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Downsizing Boomers to Fuel Apartment Market

Downsizing Boomers to Fuel Apartment Market

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 24, 2015

Millennials may be a big driver of multifamily housing now, but baby boomers looking to downsize are expected to drive apartment growth over the next few years, according to a study by the Kansas City Federal Reserve. They found that older Americans are “increasingly downsizing” to apartments.
In general, the downsizing activity usually occurs around the age of 70 and becoming increasingly prominent by age 75, writes Kansas City Fed senior economist Jordan Rappaport. By next year, the oldest baby boomers will turn 70. The number of Americans aged 70 and older will increase by more than 20 million in the next 15 years, according to Census Bureau estimates.

The Most Common Delays Toward Closing

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 09, 2015

The majority of contracts – 64 percent -- are settled on time with no delays to closing, but some REALTORS® acknowledge facing delays or even having contracts terminated for numerous reasons, according to the latest REALTORS® Confidence Index Survey, a survey of more than 1,500 REALTORS®. Twenty-six percent of REALTORS® surveyed identified a delay to settlement, while 10 percent said they have even had a contract terminated prior to closing.

"It is surprising that in a 'tight' and 'difficult' credit environment, only 12 percent of contracts that were reported to have settled or terminated had financing issues," economists at the National Association of REALTORS® report. "One explanation may be that potential home buyers are deciding to sit on the sidelines for now, so these buyers were not captured in the data."About 60 percent of REALTORS® reported some type of issue on their contract in April. For example, 12 percent of REALTORS® identified a financing issue; 8 percent had home inspection problems surface; and 7 percent had an appraisal issue. Three percent of REALTORS® also identified issues buying/selling distressed property; titling and deed issues; or with contingencies stated in the contract.

Source:"64 Percent of Contracts Are Settled on Time," National Association of REALTORS® Economists' Outlook Blog (June 8, 2015)

Home Sales Cooled Off This Spring

Home Sales Cooled Off This Spring

DAILY REAL ESTATE NEWS | FRIDAY, MAY 22, 2015

Existing-home sales slowed in April, with all major regions of the country – except the Midwest – experiencing declines as buyer demand continues to far exceed the number of homes for-sale, according to the National Association of REALTORS® latest housing report.Total existing-home sales – reflecting completed transactions for single-family homes, townhomes, condos, and co-ops – fell 3.3 percent to a seasonally adjusted annual rate of 5.04 million in April, NAR reports. Despite the dip, sales are about 6 percent above year ago levels.
April sales failed to keep the robust gain seen in March, says Lawrence Yun, NAR’s chief economist
"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," Yun says. "However, the overall data and feedback we're hearing from REALTORS® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."
Regional BreakdownHere's a closer look at how existing-home sales fared across the country in April:

• Northeast: sales declined 3.1 percent to an annual rate of 620,000, but are 1.6 percent above a year ago. Median price: $253,200, up 3.6 percent compared to April 2014.

• Midwest: sales increased 1.7 percent to an annual rate of 1.22 million in April, and are 13 percent above April 2014. Median price: $173,700, up 11.4 percent from a year ago.

• South: sales decreased 6.8 percent to an annual rate of 2.04 million in April, but are still 3.6 percent above April 2014. Median price: $189,400, up 8.5 percent from a year ago.

• West: decreased 1.7 percent to an annual rate of 1.16 million in April, but are still 6.4 percent above a year ago. Median price: $318,700, which is 10 percent above April 2014.

But the limited for-sale inventories may continue to hold back sales.
"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012."
Market Snapshot for AprilInventories: For-sale inventories rose 10 percent at the end of April to 2.21 million existing homes for-sale. Inventories are still 0.9 below year ago levels and are at a 5.3-month supply at the current sales pace.
Home prices: The median existing-home price for all housing types was $219,400 in April – 8.9 percent above last year. This marks the largest percentage gain in home prices since January 2014.
Days on the market: Properties sold faster in April, averaging 39 days. That is the fastest since July 2013 (which was 42 days) and the second shortest time (37 days in June 2013) since NAR began tracking such data in May 2011. What’s more, nearly half of the homes on the market sold for less than a month in April. Broken out, short sales were on the market the longest at a median of 180 days; foreclosures sold in 50 days; and non-distressed homes took 38 days.
Distressed sales: Foreclosures and short sales made up 10 percent of home sales in April, below the 15 percent share a year ago. In April, 7 percent of sales were foreclosures and 3 percent were short sales. Foreclosures sold for an average discount of 20 percent below market value, while short sales were discounted on average 14 percent.
Source: National Association of REALTORS®

All-cash sales: The number of transactions that involved all-cash were 24 percent in April, unchanged from March but down significantly from a year ago when all-cash sales comprised 32 percent of transactions. Individual investors who account for the bulk of cash sales purchased 14 percent of homes in April, down from 18 percent a year ago. Seventy-one percent of investors paid cash in April, according to NAR.

Which is Worse for California: Pools or Lawns?

Which is Worse for California: Pools or Lawns?

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 03, 2015

Residential swimming pools are coming under attack in drought ravaged California. The state has mandated a reduction in water consumption by 25 percent due to a severe four-year drought, and some cities are pointing the finger at pools as big water wasters.  
About 1.18 million residential pools exist in California, according to data from Metrostudy. Several cities and water districts across the state—such as in Orange County and San Jose—have passed bans on new pool permits, filling new pools, and draining and refilling existing pools in response to the drought mandate. But industry representatives insist pools are better for the environment than traditional lawns.
“We’re not saying, ‘Solve the drought, put in a pool,’ but the bottom line is people who put in a pool are making a decision to do something more water efficient with their backyard. They’re saving water,” says John Norwood, the California Pool and Spa Association’s president. “Pools are landscaping.”The California Pool and Spa Association is lobbying water districts to attempt to end proposed bans on filling pools and spas. The industry says its in-house study shows that a standard-sized pool uses one-third the amount of water as an irrigated lawn after an initial fill. 
Water-conservation experts disagree, arguing that residential pools and lawns use about the same amount of water. Peter Gleick, president of the Pacific Institute in Oakland, a nonprofit research institute focused on the environment, agrees with this assessment. 
“These are luxuries, and we’re in a really bad drought and everybody needs to step up instead of pointing the finger at the other guy,” Gleick says.
Source: “Pool Peddlers Tout Water Savings in California Drought,” The Seattle Times (June 2, 2015)