Home starts and sales running at half speed: Standards and Poor’s

May 6, 2011 By Leave a Comment

Friday, May 6th, 2011, 9:56 am

[dropcap2]S[/dropcap2]tandard & Poor’s expects about 320,000 new home sales and 470,000 housing starts this year — about half the historical average.

James Fielding, a senior housing director at S&P, made that assessment in a video posted on the ratings agency website.

This performance is running at half the historical average, he said.

Fielding added that times are especially challenging for homebuilders. U.S. homebuilders got off to a slow start in 2011, as severe winter storms significantly hindered sales, S&P said. However, the inclement weather may have been the least of the sector’s problems, as many players face heavy debt loads, fierce competition from existing, distressed homes on the market, and a sluggish economic recovery.

“We think in this environment it is going to be very difficult for homebuilders to be profitable,” Fielding said, adding that ratings upgrades in the sector are unlikely unless the companies can recapitalize.

Some homebuilders are employing strategies that will likely help the firms profit, or keep liquidity flowing such as reducing debt, and cutting overhead so that even at low volume they can break even.

SOURCE: Housing Wire

Filed Under: Market Update Tagged With: ,

Home Prices Edge Closer to 2009 Lows According to the S&P/Case-Shiller Home Price Indices

April 27, 2011 By Leave a Comment

New York, April 26, 2011 – Data through February 2011, released today by S&P Indices for its S&P/Case-Shiller1 Home Price Indices, the leading [pullquote_right]As of
February 2011, average home prices across the United States are back to the levels where they were in the
summer of 2003.[/pullquote_right]measure of U.S. home prices, show prices for the 10- and 20-city composites are lower than a year ago but still slightly above their April 2009 bottom.

The 10- City Composite fell 2.6% and the 20-City Composite was down 3.3% from February 2010 levels. Washington D.C. was the only market to post a year-over-year gain with an annual growth rate of +2.7%.

Ten of the 11 cities that made new lows in January 2011 saw new lows again in February 2011

To read the complete “Press Release” click here

Filed Under: Profiles and Surveys Tagged With: , , , , , ,

Listing Expired – House still unsold? Part 2: What it takes to sell in todays market

March 13, 2011 By Leave a Comment

Pricing is a critical element in offering a home for sale, and unfortunately it’s often done wrong. Sometimes that’s the agent’s fault, and sometimes it’s the homeowner’s.

We’ll start with the agent. The sad truth is that some agents try to “buy listings” by promising homeowners unrealistic prices. They say they can get a higher price than anyone else can… which is nonsense. The market determines the price.

The only way to price a home correctly is to first compare it honestly with recent sales of homes that are very similar in size, location, amenities, and condition. Then, because the market is constantly changing, it needs to be compared to homes currently for sale. In other words, compare it to the competition.

Over pricing a home can create a greater loss for a homeowner than under-pricing it, for several reasons:

Buyers who can afford a home in your proper price range never see it, because MLS searches won’t show it. (Buyers looking in the $250,000 to $300,000 range never see homes listed at $309,000!)

[pullquote_left]It doesn’t matter what the agent or seller thinks or believes, “The Market Always Determines The Price”[/pullquote_left]Buyers who can afford homes at your price will reject it

The house becomes “stale on the market” and savvy buyers who ask how long a home as been for sale may reject it without ever viewing, believing that “something must be wrong with it.”

The result: The home stays on the market too long, forcing the sellers to continue making payments while their future plans are delayed. Often, in order to sell a “stale” listing, the price must be dropped below its proper price.

Agents aren’t always the only ones at fault. Sometimes homeowners insist on listing at the wrong price, and inexperienced or insecure agents will agree. A really top agent will not, because he or she will know that an over priced listing will cost both time and marketing dollars – and won’t result in a sale.

The online MLS market analysis tool is a great starting point. But a true market analysis must be done by an agent who has seen your home – knows the local market and the homes he or she will use for comparison.

If you’d like to know what your home is really worth in today’s market, give me a call at 208.720.6888. I’ll be happy to prepare a true market analysis for you.

 

Filed Under: Advertising, Expired Listings, Internet, Marketing, Photography, Selling Tagged With: , , , , , , , , , , , , , ,

Freddie Mac: U.S. home prices drop 4.3% in fourth quarter

February 28, 2011 By Leave a Comment

February 28, 2011

U.S. home prices fell 4.3% on a year-over-year basis in the fourth quarter as foreclosures and slowing sales buoyed inventory levels, Freddie Mac said Monday in its Conventional Mortgage Home Price Index.

“Foreclosed-property and short sales remain a big part of the market. However, new foreclosures will begin to gradually slow,” said Frank Nothaft, Freddie Mac’s chief economist. “Delinquency rates reported by the Mortgage Bankers Association continue to recede from their peaks but remain high, particularly in distressed areas of the country.”

Home prices fell in every U.S. geographical region in the fourth quarter, with the steepest declines occurring in the Mountain region, where home values fell more than 4%. The region includes the states of Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming.

News Facts
  • The Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series for the United States registered a 2.6 percent decrease (-10.1 percent annualized) in the fourth quarter relative to the third quarter on a not-seasonally-adjusted basis. U.S. home values fell 4.3 percent relative to the fourth quarter a year ago.
  • Home values fell in all nine Census Divisions.
  • The revised change in home values for the third quarter of 2010 is a decline of 2.2 percent (-8.5 percent annualized) relative to the second quarter of 2010 and a decrease of 3.3 percent relative to the third quarter of 2009.
  • The CMHPI Classic Series, which includes data on both home purchase values and appraisals, indicated that average U.S. home values fell 0.8 percent (-3.3 percent annualized) during the fourth quarter. Comparing the fourth quarter of 2010 with the fourth quarter of 2009, the Classic Series shows 1.1 percent depreciation.
Quotes

[pullquote_right]“Low mortgage rates and home prices have combined to push homebuyer affordability to levels not seen in decades in most places. This high affordability will likely translate into an increase in 2011 home sales relative to last year.”[/pullquote_right]Attributed to Frank Nothaft, Freddie Mac Chief Economist

  • “Low mortgage rates and home prices have combined to push homebuyer affordability to levels not seen in decades in most places. This high affordability will likely translate into an increase in 2011 home sales relative to last year.”
  • “Foreclosed-property and short sales remain a big part of the market. However, new foreclosures will begin to gradually slow. Delinquency rates reported by the Mortgage Bankers Association continue to recede from their peaks but remain high, particularly in distressed areas of the country.”
Regional Summary

The CMHPI Purchase-Only Series had the following regional house-price changes:

  • Middle Atlantic Division (NJ, NY, PA): decreased 1.1 percent (−4.4 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 1.7 percent, and during the last five years, home values decreased 0.6 percent.
  • East North Central Division (IL, IN, MI, OH, WI): fell 2.2 percent (−8.3 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 2.9 percent, and during the last five years, home values decreased 12.4 percent.
  • East South Central Division (AL, KY, MS, TN): fell 2.2 percent (−8.5 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 3.9 percent, and during the last five years, home values increased 1.5 percent.
  • West South Central Division (AR, LA, OK, TX): fell 2.4 percent (−9.2 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 2.1, and during the last five years, home values increased 8.4 percent.
  • New England Division (CT, MA, ME, NH, RI, VT): decreased 2.3 percent (-8.8 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 1.8 percent, and during the last five years, home values declined 11.7 percent.
  • South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): declined 2.8 percent (−10.6 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 5.7 percent, and during the last five years, home values fell 16.9 percent.
  • West North Central Division (IA, KS, MN, MO, ND, NE, SD): decreased 2.8 percent (−10.9 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 3.8 percent; over the last five years, home values fell 5.3 percent.
  • Pacific Division (AK, CA, HI, OR, WA): fell 3.8 percent (−14.4 percent, annualized) in the fourth quarter of 2010. Over the last 12 months, home values decreased 6.3 percent, and during the last five years, home values have decreased 26.7 percent.
  • Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): decreased 4.3 percent (−16.0 percent, annualized) in the fourth quarter of 2010. In the last 12 months, home values decreased 9.6 percent; during the last five years, home values declined 20.0 percent.
Conventional Mortgage Home Price Index Announcement
  • The CMHPI will be discontinued after this release. In its place, the Freddie Mac House Price Index (FMHPISM) will be released each quarter. The FMHPI release is planned to be coincident with, or shortly after, Freddie Mac’s release of its quarterly earnings.

via Home Values Decline in Fourth Quarter – News Archive – Freddie Mac.

Filed Under: Market Update, Profiles and Surveys Tagged With: , , , , , , , , ,
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