properties. The Wall Street Journal reports that the average nationwide rate for apartments and home rentals is up 6.7 percent year-over-year. Rent increases for studio apartments and five-bedroom homes were particularly vigorous, rising 14.3 percent and 12.1 percent, respectively. expects even more rent hikes this year.
This upward price trend in rents suggests to us that buying an owner-occupied home will become a more viable option over the next couple of years. Here, again, is another economics lesson: as investors buy rental properties because of rising rents, they also stimulate interest in more potential homebuyers who are renting. This is one reason we are bullish on the long-term outlook for housing.

Economic Indicator
Release Date and Time
Consensus Estimate
International Trade(May)
Tues. July 12,8:30 am, et
$44.3 Billion (Deficit)
Moderately Important. Falling petroleum prices are shrinking the deficit.
Mortgage Applications
Wed., July 13,7:00 am, et
Important. Higher purchase activity reflects a rise in home sales.
Producer Price Index(June)
Thurs., July 14,8:30 am, et
All Goods: 0.4% (Decrease)Core: 0.2% (Increase)
Important. Falling energy prices have slowed producer-price increases, but inflation remains a concern.
Retail Sales(June)
Thurs., July 14,8:30 am, et
0.4% (Decrease)
Moderately Important. Sales are easing on fewer big-ticket purchases and falling gasoline prices.
Consumer Price Index(June)
Fri., July 15,8:30 am, et
All Goods: 0.1% (Decrease)Core: 0.2% (Increase)
Important. Consumer-price inflation remains elevated, so an unexpected rise could send interest rates higher.
Industrial Production(June)
Fri., July 15,9:15 am, et
0.7% (Increase)
Moderately Important. Capacity utilization continues to increase, suggesting strong business-sector growth.

Time to Remove the Monkey Wrench from the Gears
Trouble financing a home purchase is the one variable that could derail our prediction of a housing recovery. Bloomberg News recently ran a compelling article that encapsulates our most frequent lament: we need more liberal and subjective underwriting standards to get more buyers into homes. Bloomberg writes, “While a record share of Americans want to buy homes, U.S. policies [on banking and lending], often working at cross-purposes, are making it more difficult.”
We've been saying for months now that the market has gone too far in the direction of excessively high standards. Security-filings data provided by Fannie Mae show that nine of 10 mortgages it bought in the first quarter of 2011 were for borrowers with credit scores higher than 700, a 32 percent increase in the percentage of these higher-score loans. Meanwhile, the average credit score for FHA loans was 701 in April, up from 669 three years earlier.
There is a disconnect at work. People, a lot of people in fact, still want a home. In May, a record 5.5 percent of Americans said they wanted to purchase a home, according to the Conference Board, a New York research firm. This is frustrating, especially when considering we have the expertise and experience to price risk, but many people don't want to apply for a loan because they believe it is a waste of time.
It's no a waste of time; we want to speak with anyone interested in a purchase or refinance loan. However, if there was a cause that we could all get behind, it is loosening up the lending purse strings and getting more people mortgages who are worth the risk and can afford it.

Courtesy Patti Wilson, Mutual Bank of Omaha.

Friday, July 1, 2011

Historic Sanibel Lighthouse Decked Out For Independence Day

Historic Sanibel Lighthouse located at Lighthouse Beach, 1 Periwinkle Way, has been decorated with traditional patriotic red, white and blue bunting in celebration of Independence Day. The decorations will remain through Tuesday, July 5. Sanibel Lighthouse is the most photographed icon in Lee County and is a historic as well as a navigational and marine landmark.

The Sanibel Lighthouse was the first lighthouse on Florida's Gulf Coast north of Key West and the Dry Tortugas and was completed in 1884. It is a popular sightseeing destination for tourists, locals, and island residents. The lighthouse was placed on the National Register of Historic Places in 1974 and also identified as a Historic Site and Structure within the 1976 Sanibel Plan.

For more information on Sanibel history click here.