VARbuzz

Housing inventory down nationwide: Pro Teck

Andrew Kantor, Editor & Blogmaster — Wed, 16 May 2012 13:44:17 +0000

Good and bad news for Virginia in the latest Home Value Forecast from real estate valuation company Pro Teck.

Housing inventory across the country is down significantly in May — 21% below 2011, in fact. (It based this on “numerous data sources including public records, local market MLS and general economic data.”)

In fact, in every CBSA — Core Based Statistical Area — inventory was down, except Philadelphia. (Which makes sense, as who wants to live in Eagles territory?)

The Washington, D.C., metro area saw inventory drop about 28% on the Maryland side, and about 15% on the Virginia side, while the Norfolk-Virginia Beach area saw about a 23% inventory drop.

There are just over six months of remaining inventory nationwide, down from more than 10 month’s worth in 2008 — the D.C. area has even less, while both Norfolk-Virginia Beach and Richmond are about average.

The company also gives broad ranks to the nation’s single-family markets based on a variety of indicators (sales, prices, inventory, etc.).

Tops in the nation: the Boise, Idaho, and Dallas areas.

Bottoms: the Winston-Salem and Virginia Beach-Norfolk areas.

The report is chock full of other information, and it’s worth a look. Click here to do just that.

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Demand Institute study has some specific predictions about the housing market

Andrew Kantor, Editor & Blogmaster — Wed, 16 May 2012 13:11:05 +0000

A new report from the Demand Institute concludes that the U.S. housing market will finally turn the corner in 2012. That’s good, and I agree, and it’s a reasonable prediction to make.

“The recovery of the housing market will have far-reaching impacts in the coming years across the United States and international markets as U.S. consumers increase their spending on buying, renovating, furnishing and maintaining their homes.”

A-yup. Even if the market doesn’t recover this year, when it does all those things are true. Can’t really argue.

What’s going to power the recovery? Rentals, especially by young people. “More than 50 percent of those planning to move in the next two years say they intend to rent,” says the report, and that will help reduce the housing glut as investors snap them up to meet the rental demand.

Certainly sounds plausible. Another reasonable prediction.

But then the report begins to lose its usefulness, going from making blindingly obvious predictions to incredibly (as in “not credible) specific ones.

“The housing market recovery will not be uniform across the country,” it says. “Some states will see annual price gains of 5 percent or more. Others will not recover for many years.” Um… duh?

Further, “There will also be vast differences within states.” (Emphasis mine.) Again, duh.

“Consumer industries including financial services, home furnishings, home remodeling will all experience shifts in demand and new growth opportunities.”

Now there’s a statement everyone should save, because you can use it any time, any place. If things are changing — as they usually are — of course consumer industries will experience “shifts in demand and new growth opportunities.”

And then we have the specifics:

Average home prices will increase by up to 1 percent in the second half of 2012.
By 2014, home prices will increase by as much as 2.5 percent.
From 2015 to 2017, the study projects annual increases between 3 and 4 percent.
…[T]he strongest markets could capture average gains of 5 percent or more in the coming years.

You can’t predict the weather accurately more than a few days in advance, and this report is predicting home prices through 2017? Seriously? Granted it’s full of weasel words such as “by as much as” and “could capture,” but even to make such a prediction is ludicrous.

Why does this stuff frustrate me so? Because it convinces people that it’s possible to make accurate predictions, as opposed to “having a random prediction actually come true.” Which is what usually happens. So people make decisions based on what amounts to having a chicken pecking the stock tables.

Yes, the housing market is probably going to begin recovering this year and into next. Prices for the most part should begin to rise. By how much? Who can say? There are simply too many variables.

So please, don’t be among those who expect specific things in the next few years. In a world where Greece could default, Iran could rattle its sabers, hurricanes can close oil refineries, and who knows what else — well, you really can’t predict all that much.

Click here for the Demand Institute press release.

Or here for the full report (PDF).

Cell phones, driving, and Virginia law

Andrew Kantor, Editor & Blogmaster — Wed, 16 May 2012 12:44:02 +0000

So my neighbor/friend was a-driving along, and for whatever reason was on her mobile. Thinking to be a bit safer, she popped one of those Bluetooth earpiece things in so she didn’t have to hold her phone and try to drive at the same time.

And she got pulled over and ticketed. Because, apparently, Virginia law says you can’t have an earpiece thingy in your ear while driving.

In other words, if she had one hand off the wheel and one on her phone, that would have been A-OK. But keeping both hands on the wheel? That’s a no-no.

Consider yourself warned.

(Note: I’m not a lawyer nor a cop. So maybe the guy who gave her the ticket didn’t know what he was talking about, and these things are legal. I’m just relaying the anecdote, which happened in the past coupla weeks. She paid her ticket.)

All about you: NAR’s membership profile

Andrew Kantor, Editor & Blogmaster — Tue, 15 May 2012 12:58:12 +0000

NAR’s 2012 membership profile is out, and it’s full of interesting stuff about, well, you.

For the first time since 2002, member income was up — in 2011 it increased 2.3% from the year before to $34,900.

While (by definition) half of you earn less than $35K per year, 17% earn $100K or more.

One reason the number isn’t higher: Only about a third hold any kind of designation or certification. (Realtors who have even one typically earn a heck of a lot more than those with none. Shameless plug: Consider getting your GRI.)

Let’s see… what else is there?

The median Realtor age is 56; it was 52 back in 1998.
Half of Realtors have been with their current firm at least five years.
There are fewer new Realtors out there — most (53%) have at least 11 years of experience, and the typical sales agent has nine years.
Broker-owners, meanwhile, typically have 25 years in the biz.
More than three-quarters consider real estate to be their only occupation, but that’s down from 2005 when about 81% did.

Want more? Head over to Realtor.org to read the whole profile.

Ally Financial and principal reduction

Andrew Kantor, Editor & Blogmaster — Tue, 15 May 2012 12:44:19 +0000

Irony alert: Ally Financial’s mortgage division (Residential Capital, or ResCap) filed for bankruptcy — in other words, it’s asking for a massive principal reduction from its creditors.

Said Ally CEO Michael Carpenter: “The action by ResCap will enable Ally to achieve a permanent solution to its legacy mortgage risks and put these issues behind us.”

I wonder if that argument would work with Ally’s mortgage holders. “Reducing our principal would allow my family to achieve a permanent solution to our legacy financial troubles and put these issues behind us.”

Commercial sentiment is metza-metz

Andrew Kantor, Editor & Blogmaster — Mon, 14 May 2012 14:46:18 +0000

While consumers are seeing a half-full glass, commercial real estate investors and execs are less willing to say they’re confident in their slice of the economy.

According to the latest quarterly Sentiment Survey from the Real Estate Roundtable, while commercial real estate pros say things improved in the first quarter, they’re still nervous about some of the commercial mortgages that will mature in the coming year.

The confidence index — it’s now at 70 — means that there’s more positive feeling than negative, but that number is down from last year (although up from Q4 of 2011).

An interesting bit of good news is that REOs only make up about a third of commercial–mortgage backed securities delinquencies, and the number of those REO assets continues to climb.

Rather than being bad news for delinquency rates, according to Fitch, that increase in commercial REO assets will mean that overall delinquencies will go down: “We expect … that the current REO inventory will put downward pressure on the delinquency rate as it is liquidated.”

Consumer sentiment hits (another) high

Andrew Kantor, Editor & Blogmaster — Mon, 14 May 2012 13:55:03 +0000

The Thomson Reuters/University of Michigan’s consumer sentiment index (basically, the one everyone uses) not only beat the predictions for early May, but hit its highest level since January 2008.

“Analysts” had predicted that the index would drop from 76.4 (April) to 76.2. Instead, it climbed to 77.8.

What do those numbers mean? Essentially, in 1964 researchers asked consumers if they were positive or negative about the economy. They set that level as “100.” Everything else is compared to that. In short, it’s simply a relative measure — are consumers more or less positive than they were last time we asked?

This latest survey was the ninth straight month of increases — something that hasn’t happened since 1978.

As Bloomberg explained:

A jobless rate that has dropped to the lowest level in three years and a housing market that shows signs of stabilizing may be helping lift Americans’ spirits. The unexpected gain in confidence signaled consumer purchases, which account for 70 percent of the economy, can keep expanding after growing at the fastest pace in more than a year.

And Reuters added some more good news to the mix:

Separate data earlier in the day showed U.S. producer prices unexpectedly fell in April as energy costs dropped the most in six months, a sign of easing inflation pressures that could give the Federal Reserve more room to help the economy should growth weaken.

(Of course, now I’m being accused of being overly positive with stories like this. But heck, the news is good and continues to be so. And I hate writers who hedge too much — if you see good news, say so.)

LPS reports first home-price increase since 2010

Andrew Kantor, Editor & Blogmaster — Fri, 11 May 2012 12:41:43 +0000

There are a lot of small indicators of a market turnaround, and LPS (that’s Lender Processing Services) has a new one: It’s Home Price Index — which is based on actual closings — was up 0.2 percent in February, and the company expects it to rise again in March by another 0.3 percent.

Small changes, to be sure, but as LPS VP Raj Dosaj points out, prices increased “for the first time since March 2010, and for only the third time in five years.”

He points out that in other years a spring increase is erased by a summer drop, so any optimism needs to be cautious. But it’s still another small point of light.

Distressed sales plummet in MRIS territory

Andrew Kantor, Editor & Blogmaster — Fri, 11 May 2012 12:32:13 +0000

We’ve now got MRIS’s April numbers for foreclosures and short sales. Short sales are slightly up, but foreclosures are waaaay down.

Short sales: 12.2% of the market, up about 3% from last April
Foreclosure sales: 11.0% of the market, down 47% from last April
Total distressed sales: 23.2% of the market, down 29% from last April

Granted, having a market where almost a quarter of the sales are distressed isn’t a Good Thing, but there’s a sense to it. People bought near the top of the bubble and have to sell (for whatever reason — job, life change, etc.). So they either take the hit or work out a short sale with their lenders.

That means that short sales are going to continue to be a noticeable part of the market for as long as lots of folks own homes bought between, say, 2004 and 2007. If they have to sell, they’ll have to sell at a lower price, ’cause it’s gonna be a while before prices are back up to those unnatural highs.

Mortgage rates hit all-time low again

Andrew Kantor, Editor & Blogmaster — Thu, 10 May 2012 15:24:33 +0000

30-year fixed-rate averages 3.83 percent. That is all. --------------------------------------------------------------------- “Go Beyond” with zipLogix, creators of zipForm® real estate forms software. Also part of the zipLogix software suite is zipForm Mobile, zipLogix Digital Ink® Digital Signatures, zipVault® document storage, and relay® transaction management tool. Broker solutions also available. ---------------------------------------------------------------------