Housing Come Back is Here !!!

U.S. home resales edged downward in March, a pause in the housing market recovery that has helped boost the economy

Nationwide, the median price for a home resale rose to $184,300 in March, up 11.8 percent from a year earlier, the biggest increase since November 2005. The limited supply of available properties is pushing up home values.

First, this isn't a "pause in the housing market recovery". The housing recovery is based on residential investment, and only the commission on existing home sales is included in residential investment (the main contributors are new home sales and home improvement).   A decline in the headline number for existing home sales due to fewer distressed sales, is a positive, not a negative!

Second, the median price is a poor measure of overall market prices since this reflects changes in the mix in addition to changes in prices (the repeat sales indexes are a better measure of price changes).  Note: Lawler used the median over the weekend to show that investors are buying at a higher price point - an appropriate use of the median price.

The NAR reported total sales were up 10.3% from March 2012, but conventional sales are probably up over 20% from March 2012, and distressed sales down.  The NAR reported (from a survey):

Distressed homes - foreclosures and short sales - accounted for 21 percent of March sales, down from 25 percent in February and 29 percent in March 2012.

Although this survey isn't perfect, if total sales were up 10.3% from March 2012, and distressed sales declined from 29% of total sales to 21%, this suggests conventional sales were up sharply year-over-year - a good sign. However some of this increase is investor buying, although the NAR is reporting investors are buying about the same percentage as a year ago:

Individual investors, who account for most cash sales, purchased 19 percent of homes in March, down from 22 percent in February; they were 21 percent in March 2012.

Other data suggests investor buying has increased, see Housing: Some thoughts on Investor Buying, Inventory and recent Price Increases and from the WaPo: Wall Street betting billions on single-family homes in distressed markets

Of course inventory is the key number in the NAR report.  The NAR reported inventory increased to 1.93 million units in March, up from 1.90 million in February.  Some of this increase was seasonal, and this is still a very low level of inventory.  And inventory is still down sharply year-over-year; down 16.8% from March 2012.  But this is the smallest year-over-year decline since 2011.    

Important: The NAR reports active listings, and although there is some variability across the country in what is considered active, most "contingent short sales" are not included. "Contingent short sales" are strange listings since the listings were frequently NEVER on the market (they were listed as contingent), and they hang around for a long time - they are probably more closely related to shadow inventory than active inventory. However when we compare inventory to 2005, we need to remember there were no "short sale contingent" listings in 2005. In the areas I track, the number of "short sale contingent" listings is also down sharply year-over-year.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Calculated Risk

Click on graph for larger image.

Sales NSA in March (red column) are  above the sales for for 2008 through 2012, but below the bubble years of 2005 and 2006.  

The bottom line is this was a solid report. Conventional sales have increased sharply, although some of this is investor buying. And inventory is low, but the year-over-year decline in inventory is decreasing.

Housing affordability is based entirely on low mortgage rates

Homes are more affordable now than they have been in decades, but that could turn more quickly than expected, because the affordability is based entirely on mortgage rates.

Home prices are actually rising faster than expected, but the gains are being masked for buyers by historically low rates. These rates allowed U.S. homeowners to pay almost 37 percent less in monthly mortgage payments at the end of last year than pre-housing–bubble norms, according to a new report from online real estate portal, Zillow. This as homes today cost 14.5 percent more compared to historic averages, relative to median incomes.
The average rate on the 30-year fixed mortgage dropped to 3.68 percent last week, according to the Mortgage Bankers Association. From 1985 through 1999, rates ranged from 6 to 13 percent. Present low rates have allowed buyers to purchase more expensive homes, and the mortgage payment is taking less out of their monthly paychecks.
Back in the mid-eighties and nineties, Americans spent nearly 20 percent of their median monthly incomes on their home loans—compared to just 12.5 percent today, according to Zillow.
[Click to compare rates from multiple lenders now.]
The trouble is that wages have either stagnated or dropped at the same time that home values are rising. Pre-bubble, U.S. homebuyers spent 2.6 times their median annual incomes on the purchase price of a typical home, but now they are spending three times their incomes—meaning homes are 14.5 percent more expensive relative to income, according to Zillow. That is all made possible by government-subsidized, record low rates.
"The days of historically high levels of housing affordability are numbered," said Zillow Chief Economist Stan Humphries. "Current affordability is almost entirely dependent on low interest rates, and there's no doubt that rates will begin to rise in the next few years."
Rates will rise because the Federal Reserve will inevitably have to get out of the business of buying agency mortgage-backed securities, which currently drives down rates. This won't happen immediately, but it will in the next two to three years.
That will directly affect home buying demand, because without dramatic income growth, potential first-time buyers will see monthly payments as too big of a chunk to pay. Meanwhile potential move-up buyers will not want to let go of their fixed low rates, and that will be a disincentive to move.
Homeowners in 24 of the 30 largest metros covered by Zillow were paying more for homes at the end of 2012 relative to their region's median income than they were from 1985 through 1999. That is a clear red flag that should rates rise, even a few percentage points, home purchases and purchasing power, will fall.

The 15 Best Housing Markets For The Next Five Years

Norwich-New London, Connecticut

Annualized expected growth from 2012 - 2017: 

7.9 percent

Home prices in Norwich-New London have tumbled 23.4 percent since their Q2 2006 peak.

It has a population of 273,502, an unemployment rate of 8.6 percent, and a median family income of $80,500,

above the national median of $63,800. It also has a median home price of $225,000.

Tucson, Arizona

Wikimedia Commons

Annualized expected growth from 2012 - 2017: 
7.2 percent

Tucson's home prices have plunged 40.4 percent since their Q1 2006 peak. The metro has a median home price of $165,000.

It has a population of 989,569, a median family income of $57,800, and an unemployment rate of 6.9 percent.

Visalia-Porterville, California

Google Maps

Annualized expected growth from Q3 2012 - Q3 2017:
7.2 percent

Home prices in the Visalia-Porterville metro area have plunged 52.9 percent since they peaked in Q1 2006, and the city has a median home price of $145,000.

It has a population of 449,253, an unemployment rate of 14.9 percent, and a median family income of $48,200below the nationational median.

Ocala, Florida

Steven Gresser / Flickr

Annualized expected growth from Q3 2012 - Q3 2017: 
7.2 percent

Home prices in Ocala are down 48.1 percent from their Q3 2006 peak.

The metro has a population of 332,529, an unemployment rate of 9.0 percent, a median family income of $45,300, and a median home price of $107,000.

Yakima, Washington

Wikimedia Commons

Annualized expected growth from Q3 2012 - Q3 2017: 
7.3 percent

Home prices in Yakima are down 9 percent since their Q1 2009 peak. It has a median home price of $157,000.

Yakima has a population of 247,141, an unemployment rate of 9.3 percent, and a median family income of $48,800.

Gulfport-Biloxi, Mississippi

Ed Schipul via Flickr

Annualized expected growth from Q3 2012 - Q3 2017: 
7.4 percent

Home prices in the Gulfport-Biloxi metro area have slipped 21.4 percent since their Q4 2007 peak, and the metro has a median home price of $108,000.

It has a population of 253,511, an unemployment rate of 7.9 percent and a median household income of $53,100.

Vallejo-Fairfield, California

flickr

Annualized expected growth from Q3 2012 - Q3 2017: 
7.5 percent

The Vallejo-Fairfield metro area's home prices have fallen 59.2 percent since their Q1 2006 peak.

It has a population of 416,471 and an unemployment rate of 9.5 percent. It also has a median family income of $76,800, and a median home price of $230,000.

Yuma, Arizona

Google Maps

Annualized expected growth from 2012 - 2017: 
7.7 percent

Home prices in Yuma have fallen 37.7 percent since their Q4 2006 peak.

It has a population of 200,870, an unemployment rate of 30.1 percent, nearly four times the national average. It has a median family income of $45,700

Reno-Sparks, Nevada

Wikimedia Commons

Annualized expected growth from Q3 2012 - Q3 2017: 
8.1 percent

The Reno-Sparks metro area has a population of 429,606, a median family income of $63,100, and an unemployment rate of 10.0 percent, higher than the national unemployment rate of 7.8 percent.

Home prices are down 52.6 percent from their Q1 2006 peak, and the metro has a median home price of $177,000.

Santa Barbara-Santa Maria-Goleta, California

Google Maps

Annualized expected growth from Q3 2012 - Q3 2017: 
8.4 percent

The Santa Barbara-Santa Maria-Goleta metro area has a population of 426,878, a median family income of $70,300, and an unemployment rate of 7.2 percent.

Home prices are down 50.4 percent from their Q3 2005 peak, and the metro has a median home price of $285,000.

Carson City, Nevada

Google Maps

Annualized expected growth from Q3 2012 - Q3 2017: 8.5 percent

Carson City home prices have fallen 51.0 percent since their Q2 2006 peak.

The Carson City metro area has a population of 55,439, an unemployment rate of 10.2 percent, and a median family income of $66,300.

Sebastian-Vero Beach, Florida

Google Maps

Annualized expected growth from Q3 2012 - Q3 2017: 8.9 percent

Sebastian-Vero Beach home prices have fallen 50.5 percent since their Q4 2005 peak.

The metro has an unemployment rate of 9.9 percent, a median family income of $59,200, median home price of $139,000.

Panama City-Lynn Haven-Panama City Beach, Florida

Wikimedia Commons

Annualized expected growth from Q3 2012 - Q3 2017: 
9.1 percent

Home prices in the Panama City-Lynn Haven-Panama City Beach metro area have fallen 41.9 percent since their Q1 2006 peak. It now has a median home price of $143,000.

The metro has a population of 169,856, an unemployment rate of 7.6 percent, and a median family income of $56,400.

Santa Fe, New Mexico

Wikimedia Commons

Annualized expected growth from Q3 2012 - Q3 2017: 
9.1 percent

Santa Fe's home prices have fallen 21.1 percent from their Q4 2007 peak. The Sante Fe metro area has a population of 145,648, an unemployment rate of 5.0 percent below the national average, and a median household income of $60,100, below the national median of $63,800.

Medford, Oregon

Bailey Weaver via Flickr

Annualized expected growth from Q3 2012 - Q3 2017: 
9.7 percent

Medford's home prices have fallen 39.2 percent since their peak in Q2 2006. The metro has a population of 204,822 and median family income of $50,100.

At 10.0 percent Medford's unemployment rate is higher than the national average.

Read more: http://www.http://beachluxuryrealestate.com/

Housing as an Investment? Yes

Should you look at housing as a (good) investment?

For the love of five years of foreclosures, bank failures, and congressional testimonies, have we learned nothing? Bobcats and coyotes, after all, were taking over condemned houses with antifreeze-green pools. That’s pretty Mad Max where I come from.

Don’t look now, but with the sector resurgent—prices for single-family homes climbed in 88 percent of U.S. cities in the fourth quarter—the idea of “house as nest egg” is making a comeback. The most recent national median price for an existing single-family home is about $179,000, a 10 percent rise from a year earlier, which was the biggest gain since 2005, according to the National Association of Realtors.

Still, Yale professor and home-price tracker Robert Shiller says housing remains a pretty crummy investment over the long run. He calculated (PDF) that real (after-inflation) home-price appreciation from 1890 to 1990 was approximately zero percent. “Housing,” he told Bloomberg TV, “takes maintenance, it depreciates, it goes out of style. All of those are problems. And there’s technical progress in housing. So new ones are better.”

He continued: “So why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000s. And I don’t expect it to come back. Not with the same force.” The professor then compared the idea of investing in housing to investing in cars: “Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won’t want our cars. It’s the same with our houses. So they’re not really an investment vehicle.”

Those in the industry don’t buy that analysis. “The key to evaluating housing from an investment standpoint is to understand what gives real estate its value,” says Andrew Jeffery, a director of acquisitions for Cirios, a San Francisco residential property investment shop. “Shiller misses the point by comparing investing in houses to investing in cars. Houses, and all real estate, have the potential to generate cash flow. Cars do not. The value of a property is derived from what multiple the market assigns this cash flow, which is based on a variety of factors, from location to property type and tenant profile.”

He says many homeowners—present and prospective—simply view homes as assets whose price appreciates and depreciates with market conditions, ignoring their key potential to throw off cash. Also, Jeffery says it’s critical for investors to grasp how leverage works in housing. Think about it: You put down $110,000 on a $540,000 house. If the value jumps to $650,000 when you’re ready to sell, you’ve effectively used debt to double your initial investment. Of course, interest payments and upkeep eat into that profit, and too many people know the pain of owing more on their mortgages than their homes are worth. But the tax deductibility of mortgages mitigates the risks.

Jeffery says that thanks to leverage, a person who buys a house and rents it out will come out ahead of someone who invests the same amount of money in the stock market—especially at the point when the incoming rent covers maintenance outlays and helps pay off the mortgage. Going by historical data, by the time the owner retires, the house should be worth more than what equities would have returned. Plus, he says, “You’d already own your cash-flowing fixed income assets to retire on.”

Attracting Comments & Buyers to Your Blog

Many people have been talking about blog comments but no one was sharing actually results and numbers.  So I wanted to share my results and my tips to getting more comments on your blog.

When I started blogging a year ago, I would write posts and sit back and wait for the comments to role in, since it seemed like that’s what other bloggers did to get their comments..Right?

Well I waited around a lot…lol

Each post I wrote I said this is the one, this post is awesome I HAVE to get some comments, at least one? Do you know what happened?  Yep…NO comments!

I was so pissed, I would some time and work into that post I felt I deserved a few comments. After I got over being mad at the internet world, I got an ice coffee mmmm coffeeeee lol , I relaxed and I started asking questions to see if I was the issue, even though I knew better since I know “I’m Awesome” haha

I Was Questioned Everything

• I was questioning everything I was doing or not doing…
• Do they not like my content?
• Did I make a mistake starting a blog?
• Did I send it out to the wrong places?
• Am I in the right niche?

I went on for a couple hours and it hit me…

I wasn’t doing anything wrong, I was actually doing almost everything right…Almost!

3 Steps To More Comments

Good Content -> More traffic ->Building a relationship with that traffic

I was writing pretty good content, I was building relationships with the readers I had, my only real lack was that I needed more eyes on my posts. Most bloggers that start out do not get big comments, so once you realize that, you can relax and continue to blog stress free.

The more attention I gave to all 3 steps, the more results I started seeing over time.

Getting Comments Is Like Losing Weight

I look at getting comments as if I was trying to lose weight.

Dieting is good, aerobics is good, working out with weights is good BUT to get real results and hit your goal weight you need to do all three combined over time.

Getting comments is the same way.

Writing good content is good, more traffic is good, building relationships is good BUT to get the results you want “more comments” then you need to hit it hard on all three steps over time.

First – Good Content

Second – More Traffic

Third – Build Relationships

So How Much Weight Have I Lost?

Ok you want to know about the comments not weight…lol

Here are 4 posts I wrote back to back…

Comments 27 – Top 50 Places To Advertise Your Website For Under $25

Comments 36 – Breaking Into The Top 20 Internet Marketers Online With No List

Comments 48 – There Is A New Blogging Star Born Everyday, Are You Next?

Comments 100 – My Crazy Simple 7 Step Plan To Promote A New Post

How Do I Bring It Together

Now you can see the benefits of following all 3 Steps in combination, so let’s get into the 3 steps…

1- Writing Good Content

I write when I have something to share and I try not to write about things I see to many bloggers writing about too. I like to write about what I’m going thru and learning at that time and chances are if I’m going thru it so are other bloggers.

Another thing I do is to write about what my blog is about blogging, make money blogging, and making money online.

If readers come to your blog expecting blog tips, then make sure you have plenty of “blog tips” information available.  As simple as this is, many many bloggers will start with an idea then post about everything BUT what their blog was initially about.

Also watch your spelling and grammar, this has been an issue for me haha.. (I think faster then I can type) but I am getting better.  People will notice so take the time to check spelling and grammar.

2- Getting More Traffic

I have tried so many traffic getting techniques in the past 8 months, some worked and some were a waste of time and money. I now have a few that I use daily to drive more traffic and so far they are working well.

For me I drive a good amount of traffic from Twitter and Facebook, I have found that they both work best to drive targeted traffic.  As far as getting the most from Twitter and Facebook, you need to “be there” that means offering tips, info, help, resources etc..

Make yourself available to answer questions.

As I shared in a post My Crazy Simple 7 Step Plan To Promote A New Post I do a lot to promote a new post, writing great content that no one sees is a waste of time.

I use Onlywire to bookmark my posts pretty quickly. I’m a big believer in the benefits of bookmarking all your posts.  I also recently started submitting my posts to LinkedIn groups.

I also chase Google for some search luv like a love struck school kid..lol

A simple plan I follow to SEO my blog posts and better my chance at getting ranked on Google is to grab a keyword and use it in your Title, First sentence, Middle and End of your post, then use it in your tags.

Your goal is to rank for as many smaller keywords as you can since ranking for a number of smaller keywords will get you more traffic then ranking for one huge keyword.

3- Building Relationships

You started a blog to offer help or information to readers, right? So then building relationships with your readers should be the easy stuff.

I am real, the person you see or read online is the person you will see in person. Being yourself and letting your personality show is the best way to start building relationships with your readers, make your blog personal.

I make myself available thru out the day and I answer every @ reply and DM on Twitter and every email or update on Facebook.

On my blog, I ask for comments or opinions or feedback.  If you don’t ask, then you can’t be upset if you get no comments. Now once the comments come in, I reply to all of them, yes even the ignorant ones…lol Not everyone will see things the same way as you, and that’s fine.

When replying to comments I like to use that as a way to add more information continuing from the post, this is a great place to take your post to a higher level.

Bottom line here is be real, be helpful and be available and the relationships will build themselves.

Take Action

Yes all this sounds great, but if you don’t put it to work today and stick to it for at least 2-3 months then nothing will change on your blog.

But if follow all 3 steps combined you will see results. Once the comments start rolling in, it will start to snow ball into more and more comments.

 

RE/MAX agents gaining access to RES.net platform

The nearly 90,000 agents affiliated with Re/Max are gaining access to RES.net's Agent Portal, a communication and a back-office management tool that will allow them to invite contacts into their networks, share tasks and documents, and send messages to their clients and others involved in transactions.

RES.net builds portals designed for different aspects of the real estate business, streamlining processes and integrating communications between servicers, brokers, outsourcers, third-party service providers, homeowners and buyers.

The RES.net online platform was originally developed for default transactions, said Chief Operating Officer and President Todd Mobraten in a statement. 

Now, Mobraten said, RES.net is "proud to work with Re/Max in introducing this technology to agents managing any type of property. Consumers have adapted to using technology in every aspect of their lives, and the real estate industry must also evolve."

The RES.net online platform allows agents to reach potential buyers and sellers and handle transactions completely online from any location using a mobile application, he said.

More than 9,000 Re/Max agents already do business with RES.net, said Mike Ryan, Re/Max executive vice president for global communications and branding.

Top 10 Issues Affecting the Real Estate Industry

 

The Counselors of Real Estate®, an invitation-only professional association of top leaders in more than 50 specialties within the real estate industry (and which is an affiliate of the National Association of REALTORS®) developed the following list of critical issues that will affect the real estate industry over the next 10 – 30 years. Members of CRE®s External Affairs Committee regularly issue alerts about important topics. Many of the issues have strong interrelationships and are common across industries.

Through a series of objective white papers to be developed over the next few years, the organization seeks to engage leaders within the industry and the world economy in meaningful dialogue to address these urgent issues.

Response to these trends will separate the winners from the losers in the real-estate market, said Scott Muldavin, CRE, a member of the group and president of The Muldavin Company, a consulting firm serving the real-estate industry.

1. Aging Population 

The aging of the population will broadly and dramatically affect the real estate markets from housing, retail sales, health care, and the myriad of factors that define success for different geographic areas. Aging will most directly affect the demand for real estate, but will have scores of less direct impacts such as potential capital impacts as the pensioners by the scores of millions move from being net contributors to net users of capital.

2. Funding of Public Employee Retirement Systems 

Underfunding of state and local retirement systems in the trillions of dollars provides extreme challenges to the provision of basic local and state services critical to real estate properties and markets. Can we tap existing government assets for cash in a way that makes economic sense and does not shortchange future generations? Real winners and losers to emerge.

3. Student Debt Burdens 

Student college debt averages more than $20,000 per student and its total exceeds consumer debt for the first time. How will such burdens change the patterns of spending, household formation, and growth of this generation of graduates?

4. Infrastructure Funding and US Competitiveness

Creative public-private partnerships with state & local governments are being viewed as potential supplements or replacements for Federal funding of the next generation of needed infrastructure improvements, and could cover the trillions of dollars of deferred maintenance of existing assets.

5. Changing Office, Retail and Industrial Demand 

Radical reductions in office space use by larger occupants due to technology change and acceptance of alternative work systems—and similar changes in retail as Internet buying changes the role and purpose of physical retail —will define winners and losers going forward. The Panama Canal expansion and East Coast port expansion are changing the dynamics of warehousing.

6. Real Estate Capital Markets Liquidity

Capital limitations on banks as a result of Dodd Frank legislation and existing over allocations to real estate, concerns about the scale of the return of the CMBS market, hundreds of billions of dollars of real estate loans that must be refinanced in the next 3-7 years, as well as growing capital demands by other sectors of the economy will create continuing uncertainty over access to capital. Smaller properties; properties in secondary or tertiary markets; and properties with weak borrowers, substantial vacancy, high rollover of tenants in early years, or other risk factors are already experiencing a severe capital shortage.

7. Global Change and Uncertainty

The political gridlock and budget crisis in the US, the European financial crisis, the pending (now underway) slowdown of China’s economy, uncertainty and slow growth in the Middle East, and continuing expansion of global interconnections makes uncertainty about the future a certainty. What does it mean for real estate investment in the US and abroad?

8. Integration of Sustainability

Sustainability has moved beyond a gimmick and become part of corporate governance, management and reporting systems, supply chains, and the basic functioning of many companies—increasing the value of sustainable property investment. How must real estate businesses adapt to keep up?

9. Low Cap Rates

Cap rates for core properties are back to troubling 2007 levels. What happens if interest rates increase and cap rates decompress? Has the industry set itself up for another disastrous value decline?

10. Civil Discord and Political Gridlock

Many of the key issues and challenges require broad consensus to solve. Will there be greater cooperation, or will political gridlock continue? Answers to this question will be critical to determining the future of the real estate industry and societies of the world.