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US home sales shoot up to 10-year high

US home sales shoot up to 10-year high

US home sales shoot up to 10-year high

April 24, 2017/WASHINGTON (AP)(stlrealestate.news) — Americans purchased homes in March at the fastest pace in over a decade, a strong start to the traditional spring buying season.

Sales of existing homes climbed 4.4 percent last month to a seasonally adjusted annual rate of 5.71 million, the National Association of Realtors said Friday. This was the fastest sales rate since February 2007.

The U.S. housing market faces something of a split personality: A stable economy has intensified demand from would-be buyers, but the number of properties listed for sale has been steadily fading. The result of this trend is prices rising faster than incomes, homes staying on the market for fewer days and a limit on just how much home sales can grow. It’s a situation that rewards would-be buyers who can act quickly and decisively.

“The pace of sales we saw in March is unsustainable,” said Nela Richardson, chief economist at the brokerage Redfin. “Sales may be soaring, but inventory isn’t.”

The inventory shortage largely reflects the legacy of a housing bubble that began to burst a decade ago.

Foreclosed properties were snapped up by investors who turned the homes into income-generating rentals, depriving the market of supply. And many owners who escaped the downturn unharmed chose to refinance their mortgages at extremely low rates, possibly making them hesitant to move to a new house that could increase their monthly costs.

This mismatch between supply and demand can be seen in two simple figures tracked by the Realtors.

Sales have risen 5.9 percent over the past year, but the inventory of homes for sale has fallen 6.6 percent to 1.83 million properties. This means there are essentially more buyers chasing fewer properties.

The consequences can be seen in home values and days on the market. The median sales price in March climbed 6.8 percent over the past year to $236,400, significantly outpacing wage growth. And it took an average of 34 days to complete a sale, compared to 47 days a year ago.

In March, sales rose in the Northeast, Midwest and South but declined in the West.

It’s possible that more Americans are devoting their incomes to housing as retail sales have struggled in recent months, said Jennifer Lee, a senior economist at BMO Capital Markets.

“Although spending on doo-dads may have slowed, perhaps more of their funds are being directed towards housing,” Lee said.

Demand might increase further as mortgage rates began to dip in recent weeks.

Home loan costs had been climbing after President Donald Trump won the November election, under the belief that the government would engage in forms of stimulus such as tax cuts and greater deficits that could cause higher levels of inflation. But major initiatives such as tax reform have stalled in recent weeks as the administration has yet to put forward a proposal, prompting more doubts as to when and whether any stimulus might arrive.

Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. The average is now at its lowest level in five months.

JOSH BOAK, AP Economics Writer

US home sales shoot up to 10-year high

US home sales shoot up to 10-year high

WASHINGTON/April 21, 2017 (AP) (stlrealestate.news) — Americans purchased homes in March at the fastest pace in over a decade, a strong start to the traditional spring buying season.

Sales of existing homes climbed 4.4 percent last month to a seasonally adjusted annual rate of 5.71 million, the National Association of Realtors said Friday. This was the fastest sales rate since February 2007.

The U.S. housing market faces something of a split personality: A stable economy has intensified demand from would-be buyers, but the number of properties listed for sale has been steadily fading. The result of this trend is prices rising faster than incomes, homes staying on the market for fewer days and a limit on just how much home sales can grow. It’s a situation that rewards would-be buyers who can act quickly and decisively.

The inventory shortage largely reflects the legacy of a housing bubble that began to burst a decade ago.

Foreclosed properties were snapped up by investors who turned the homes into income-generating rentals, depriving the market of supply. And many owners who escaped the downturn unharmed chose to refinance their mortgages at extremely low rates, possibly making them hesitant to move to a new house that could increase their monthly costs.

This mismatch between supply and demand can be seen in two simple figures tracked by the Realtors.

Sales have risen 5.9 percent over the past year, but the inventory of homes for sale has fallen 6.6 percent to 1.83 million properties. This means there are essentially more buyers chasing fewer properties.

The consequences can be seen in home values and days on the market. The median sales price in March climbed 6.8 percent over the past year to $236,400, significantly outpacing wage growth. And it took an average of 34 days to complete a sale, compared to 47 days a year ago.

In March, sales rose in the Northeast, Midwest and South but declined in the West.

Demand might increase further as mortgage rates began to dip in recent weeks.

Home loan costs had been climbing after President Donald Trump won the November election, under the belief that the government would engage in forms of stimulus such as tax cuts and greater deficits that could cause higher levels of inflation. But major initiatives such as tax reform have stalled in recent weeks as the administration has yet to put forward a proposal, prompting more doubts as to when and whether any stimulus might arrive.

Mortgage buyer Freddie Mac said Thursday that the average interest rate on 30-year fixed-rate home loans declined to 3.97 percent this week from 4.08 percent last week. The average is now at its lowest level in five months.

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JOSH BOAK, AP Economics Writer

Regulators list many mortgage errors at Ocwen Financial

Regulators list many mortgage errors at Ocwen Financial

April 21, 2017 /(AP)(stlrealestate.news) Federal and state regulators say Ocwen Financial — one of the nation’s largest mortgage lenders that is not a bank — made numerous errors in the mortgages it serviced.

Ocwen disputes the allegations by the Consumer Financial Protection Board and calls them “politically motivated.”

Regulators cited items including that the company:

Relied on error-prone software to process and apply mortgage payments and maintain loan balance information, and instead of fixing the software used manual workarounds that generated more errors.

— Illegally foreclosed on at least 1,000 people. In those cases, they said, Ocwen sometimes foreclosed before reviewing borrowers’ applications for loss mitigation. In some cases, Ocwen requested more information from borrowers, but foreclosed before the deadline.

— Failed to properly credit numerous borrowers’ loan payments and failed to send accurate statements.

— Mismanaged escrow accounts for more than 75 percent of the 1.4 million loans it services. They said Ocwen failed to properly analyze some accounts because of its reliance on manually entering information.

— Failed to make timely home insurance payments that led to lapses in coverage for more than 10,000 borrowers.

— Neglected to properly investigate and respond to complaints about errors. Since April 2015, Ocwen received more than 580,000 complaints from over 300,000 different borrowers.

— Overcharged consumers roughly $1.2 million because Ocwen failed to cancel borrowers’ private mortgage insurance in a timely manner once the balance on their mortgages reached 78 percent of the property’s original value.

What goes into the appreciation of a house

What goes into the appreciation of a house

April 20, 2017 (stlrealestate.news) It’s natural to wonder what your home could be worth ten, twenty years into the future. American real estate prices have increased since the founding of the country, and becoming a master of appreciation and how to get the most for your house when the time comes is a special art form. Though different factors are popular for home value at different times, we’re going to look at the constants for quality home appreciation.

If the economy is strong, a home’s value is generally increased 3 to 4 percent every year, driven by natural inflation and natural population growth. From 2011 to 2016, the national housing market was recovering from the Great Recession at a slightly higher speed, with a 6.3 percent growth rate on average. Realtor.com wanted to provide an answer to appreciation with regards to futuristic home value, so they looked at this five-year period and calculated the annual price growth rate of homes with particular features. Though it’s difficult to pinpoint the actual point of appreciation, Realtor.com definitely uncovered from useful trends.

Small is huge right now: Smaller homes are actually appreciating faster than larger homes right now. Homes of less than 1,200 square feet have appreciated at 7.5 percent a year for the past five years. But, homes with more than 2,400 square feet are only inching up at 3.8 percent a year.

Bedroom consolidation: It’s not how many bedrooms you have, it’s how spacious the existing ones are. Americans are having fewer kids today, and they’re not interested in 7 small bedrooms. They want 3 beautiful rooms instead.

Floor space: Even if it’s a small home, people want to have access to space today. Fewer walls are better, and if a home has the ability to take down excess walls, it’s going to help it appreciate.

Real estate broker gets jail time for forging verdict slip

Real estate broker gets jail time for forging verdict slip

BOSTON/April 20, 2017 (AP) (stlrealestate.news) — A Boston real estate broker has been sentenced to a year in jail for tampering with a jury verdict slip from his earlier larceny conviction.

David Scher was sentenced Tuesday in Suffolk Superior Court.

Suffolk District Attorney Daniel Conley’s office said the 34-year-old Scher pleaded guilty to several charges, including perjury, forgery and tampering with a court document.

Scher was convicted of larceny in 2014 for stealing a laptop from Suffolk University Law School, where he had been a student. Prosecutors said he later replaced the verdict slip in his case file with a forgery that said “not guilty.”

Scher was sentenced to 2½ years in jail, with one year to serve and the balance suspended for a two-year probationary period.

His lawyer did not immediately return a call seeking comment.

New Mexico housing market on pace for record year

New Mexico housing market on pace for record year

ALBUQUERQUE, N.M./April 20, 2017 (AP)(stlrealestate.news) — Real estate agents say 2017 could be a record-setting year for New Mexico’s housing market.

The Realtors Association of New Mexico reports that 1,760 properties were sold in March, representing an increase of more than 6 percent over the same period last year.

The figures also show that 19 counties across the state reported an increase in sales for the first quarter over the first three months of 2016.

Association officials say inventory is still tight in many areas and homes that are priced right are going quickly and sometimes getting multiple offers. Median prices are also on the rise, up 4 percent statewide from last year at this time.

The group says property sales contributed over $1 billion to New Mexico’s economy during the first quarter.

US housing starts fell in March; still stronger than in 2016

US housing starts fell in March; still stronger than in 2016

WASHINGTON/April 19, 2017 (AP)(STLRealEstate.News) — U.S. builders broke ground on fewer homes in March, but the pace of construction so far this year remains stronger than in 2016.

Housing starts fell 6.8 percent last month to a seasonally adjusted annual rate of 1.22 million, the Commerce Department said Tuesday. The setback came after strong gains in a warmer-than-usual February. Groundbreakings on new homes are still 8.1 percent higher through the first three months of this year compared with 2016.

More Americans are seeking homes as job security has improved with low unemployment. But even with a wave of construction, a dwindling supply of new and existing homes across much of the country has threatened to become a major drag on the housing market.

Jennifer Lee, a senior economist at BMO Capital Markets, suggested that the March decline was likely temporary.

“Is it the start of a trend? Likely not, given the strong demand for housing and the low levels of inventory to choose from,” Lee said.

Despite a winter storm last month, housing starts increased in the Northeast largely because of apartment construction. The pace of groundbreakings tumbled in the Midwest, South and West.

The March decline was likely due in part to an unseasonably temperate January and February, which allowed builders to begin construction earlier.

“Much warmer-than-usual weather in the first two months of the year pulled starts forward into those months, and March — with more normal temperatures — saw the payback with declines in both single- and multifamily construction,” said David Berson, chief economist at Nationwide Mutual Insurance.

During the first three months of this year, construction of buildings with at least five units — mainly apartment complexes — has climbed 14.1 percent. Single-family housing starts have risen 5.9 percent.

More properties will likely begin construction in the coming months. Building permits, an indicator of future construction, rose 3.6 percent in March to an annual rate of 1.26 million.

U.S. homebuilders expect rising sales, though they have become somewhat less optimistic. The National Association of Home Builders/Wells Fargo builder sentiment index released Monday dipped to 68 this month from 71 in March. Readings above 50 indicate more builders view sales conditions as favorable rather than poor. The index has been above 60 since September.

But strengthening demand and builder sentiment have yet to generate enough construction to sufficiently boost the availability of homes. That trend could temper sales growth and weaken affordability, in part because the shortage of homes has pushed up prices.

There were 266,000 new homes for sale last month, up nearly 10 percent from a year earlier. But sales of new homes rose 13 percent over the past year.

Purchases of existing homes have also increased. Yet sales listings of existing homes dropped 6.4 percent over the past year to 1.75 million properties in February, a figure only slightly higher than in January when listings were at an all-time low.

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JOSH BOAK, AP Economics Writer

American homebuilders activity slows in March

American homebuilders activity slows in March

April 19, 2017 (STLRealEstate.News) The American construction industry has been very busy trying to keep up with real estate demand as of late.  Participating in unprecedented amounts of home-building since the Great Recession in 2016, the trend is expected to continue thoroughly throughout the year of 2017.  A survey of confidence among American home-builders did, however, fall a bit towards the end of March – but remains optimistic heading into the spring.  New data from the National Association of Home Builders came to the conclusion this past week.

The association also stated that its housing-market index fell by three points to 68 at the beginning of April.  The index reached 71 in March, its strongest reading since June 2005.  Economist went on to state that they do expect home-builder confidence for the month of April to hit 70, according to a poll that was conducted by Thomson Reuters.  Last month’s results in February were the highest on the index in the past 12 years as President Donald Trump has been viewed as having a significant impact on rolling back the regulations in the industry today.  The results have been hyperactive activity by industry companies.

In this same report put out by the association, the trade groups’ chief economist, Robert Dietz, stated, “there is continued demand for new construction – however, builders are facing several challenges right now, including hefty regulatory costs and ongoing increases in building material prices.  Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers.”

All three levels of the index did confirm a drop towards the end of March into early April but stated that they are maintaining healthy levels nonetheless.  The components measuring current sales fell three points, while index charting sales expectations dropped three points as well.

6 million jobs created by commercial real estate development last year

6 million jobs created by commercial real estate development last year

April 19, 2017 (STLRealEstate.News) We often think about what commercial real estate construction can do for business activity and the economy, but do we ever stop to consider what kind of job creation it can contribute to in our country?  According to an annual study, Economic Impacts of Commercial Real Estate, by the NAIOP Research Foundation, the development, construction, and ongoing operations within commercial real estate supported 6.25 million American jobs and contributed to $861 billion in the U.S. GDP during 2016 alone.

When broken down further, the report showed that this activity spurred the creation of 410 million square feet of office, retail, warehouse, and industrial properties with the combined capacity to host more than 1 million new workers whose salary, when put together, created $57.6 billion in revenue.  Among these states contributing to this turnover, New York led the pack with the highest level of commercial real estate development spending in 2016, at $24.8 billion, followed by Texas at $18.5 billion and California at $14.3 billion.

The report then looked at the different sectors of commercial real estate.  It found that office construction expenditures totaled $36.6 billion in 2016, increasing by 28.7 percent from 2015 and warehouse construction totaled $13.6 billion in 2016, registering a sixth consecutive year of increased expenditures. It gained 12.7 percent from the 2015 figure.

Not surprisingly, retail expenditures were down seven percent from 2015, while industrial construction spending also decreased a second year to $15.5 billion – a massive 29.9 percent decrease from 2015.

Thomas Bisacquino of NAIOP went on to state after the report release, “The importance of commercial real estate development to the U.S. economy is well established, and the industry’s growth is critical to creating new jobs, improving infrastructure, and creating places to work, shop, and play.  We look forward to the results for the end of 2017’s growth.”

Grocery store to open in St. Louis’ Dogtown

Grocery store to open in St. Louis’ Dogtown

ST. LOUIS, MO/April 19, 2017 (STLRealEstate.News) Developers of an apartment project in St. Louis’ Dogtown neighborhood this week announced they are in deep negotiations for opening a grocery store on the bottom floor of their proposed building.  The move, they argue, would be lucrative for both the residents of the building and surrounding community members looking to have more access to grocery shopping today.

Pearl Companies of Indianapolis already won neighborhood backing for the 100-unite apartment building at 6300 Clayton Avenue.  Dogtown residents this past January came together for a vote to support a zoning variance that would all the five-story structure to be built at the site of the former lumberyard.  Though materials that have been submitted to the St. Louis Tax Increment Financing Commission don’t specify the grocer, they do say the retailer is local and negotiations are ongoing.  This particular project would include 16,000 square feet of commercial space on the ground floor, a retail component all residents have expressed interest in since negotiations began.

It’s worth noting that community members opposed the prior plan that was proposed four years ago.  The new plan states that the grocery store would occupy the entire ground floor of the proposed building, according to documents submitted to the city.  To make it happen, the development company is seeking $3.8 million in TIF assistance for the $25.6 million project.  This same project is also calling for 127 underground parking spaces for all of the building residents.  Almost 90 of the 100 apartments would be either bedrooms or studios, with the remainder being left for two-bedroom apartment construction.

If all continues according to the plan, these developers will have no problem erecting their Dogtown apartment complex, equipped with a full-scale grocery store in the bottom and underground parking spaces that make this place one surely to be sought after.