Orange County
Real Estate
with
Monica Ruggieri

Friday, August 21, 2009

Existing-Home Sales Rise a Surprising 7.2%

WASHINGTON (Reuters) - Sales of previously owned U.S. homes jumped 7.2 percent in July to mark the fastest sales pace in nearly two years, an industry survey showed on Friday, in a strong sign that housing is pulling out of a three-year slump.

Sales in July rose for the fourth straight month to hit an annual rate of 5.24 million units, the highest rate since August 2007, the National Association of Realtors said, beating market expectations for a 5 million unit pace. Sales in June had been at a 4.89 million pace.

July's increase was the largest monthly gain since the series started in 1999. The last time sales rose for four consecutive months was in June 2004, the NAR said.

The Realtors group heralded the July sales as a turning point, while some observers offered a more cautious view.

"The housing market has decisively turned for the better. We are bouncing back," NAR chief economist Lawrence Yun told reporters.

"Overall, these figures may suggest that the recovery in housing activity is gathering pace, but there is a long way to go yet," said Paul Dales, U.S. economist at Capital Economics in Toronto.

U.S. stock indexes rallied on the data, with the Dow Jones industrial average up 1.5 percent in mid-morning, and home builders posted hefty gains. Pulte Homes Inc was up 3.5 percent, while D.R. Horton Inc gained 4.3 percent.

Luxury home builder Toll Brothers Inc was up 3.3 percent. A broader measure of home construction stocks was up 3.4 percent to 293.28 after the housing data.

Treasury debt prices fell as investors viewed the data as another indication that the recession that started in 2007 was close to an end, if not over.

U.S. Federal Reserve Chairman Ben Bernanke, speaking at a gathering of central bankers and top economists in Jackson Hole, Wyoming, said prospects for a resumption in global economic growth after a deep contraction looked good "in the near term.

MULTI-FAMILY DWELLINGS LEAD SALES GAINS

Compared to July last year, sales rose 5.0 percent. The improvement in sales in July was broad based with single-family home sales rising 6.5 percent to an annual rate of 4.61 million units and multi-family dwellings surging 12.5 percent to a 630,000 unit rate.

Still, high unemployment threatens the budding recovery as many homeowners continue to lose their properties, and some economists question the sustainability of the economic recovery many see taking root.

A report from the Mortgage Bankers Association on Thursday showed late home loan payments jumped to a record high in the second quarter, with almost one in eight homeowners delinquent or in the process of foreclosure.

The inventory of existing homes for sale in July rose 7.3 percent to 4.09 million units from the previous month, NAR said. At July's sales pace, that represented a 9.4 months' supply, the same as in June.

The national median home price was $178,400 in July, down 15.1 percent from the same period last year, weighed down by distressed sales as they typically sell for 15 to 20 percent less than traditional homes.

Source: Reuters

posted by Monica Ruggieri at 8/21/2009

Monday, July 27, 2009

U.S. new home sales rise sharply in June

WASHINGTON (Reuters) - Sales of new single-family homes in the United States rose more than expected in June, while the inventory of homes for sale fell to a more than 11-year low, government data showed on Monday.

Sales rose to an annual rate of 384,000 in June, the Commerce Department reported, up 11 percent from May, while the number of new homes still for sale fell to 281,000, the lowest since February 1998.

"The data will reinforce the developing thinking that housing market has bottomed and that the economy has stabilized and will grow in the third quarter," said Jim Awad, managing director at Zephyr Management in New York.

"In the cocktail of the market, it will be viewed positively and will add credence to the bulls, who think we will have a rebound in the markets going forward," he said.

Despite the encouraging data, the median sale price for a new home fell to $206,200, down 5.8 percent from the previous month, and down 12 percent from a year ago.

Source: Reuters

posted by Monica Ruggieri at 7/27/2009

Friday, May 29, 2009

Housing Picture Brightens in California

This reflects the exponential increase in sales activity that we have seen over the past weeks. I've now sold two homes with multiple offers within the first two weeks of being listed. -Monica

SAN FRANCISCO -- California's median price for existing homes rose 1.4% in April from March, marking the second consecutive monthly increase in housing prices and prompting some industry officials to declare that the state's long swoon in housing values could be at or near the bottom.

California's housing market is being closely watched as a barometer of the economy -- it is the nation's largest. Prices soared during the boom, but the collapse of housing prices has pummeled homeowners and helped send foreclosures skyrocketing. Any sign of recovery would be taken as a sign that the market is bottoming.

It was the first back-to-back increase in the state's housing prices in two years, following an increase in the median price of homes in March from February. The median price of $256,700 for single-family homes in April is up from a median price of $253,040 in March, according to estimates by the California Association of Realtors.

The April prices were still off 36.5% from the same month a year ago, but the sales of 540,360 homes on a seasonally adjusted, annualized basis represented a 49.2% rise over the same time, the Realtors group reported Thursday.

April also marked the eighth consecutive month of single-family-home sales above 500,000 units. The inventory of unsold homes continued to shrink, to 4.6 months' supply from 9.8 months a year ago. "It appears that the median price is now at or near the bottom," said Leslie Appleton-Young, chief economist for the Realtors' association, who has previously made more subdued comments.

But no one is pronouncing any imminent turnaround in either the national or California markets. Housing continues to be weighed down by factors including high unemployment, high foreclosures and continued economic uncertainty. While California's home market appears near the bottom of a long slide, prices could continue to fluctuate for the rest of the year, some analysts say.

"At best, some markets have at least temporarily leveled off in price," said Andrew LePage, analyst at MDA Dataquick Information Services, a market-research firm in La Jolla, Calif. "I don't see any markets that have clearly bottomed out."

In general, the best-performing markets across the state in terms of sales volume were in lower-priced, inland areas that had seen some of the steepest declines in prices. Sales in the high-desert region outside Los Angeles, for example, more than doubled in April from the same month a year ago, after price declines of 49.5% over the same time. Median prices, even month to month, continued to fall there amid a glut of foreclosures.

But in several more densely populated areas, the median price was stronger. Los Angeles County's median rose 1.9% in April from March, after falling 31% over the past year. In Silicon Valley's Santa Clara County, the median price rose 3.6% after a year-over-year fall of 38.2%, the Realtor's group said. Boosting sales are some of the best affordability rates in almost a decade, say economists.

Realtors' officials said sales remain weaker for more-expensive homes. Inventories of unsold homes in the under-$500,000 segment, for example, shrank to nearly three months' supply in April from about 10 months a year ago. But the inventory of homes priced at more than $1 million rose to about 17 months from 10 months a year earlier.

The problem for the higher end of the market is that lending has tightened greatly for the jumbo mortgages that are often needed to buy a home costing more than $500,000, say economists. Some lenders now require down payments of as much as 30% to 40%. As a result, sales have remained anemic in pricey markets like San Francisco.

Printed in The Wall Street Journal, page A4, 05/29/09

posted by Monica Ruggieri at 5/29/2009

Thursday, May 28, 2009

U.S. new home sales rose 0.3 percent in April

WASHINGTON (Reuters) - Sales of newly built U.S. single-family homes rose slightly less than expected in April, a government report showed on Thursday, and the previous month's figures were revised down to show a steeper fall.

The Commerce Department said sales rose 0.3 percent to a 352,000 annual pace, from a downwardly revised 351,000 in March. March sales were revised to show a 3 percent decline, which had been reported as a 0.6 percent slide.

Economists polled by Reuters had forecast sales at a 360,000 rate in April.

The median sales price in April fell 14.9 percent to $209,700 from a year earlier, the department said. The median marks the half-way point, with half of all houses sold above that level and half below. However compared to March, the median price was up 3.7 percent, the biggest increase since November.

The inventory of homes available for sale in April fell 4.2 percent to 297,000, the lowest level since May 2001. April's sales pace left the supply of homes available for sale at 10.1 months' worth, the lowest since a matching reading in July.

posted by Monica Ruggieri at 5/28/2009

U.S. jobless claims fell 13,000 last week

This is an important economic indicator for signaling the start of a recovery. -Monica

WASHINGTON, May 28 (Reuters) - The number of U.S. workers filing new claims for jobless benefits dropped by 13,000 last week, the Labor Department reported on Thursday, but so-called continued claims hit a new record as the recession took a further toll on job prospects.

Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 623,000 in the week ended May 23 from a revised 636,000 in the prior week. It was the second straight week in which initial claims fell.

Analysts polled by Reuters had forecast 630,000 new claims for benefits last week compared with a previously reported 631,000 in the preceding week.

Some 5.7 million U.S. jobs have been scrubbed from payrolls since a severe recession began in late 2007, battering labor markets as companies cut current employees and hold off on hiring.

The number of people staying on benefit rolls after drawing an initial week of aid increased by 110,000 to a higher-than-forecast 6.79 million in the week ended May 16, the most recent period for which the data was available. Analysts had estimated continued claims would be 6.74 million.

Continued claims have set new records in every week since Jan. 24 and now are more than double the level they were at a year ago.

posted by Monica Ruggieri at 5/28/2009

Tuesday, May 26, 2009

US consumer confidence makes biggest gain in 6 years

NEW YORK, May 26 (Reuters) - U.S. consumer confidence soared in May to its highest level in eight months as severe strains in the labor market showed some signs of easing, though Americans' mood remained depressed by historical standards.

The Conference Board, an industry group, said its index of consumer attitudes jumped to 54.9 in May from a revised 40.8 in April, the biggest one-month jump since April 2003.

The consensus forecast was for the index to rise to 42.

Fewer Americans said jobs were "hard to get," the survey found, with that measure slipping to 44.7 percent from 46.6 percent. Those saying jobs were plentiful climbed to a still meager 5.7 percent, but that was still higher than March's 4.9 percent.

"Consumers are considerably less pessimistic than they were earlier this year," said Lynn Franco, director of The Conference Board's Consumer Research Center.

posted by Monica Ruggieri at 5/26/2009

Monday, May 18, 2009

U.S. homebuilder sentiment vaults to 8-month high

WASHINGTON (Reuters) - U.S. homebuilder sentiment jumped to its highest level in eight months in May, a private survey showed on Monday, supporting views that the three-year housing slump might be close to an end.

The National Association of Home Builders/Wells Fargo Housing Market Index rose to 16 from 14 in April, in line with market expectations. The NAHB also said its measure of housing affordability surged 10 points to a record 72.5 in the first quarter of this year.

The NAHB attributed the second straight monthly increase in the housing market gauge -- which measures builder confidence in the market for newly built, single-family homes -- to "the best home-buying conditions of a lifetime."

The group's chief executive officer, Jerry Howard, told Reuters that the two consecutive months of gains in the index were encouraging signs.

"It is a very important indicator that we are approaching the bottom and market stability could be just around the corner, that is what we are hoping for," said Howard.

"We are looking to reach bottom during the course of this summer and probably bounce along the bottom until early fall before things really start to get back to normal. We don't expect market equilibrium until 2012."

The Dow Jones home construction index surged 6.65 percent, also buoyed by Citigroup's upgrading of its rating on the second largest U.S. homebuilder, Lennar Corp, to "buy."

The Federal Reserve's aggressive cuts in interest rates to almost zero percent and buying of mortgage-backed securities have lowered the cost of home loans.

BOTTOM NOT TOO FAR AWAY

That, together with an $8,000 tax credit for first-time buyers, is helping to lend some stability to the distressed housing market. Other housing indicators have recently shown a sharp slowing in the pace of the market's decline, raising optimism that a bottom is not too far away.

Howard said he was also encouraged by a gradual reduction in the stock of unsold existing houses, currently at around an 11-month supply. He said the ideal level for inventories of existing home sales was a supply of six months.

The collapse of domestic house prices and the subsequent global credit crisis were the main catalysts for the U.S. recession, now in its 17th month, and restoring stability to the housing market is a key element to a recovery in the economy.

Housing starts and building permits data due out on Tuesday could bolster the argument of a gradual market recovery. A Reuters survey forecast housing starts to have picked up modestly in April to an annual rate of 520,000 units after falling to 510,000 the previous month.

"The good news is that we likely have the worst of the housing crisis behind us. The bad news is that the housing market is only improving with turtle speed," said Torsten Slok, a senior economist at Deutsche Bank in New York.

NAHB chief economist David Crowe told reporters that while affordability was the best in years -- thanks to mortgage rates at historic lows and house prices at levels last seen in 2003 -- access to credit posed a major headwind to recovery.

"Our greatest concern is the access to credit for both the borrower and the builder. Underwriting standards have been tightened. Buyers are sometimes asked to put larger payments down and builders are finding it difficult to get credit to build those homes," said Crowe.

The NAHB report also showed two out of three subindexes of the Housing Market Index rising in May.

The current sales conditions gauge climbed two points to 14, while the sales expectations measure for the next six months rose three points to 27. The traffic of prospective buyers index was unchanged at 13 in May.

"While we are not ready to pop the champagne, there is light at the end of the tunnel here," said Howard.

Source: Reuters

Labels: Market Info

posted by Monica Ruggieri at 5/18/2009