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Wednesday, February 24, 2021

U.S. Home Prices Up 10.1% in Dec. – Highest Since 2014

 By Paul Wiseman

Fueled by low-interest rates and high buyer demand, home prices surged 10.1% higher year-to-year in Dec., according to the Case-Shiller 20-city home price index.

WASHINGTON (AP) – U.S. home prices surged at the fastest pace in nearly seven years in December, fueled by low mortgage rates and Americans moving from crowded urban areas to houses in the suburbs.

The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, climbed 10.1% in December from a year earlier. The year-end jump was the biggest since April 2014 and follows a strong 9.2% year-over-year gain in November.

Home prices climbed 14.4% in Phoenix, 13.6% in Seattle, and 13% in San Diego in December. But prices rose all over. Chicago, which recorded the slowest price gain, saw a 7.7% uptick. Detroit was not included in the year-over-year figures because of record-keeping delays caused by the coronavirus pandemic.

“These data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, global head of index investment strategy at S&P DJI.XX. But he said it was unclear whether the trend would last.

Prices have also been pushed up by the limited supply of homes on the market.

“With mortgage rates remaining relatively low and the wave of eager buyers continuing to swell, it’s unlikely that this competition for housing, and subsequent strong price appreciation, will meaningfully abate in the near future,” said Matthew Speakman, an economist at the real estate firm Zillow.

Homebound consumers are also sprucing up their living quarters. Commenting on a year-end surge of revenue and earnings at Home Depot, Neil Saunders of GlobalData calculated that Americans each spent the equivalent of $402 last year at the home-improvement giant.

The housing market has been resilient throughout the coronavirus pandemic, helped by rock-bottom rates on home loans. The average rate on the benchmark 30-year, fixed-rate mortgage ticked up to 2.81% last week from 2.73% but remains well below where it was a year earlier: 3.49%.

But the Commerce Department reported last Thursday that U.S. home construction fell 6% in January, dragged down by a 12.2% drop in construction of single-family homes; apartment construction climbed 16.2%. Still, applications for building permits, which typically signal where home building is headed, rose sharply in January.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Monday, February 22, 2021

Florida"s Housing Market Continues Strong in January 2021

By Marla Martin 

Florida Realtors’ data: Single-family home sales rose 18% year-over-year, median sales price up 15.1%; condo sales up 24.6%, median price up 15%. Chief Economist O’Connor: Closed sales in Jan. were “way, way above our historical average,” which is likely for most, if not all, of 2021.

ORLANDO, Fla. – Florida’s housing market continued to show momentum in January even with the ongoing pandemic, with more closed sales, rising median prices, more new pending sales and increased pending inventory compared to a year ago, according to Florida Realtors® latest housing data. Single-family existing-home sales rose 18% compared to a year ago.

“2021 began with the same market conditions we saw over the previous months, such as very low mortgage rates, high buyer demand and a lack of inventory,” said 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “This shortfall in inventory continues to put pressure on home prices. However, new pending sales increased 16.9% for single-family existing homes last month compared to January 2020, while new pending sales for condo-townhouse units rose 32% year-over-year.”

In January, closed sales of single-family homes statewide totaled 21,587, up 18% year-over-year, while existing condo-townhouse sales totaled 9,608, up 24.6% over January 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales price for single-family existing homes was $305,000, up 15.1% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $230,000, up 15% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor noted that Florida’s housing market kicked off 2021 on a strong note.

“Eighteen percent year-over-year growth in single-family sales and 25% growth in condo and townhouse sales is way, way above our historical average – and we will likely remain well above our historical average for most, if not all, of 2021,” he said. “The primary reason is that mortgage rates will likely remain quite low for the duration of the year. The Federal Reserve has repeatedly signaled it intends to pursue a monetary policy agenda that ensures this will be the case.

“That said, economic forecasters have reached something of a consensus that mortgage rates have finally reached a bottom. Interest rates are, of course, notoriously difficult to forecast, so you never really can be sure exactly where they’ll be 12 months from now – then again, it’s a reason to take notice when everyone’s forecasts actually agree on something. However, there is still some mild disagreement among prominent forecasters in terms of how fast rates will rise from here – although no one is currently predicting rates are going to rise too significantly.”

Taking a look at the supply side of the market, last year’s decline in active listings of existing homes for sale continued into January 2021, according to O’Connor.

He added, “To be clear, I’ve pointed out that year-over-year growth in new listings – at least on a statewide basis – was positive over the second half of 2020. It’s just the pace of sales has been so frenetic that these new listings have not replaced enough of our inventory to reverse the trend. However, in January 2021, new listings of single-family homes were down over 10% year-over-year in what is normally a strong month for new listings. Likewise, new listings of condos and townhouses were down statewide by almost 7%. We’ll need to keep an eye on new listings for the next few months to see if this is really a downshift or just a one-time decline.”

On the supply side of the market, inventory (active listings) continued to be constrained in January. Single-family existing homes were at a very restricted 1.6-months’ supply while condo-townhouse inventory was at a 3.9-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.75% in January 2021, significantly lower than the 3.62% average during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

© 2021 Florida Realtors®

Thursday, February 18, 2021

More than half of homes sell within two weeks

By Kerrie Kennedy - February 17, 2021 

A new report from Redfin shows how inventory shortages are driving a chain reaction that includes accelerating home prices, unprecedented competition and surprisingly, the suppression of much-needed new listings.

The Seattle-based real estate brokerage looked at key metrics across more than 400 U.S. metropolitan areas during the 4-week period ending February 7.

According to the report, the median home sale price in the U.S. increased 15% year over year to $318,750, while asking prices of newly listed homes hit a new all-time high of $334,770, up 10% from the same time a year ago.

In a typical year, asking prices do not surpass the previous year’s peak until March.

But determined buyers are not letting rising prices stop them. Pending home sales during that 4-week period were up 29% year over year.

For the week ending February 7, the seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—was up 63% from the same period a year ago.

Buyers are also buying more quickly to get ahead of the competition. The report showed that 52% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 43% rate during the same period a year ago.

This is the first time the four-week average has surpassed 50% since at least 2012 (as far back as Redfin’s data for this measure goes). During the week ending February 7, the rate was 57%.

Homes across the country are also selling for close to listing prices. The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased slightly to 99.3%—1.6 percentage points higher than a year earlier.

Meanwhile, new listings of homes for sale were down 11% from a year earlier.

Active listings (the number of homes listed for sale at any point during the period) fell 37% from 2020 to a new all-time low.

“There is a serious lack of new listings, and although prices are through the roof, homeowners are reluctant to sell, because it’s so hard to buy again unless you are moving to a less expensive area where you can afford to outbid other buyers,” said Redfin chief economist Daryl Fairweather in the report. “Sellers who are concerned about finding their next home are asking buyers for a rent-back agreement, which allows the seller to stay in the home until they can move into their next one. Offering a rent-back agreement can also be a winning strategy for buyers with flexible timelines.”

Friday, February 12, 2021

NAR: All Metro Areas Saw Home Prices Rise in 4Q 2020

NAR: All Metro Areas Saw Home Prices Rise in 4Q 2020

Of those metros, 88% (161 areas) saw double-digit price increases. Two Fla. metros were among the 10 highest price gainers: Naples at 29.9% and Crestview at 28.6%.

WASHINGTON – Every metro area tracked by the National Association of Realtors® (NAR) through the fourth quarter of 2020 witnessed home prices grow from a year ago, according to NAR’s latest quarterly report.

Eighty-eight percent of the metros NAR follows (161 areas) saw double-digit price increases. For comparison, only 115 metro areas saw such growth in the third quarter.

“The fourth quarter of 2020 presented circumstances ripe for home price increases,” says NAR Chief Economist Dr. Lawrence Yun. “Mortgage rates reached record lows, thereby driving up the demand. At the same time, inventory levels also reached record lows, leading to grim inventory conditions of insufficient supply in the fourth quarter.”

The highest price gainers were Bridgeport, Conn. (39.2%); Pittsfield, Mass. (32.2%); Atlantic City, N. J. (30.0%); Naples, Fla. (29.9%); Barnstable, Mass. (28.9%); Crestview, Fla. (28.6%); Boise City, Idaho (27.1%); Binghamton, N.Y. (24.4%); Kingston, N.Y. (24.2%); and Spokane, Wash. (23.6%). National destination sites such as Atlantic City, Barnstable, and Naples, along with small towns within driving distance from major cities like Binghamton and Kingston in New York, all saw large price increases, an indication of the strong demand for vacation homes and affordable homes during the ongoing pandemic.

“Although tourism took a major hit overall throughout 2020, our data shows that vacation housing still did well in terms of sales,” Yun says. “Many people purchased in these areas because they found themselves with new work-from-home freedoms.”

Eight places in the West region, along with two areas in the East, combined for the 10 most expensive metros in the fourth quarter. This included San Jose, Calif. ($1.40 million); San Francisco, Calif. ($1.14 million); Anaheim, Calif. ($935,000); Urban Honolulu, Hawaii ($902,500); San Diego, Calif. ($740,000); Los Angeles, Calif. ($688,700); Boulder, Colo. ($661,300); Seattle, Wash., ($614,700); Nassau, N.Y. ($591,600); and Boston, Mass. ($579,100). With the exception of Boulder, these same metros – the most expensive markets – all saw double-digit growth in median single-family existing-home sale prices.

The national median existing single-family home price rose 14.9% on a year-over-year basis, to $315,900. All regions experienced double-digit year-over-year price growth. The Northeast led this charge at 20.7%, followed by the West at 15.5%, the Midwest at 15.1% and finally the South at 14.0%.

While home sellers benefited from the fourth quarter price increases, Yun says the large shifts in home prices could soon become detrimental to homebuyers.

“The average, working family is struggling to contend with home prices that are rising much faster than income,” he says. “This sidelines a consumer from becoming an actual buyer, causing them to miss out on accumulating wealth from homeownership.”

Nonetheless, Yun notes that low mortgage rates are helping many buyers afford their monthly mortgage payments. In the fourth quarter of 2020, a family needed an income of $49,908 to cover a 30-year fixed-rate mortgage with 20% down payment affordably, which is only slightly higher than the income required to afford a home one year ago ($48,960 in 2019’s fourth quarter). In a majority of metro areas – 130 of the 183 metro areas NAR tracked – a family needed less than $50,000 to pay their mortgage (71% of metros; 69% in 2020 Q3).

However, in seven metro areas, NAR found that a family needed more than $100,000 to buy a house. This was the case in San-Jose-Sunnyvale, Calif. ($222,989); San Francisco, Calif. ($181,576); Anaheim, Calif. ($148,925); Urban Honolulu, Hawaii ($143,748); San Diego, Calif. ($117,865); Los Angeles, Calif. ($109,694); and Boulder, Colo. ($105,330).

On average, families typically spent 14.8% of their income on mortgage payments based on a median family income of $84,313 in the fourth quarter (14.9% one year ago) if assuming a 20% down payment mortgage. With higher home prices, the monthly mortgage payment marginally rose to $1,040 ($1,020 one year ago). This is the case even as the effective 30-year fixed mortgage rate decreased to 2.81% in the fourth quarter of 2020 (3.76% one year ago). 

© 2021 Florida Realtors®

Tuesday, January 26, 2021

Census Analysis: In Population Growth, Florida is Number 2 in the Nation

By Kerry Smith

An analysis by Pew Charitable Trusts: 16 states’ populations have declined since the Great Recession, but the big winners are Texas (up 374K) and Fla. (up 241K).

WASHINGTON – Americans aren’t afraid to relocate. An analysis of U.S. Census Department data by Pew Charitable Trusts looked at state-to-state migrations since the Great Recession (2010-2020). While the U.S. population grew about 7%, 16 states’ populations declined, with Florida one of the top destinations for relocating Americans.

Only Texas gained more people by about 374,000, according to the analysis. Florida ranked second with a net gain of about 241,000.

Three states – California, Massachusetts and Ohio – spent most of the last decade growing only to see their population decline during 2020.

Three other states – Michigan, New Jersey and Pennsylvania – saw a drop in their number of residents go down for the first time in 2019.

The remaining 10 states – Alaska, Connecticut, Hawaii, Illinois, Louisiana, Mississippi, New York, Rhode Island, Vermont and West Virginia – started their slow population decline earlier.

While the numbers are based on Census Bureau figures, the Pew Charitable Trust says 2020 numbers were not based on the latest Census. The Census counts, once confirmed, will determine which states gain more representation in the House of Representatives and Electoral College.

Still, researchers say the 16 states with a lower population may be entering a period of economic stagnation.

Source: Dan McCue, The Well News

© 2021 Florida Realtors®

Monday, January 25, 2021

Strong gains in Florida's Real Estate Market

 

Fla.’s Housing Market: Strong Gains in Dec. Despite Pandemic

Florida Realtors Dec. data: More closed sales (single-family sales up 21%, condo-townhouse sales up 27.7%), more new pending sales, higher median prices and more new listings year-over-year. Chief Economist O’Connor: Higher pending sales “strongly signal” higher closed sales into 2021.

ORLANDO, Fla. – Despite the ongoing pandemic and a still struggling jobs outlook, Florida’s housing market in December showed more closed sales, more new pending sales, higher median prices and more new listings compared to a year ago, according to Florida Realtors® latest housing data. Single-family existing home sales rose 21% compared to a year ago.

“The strength and resilience of Florida’s housing market in 2020 has been remarkable – even with the challenges caused by the ongoing global pandemic and the resulting economic turmoil, the market in December ended on a high note,” says 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Mortgage rates remain historically low and there’s great interest from buyers throughout the state. However, a continued shortage of for-sale inventory is having an impact on prices and attainable, affordable housing.”

In December, closed sales of single-family homes statewide totaled 30,478, up 21% year-over-year, while existing condo-townhouse sales totaled 12,752, up 27.7% over December 2019. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in December for 108 consecutive months. The statewide median sales price for single-family existing homes was $309,000, up 14.4% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $230,000, up 13.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor noted that December’s closed sales for existing single-family homes was the second highest total for any month in 2020.

“Last winter we were on pace to have one of the best years on record in residential real estate,” he said. “The pandemic dashed those dreams in March, of course, but the housing market has since come roaring back – right now a lot of the right factors are in place for us to get off to another really strong start in 2021. New pending sales of single-family homes were up 30.7% year-over-year in December, while new pending condo and townhouse sales were up 42.6%, which strongly signals that we’re going to see this surge in closed sales continue into at least the first couple of months of this year.”

O’Connor added, “For all of 2020, we ended up with almost 6% more closed single-family home sales across the state than in 2019. But our current rate of sales is better exemplified by what took place during the second half of 2020, with single-family home sales marking an 18% year-over-year increase. And December’s strong finish for condo and townhouse sales put its annual total for 2020 ahead of its 2019 total by 2.5%.”

The state’s luxury market led the way throughout the second half of 2020, O’Connor noted, and coupled with the overall increase in home value appreciation across the board during that time, it resulted in a dollar volume of sales in 2020 that was far greater than in 2019.

“The dollar volume of closed single-family home sales rose by 22.5% in 2020 to nearly $125 billion,” he said. “Closed sales in the condo and townhouse category, meanwhile, ended the year with an annual total dollar volume in excess of $36 billion, for an increase of just under 14%.”

New listings statewide increased year-over-year in both property type categories in December, up 10% for single-family existing homes and 11.4% for condo and townhouse units.

On the supply side of the market, inventory (active listings) remained restricted, particularly in the single-family existing home category, which was at a very limited 1.8-months’ supply in December. Condo-townhouse inventory was at a 4.2-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.68% in December 2020, significantly lower than the 3.72% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

© 2021 Florida Realtors®