MA real estate

Why Has Housing Supply Increased as Sales Have Slowed Down?


Newton, MA. Real Estate, Compass, Newton Top Brokers, Sotheby’s

Why Has Housing Supply Increased as Sales Have Slowed Down?

Why Has Housing Supply Increased as Sales Have Slowed Down? | MyKCM

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the inventory of homes for sale this year compared to last year has increased for the last four months, all while sales of existing homes have slowed compared to last year’s numbers.

For over three years leading up to this point, the exact opposite was true; Inventory dropped as sales soared.

NAR’s Chief Economist Lawrence Yun shed some light on what could be contributing to this shift,

“This is the lowest existing home sales level since November 2015. A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”

Let’s take a deeper look:

Interest Rates

Since January, 30-year fixed mortgage interest rates have increased nearly a full percentage point (from 3.95% to 4.9%). Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association are all in agreement that rates will continue to increase to about 5.2% over the next 12 months.

“The rise in [mortgage] rates paired with this very strong price appreciation absolutely is slowing housing,” said Fannie Mae’s Chief Economist Doug Duncan.

Even though rates are higher than they’ve been in a decade, they still remain below the average for the 1970s, 80s, 90s, and 2000s!

Mismatch of Inventory

Elizabeth Mendenhall, President of NAR, said it best, “Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.”

Prices of starter and trade-up homes have appreciated faster than their higher-priced counterparts. Over the last 5 years, the lowest-priced homes have appreciated by 47% while the highest-priced homes have appreciated by only 24%.

According to the Institute of Luxury Home Market’s Luxury Market Report, the $1M-and-up price range is now experiencing a buyer’s market. This means that supply (inventory) has finally caught up with demand and buyers are in the driver’s seat when it comes to negotiations. Additionally, many listings in this price range have experienced price cuts in order to entice buyers to put in offers.

Bottom Line

Additional inventory coming to market could help normalize the housing market and allow incomes to catch up to home prices. For more information about sales and inventory in our area, let’s get together so we can help you make the best decision for you and your family.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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Newton Home Prices Have Appreciated 8.4% vs. a Gain of 6.9% Nationally.


Newton, MA. Newton Top Broker, Compass, Sotheby’s

Newton Home Prices Have Appreciated 8.4% in 2018.

Home Prices Have Appreciated 6.9% in 2018 | MyKCM

Between 1987 and 1999, which is often referred to as the ‘Pre-Bubble Period,’ home prices grew at an average of 3.6% according to the Home Price Expectation Survey.

Every month, the economists at CoreLogic release the results of their Home Price Insights Report, which includes the actual year-over-year change in prices across the country and their predictions for the following year.

The chart below shows the forecasted year-over-year prices for 2018 (predictions made in 2017). According to their predictions, the average appreciation over the course of 2018 should be 4.8%, which is still greater than the ‘normal’ appreciation of 3.6%.

Home Prices Have Appreciated 6.9% in 2018 | MyKCM

If we layer in the actual price appreciation that has occurred this year, we can see that over the course of 2018, home prices have appreciated by an average of 6.9% and have outpaced projections all year!

Home Prices Have Appreciated 6.9% in 2018 | MyKCM

What does this mean?

The tale of today’s real estate market is one of low inventory, high demand, and rising prices. The forces at work can be simply explained with the theory of supply and demand. That being said, if a large supply of inventory were to come to the market, prices may start to appreciate closer to the forecasted rate which would STILL be greater than the historic norm!

Bottom Line

If you are a homeowner whose house no longer meets your needs, now may be a great time to list your home and capitalize on the equity you have gained over the last year to make a significant down payment on your next home!

Home Sales Expected to Continue Increasing in 2019


Newton’s Top Broker, Newton, MA. real estate, Compass, Sotheby’s

Home Sales Expected to Continue Increasing in 2019

Freddie MacFannie Mae, and the Mortgage Bankers Association are all projecting that home sales will increase nicely in 2019. Below is a chart depicting the projections of each entity for the remainder of 2018, as well as for 2019.

Home Sales Expected to Continue Increasing in 2019 | MyKCM

As we can see, Freddie MacFannie Mae, and the Mortgage Bankers Association all believe that homes sales will increase steadily over the next year. If you are a homeowner who has considered selling your house recently, now may be the best time to put it on the market.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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Buying a Home? You Don’t Need to Do It Alone


Top Realtors, Newton, MA.  Sotheby’s Newton, MA.

 

Buying a Home? You Don’t Need to Do It Alone

Posted: 30 Jul 2014 04:00 AM PDT Another great topic from my friends at  KCM CREW

Buying a Home? You Don’t Need to Do It Alone | Keeping Current Matters

Last week, Discover Home Loans released an interesting survey which revealed how prepared home buyers are for the actual mortgage process. The survey reported that 94 percent of prospective buyers believe they are making a good investment decision if they buy a home. The survey also explained that 66 percent of buyers reach out to real estate agents to help determine whether buying a certain home would be a good investment. However, there is less certainty regarding the mortgage process.

Most buyers overwhelmed

The majority of potential buyers are actually overwhelmed with the plethora of information available about the home financing process.  Here are some interesting highlights from the report:

  • Nearly 66% feel overwhelmed with the amount of information available
  • 76% of those under the age of 30 feel overwhelmed
  • 76% of first time buyers feel the same way
  • 54% of those buyers who have previously owned also were overwhelmed
  • 59% of buyers turn to mortgage bankers to help evaluate mortgage terms and comparing offers
  • 49% of buyers turn to real estate agents to help evaluate mortgage terms and comparing offers

There is help available…use it!

Cameron Findlay, chief economist at Discover Home Loans, gives great advice:

“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress. Those looking to purchase should work closely with their lender and realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”

Bottom Line

The purchasing of a home can put great pressure on a family. Reach out to the qualified mortgage and real estate professionals in your market for assistance throughout the process.

What Does QE3 Mean to Housing?


real estate, newton, ma.  margaretszerlip@gmail.com, best realtor, newton, ma.

 

What Does QE3 Mean to Housing?

Fed Chairman Ben Bernanke announced last week that the Fed would again be pumping money into mortgage-backed-securities as a way to stimulate the economy. The big question for us becomes what impact this will have on the housing market. There is absolutely no doubt that Bernanke had the housing industry in mind while making this decision. In his post meeting news conference Bernanke explained:

“I think that house prices are beginning to rise in some markets, which will encourage people to look at homes, will encourage lenders to make more mortgage loans. I am hoping we will continue to see progress in the housing market. That is one of the missing pistons in the engine here, housing is usually a big part of a recovery process. We haven’t had that nearly to the usual extent. And to the extent that we can support housing I think that would be a very useful outcome.”

How does keeping rates low help the market?

HSH Associates which reports on trends in the mortgage rate environment explains:

“Of all the Fed policies, driving down mortgage rates has arguably been the most successful. Low rates have fostered refinancing, putting money in homeowner pockets and helping to spur consumer spending. Those low rates have enhanced housing affordability, while the steadying aspect of the Fed’s presence in the market has allowed for more of those transactions to complete; in turn, this has helped to firm up home prices. The Fed is trying to cause at least some inflation, namely in asset prices — homes, stocks.”

But what impact will it actually have on home sales?

Keeping interest rates low will definitely help. However, we are not sure it will be a driving force in a housing recovery. Rates are already at historic lows and  the challenge to many buyers is availability of mortgage money more than it is the cost of that money (rate). HSH Associates believes:

“Looking across the potential audiences who want to buy homes, can a claim be made that interest rates are an impediment? More likely, credit ruined in the downturn, a lack of income, unemployment or even asset strength are keeping people out of the market. In addition, there is arguably a cohort which cannot participate due to a foreclosure, short-sale or deed-in-lieu effected over the last few years, and there is likely still another group who will not buy a home at all, having watched family and friends suffer mightily with real estate issues and losses in the downturn. In this way, lower interest rates aren’t much of an inducement for a lot of folks, and except at the margins, the change merely enhances the opportunity for people already well-positioned and motivated to buy a home.”

Richard Green, director of the University of Southern California Lusk Center for Real Estate, echoed this sentiment in a recent MarketWatch article:

“While QE3 certainly won’t hurt the housing market, its short-term effect will likely be limited. The constraint that is keeping people out of the housing market is absence of equity. The drop in house prices means that many borrowers are underwater on their houses, and high unemployment has prevented potential first-time buyers from accumulating down payments.”

Keeping rates low can’t hurt the market and perhaps it will encourage some move-up buyers to make the move now. But few believe it will spur a dramatic increase in home sales.

 

MA. Pending Sales Increase Hits 15 Straight Months in July!


Newton, MA.  Realtor, Newtonmasshomesforsale.com, best Newton, MA. Realtor

Mass. Pending sales increases hits 15 straight months in July

Today we released our July pending home sales numbers and for the 15th straight month, single-family and condominium pending sales have gone up.  On a month-to-month basis pending sales have ticked down from June . This is the 2nd straight month-to-month decrease.

Link to release: July 2012 Pending Home Sales

Here are the highlights:

  • Single-family pending home sales were up 33.58% compared to July 2011
  • Single-family month-to-month pending home sales were down 8.52% from June 2012
  • Condo pending home sales were up 29.87% compared to July 2011
  • Condo pending month-to-month home sales were down 11.78% from June 2012

Home Sales Reach Two-Year High as U.S. Rates Fall


Newton, MA.  Realtor  Newton, MA.  Homes fro Sale

Reported by BLOOMBERG TODAY JUNE,25, 2010

Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool.

June 25 (Bloomberg) — Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool. Erik Schatzker reports on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

The deck of a Toll Brothers Inc. model home stands in Randolph, New Jersey. Falling borrowing costs and more affordable properties may keep luring buyers, even as a cooling job market and limited access to credit restrain the recovery. Photographer: Emile Wamsteker/Bloomberg

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Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month, the Commerce Department reported today in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low.

Falling borrowing costs may keep luring buyers to builders like Toll Brothers Inc. (TOL), even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a program to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion.

“It’s another sign of life in the housing sector,” said Brian Jones, a senior U.S. economist for Societe Generale SA in New York, who forecast a gain to 362,000. “It’s consistent with a gradual improvement in activity, but we’ve got miles to go before we get back to normal.”

Stocks dropped amid concern that a meeting of European leaders later this week will fail to help contain the region’s debt crisis. The Standard & Poor’s 500 Index dropped 1.6 percent to 1,313.72 at the 4 p.m. close in New York. The yield on the benchmark 10-year Treasury note fell to 1.60 percent from 1.68 percent late on June 22.

BIS Report

Elsewhere, the Basel, Switzerland-based Bank for International Settlements said in its annual report published yesterday that central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen finances fall short.

Bloomberg survey estimates for U.S. new-home sales, which are counted when contracts are signed, ranged from 327,000 to 375,000. The April reading was unrevised at the previously estimated 343,000, while March and February were revised up.

The median sales price increased 5.6 percent from the same month last year, to $234,500, today’s report showed. Prices have climbed on a 12-month basis since February, the best performance in five years.

Purchases rose in two of four U.S. regions last month, led by a 37 percent jump in the Northeast, while the South climbed 13 percent. Demand dropped 11 percent in the Midwest and 3.5 percent in the West.

Lean Supply

The number of newly constructed houses on the market was at 145,000 compared with the record low of 144,000 reached in April and March. The record high of 572,000 was reached in July 2006. The supply of new houses on the market at the current sales pace dropped to 4.7 months, the lowest since October 2005, from 5 months in April.

In response to improving demand, builders broke ground on 516,000 single-family houses last month at an annual pace, up 3.2 percent from April and the most this year, the Commerce Department reported last week.

The Washington-based National Association of Home Builders/Wells Fargo sentiment index rose by 1 point this month to 29, the highest since May 2007, another report last week showed.

Horsham, Pennsylvania-based Toll Brothers, the largest U.S. luxury-home builder, on May 23 reported second-quarter profit that beat estimates as orders jumped.

Suppliers Benefit

United Technologies Corp. (UTX) and Lennox International Inc. (LII), makers of heating and air conditioning units, are among companies benefitting from developers’ positive outlook. Lennox, based in Richardson, Texas, had a 40 percent increase in sales to new-home builders in the first quarter. United Technologies, in Hartford, Connecticut, forecasts about 700,000 housing starts this year, Chief Financial Officer Gregory Hayes said.

“The expectation is we’re not going to see a huge recovery in the U.S. residential marketplace, but we should see a steady recovery,” Hayes said at a June 14 conference. “Residential is coming back, but it’s very, very slow.”

The stabilization in housing has boosted builder shares this year. The Standard & Poor’s Supercomposite Homebuilder Index has climbed 33 percent this year through June 22, compared with a 6.2 percent gain for the broader S&P 500.

Residential construction hasn’t contributed to economic growth over the course of an entire year since 2005, when it accounted for 0.4 percentage point of the 3.1 percent increase in gross domestic product. From 2006 through 2009, the homebuilding slump subtracted 0.8 percent point from growth on average. The declines diminished over the past two years.

Shrinking Share

Newly constructed houses made up 6.7 percent of the residential market last year, down from a high of 15 percent during the boom of the past decade.

Sales of existing homes declined in May as fewer distressed properties reached the market, the National Association of Realtors reported last week. The decline in transactions involving foreclosures and short sales, where a lender agrees to accept less than the balance of the mortgage, helped push the median price of a previously owned house up 7.9 percent from the same time last year, the biggest 12-month gain since February 2006.

Less competition from existing houses and even lower mortgage rates may keep spurring the market. The average rate on a 30-year fixed loan dropped to 3.66 percent last week, the lowest in data going back to 1972, according to Freddie Mac.

The central bank last week aimed to keep borrowing costs low. Policy makers announced they will expand the Operation Twist program to extend the maturities of assets on its balance sheet. They said they stood ready to take further action to put unemployed Americans back to work. Fed officials also lowered their outlook for growth and employment.

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

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5 Real Estate Trends to Look For in 2012 and How they Pertain to Newton, MA.


Newton, MA. Realtor

5 Real Estate Trends to Look For in 2012

by THE KCM CREW on JANUARY 3, 2012

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

Yes, buyers are returning in droves, but only for property that has a real perception of value.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

There were more foreclosures in Newton during 2011, however there are not enough of them to have a significant impact here in Newton

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

  • They will eat up some of the buyer demand in the market.
  • They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

Again, Newton has been spared the foreclosure debacle for the most part. Appraisals continue to be stressful, greater responsibility is required from the Agents to come armed with comps. Many appraisers have never stepped foot in Newton before.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

Yes, there has been a noticeable increase in short sales. I believe this could impact the number of sales because these buyers for the most part are not moving up to larger homes. On the other hand, this is a supply and demand business, so less inventory usually means higher prices.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

Yes, this is already happening. The old way of doing business doesn’t cut it anymore. You need an agent who is:

1.tech savvy

2. hard-working

3. knowledgeable

4.well-respected by the rest of the real estate community

5. strong negotiation skills with the ability to communicate effectively….sometimes that means speaking to your clients and not just e-mailing or texting.

House Rrices: Where Will They Be in the Spring?


Newton, MA.

Reprinted from The KCM Crew

This post refers to the national real estate market, I believe the market here in Newton, Weston, Wellesley, MA. will remain relatively unchanged thru the spring.  If anything I see a slight dip in the 1st Q of 2012

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

  1. They don’t want to be inconvenienced during the holiday season.
  2. They believe that they will see more potential buyers and as a result will get a higher price.
  3. In the northern part of the country, they might not want people walking through the snow and then into their house.
  4. All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down  since October of last year, when the robo-signing controversy sparked a flurry  of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in  September and the third quarter continued to register well below levels from a  year ago, there is evidence that this temporary downward trend is about to  change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

  • Zillow believes we will not see a bottom in prices until the first quarter of 2012.
  • Standard & Poors thinks prices will drop %5 in the next few months.
  • JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
  •  Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

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