Lawrence Yun’s economic and forecast update

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

The Housing Market

  • Existing-home sales in May hit the highest mark since 2009, when there had been a homebuyer tax credit … remember, buy a home and get $8,000 from Uncle Sam.  This tax credit is no longer available but the improving economy is providing the necessary incentive and financial capacity to buy.  Meanwhile new home sales hit a seven-year high and housing permits to build new homes hit an eight-year high.  Pending contracts to buy existing homes hit a nine-year high.
  • Buyers are coming back in force. One factor for the recent surge could have been due to the rising mortgage rates.  As nearly always happens, the initial phase of rising rates nudges people to make decision now rather than wait later when the rates could be higher still.
    • The first-time buyers are scooping up properties with 32 percent of all buyers being as such compared to only 27 percent one year ago.  A lower fee on FHA mortgages is helping.
    • Investors are slowly stepping out.  The high home prices are making the rate of return numbers less attractive.
  • Buyers are back.  What about sellers?  Inventory remains low by historical standards in most markets.  In places like Denver and Seattle, where a very strong job growth is the norm, the inventory condition is unreal – less than one month supply.
  • The principal reason for the inventory shortage is the cumulative impact of homebuilders not being in the market for well over five years.  Homebuilders typically put up 1.5 million new homes annually.  Here’s what they did from 2009 to 2014:
    • 2009: 550,000
    • 2010: 590,000
    • 2011: 610,000
    • 2012: 780,000
    • 2013: 930,000
    • 2014: 1.0 million
    • Where is 1.5 million?  Maybe by 2017.

Click here to read the complete report.

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Study: work-life challenges across generations

Knowing that millennials and parents are under increasing pressure, we wanted to understand what employees seek in a job — why they quit, why they stay and how this differs by generation.

To learn more, EY.com surveyed approximately 9700 adults aged 18-67 who are full time employed across a variety of companies in the US, UK, India, Japan, China, Germany, Mexico and Brazil.

We learned:

  • Work-life balance is harder worldwide. Approximately half (46%) of managers globally are working more than 40- hour weeks, and four in 10 say their hours have increased over the past five years.
  • Why people are quitting their Jobs. The top five reasons people quit their jobs are: minimal wage growth, lack of opportunity to advance, excessive overtime hours, a work environment that does not encourage teamwork and a boss that doesn’t allow you to work flexibly.
  • People want flexibility. Being able to work flexibly and still be on track for promotion is very important.
  • Managing work and family responsibilities for US Millennials is proving difficult. Millennials (78%) are almost twice as likely to have a spouse/partner working at least full-time than Boomers (47%). Consequently, “Finding time for me” is the most prevalent challenge faced by millennial parents who are managers in the US (76%) followed by “getting enough sleep” and “managing personal and professional life” (67%).ey-millennials-generation-go

Source: EY.Com

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Freddie Mac: The housing market pivots

Each month, Freddie Mac compiles data on major economic, housing and mortgage market indicators and offers forecasts in its U.S. Economic & Housing Market Outlook.

Not only are more Americans taking out a mortgage to purchase a home, but after seven years of decline, debt outstanding on single-family properties is increasing on a year-over-year basis. This is yet another sign the economy and housing markets are pivoting toward normalcy. We’re likely to see many millions more households and millions more homeowners over the next five years, driving mortgage debt outstanding higher.

Click here to read or download the report.

Pivoting Toward Normalcy

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Mark Given heads up VAR’s Relocation Day Conference

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VAR’s Relocation Day is a must for anyone who is involved in relocation whether it’s with corporate clients, government groups or those who are moving for a promotion or new job. VAR is proud to present featured speaker Mark Given. Mark will show you how to manage your life and business more efficiently despite the everyday challenges.

Other event highlights include:

  • Worldwide ERC Update – Pandra Richie, Long & Foster
  • Panel: What Can We Do Better As Relocation Agents and the Future of Relocation
  • Communication: Handling and Avoiding Breakdown – Rachael Joyner, Joyner Fine Properties
  • How to Generate Real Leads via Social Media – Laureston Hawley, Movement Mortgage.

Click here to register and get the best rates today!

 

 

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Real Show is taking registrations (and early bird ends June 30!)

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The three biggest days for Virginia’s REALTORS® is coming this fall — the Real Show 2015. Make sure you’ve made your reservations now for the largest gathering of real estate professionals in Virginia. Early bird registration ends June 30CLICK HERE to register today and lock in the best possible registration rate.

It’s the perfect place to build referrals, grow your circles, and connect with peers.

  • Pick up some CE while you’re there, too, and attend lively workshops on the topics you need to know about.
  • And there’s the trade show, too, with dozens of vendors showcasing the latest products to help you do your business better.
  • It’s the one event that has it all: convenient, concentrated, and connected — all at the beautiful Williamsburg Lodge.

Visit the Real Show 2015 online to register and to see the complete schedule.

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The top 5 things to know about TRID now

Now, still only weeks away from TRID’s (TILA-RESPA Integrated Disclosure Rule or Rule) effective date, lenders, REALTORs®, and settlement agents need to be taking stock of their preparedness and communicating among themselves and with consumers about what to expect come October 2015. We asked three individuals from organizations recognized as industry leaders who have been dedicated to implementing TRID on time and in compliance to name their “Top 5” for TRID compliance. These thoughts are intended to help you ensure you’re prepared and to provide insights on issues you need to consider prior to the effective date. Click here to read the complete story.

Source: Mortgage Compliance Magazine

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Virginia Peninsula Association of REALTORS® holds 25th Anniversary Golf Classic

The Virginia Peninsula Association of REALTORS® (VPAR) recently held their 25th Anniversary Golf Classic at the Kiln Creek Golf & Country Club in Newport News. The 2015 President Dewey Hutchins of Liz Moore & Associates welcomed and thanked the players, sponsors and volunteers and then set out on the course with his fab foursome! The day ended with a great barbecue dinner and lots of door prizes.  The golf tournament is presented by the Virginia Peninsula Association of REALTORS® Charitable Foundation and proceeds will benefit various local charitable organizations.

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Surge in residential sales is strong start to summer selling season

Demand for homes is boosting sales across the nation, and Virginia is no exception. May 2015 home sales volume in the Commonwealth was the highest the state has experienced in May since the 2008 recession, according to the May 2015 Homes Sales Report released by the Virginia Association of REALTORS® (VAR).

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Other highlights of the report include:

  • Virginia home sales in 2015 continue to remain well above sales in 2014.
  • From April to May, there was a 14.7 percent increase in residential sales. This more than doubled the 5.72 percent increase in home sales from March to April and sets a strong pace for the summer selling season.
  • Homes were on the market for about 69 days in May, which is true to form for this time of year and may even decrease through June and into July based on annual trends.
  • The thirty-year mortgage interest rate increased to 3.84 percent. While this rate is still historically low, the increase may encourage buyers to enter the market before rates creep up any further.

“It’s fantastic to see home buyers returning to the market in droves, both nationally and in Virginia,” said Deborah Baisden, president of the Virginia Association of REALTORS®. “The low mortgage rates and a growing economy are enticing buyers to move forward with more confidence regarding their home ownership decisions. As we head into our country’s birthday weekend, this news is definitely something to celebrate.”

The Virginia Home Sales Report is published by the Virginia Association of REALTORS®, with analysis provided by the Virginia Center for Housing Research at Virginia Tech. The May Home Sales Report, with charts and graphs, is available on the organization’s website.

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CFPB proposes mortgage rule delay

The Consumer Financial Protection Bureau is proposing a delay to new mortgage disclosure rules, pushing back the start date to Sat., Oct. 3.

The original deadline for the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure regulation was Aug. 1. The proposed date change still must undergo public comment before July 7. The new implementation date will not become official until the final rule is issued by the CFPB

The new “Know Before You Owe” mortgage disclosure rules aim to streamline the disclosure process for home buyers during closing by merging the Truth in Lending Act and the Real Estate Settlement Procedures Act into one form.

“The bureau believes that scheduling the effective date on a Saturday may allow for smoother implementation by affording industry time over the weekend to launch new system configurations and to test systems,” the CFPB wrote in the proposed rule that details the new deadline. “A Saturday launch is also consistent with existing industry plans tied to the Saturday, August 1, effective date.”

The CFPB also states in the proposal: “In recent weeks, the bureau has learned that delays in the delivery of system updates have left creditors and others with limited time to fully test all of their systems and system components to ensure that each system works with the others in an effective manner. These delays pose risks to the smooth implementation of the new forms mandated under the TILA-RESPA Final Rule.”

Source: National Association of REALTORS®

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First-Time homebuyers lead the way in May

The National Association of REALTORS® (NAR) latest Existing Home Sales Report revealed that first time homebuyers made up 32% of all sales in the month of May; marking the highest share since September 2012 and up from 27% the same time last year.

  • NAR’s Chief Economist, Lawrence Yun, cited “strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs,” as contributing factors to the increase in first-time buyers.
  • Existing-home sales rose 5.1% to a seasonally adjusted rate of 5.35 million. Total housing inventory for sale remains under the 6.0 months needed for a historically normal market at a 5.1 month supply.
  • Homes sold quickly in May, as 45% of homes sold in less than a month. May also marked the 39th consecutive month of year-over-year price gains as the median existing home price rose 7.9% above May 2014 to $228,700.

Below is a chart showing the breakdown of price increases by region:

EHS-Prices-Regional-KCM

Yun went on to say,

“Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers.”

“However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent.”

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