D-FW home price growth trailed the nation in the fourth quarter

D-FW home price growth trailed the nation in the fourth quarter

Dallas-Fort Worth home price gains were slightly below the nationwide average in the latest comparison.

D-FW home prices rose 3.6 percent in the fourth quarter of 2018 from a year earlier compared with a nationwide 4 percent increase, according to the National Association of Realtors.

While home appreciation across the country has cooled, more than a dozen U.S. metro areas the Realtors group tracked had double-digit gains in the final three months of 2018.

“Home prices continued to rise in the vast majority of markets but with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace,” Realtors’ chief economist Lawrence Yun said in the closely-watched report. “Housing affordability will be the key to sustained healthy growth in the housing market in the upcoming years.”

The largest fourth quarter home price gains were in Cumberland, MD (up 29 percent) and Boise, Idaho (up 14.3 percent.)

Home prices fell year-over-year in 14 metro areas, with the worst declines in Decatur, Ill. (-10.7 percent) and Elmira, N.Y. (-8.3 percent.)

Among Texas’ big cities, the largest price growth was in Austin where median single-family home prices were 5.9 percent higher than fourth quarter 2017. Austin also had the highest prices with a median of $310,400 at the end of 2018.

D-FW’s median home price of $254,900 is still just a bit below the nationwide $257,600 price, according to the Realtors.

Nationwide home sales by real estate agents fell 7.4 percent in the fourth quarter compared with a year earlier. The biggest drop was in the West where home sales were 13.9 percent below a year ago.

The slowdown in home sales and price increases in the second half of 2018 is continuing into early 2019.

The moderation in the U.S. home market comes after several years of booming sales and huge price gains.

Article by Steve Brown for the Dallas Morning News.

Related article: Buying a Home This Year? Here’s What to Watch.

 

 

 

Home Sellers in Q3 Netted $61K at Resale

Home Sellers in Q3 Netted $61K at Resale

According to a recent report by ATTOM Data Solutions, home sellers who sold their homes in the third quarter of 2018 benefited from rising home prices and netted an average of $61,232.

This is the highest average price gain since the second quarter of 2007 and represents a 32% return on the original purchase prices.

After the Great Recession, many homeowners were left in negative equity situations but home price appreciation in the recovery period since then has given homeowners something to smile about.

The results from ATTOM fall right in line with data from the latest edition of the National Association of Realtors’ (NAR) Profile of Home Buyers and Sellers. Below is a chart that was created using NAR’s data to show the percentage of equity that homeowners earned at the time of sale based on when they purchased their homes.

home sellers enjoy increase Indigo Skye Group blog

Even though those who purchased at the peak of the market netted less than those who bought before and after the peak, the good news is that there was a double-digit profit to be had! Many homeowners believe that they are still underwater which has led many of them to not even consider selling their houses.

Bottom Line

If you are curious about how much equity you’d earn if you sold your home, let’s get together to perform an equity review and determine the demand for your home in today’s market!

 

Related article: The #1 Reason To List Your Home For Sale Now.

Are We About to Enter a Buyers’ Market?

Are We About to Enter a Buyers’ Market?

Home sales are below last year’s levels, home values are appreciating at a slower pace, and there are reports showing purchasing demand softening. This has some thinking we may be entering a buyers’ market after sellers have had the upper hand for the past several years. Is this really happening?

The market has definitely softened. However, according to two chief economists in the industry, we are a long way from a market that totally favors the purchaser:

Dr. Svenja Gudell, Zillow Chief Economist:

“These seller challenges don’t indicate we’re suddenly in a buyers’ market – we don’t expect market conditions to shift decidedly in favor of buyers until 2020 or later. But buyers certainly are starting to balk at the rapid rise in prices and home values are starting to grow at a less frenetic pace.”

Danielle Hale, Chief Economist of realtor.com:

“The signs are pointing to a market that’s shifting toward buyers. But, in most places, we’re still a long way from a full reversal.”

In addition, Pulsenomics Inc. recently surveyed over one hundred economists, real estate experts, and investment & market strategists and asked this question:

“When do you expect U.S. housing market conditions to shift decidedly in favor of homebuyers?”

Only 5% said the market has already shifted. Here are the rest of the survey results:

Bottom Line

The market is beginning to normalize but that doesn’t mean we will quickly shift to a market favoring the buyer. We believe Ivy Zelman, author of the well-respected ‘Z’ Report, best explained the current confusion:

“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory…we expect significant debate about whether this is a bullish or bearish sign.

In our view, the short-term narrative will probably be confusing, but more sustainable growth and affordability will likely be the end result.”

 

 

Related Article: NAR Reports it’s a Great Time to Sell

How Does Supply of Homes Impact Buyer Demand?

How Does the Supply of Homes for Sale Impact Buyer Demand?

The price of any item is determined by the supply of that item, as well as the market’s demand for it. So hows does the supply of homes impact sales? The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between seller traffic (supply) and buyer traffic (demand).

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

The darker the blue, the stronger the demand for homes is in that area. The survey showed that in 38 out of 50 states buyer demand was slightly lower than this time last year but remains strong. Only six states had a ‘stable’ demand level.

Seller Supply 

The index also asked: “How would you rate seller traffic in your area?”

As you can see from the map below, 23 states reported ‘weak’ seller traffic, 22 states and Washington D.C. reported ‘stable’ seller traffic, and 5 states reported ‘strong’ seller traffic. This means there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for homes.

Bottom Line

Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet buyer demand, prices will continue to increase. If you are debating listing your home for sale, let’s get together so we can help you capitalize on the demand in the market now!

 

Related article: Is the Real Estate Market Getting Back to Normal?

Why We Are Not Heading Toward A Housing Bubble

4 Reasons Why We Are Not Heading Toward Another Housing Bubble

With home prices continuing to appreciate above historic levels, some are concerned that we may be heading for another housing ‘boom & bust.’ It is important to remember, however, that today’s market is quite different than the housing bubble market of twelve years ago.

Here are four key metrics that will explain why we are not heading toward a housing bubble:

  1. Home Prices
  2. Mortgage Standards
  3. Foreclosure Rates
  4. Housing Affordability

1. HOME PRICES

There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.

Last week, CoreLogic reported that,

“The inflation-adjusted U.S. median sale price in June 2006 was $247,110 (or $199,899 in 2006 dollars), compared with $213,400 in March 2018.” (This is the latest data available.)

2. MORTGAGE STANDARDS

Many are concerned that lending institutions are again easing standards to a level that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

The Urban Institute’s Housing Finance Policy Center issues a monthly index which,

“…measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

Their July Housing Credit Availability Index revealed:

“Significant space remains to safely expand the credit box. If the current default risk was doubled across all channels, risk would still be well within the pre-crisis standard of 12.5 percent from 2001 to 2003 for the whole mortgage market.”

3. FORECLOSURE RATES

A major cause of the housing crash last decade was the number of foreclosures that hit the market. They not only increased the supply of homes for sale but were also being sold at 20-50% discounts. Foreclosures helped drive down all home values.

Today, foreclosure numbers are lower than they were before the housing boom. Here are the number of consumers with new foreclosures according to the Federal Reserve’s most recent Household Debt and Credit Report:

  • 2003: 203,320 (earliest reported numbers)
  • 2009: 566,180 (at the valley of the crash)
  • Today: 76,480

Foreclosures today are less than 40% of what they were in 2003.

4. HOUSING AFFORDABILITY

Contrary to many headlines, home affordability is better now than it was prior to the last housing boom. In the same article referenced in #1, CoreLogic revealed that in the vast majority of markets, “the inflation-adjusted, principal-and-interest mortgage payments that homebuyers have committed to this year remain much lower than their pre-crisis peaks.”

They went on to explain:

“The main reason the typical mortgage payment remains well below record levels in most of the country is that the average mortgage rate back in June 2006, when the U.S. typical mortgage payment peaked, was about 6.7 percent, compared with an average mortgage rate of about 4.4 percent in March 2018.”

The “price” of a home may be higher, but the “cost” is still below historic norms.

Bottom Line

After using these four key housing metrics to compare today to last decade, we can see that the current market is not anything like that housing bubble market.

 

Related article: This Month In Real Estate: June 2018

This Month In Real Estate : June 2018

This Month In Real Estate : June 2018

The Indigo Skye Group is happy to bring you the Real Estate News update for June 2018. Each month we share on our blog and social media networks the latest information and market insights we have available. In this update you get a birds-eye view of home sales, home prices, inventory and the most popular mortgage types and rates.
Here are just a few of the national real estate numbers we’re tracking for you right now. Click to the image below to watch the video.

HOME PRICES

The median home price increased to $257,900 in April, which was up 3.2 percent from March and up 5.3 percent from April of last year. The median home price has increased by approximately $12,900 in the past year alone.

 

HOME SALES

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.5 million homes during the month of April. This was a decrease of 2.5 percent from March and a decrease of 1.4 percent from April of last year.

 

INVENTORY – MONTH’S SUPPLY

There was a 4.0-month supply of housing inventory in April, which was an increase of 14.3 percent from March. The total number of available homes for sale has decreased by 2.4 percent compared to April of last year.

 

Mortgage Rates

 

 

Related article: Homeowners and Appraisers See Price Increases. 

Thanks for stopping by the Indigo Skye Group blog! Be sure to check the blog weekly for more informational and educational articles about real estate.

This Month in Real Estate: May 2018

Real Estate News for May 2018

The Indigo Skye Group is happy to bring you the Real Estate News update for May 2018. Each month we share on our blog and social media networks  the latest information and market insights we have available. In this update you get a birds-eye view of home sales, home prices, inventory and the most popular mortgage types and rates.

Real estate market insights update for may 2018

Home Prices

The median home price increased to $250,400 in March, which was up 3.9 percent from February and up 5.8 percent from March of last year. The median home price has increased by approximately $13,800 in the past year alone.

Home Sales

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.6 million homes during the month of March. This was an increase of 1.1 percent from February and a decrease of 1.2 percent from March of last year.

Home Inventory – Months Supply

There was a 3.6-month supply of housing inventory in March, which was an increase of 5.9 percent from February. The total number of available homes for sale has decreased by 5.3 percent compared to March of last year.

Mortgage Rates

 

Related article Selling Your House on Your Own Could Cost You.

Thanks for stopping by the Indigo Skye Group blog! Be sure to check the blog weekly for more informational and educational articles about real estate.

This Month in Real Estate: News for April 2018

Real Estate News for April 2018

Real estate news for April looks good. Home sales are up and the price of homes has increase. With a decreased number of homes in inventory, if you are looking to sell, now might be a good time to enter the market. See the details below.

HOME PRICES

The median home price increased to $241,700 in February, which was up 0.4 percent from January and up 5.9 percent from February of last year. The median home price has increased by approximately $13,500 in the past year alone.

 

HOME SALES

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.5 million homes during the month of February. This was an increase of 3.0 percent from January and an increase of 1.1 percent from February of last year.

 

INVENTORY – MONTH’S SUPPLY

There was a 3.4-month supply of housing inventory in February, which was flat from January. The total number of available homes for sale has decreased by 10.5 percent compared to February of last year.

 

REAL ESTATE NEWS ON THE MORTGAGE MARKET

  • The average 30-year fixed-mortgage rate is 4.41 percent, up 6 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 4.33 percent.
  • The average 15-year fixed-mortgage rate is 3.81 percent, up 6 basis points over the last week.

Mortgage Interest Rates Have Begun to Level Off

Whether you are a buyer searching for your first home, or a homeowner looking to move up to your next home, you should pay attention to where mortgage interest rates are heading.

Over the course of 2018, according to Freddie Mac’s Primary Mortgage Market Survey, rates have increased from 3.95% in the first week of January to 4.40% in the first week of April.

At first glance, the difference between these numbers in such a short amount of time could be concerning, but if we look at the graph below, we’ll see that rates have already started to level off and return to the mark set in February.

This is great news for anyone looking to buy a home this spring! The spring is always one of the busiest seasons for home buying, and with rates increasing even more, buyers have come off the fence to lock in great rates! This is still great advice as the experts believe that rates will continue to rise throughout the year.

Every month, Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors release their projections for where they believe mortgage rates will be in the coming months. If we take the average of what each of the four organizations is predicting for the second quarter, rates are expected to rise to about 4.48% by June.

That average climbs to 4.73% by the end of this year.

So, what does this mean?

Waiting until the end of the year to buy, with rates still projected to increase, will end up costing you more money on your monthly mortgage payment. For every $250,000 you need to borrow to purchase your dream home, you will spend $49.21 more per month, $590.52 per year, and over $17,700 by the end of your 30-year mortgage.

And that’s just the impact of your interest rate going up!

Bottom Line

If you are ready and willing to purchase a home, find out if you’re able to. Let’s get together to evaluate your needs and help you with next steps!

This Month in Real Estate: March 2018

 

 

HOME PRICES:

The median home price decreased to $240,500 in January, which was down 2.4 percent from December and up 5.8 percent from January of last year. The median home price has increased by approximately $13,200 in the past year alone.

 

HOME SALES:

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.4 million homes during the month of January. This was a decrease of 3.2 percent from December and a decrease of 4.8 percent from January of last year.

 

HOME INVENTORY – MONTH’S SUPPLY:

There was a 3.4-month supply of housing inventory in January, which was a 6.2 percent increase from December. The total number of available homes for sale has decreased by 2.9 percent compared to January of last year.

 

For indepth information and an explanation of real estate conditions in your market, contact The Indigo Skye Group!