Thursday, August 27, 2009

Busy time for homebuilders

By The Wall Street Journal

Chapel Hill Home BuildersWASHINGTON -- At least the market for new Wilson NC homes isn't getting worse, and that's the first step to getting better.

In fact, the overall economy is getting a small boost as more buyers walk into model houses ready to sign contracts and builders hire workers to pour foundations and pave roads.

Construction of single-family Chapel Hill homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since October, the government said Tuesday. Building permits climbed nearly 6 percent.

Each new Wilson NC home, Vacation homes Atlantic Beach NC and Chapel Hill Home built creates about three jobs, on average, and generates about $90,000 in taxes paid to local and federal authorities, according to the National Association of Home Builders.

With new construction up 37 percent from its low point this winter, the industry is expected to help the overall economy this quarter for the first time in 3-1/2 years.

"Housing is no longer a drag," said Mark Vitner, a senior economist with Wells Fargo. "That's a good thing."

Of course, the housing industry is coming back from the worst recession since the Great Depression, and construction is still more than 70 percent lower than at its 2006 peak. So the effect of hiring and spending on materials such as wood and concrete is modest.

In addition, hammers are silent at construction sites for apartment buildings. For developers, it makes little sense to build when there are so many vacant homes and condominiums for rent. Apartment construction fell 13 percent from June to July.

That pulled the combined construction rate for homes and apartments down 1 percent to a seasonally adjusted annual rate of 581,000 units, from 587,000 in June. Economists polled by Thomson Reuters expected 600,000.

There are still several threats to the recovery of the U.S. housing market.

The unemployment rate, now 9.4 percent, could exceed 10 percent, leaving more homeowners unable to pay their mortgages. Interest rates are still at historic lows but could rise, making homes less affordable. Foreclosures are still at record highs.

And July was the last month that most builders could start new homes and have first-time buyers qualify for a new tax credit. Buyers can save 10 percent on the price of a home, up to $8,000 in taxes, if they complete the purchase by the end of November.

Builders and real estate agents are pressuring Congress for that credit to be extended. If it isn't, sales could easily slump.

One of the reasons for the purchase was Centex's focus on more affordable homes. Since the housing bubble burst, many builders have shifted to smaller houses, Assisted living raleigh and Assisted Living Dearborn, which can be sold at lower prices.

Wednesday, August 26, 2009

Home Prices Show More Signs of Life

Raleigh real estate and Durham real estate real estate, Home prices rose again in the year's second quarter, but economists say it's too soon to call it a turning point for the beleaguered sector.

Apex real estate prices increased 0.4 percent from May to June after increasing 0.2 percent from April to May.

North Carolina Home SalesPrices, however, are still down significantly -- 11.9 percent -- when compared with June 2008.

For national home prices, the substantial 15.4 percent drop in June from a year earlier was the smallest decline since April 2008.

The gains are the first two consecutive quarterly increases in three years, although prices are at the same level as early 2003.

Adding to that momentum is rising consumer confidence. The New York-based Conference Board's Consumer Confidence Index reported Tuesday that confidence in August had rebounded from July because consumers became less concerned about the job outlook.

Home Price Indices measure the residential housing market by tracking changes in home values using repeat sales of existing homes.

Existing-home sales also show an upward trend this year, as the National Association of Realtors on Aug. 21 reported increases for four months in a row for the first time in five years.

In the Northeast, existing-home sales climbed 13 percent in July, the biggest gain of any of the four regions. However the median price was down 15 percent from a year ago because of the increase in foreclosed homes, which NAR said typically sell for 15 percent to 20 percent less than other homes.

Raleigh real estate, Durham real estate and Chapel Hill real estate also is seeing the upward trend in month-over-month statistics.

The median price of homes sold edged up to $430,000 in June from $429,000 in May, and the number of homes sold rose 51 percent in the same time period.

When comparing June prices with June 2008, however, prices and volume were down. A year ago, the median price was $515,000 and 23 more homes were sold during the month.

Sellers understand the over-inflation of prices that took place in 2004 to 2006, so the correction has already taken place.

That while drops in prices have varied across Bergen County, prices have fallen an average of 10 percent since 2005. That's opened up homeownership to a lot more people.

Realtors report increased sales and interest in homes priced at less than $500,000, which is considered lower end for the county. They also report a "strong demand" for homes in foreclosures. While the distressed prices hurt sales, they help reduce inventory.

The tone of the market has definitely shifted, but even with the pronounced rise in foreclosures, prices moved marginally upward. And that's a positive.

The U.S. Department of Commerce will release new-home sales figures today.

Monday, August 24, 2009

MLS: Triangle home sales heat up in July

Published By Triangle Business Journal

While the number of new and existing homes sold in the Triangle declined year-over-year in July, it was the best month so far in 2009 – and perhaps a sign that the residential real estate market is beginning to thaw.

Durham and Raleigh Real EstateAccording to the July Raleigh real estate report from Triangle Multiple Listing Service Inc., 2,337 homes were sold during July in the Triangle, down 8.5 percent from the 2,553 homes sold in July 2008 but a vast improvement over the 21 percent decline posted in June, when 2,211 homes were sold.

Year to date, the number of home sales in the Triangle are down 25 percent.

The total dollar volume of homes sold in July was down 12.2 percent from the year prior, to $536.3 million.

Much of the decline in home sales in the Triangle area is not related to demand. Many buyers are experience problems at the closing table. Home lenders are changing the terms of the loan prior to the closing, as many banks are hesitant to approve new home loans.

Ann Davis, founder of FORHomeBUYERS and a leading buyers agent in the RTP area reports that relationships and experience with local banks, credit unions and other Triangle home lenders are critical in today's market.

"We have direct contacts and many years of working experience designing custom home loans that work for all parties."

"Our clients' can use our experience to side-step many issues related to their credit rating and FICO scores and proceed smoothly through the entire closing process, says Ann Davis."

The median sales price of a home sold in the Triangle was down 1.8 percent in July, to $186,500, from $190,000 the year prior.

The number of new listings and the inventory of homes for sale also dropped 16 percent and 12.6 percent, respectively.

The Triangle region, as tracked by Triangle MLS, includes Wake real estate, Durham real estate, Orange real estate and Johnston real estate.

Broken down by county, Wake County had 10.5 percent fewer home sales in July compared to the year prior. Durham County had 11 percent fewer home sales. Orange County had 13.3 percent fewer home sales. Johnston County had no change from the year prior, with 206 homes sales in July.