Census Bureau: New Home Sales a Mixed Bag

Feb. home salesHousingWire reports February sales of new homes weren’t as high as expected.

New home sales edged down in February, killing some market momentum, but remain robust when compared to year ago levels.

Sales of new single-family homes dropped slightly in February to a seasonally adjusted rate of 411,000 homes sold, 4.6% below the revised January rate of 431,000 units.

However, February sales are 12.3% above the February 2012 estimate of 366,000 units, according to the U.S. Census Bureau and the Department of Housing and Urban Development.

New homes sales did not show the same strength that previous existing-home sales posted, but the number of units moved remains moderately strong, analysts at Econoday suggested.

“Today’s report somewhat fell below expectations. For now, the sales pace is moderately healthy. However, there are crosscurrents moving ahead. The Fed is keeping downward pressure on mortgage rates, but consumer confidence declined in February,” the research firm said.

The median sales price of new homes sold in February picked up considerably from $226,400 in January to $246,800 in the most recent month. The average February sales price was $313,700, up from $286,300 in January.

At the end of February, the number of new homes for sale reached 152,000 units, up from January’s 150,000 homes. This represents a 4.4-month supply homes at today’s sale pace, up from 4.1 months last month.

Paul Diggle, property economist for Capital Economics, noted that the minor drop in February new home sales and the downward revisions to January sales were expected. This shift also suggests the housing recovery is “coming off the boil.”

“Driven by favourable valuations, low interest rates and reduced competition from deeply discounted existing homes, we expect the underlying recovery in new home sales to continue this year,” Diggle said.

Cobb County Offering Help With Home Repairs

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Cobb County is offering one-time Minor Home Repair Grants of up to $10,000 to low income homeowners for repairs that solve health and safety risks. Examples of the repairs are HVAC and furnace work, roofing, electrical and plumbing work, septic system repair and window and door replacements. Zero percent loans are also available for lead paint or asbestos abatement.

If you think you or someone you know might be eligible, please contact the Community Development Block Grant office at 770-528-1455. Program eligibility depends on many factors, including household income.

Number of Metro Atlanta Homeowners Underwater in Mortgages Dropping

homeowner_underwater(ATLANTA BUSINESS CHRONICLE) — Half of all Metro Atlanta Homeowners were underwater in their mortgages by the end of 2012, according to Zillow.com’s fourth-quarter negative equity report.

The report also noted 49,827 metro Atlanta homeowners were freed from negative equity – owing more on their mortgages than their homes are worth – in 2012, echoing a national drop.

In the United States, negative equity dropped to 27.5 percent of all homeowners with a mortgage in the fourth quarter of 2012, compared with 31.1 percent in the fourth quarter of 2011. Some 2 million American homeowners freed themselves from being underwater last year.

Looking ahead, Zillow.com projects metro Atlanta’s negative equity rate will dip to 47.9 by the end of 2013, with another 17,255 local homeowners freeing themselves from negative equity.

JPMorgan Forecasts Rising Home Prices

investors on housingJPMorgan Chase predicts home prices will rise as much as 7% in 2013. This forecast is much more optimistic than initially expected because JP Morgan now expects investors will continue to take interest in nonperforming loans and distressed properties. According to JP Morgans’ February investor survey, most investors believe home prices will increase by less than 5% while some investors expect home price growth to increase as much as 15%. The nation’s shadow inventory is also expected to fall to 3 million by the end of this year. While 1 in 4 home owners were underwater in 2011, JP Morgan expects only 1 in 10 borrowers ot be underwater in their mortgages by the end of 2013.

In February existing sales were down to the lowest level since March 2005. Across the country, hosuing markets are seeing lower levels of inventory. While inventory levels are down, a historically large foreclosure inventory should continue to exist through 2017, reflecting the growing share of delinquent loans in judicial states since timelines are considerably longer.

The path to recovery looks promising. JP Morgan forecasts home prices to rise the next three years, with 3.9% growth expected in 2014 and a 3.2% increase anticipated in 2015, representing roughly 14% in cumulative growth. The projected growth rates are still relatively small for 2014 and 2015 because JPMorgan believes income growth and lending standards will limit price gains.

To read more about JP Morgan’s forecast, visit http://www.housingwire.com/news/2013/03/14/jpmorgan-raises-home-price-forecast-sees-long-road-recovery.

Metro Atlanta Case-Shiller Index Reported February 2013

The latest Case-Shiller Index was published on Tuesday, February 26th 2013.  As always, the index reports on data 60 days in arrears. Therefore, the index reports Metro Atlanta home values for December 2012. So what does the latest index show and what does that mean for home values in Metro Atlanta? Things are improving in our market however two important considerations must be taken into account. First, the Case-Shiller index of home values is very different from average sale prices or median homes prices. The Case-Shiller Index reports on repeat properties sold, which are generally better indicators of home values. Second, this index reflects average home values for all of Metro Atlanta. Remember, real estate is local and every market is different. There are some local communities that have held their values reasonably well and others that may continue to decline. In fact, some homes entering the market are getting multiple offers and closed prices above list price. Your local Prudential Georgia Realty agent can help you understand the specific metrics in your local market. However, the Case-Shiller Index is a good general indication on what is happening in our market.

Now for the news…. Nationally average home prices increased by .02% when compared to last month and increased 7.3% over the past year.  The December index for Atlanta shows a .28% (non-seasonally adjusted) increase in home values from November 2012 and a 9.91% increase over the last year.  While these numbers are positive, we must bear in mind that home prices are still down 29.69% from the peak of July 2007.  The current Case-Shiller index reflects values similar to home values in the spring of 1999.  The November index for Atlanta is 95.95.  Atlanta and Detroit posted their largest year-over-year increases since the index started tracking results in 1991.  New York, Chicago and Cleveland show the worst performance over the past year.

The Metro Atlanta real estate market continues to show signs of improvement for sellers. Listing inventory is down 37% from January of 2012 and down 57% from January of 2011.  That represents around 4 months supply of inventory based upon the latest closed sales trend.  Six months supply is considered normal. We have seen an extended period of low inventory since last year.  Buyer activity remains strong led by baby boomers, first time buyers and investors.  At the same time, the pace of pre-foreclosures (notices of default) and foreclosures has slowed.   RealValuator reports that short sales and foreclosures were over 60% of the transactions sold in 2010, 47% in 2011 and 37% in 2012.  Market sales (resales, new homes) are outpacing bank-owned sales. Your local PGR agent can show you the specific conditions in your market so you can make the best real estate decisions.

We have now seen a series of positive results from the Case-Shiller Index but the last few months show the trend slowing or leveling off.  Over the next few months, we may start to see results that are flat or slightly positive as we move toward spring.  We are moving back to a more normal seasonal pattern where the spring and summer months are the heaviest selling months. View the graph of the monthly Case-Shiller results from 2010, 2011 and 2012:

If you look back further at home values (see chart below), you can see that we had a bubble in homes values. As with many cyclical markets, we have over-corrected with values that are below the normal trend line. Over time, we expect this pattern to normalize and values will return to this predictable track. That makes now a great time to buy or invest in real estate for Metro Atlanta!

This chart shows the end of the year (December) index for recent years.  As you can see, we had a steady decline for 5 years but are showing a positive trend compared to last year.

If you look at the average annual Case-Shiller index for each year, here is how homes purchased in recent years would compare to the current index:

Homes Bought in 2000 – Loss of 7.05%
Homes Bought in 2001 – Loss of 11.98%
Homes Bought in 2002 – Loss of 15.25%
Homes Bought in 2003 – Loss of 17.92%
Homes Bought in 2004 – Loss of 20.71%
Homes Bought in 2005 – Loss of 24.52%
Homes Bought in 2006 – Loss of 27.96%
Homes Bought in 2007 – Loss of 28.42%
Homes Bought in 2008 – Loss of 21.77%
Homes Bought in 2009 – Loss of 11.49%
Homes Bought in 2010 – Loss of 9.28%
Homes Bought in 2011 – Loss of 2.45%

Yes, we are slowly climbing our way out of this unprecedented housing crisis – but we are not quite there yet. So where will home values go from here? The key factors that will impact our home values include the following:

Demand from Buyers: SmartNumbers reports that we finished 2012 with over 75,000 homes sold – a 7% increase from 2011.  We are moving back toward a more normal expectation of 80,000 to 85,000 homes sold per year.

Mortgage Rates/ Credit Availability: Average mortgage rates in the past 50 years were 8%. We expect to see historically low mortgage rates continue now that the Fed is still purchasing $85 billion of bonds and mortgage-backed securities each month.  But this stimulus to keep rates artificially low will not last forever as the Fed is already signaling they may start to slow down this program.  Freddie Mac and the Mortgage Bankers Association predict mortgage rates to rise to over 4% in 2013. In 3-5 years, we expect to see rates in the 6-8% range again.

Supply/ Inventory Levels: Most of our markets are showing inventory levels down well over 30% from the prior year levels. We see investors very active under $200,000 which will continue to shrink that inventory. New homes will continue to grow but not fast enough to have a significant impact on inventory levels. As values begin to rise, we expect “sideline sellers” to get back into the market. Overall, the “for sale” inventory will remain low compared to normal levels.

Competition from Short Sales/ Foreclosures: In 201o, RealValuator reports that short sales and foreclosures were over 60% of the transactions sold. In 2011, that dropped to 47% and in 37% in 2012.  We are now seeing resales and new homes outpace the sales of bank-owned properties.

It is clear that the housing market for the Greater Metro Atlanta area is improving.  Right now, we still have low prices and incredible mortgage rates.  You and your agent should be carefully watching the leading indicators.  There are some great opportunities to buy or invest.  But the low inventory may cause prices to start rising at an abnormally high rate.  In 5 or 10 years, many will look back and regret not buying their dream home when they had the chance! Check back for our next posts with the latest facts and insight that can make you money!


Home Prices Rose .3% in January

http://rismedia.com/wp-content/uploads/2013/03/home_price_increase_object.jpgThe latest FNC Residential Price Index® (RPI) indicates that U.S. property values continued to recover through January—the 11th consecutive month of rising prices. Despite the uneven pace of price gains across different geographical markets, there are clear signs that the housing recovery is increasingly widespread.

A limited housing supply and declining foreclosure sales are contributing to the recovery of underlying property values. The average list-to-sale price ratio increased to 93.5 in January, compared to 90.3 during the same period a year ago; in other words, the average asking price discount dropped to 6.5 percent from 9.7 percent. Foreclosures, as a percentage of total home sales, were 20.2 percent in January, down from 26.9 percent a year ago.

Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC 100-MSA composite index shows that January home prices rose 0.3 percent from the previous month and were up 5.7 percent on a year-over-year basis from the same period in 2012.] The 30-MSA and 10-MSA composite indices show similar trends of rising prices, with the 10-MSA composite accelerating more rapidly at 0.8 percent month-over-month and 7.2 percent year-over-year.

FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts, reflecting poor property conditions.

Seventeen of the component markets tracked by the FNC 30-MSA composite index show higher prices in January. The strong price momentum continues in Phoenix and Las Vegas where prices were up 1.9 percent and 1.5 percent in January after rising 2.1 percent and 2.0 percent, respectively, in December. Year-over-year, the two cities saw prices rise 28.6 percent and 12.5 percent. The January price declines seen in the other 13 markets are largely attributable to seasonal fluctuations. Home prices have bottomed out in these markets. On a year-over-year basis, all 30 component markets show higher prices from a year ago, but it is clear that the degree of market improvement remains inconsistent nationwide.

Although home prices have improved significantly in the last 12 months, a six-year price comparison shows that current prices remain well below their near-peak levels. On average, today’s home prices are about 27.5 percent below January 2007. In hard-hit markets such as Las Vegas, Orlando, Miami, and Riverside, Calif., home prices are only half of what they were six years ago.

Source URL: http://rismedia.com/2013-03-16/january-home-prices-rise-0-3-percent/

Prudential Georgia Realty Makes the List Again!

The-ListEvery year, the Atlanta Business Chronicle releases its Atlanta’s Top 25 Residential Real Estate Companies list. Published annually, this report ranks local real estate companies by sales units and sales volume.

In Atlanta Business Chronicle’s March 15, 2013 print edition, the Top 10 Residential Real Estate Organizations, the Top 25 Residential Real Estate Companies and the Top 25 Residential Real Estate Offices were listed. All three lists are ranked by 2012 Atlanta gross residential sales volume.

Prudential Georgia Realty was in the top 5 of Residential Real Estate Organizations. This is the 3rd year in a row Prudential Georgia Realty has achieved its standing as a top real estate company in Metro Atlanta.

Total 2012 Atlanta gross residential sales volume for the top 10 was $18,207,477,427, up 21% from last year. Total number of homes sold in 2012 by these organizations was 103,636.

Eek! You’ve Found Mold! What Do You Do?

Mold. It’s green, it’s red, it’s blue, grey, pink, or even black. It not just looks and can smell bad, it can also cause respiratory problems, sinus infections, and other health issues. It’s the creepiest of roommates.

What do you do if it’s taken up residence in your home? The first step in fighting mold is understanding some very simple arithmetic. Given enough time, moisture plus mold spores equals mold infestation. Mold is a type of fungus made up of tiny microscopic organisms that can grow just about anywhere. It multiplies through spores. Mold spores can take up residence anywhere- ceiling tiles, wallpaper, wood, paints, carpet, and insulation.

You can not stop mold spores form entering your home- they’re everywhere, but you can control its growth by keeping your home dry. Inspect your home for moisture. Check for a leaky roof and leaking plumbing. Poorly ventilated bathrooms are also common growth areas. Keeping humidity levels in your home below 60%, which may mean investing in a dehumidifier, also helps.

Other mold prevention tips include installing a light in a shower or closet and leaving it on 24/7. You can also order silica gel from a science supply company to help absorb moisture in problem areas. Silica gel can be reused multiple times by drying it in the oven. Just be careful if you have any pets or children- silica gel has it’s own serious dangers when ingested so following the warnings carefully.

Another factor in keeping mold spores from growing is to remove their food source. Dust, soil, and grease are attractive treats for fungi, so keep your home clean, especially in areas like kitchens where moisture is also likely.

If you still have an unwelcome, creepy, moldy roommate taking up residence, knowing how to kick it out safely is important. Cleaning large or hidden areas may require professional mold remediation. For small areas (less than 10 square feet) you can probably take care of it yourself. Try these tips for cleaning mold:

1. Wear a face mask, goggles, and rubber gloves. Don’t touch mold with bare skin.

2. Seal off the area to prevent the tiny spores from spreading to other parts of the house during the removal process. Open the windows and cover heat registers and ventilation ducts.

3. Wash the affected hard surface areas with a mild detergent solution, such as laundry detergent and warm water. As an added step, wipe the area with a solution of a quarter-cup bleach and one quart of water. (Warning: Do not mix ammonia and bleach; the fumes can be toxic.)

4. Dry the surface completely. Use fans and dehumidifiers or natural ventilation.

5. Apply a borate-based detergent solution. Don’t rinse. This will help prevent the mold from growing again. (Look for “borate” listed on the ingredient labels of laundry or dishwasher detergent.)

6. Don’t take shortcuts. Never paint or caulk over moldy surfaces. The paint will peel and the mold will resurface.

Other cleaning solutions that are less harsh than bleach can also be effective. Try scrubbing surfaces with baking powder and a spray bottle of half water and half white vinegar. A half teaspoon of tea tree oil added to laundry can kill musty smelling spores in washable fabrics. Leahter goods can be cleaned with a 50/50 mix of rubbing alcohol and water, but test a small spot first. Interestingly, straight vodka can also be effective- just spray on the moldy surface, let sit for 15 minutes, and then rinse. There’s no lingering scent.

Another good source of information and tips is the EPA. If you’ve tried these methods and the mold still returns, or you’ve discovered a significant area of mold, call a professional. A mold remediation company can sometimes be the only effective way to safely resolve a mold problem.