Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg.
The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.
More than likely, that era is gone for good.
“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.
Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up.
“People shouldn’t look at a home as a way to make money because it won’t,” Mr. Baker said.
If the long term is grim, the short term is grimmer. Housing experts are bracing themselves for Tuesday, when the sales figures for July will be released. The data is expected to show a drop of as much as 20 percent from last year.
The supply of homes sitting on the market might rise to as much as 12 months, about twice the level of a healthy market. That would push down prices as all those sellers compete to secure a buyer, adding to a slide that has already chopped off as much as 30 percent in home values.
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Thursday, August 26, 2010
Wednesday, August 25, 2010
Miami Existing Condominium Sales Rise 43 Percent
The Miami real estate market continues to strengthen as a result of increased sales and stabilizing home prices. In the Miami MSA, there was a 43 percent increase in condominium sales in July compared to July 2009 and a 112 percent increase compared to two years ago, when homes sales began climbing, according to the MIAMI REALTORSand the Southeast Florida Multiple Listing Service (SEFMLS).
The sales of existing single-family homes in the Miami MSA dropped eight percent in July compared to July 2009 but were 51.3 percent higher than they were in July 2008. The Miami real estate market experienced rising residential sales since August 2008, posting increases for 23 consecutive months. Condominium sales continue to increase. Statewide sales increased 11 percent for condominiums and dropped 14 percent for single-family homes.
Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 27.2 percent from the previous month, and are 25.5 percent below July 2009, according to the National Association of Realtors (NAR).
The median sales price for single-family homes in the Miami metropolitan statistical area (MSA) in July increased three percent to $199,300 compared to a year ago. The median sales price for condominiums in July was $110,500 down 20 percent from a year ago. Statewide median sales prices decreased seven percent to $138,000 for single-family homes and 20 percent to $87,200 for condominiums.
“While sales of single-family homes have slowed down after nearly two years of significant increases, sales of condominiums continue to rise and at a considerable pace,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI REALTORS. “This shows that there is demand for local properties, which should result in further strengthening into the future. We are encouraged by the performance of the local market and expect continued stabilization.”
Average Home Sales Price Increases
The average sales prices, which have increased consistently over the last few months, for residential properties rose again in July for single-family homes but dropped slightly for condominiums. According to the SEFMLS, the average sales price for residential properties that sold in Miami-Dade County in July increased 8.3 percent from the previous year to $294,479 for single-family homes and decreased 5.8 percent to $212,156 for condominiums.
Days on the Market and Inventory Levels Decrease
The inventory of residential listings in Miami-Dade County according to the SEFMLS has dropped 11.4 percent from 28,956 to 25,659 since July 2009. The number of active single-family home listings is 13 percent lower compared to a year ago, while active condominium listings have dropped 11 percent. Compared to last month, the total inventory of homes increased 1.9 percent. The average days a property stays on the market decreased 10.3 percent to 100 for single-family homes and 11.9 percent to 114 for condominiums.
Nationally, total housing inventory at the end of July rose 2.5 percent from the previous month.
“Demand for local properties, including multiple bidding reminiscent of the boom during the last decade, is driving values,” said 2010 MIAMI REALTORS Residential President Oliver Ruiz. “Median and average sales prices are rising, while condominium prices are expected to follow due to the considerable increase in sales.”
MIAMI REALTORS
The MIAMI Association was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents 23,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website iswww.miamire.com.
The sales of existing single-family homes in the Miami MSA dropped eight percent in July compared to July 2009 but were 51.3 percent higher than they were in July 2008. The Miami real estate market experienced rising residential sales since August 2008, posting increases for 23 consecutive months. Condominium sales continue to increase. Statewide sales increased 11 percent for condominiums and dropped 14 percent for single-family homes.
Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 27.2 percent from the previous month, and are 25.5 percent below July 2009, according to the National Association of Realtors (NAR).
The median sales price for single-family homes in the Miami metropolitan statistical area (MSA) in July increased three percent to $199,300 compared to a year ago. The median sales price for condominiums in July was $110,500 down 20 percent from a year ago. Statewide median sales prices decreased seven percent to $138,000 for single-family homes and 20 percent to $87,200 for condominiums.
“While sales of single-family homes have slowed down after nearly two years of significant increases, sales of condominiums continue to rise and at a considerable pace,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI REALTORS. “This shows that there is demand for local properties, which should result in further strengthening into the future. We are encouraged by the performance of the local market and expect continued stabilization.”
Average Home Sales Price Increases
The average sales prices, which have increased consistently over the last few months, for residential properties rose again in July for single-family homes but dropped slightly for condominiums. According to the SEFMLS, the average sales price for residential properties that sold in Miami-Dade County in July increased 8.3 percent from the previous year to $294,479 for single-family homes and decreased 5.8 percent to $212,156 for condominiums.
Days on the Market and Inventory Levels Decrease
The inventory of residential listings in Miami-Dade County according to the SEFMLS has dropped 11.4 percent from 28,956 to 25,659 since July 2009. The number of active single-family home listings is 13 percent lower compared to a year ago, while active condominium listings have dropped 11 percent. Compared to last month, the total inventory of homes increased 1.9 percent. The average days a property stays on the market decreased 10.3 percent to 100 for single-family homes and 11.9 percent to 114 for condominiums.
Nationally, total housing inventory at the end of July rose 2.5 percent from the previous month.
“Demand for local properties, including multiple bidding reminiscent of the boom during the last decade, is driving values,” said 2010 MIAMI REALTORS Residential President Oliver Ruiz. “Median and average sales prices are rising, while condominium prices are expected to follow due to the considerable increase in sales.”
MIAMI REALTORS
The MIAMI Association was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents 23,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. MIAMI’s official website iswww.miamire.com.
Tuesday, August 24, 2010
Tampa area home sales plummet 19 percent
TAMPA - The federal home buyer tax credit is over and, boy, does it show.
Sales were down a whopping 19 percent in July, compared to the same month last year. That follows a 13 percent increase in June.
Sales haven't dropped this much since Feb. 2008 when sales dropped 29 percent. Sales in the Tampa-St. Petersburg-Clearwater area haven't fallen at all since May 2009, when sales slid a modest 1 percent.
The credit – up to $8,000 for first-time buyers and $6,000 for repeat buyers – expired in April. That, combined with rising unemployment, is putting a damper on home buyer demand.
Economist worry it could get worse because the July data still reflects some of the boost given by the credit. Those taking advantage of the tax credit have until the end of September to close those deals.
There were 2,283 homes sold in July in the Tampa-St. Petersburg-Clearwater area, compared to 2,822 last year. The median sales price was $130,500, down 9 percent from $143,100 last July.
Nationally, sales fared even worse. Sales fell to the lowest level in 15 years.
The National Association of Realtors said July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million.
Sales were down a whopping 19 percent in July, compared to the same month last year. That follows a 13 percent increase in June.
Sales haven't dropped this much since Feb. 2008 when sales dropped 29 percent. Sales in the Tampa-St. Petersburg-Clearwater area haven't fallen at all since May 2009, when sales slid a modest 1 percent.
The credit – up to $8,000 for first-time buyers and $6,000 for repeat buyers – expired in April. That, combined with rising unemployment, is putting a damper on home buyer demand.
Economist worry it could get worse because the July data still reflects some of the boost given by the credit. Those taking advantage of the tax credit have until the end of September to close those deals.
There were 2,283 homes sold in July in the Tampa-St. Petersburg-Clearwater area, compared to 2,822 last year. The median sales price was $130,500, down 9 percent from $143,100 last July.
Nationally, sales fared even worse. Sales fell to the lowest level in 15 years.
The National Association of Realtors said July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million.
Florida Realtors to get $16 million for BP oil disaster
Florida real estate professionals will be eligible to receive payments for damages from the $20 billion oil spill fund established by BP, says Florida Realtors. Certain real estate claims for lost sales and loss of income were not included in the original rules established by Kenneth Feinberg, administrator of the Gulf Coast Claims facility. That changed after he had several meetings with Realtor organizations from Florida, Alabama, Mississippi, Louisiana and Texas. Feinberg agreed to a make special allocation that initially includes $16 million for damage claims from Florida. The allocation is available to all real estate professionals with active licenses at the time of the loss, not just Realtors. Florida Realtors have contracted with an independent national claims adjustment firm, Indiana-based NCA, to handle the claims.
Florida home sales fall, condo sales rise in July
Florida’s real estate market has been on a roller-coaster ride, with statewide sales of existing single-family homes falling 14 percent in July, to 13,589 from 15,762 a year ago.
A month ago, Florida Realtors reported statewide existing home sales in June had risen 15 percent, year-over-year, marking the 22nd consecutive month that sales activity had increased.
"The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, in a news release. "As we move past this second dip, which is evident in the July data, the continued recovery of the state's housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.”
Existing home sales also fell in all three South Florida metropolitan areas, with Fort Lauderdale taking the biggest hit – down 21 percent, to just 720 homes sold, from 907 in July 2009.
The median price there fell 5 percent, to $207,500 from $219,000.
Existing home sales in Miami slid 8 percent, to 593 homes sold in July from 643 a year ago. The median price, however, edged up 3 percent, to $199,300 from $192,700.
And, in West Palm Beach, existing home sales fell 7 percent, to 802 from 859, with the median price slipping 8 percent, to $226,000 from $245,200.
Existing condo sales fared better, rising 11 percent statewide, to 5,557 from 4,991. However, the median price plunged 20 percent, to $87,200 from $108,500.
Miami saw existing condo sales jump 43 percent, to 837 from 585. But the median price slid 20 percent, to $110,500 from $137,600.
West Palm Beach condo sales bumped up 16 percent, year-over-year, to 791 from 679. But the median price of an existing condo fell 15 percent, to $93,400 from $110,500.
Fort Lauderdale was the only South Florida metro area to see condo sales fall. It was down 12 percent, to 813 from 927. The median sales price of a condo there fell 8 percent, to $74,000 from $80,800.
Nationwide, existing home sales plunged 25.5 percent, year-over-year, in July, to a seasonally adjusted annual rate of 3.83 million units from 5.14 million in July 2009, and 27.2 percent from a downwardly revised 5.26 million in June, according to the National Association of Realtors.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” said Lawrence Yun, NAR’s chief economist, in a news release. “To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family home sales – accounting for the bulk of transactions – are at the lowest level since May 1995.
The national existing-home median price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales, accounting for 32 percent of transactions in July, up slightly from 31 percent in July 2009 and unchanged from June, according to NAR
Read more: Florida home sales fall, condo sales rise in July - South Florida Business Journal
A month ago, Florida Realtors reported statewide existing home sales in June had risen 15 percent, year-over-year, marking the 22nd consecutive month that sales activity had increased.
"The homebuyer tax credit expiration added a double dip to what has already been a harrowing ride in the Florida housing market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, in a news release. "As we move past this second dip, which is evident in the July data, the continued recovery of the state's housing market will be contingent upon the improvement of the fundamental underpinnings of the housing sector.”
Existing home sales also fell in all three South Florida metropolitan areas, with Fort Lauderdale taking the biggest hit – down 21 percent, to just 720 homes sold, from 907 in July 2009.
The median price there fell 5 percent, to $207,500 from $219,000.
Existing home sales in Miami slid 8 percent, to 593 homes sold in July from 643 a year ago. The median price, however, edged up 3 percent, to $199,300 from $192,700.
And, in West Palm Beach, existing home sales fell 7 percent, to 802 from 859, with the median price slipping 8 percent, to $226,000 from $245,200.
Existing condo sales fared better, rising 11 percent statewide, to 5,557 from 4,991. However, the median price plunged 20 percent, to $87,200 from $108,500.
Miami saw existing condo sales jump 43 percent, to 837 from 585. But the median price slid 20 percent, to $110,500 from $137,600.
West Palm Beach condo sales bumped up 16 percent, year-over-year, to 791 from 679. But the median price of an existing condo fell 15 percent, to $93,400 from $110,500.
Fort Lauderdale was the only South Florida metro area to see condo sales fall. It was down 12 percent, to 813 from 927. The median sales price of a condo there fell 8 percent, to $74,000 from $80,800.
Nationwide, existing home sales plunged 25.5 percent, year-over-year, in July, to a seasonally adjusted annual rate of 3.83 million units from 5.14 million in July 2009, and 27.2 percent from a downwardly revised 5.26 million in June, according to the National Association of Realtors.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year,” said Lawrence Yun, NAR’s chief economist, in a news release. “To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family home sales – accounting for the bulk of transactions – are at the lowest level since May 1995.
The national existing-home median price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales, accounting for 32 percent of transactions in July, up slightly from 31 percent in July 2009 and unchanged from June, according to NAR
Read more: Florida home sales fall, condo sales rise in July - South Florida Business Journal
Plunging home sales could sink recovery
NEW YORK (CNNMoney.com) -- With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.
Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.
0
diggs
diggEmail Print CommentThat credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.
Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.
5 most affordable cities to buy a house
The combination of weak demand and glut of homes has put downward pressure on prices.
And as the recession proved, the housing market and the broader economy are closely intertwined. When housing prices collapse, so does the overall wealth and confidence of Americans.
"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending," Dales said. "They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy.
The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
0:00 /2:30Chinese house flipping forms bubble
Though prices have yet to fall back, Dales expects they will decline about 5% from current levels over the next six months.
On the bright side, Dales said while a drop prices will put a dent in the economy recovery, it won't lead to another recession.
"The bulk of the downward adjustment in housing prices has been achieved over the last several years, so we're not headed for a complete disaster," said Dales. "We're going to see a double-dip in housing prices, but not a double-dip in the overall economy."
Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.
The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.
Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.
They fell by 25% in the West and 22.6% in the South.
Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.
0
diggs
diggEmail Print CommentThat credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."
The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.
Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.
5 most affordable cities to buy a house
The combination of weak demand and glut of homes has put downward pressure on prices.
And as the recession proved, the housing market and the broader economy are closely intertwined. When housing prices collapse, so does the overall wealth and confidence of Americans.
"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending," Dales said. "They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy.
The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
0:00 /2:30Chinese house flipping forms bubble
Though prices have yet to fall back, Dales expects they will decline about 5% from current levels over the next six months.
On the bright side, Dales said while a drop prices will put a dent in the economy recovery, it won't lead to another recession.
"The bulk of the downward adjustment in housing prices has been achieved over the last several years, so we're not headed for a complete disaster," said Dales. "We're going to see a double-dip in housing prices, but not a double-dip in the overall economy."
Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.
The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.
Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.
They fell by 25% in the West and 22.6% in the South.
Plunging home sales could sink recovery
http://money.cnn.com/2010/08/24/real_estate/existing_home_sales/
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