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Midyear Update: Flat Forecast for Home Sales This Year

May 20, 2018 by

For the foreseeable future, the housing market will be plagued by scarce supply, according to presenters at the 2018 REALTORS® Legislative Meetings & Trade Expo, held recently in Washington, D.C.

With the economy and employment encouraging growth, home sales will be subdued, though still on an uphill track, according to National Association of REALTORS® (NAR) Chief Economist Lawrence Yun, who discussed the market during the Residential Economic Issues and Trends Forum. A forecast by Yun projects 5.6 million sales in 2018—a 1.8 percent increase—and another 5.7 million in 2019. Home sales were up 1.1 percent in 2017 and 3.8 percent in 2016, according to NAR.

“Overall fundamentals remain solid, driven by a growing economy and steady job creation, which will sustain home sales in 2018 slightly above last year’s pace,” Yun said. “The worsening housing shortage means home prices are primed to rise further this year, too, hindering affordability conditions for homebuyers in markets across the country.”

Affordability is at its lowest in six years, according to the NAR Housing Affordability Index, and is expected to worsen. The disparity between earnings and home prices is severe: incomes increased 15 percent from 2011 to 2017, while home prices rose 48 percent. Affordability will be further tightened by increasing mortgage rates, which Yun expects will rise to 4.6 percent by year-end.

“Challenging affordability conditions have prevented a meaningful rise in the homeownership rate after having fallen to a 50-year low a few years ago,” said Yun. “To increase homeownership, more home construction is needed, which could be boosted by delivering regulatory relief to community banks, removing the lumber tariff, re-examining stringent zoning laws and training more workers for the construction industry.”

According to the forecast, ground-breaking is projected to reach 1.3 million starts in 2018, and 1.4 million starts in 2019—hardly an inroad.

The biggest cohort of homebuyers—millennials—are particularly struggling, with homes in their price point all but swallowed up, said Danielle Hale, chief economist at realtor.com®, who joined Yun. According to data from realtor.com®, there are 250,000 less properties in the starter tier (priced under $ 200,000) today than there were in 2015.

There is a brighter horizon, however.

“We are starting to see new listings grow in recent months,” Hale said. “The inventory shortage isn’t over—it took us years to get into an inventory rut, so it’s going to take us years to get out of it—but we do see signs of a turnaround.”

Hale and Yun were also joined by Jessica Lautz, director of Demographics and Behavioral Insights at NAR. According to Lautz, African American and Hispanic/Latino individuals, as well as those with college debt, are more challenged than others when it comes to homeownership.

“The homeownership rate amongst some ethnic groups hasn’t rebounded since the recession, and the ongoing affordability crisis has hampered potential buyers under 35, especially those with student debt, from accessing mortgage credit and making home purchases,” Lautz said.

For more information, please visit www.nar.realtor.

DeVita_Suzanne_60x60Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Zillow Posts Banner Year. Did You?

Feb 12, 2018 by

Zillow Posts Banner Year.  Did You?

The post Zillow Posts Banner Year. Did You? appeared first on National Real Estate Post.

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Existing-Home Sales: A Dim End to a Bright Year

Jan 24, 2018 by

Existing-home sales in December dimmed, but, for the year, were at a record not seen in 11 years, the National Association of REALTORS® (NAR) reports.

Existing-home sales in December totaled 5.57 million, a 3.6 percent decrease from November, but a 1.1 percent increase from one year prior. Inventory decreased 11.4 percent to 1.48 million, 10.3 percent lower than one year prior.

“Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” says Lawrence Yun, chief economist at NAR. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.

“Closings scaled back in most areas last month for this same reason,” Yun says. “Affordability pressures persisted, and the pool of interested buyers at the end of the year significantly outweighed what was available for sale.”

“Last year was a banner year for home sales,” says Joseph Kirchner, senior economist for realtor.com®. “Strong employment and millennial demand pushed them to their highest level in 11 years. The drop we saw in December home sales is not surprising after the spikes we’ve seen over the last two months. Many unsuccessful summer buyers stayed in the market well into the fall, which led to higher October and November sales. Unfortunately, the fall frenzy didn’t leave much for December buyers, which is what you’re seeing in [these] numbers. You can’t buy a home if there’s nothing to buy.”

“Excluding the run-up to the housing bubble, last year was the best year for home sales so far,” says Ruben Gonzalez, economist for Keller Williams. “The current strength of the employment situation and consistent economic growth leads us to believe that the fundamentals driving demand for homes in 2018 will remain strong. Low inventory remains an issue for existing homes and may constrain sales if it persists throughout the year. We have seen persistent but slow improvement in construction of new homes, but so far demand for existing homes continues to outpace the addition of new inventory, especially in the entry-level price ranges. Overall, we look forward to 2018 being another strong year for home sales, likely similar in magnitude to the previous two years.”

Inventory is currently at a 3.2-month supply. Existing homes averaged 40 days on market in December, 12 days less than one year prior. All told, 44 percent of homes sold in December were on the market for less than one month.

“The lack of supply over the past year has been eye-opening, and is why, even with strong job creation pushing wages higher, home price gains—at 5.8 percent nationally in 2017—doubled the pace of income growth and were even swifter in several markets,” says Yun.

The metropolitan areas with the fewest days on market and most realtor.com views in December, according to realtor.com’s Market Hotness Index, were San Jose-Sunnyvale-Santa Clara, Calif., San Francisco-Oakland-Hayward, Calif., Vallejo-Fairfield, Calif., Colorado Springs, Colo., and Stockton-Lodi, Calif.

The median existing-home price for all types of houses (single-family, condo, co-op and townhome) was $ 246,800, a 5.8 percent increase from one year prior. The median price for an existing single-family home was $ 248,100, while the median price for an existing condo was $ 236,500.

Single-family existing-home sales came in at 4.96 million in December, a 2.6 percent decrease from 5.09 million in November and a 1.0 percent increase from 4.91 million one year prior. Existing-condo and -co-op sales came in at 610,000, an 11.6 percent decrease from November and a 1.7 percent increase from one year prior.

Twenty percent of existing-home sales in December were all-cash, with 16 percent by individual investors. Five percent were distressed.

All four of the major regions had lower sales in December, with existing-home sales falling 7.5 percent to 740,000 in the Northeast, with a median price of $ 261,400; 6.3 percent to 1.33 million in the Midwest, with a median price of $ 191,400; 1.7 percent to 2.30 million in the South, with a median price of $ 221,200; and 1.6 percent to 1.20 million in the West, with a median price of $ 367,400.

First-time homebuyers comprised 32 percent of existing-home sales in December, up from 29 percent in November.

“Rising wages and the expanding economy should lay the foundation for 2018 being the turning point towards an uptick in sales to first-time buyers,” Yun says. “However, if inventory conditions fail to improve, higher mortgage rates and prices will further eat into affordability and prevent many renters from becoming homeowners.”

For more information, please visit www.nar.realtor.

For the latest real estate news and trends, bookmark RISMedia.com.

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Win This Year One Week at a Time

Jan 17, 2018 by

Think about the goals you set one year ago and where you are today. Is this where you imagined you would be? Did your life and career unfold the way you wrote your business plan? If you worked hard and had some good luck along the way, things may have gone as expected or better than planned. But for many of us, our plans may have taken a detour, or completely derailed due to something unexpected.

Every year we’re told to create a business plan in order to make more money and reach our various goals. But more often than not, that plan is based on every single day of the upcoming year working perfectly. So, what happens when it doesn’t?

By the time January ends, we may already find ourselves behind due to real life hitting us with some unplanned events. We rationalize that with 11 months to correct our path, we have plenty of time to catch up. But that doesn’t always happen, and at the end of the year, we find we’ve fallen short of our goals.

If you view an annualized year, you may be setting yourself up for failure before you even start. In “The 12 Week Year,” authors Brian P. Moran and Michael Lennington share their tips for making this year different by focusing on executing one week at a time.

Here are a few steps to help you navigate one week at a time:

  1. Think 12 weeks instead of 12 months.
    In “The 12 Week Year,” Moran and Lennington address the challenge of why some people get more accomplished than others. They share how developing consistent execution by closing the gap of goals 365 days out to a more flexible and scalable 12-week system is the key to more productivity, and, ultimately, success.
  1. Every day of every week counts.
    Change your focus to look at shorter timeframes to inspect your progress (or lack of it). To successfully accomplish this, you must begin by readjusting your daily activities. A Daily Success Habits Tracker is one of the best tools to help you do this. Using this tracker each day to record a daily target for a specific number of calls, handwritten notes and other dollar-productive activities will help you develop incremental success habits every day.
  1. Track your time and eliminate fake work.
    Learn to focus on activities that get you in front of more people with solutions to meet their needs. For example, in your market, is there a specific age demographic that may be ready to trade down from big homes to single-level living? Target them with information, living solutions and options. And don’t just rely on new magic platforms or super systems. Pick up the phone for an hour every day and connect with people who need your services to see measurable results.
  1. Deadlines create urgency.
    Did you know that many sales agents do their best work at the end of the year? That’s because people tend to focus on the finish line and pour on the power to make their numbers once it’s in sight. Change your focus from a year-end finish line to a week-end finish line to see compounded results by this time next year.

Step out and make this year your best ever with weekly wins to cash in on big results. Visit https://ph197.infusionsoft.com/app/page/ris-jan2018 for a free copy of the Daily Success Habits Tracker.

Murphy_Terri_60x60Terri Murphy is a communication engagement specialist, author, speaker and coach. She is the author/co-author of five books, and founder of MurphyOnRealEstate.com. Contact her at TerriMurphy.com, MurphyOnRealEstate.com or Terri@TerriMurphy.com.

For more information, please visit www.workmansuccesssystems.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Happy New Year From NREP

Jan 2, 2018 by

Happy New Year!  We’ll see you next year and have at it again!

The post Happy New Year From NREP appeared first on National Real Estate Post.

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