Last year I worked with a few frustrated sellers, their homes would hang out on the market for a while and receive low ball offers. Plus, buyers would nitpick the properties apart and ask for a ton of concessions. The agents (myself) would communicate and assure our sellers that we’re doing our best to promote and sell their homes for the best price. Contrast that with today’s market, sellers are receiving multiples offers with in hours of the property going live on the Multiple Listing Service – MLS. As an example, today my client toured a home in Arroyo Grande that has been on the market for 2 days. This home was previously listed last year for 9 months with no sale. Today I called the listing agent and was informed that there are already four offers….hurry…. if I want my offer to be reviewed. I know this house well, I showed it last year multiple times to clients that didn’t want to pay the asking price of $299K. Today the property is listed for $40K more and the seller is going to get their price. I hope my client gets a chance for consideration with our offer, including consideration on the forthcoming multiple counter offer. Like I said, it’s a new market!!!
By NICK TIMIRAOS And KELSEY GEE
U.S. home prices in June posted their first year-over-year increase in nearly two years, according to a widely watched index released on Tuesday, as more buyers chased fewer homes on the market.
ReutersSale prices of U.S. homes were up in June, the S&P Case-Shiller indexes showed Tuesday.
The S&P/Case-Shiller index of 20 major metropolitan areas showed home prices rose by 0.5% in June, compared with a year ago, to end a 20-month streak of declines. Home prices are still down by nearly 31% from their 2006 peak but have returned to mid-2003 levels.
A separate national index released by Case-Shiller said prices were up by 1.2% from a year ago and by 2.2% from the first quarter, on a seasonally adjusted basis. The quarterly gain was the largest since late 2005. “This is a clear trend now. We have had a very strong spring season,” said Mark Fleming, chief economist at real-estate data firm CoreLogic Inc.
Tuesday’s report follows several others that had pointed to an exceptionally strong bounce in sales this spring. The rebound began to take hold months ago, as the number of homes for sale dropped sharply, especially as banks have listed far fewer foreclosures. In addition, some traditional sellers are holding out for better prices or are unwilling to sell because they owe more than their homes are worth.
At the same time, investors have been aggressively scooping up bargain-priced foreclosures that can be converted into rental properties, while low mortgage rates are giving buyers even more purchasing power.
In each of the past three years, home prices have picked up in the spring and summer only to erase those gains in the fall and winter, when sales activity slows. But economists said there is a better chance the low inventories of for-sale homes and stronger demand could prevent prices from dipping below their previous lows.
“We have a much better supply-and-demand equilibrium right now,” said Mr. Fleming. Compared with previous years’ false dawn for housing, “we’re much closer to the level of supply matching the albeit-muted level of demand,” he said.
The report showed that price gains were increasingly broad based, though not every part of the country is benefiting. Of 20 tracked cities, 13 posted year-over-year increases, compared with just seven cities three months ago. Prices in Phoenix were up by 14% from a year ago, continuing a sharp turnaround for the hard-hit market. Prices were below last year’s June level in six markets; the worst was Atlanta, which was down by 12%.
Since prices began falling in 2006, they had previously posted year-over-year increases briefly in 2010, when home buyer tax credits fueled a burst of sales activity.
The housing market still faces stiff headwinds, including tight lending standards, an economy that isn’t producing large job or wage gains, and high levels of homeowners who are underwater, or owe more than their homes are worth.
Many economists say the recent price gains aren’t likely to be sustained at the current pace. Instead, the sharp bounce may reflect the fact that prices in some parts of the country fell so far that they created unusually attractive deals. Some industry executives fret over why demand isn’t higher given the low level of mortgage rates.
Another concern: While low inventory has helped push prices higher, it also has begun to crimp sales volumes, particularly in Western markets such as Phoenix, Las Vegas and Sacramento, Calif. Some economists say sales of previously owned homes could fall in the coming months, in part because there aren’t enough homes for buyers to choose from. That could lift sales of newly built homes.
“To see real sales-volume gains, you’re going to need to see more opportunistic sellers,” said Glenn Kelman, chief executive of real-estate brokerage Redfin. “The only people selling are those who are bursting at the seams because they had a third baby or because they took a job out of state.”
Jillian Holliday has no plans to move out of the house that she bought and renovated in Orlando last October, but that hasn’t stopped her from trying to purchase nearby properties that could be fixed up and resold for a profit. She and her father offered to pay $230,000 for a tidy 1920s-era home in downtown Orlando the day it went on the market in April.
“There’s almost nothing for sale in this neighborhood,” said the 30-year-old recruiter. “And the houses you do see sell really quickly.” The home is being sold as a short sale, where the seller must receive the bank’s approval to sell at a loss. The last buyer walked away from the property after spending eight months under contract. Ms. Holliday hopes the sale will close by September. “It’s such a gem,” she said.
Write to Nick Timiraos at email@example.com
According to Inman News, the National Association of Realtors, the Florida Association of Realtors, and Case-Schiller are working on changing the way they track real estate statistics. I have blogged multiple times how the statistics being released by these companies and others don’t really tell what’s going on in a market because they only report a single median home price (instead of tracking statistics of non-foreclosure, REO, and Short Sale sales seperately). They also don’t report foreclosure mix percentages which can lower or raise the single median home price. We already report the most comprehensive local market statistics available ANYWHERE on our Statistics Dashboards.
From the article:
“The National Association of Realtors and most state and local Realtor associations currently track median home prices. But indexes that track median home price don’t necessarily provide an accurate picture of what’s happening to the value of housing, Florida Realtors said.
That’s because changes in median home price may reflect a change in the mix of housing sales, rather than an underlying trend in housing values. An increase in the proportion of sales at the lower end of the market, including distressed property sales, may push down median home price, for example. Conversely, an an increase in median home price may reflect increased sales of larger, more luxurious properties, rather than appreciating home prices, the trade group noted.”
I am a shameless foodie……..can’t avoid experimenting on unsuspecting family and friends, particularly when we have so many yummy enhancers right here at home. But I work too much and tend to search out the simpler ways to create great food on the average day. A current favorite short cut is to make fab tasting food with local vinegars. Chaparral Gardens Artisan Vinegars off of Highway 41 West in Atascadero – a class act that never fails to deliver. I have used their vinegars since the Gardens were a small roadside stand that made my simple salads into something special. My current selections include Pacific Spice and Blackberry & Roasted Pepper. But now I have a new ‘must have’ secret ingredient in my kitchen……..Star Anise and Vanilla Bean Balsamic produces something similar to the tricky mole! This Limited Reserve Vinegar along with some fresh garden herbs is my new standby as a marinade which turns everyday chicken into something memorable! Check them out at select farmers markets or on the web at http://cgvinegar.com/vinegars.html
Little has changed since we posted a rate update for Thursday, August 23 entitled Mortgage rates drop in the wake of poor jobs report, Fed minutes.
At the time, we wrote: “After several straight weeks of cost increases, rates have plummeted, in some cases by 3/4 of a point. Minutes from the Fed’s latest meetings reveal that the FOMC is concerned about the strength of the economy and is seriously considering another round of Quantitative Easing (QE3), a step that has been resisted thus far. The price of U.S. government debt rose, dropping the yield of the 10-year Treasury and bringing mortgage rates down with it.”
For several weeks, mortgage interest rates had moved off lows and rose in cost, as equities climbed upward and improved employment and housing numbers flooded the news cycle. The Fed’s gloomy outlook of the economy and possible implementation of QE3 alarmed investors, who then moved back to U.S. debt – viewed as the “safe haven” bet for the uncertain future. (For more on the future outlook of mortgage rates see our rundown HERE). For a complete update of mortgage rates to begin the week, you can see our post HERE.
The Dow rallied from its difficulties on Thursday with 100 point gains on Friday and then fell by 33 points on Monday, August 27 to begin the week. The yield of the 10-year Treasury (the historic 30-year mortgage rate tracker) fell by 0.0342 percent to 1.6534 percent.
Stopped by Avila Beach yesterday evening and saw a show. Pelicans, dolphins, sea lions, and a whale. This iphone video is of the feeding frenzy.
Now that most of the area K-12 schools are back in school, we have a few weeks before we start seeing the incoming Poly students in town for WOW (Week of Welcome). Fall classes at Poly start on Tuesday, Sept 18th with the move-in date for freshman being Sept 12th.
Cuesta College classes started this past Monday (the 20th).
Classic California bungalow close to down town.Move-in condition. Large back yard with deck. Covered front porch.Great landscaping with drip system and sprinklers.