Busy time for homebuilders

By The Wall Street Journal

WASHINGTON -- 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.

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.

Prices, 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.

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.

According 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.

Raleigh Real Estate Jumped 11% in June From May

Story By The Wall Street Journal

Raleigh real estate soared in June from the previous month, the third increase in a row and supplying fresh evidence the housing market is beginning to recover from its long crisis.

Sales of single-family homes increased by 11.0% to a seasonally adjusted annual rate of 384,000 compared to the prior month. Though, year-over-year, new-home sales were 21.3% lower than the level in June 2008.

The median price for new Chapel Hill homes was $206,200 in June, down 12.0% from $234,300 in June 2008. On a monthly basis, the price fell from May 2009's $219,000.

The increase was the fourth in six months, as buyers take advantage of falling prices. It appears new-home sales reached a bottom in January, at a level of 329,000, and that the market is beginning to recover slowly. The level of 384,000 in June was the highest since 390,000 last November.

Raleigh real estate new home construction unexpectedly rose in June. Housing starts increased 3.6% to a seasonally adjusted 582,000 annual rate compared to the prior month. The starts data also showed building permits surged, and single-family starts made their biggest climb in four years.

May new-home sales for Chapel Hill homes rose 2.4% to an annual rate to 346,000, Monday's data showed. Originally, May sales fell, sliding 0.6% to 342,000. April sales climbed 1.8%.

A recovery of the housing market will be slow. New homes are in competition with used homes, which are cheaper these days because of foreclosures.

Prices are down because of too much supply. The ratio of houses for sale to houses sold in June was 8.8. But inventories are shrinking. The ratio was 10.2 in May. At the end of June, there were an estimated 281,000 homes for sale. That's below 293,000 for sale at the end of May.

Cheaper prices and historically low mortgage rates are offsetting tight credit and a high unemployment rate. Another lure, for first-time buyers, is a government tax credit.

Regionally last month, new-home sales rose 29.2% in the Northeast, 43.1% in the Midwest, and 22.6% in the West. Sales in the South were down 5.3%.

An estimated 36,000 homes were actually sold in June, up from 33,000 in May, based on figures not seasonally adjusted.

Even real estate and property sales at unique offerings like Raleigh retirement communities are increasing.

If you're considering relocating to Raleigh NC, buying or building a new home in Raleigh-Cary-Durham-Chapel Hill NC or finding a Raleigh retirement community, FOR HomeBUYERS, Inc., a leading Raleigh real estate agency and Exclusive Buyer Real Estate Agency in Raleigh will represent YOU 100% throughout the entire home buying or home building process.

Federal Tax Incentive Gets Market Moving

Story from Newburyport News

There is a tax credit to stimulate the real estate market, and it's working. In February, a federal tax credit for first-time home buyers of $8,000 was passed into law, and the effect has been noticeable.

Basically, if you haven't owned a home for the last three years and your income is within the prescribed limits, if you buy a home before Dec. 1, you can claim an $8,000 credit against your 2009 income tax return. That's a chunk of cash in your pocket to buy a home. And because the FHA is giving mortgages with as little as 3.5 percent down to people with reasonable credit, the barriers to buying a home are low.

So things have been happening. The demand for lower-priced properties — less than $300,000 — has increased substantially. Condos are selling. Renters who never before thought they could buy their own home are finding out that now they can! And while buyers can't borrow the down payment, it CAN be a gift from a relative.

Some homeowners are realizing that now is a great time to sell because of this new demand. They have been catching on that now is a good time to put their starter home on the market and move on — it's a great time to move up because the homes in the $300K to $600K range are well priced and the interest rates are low.

Buyer and seller services have never been better — the best Realtors have hung in there through the slump and are busy with the growing momentum.

This government stimulus is well thought out and having a beneficial and stabilizing effect on the real estate market. While no one expects prices to go back to the levels of a few years ago any time in the foreseeable future, prices are now at the 2001-2002 levels, which makes a lot more sense. Unless you bought your home or refinanced it to the max at the peak of a giddy market, when many people — including the lending industry — unfortunately chose to ignore the old adage "it's too good to be true," you are probably in good shape to thoughtfully plan your home ownership future. Once again, we do have something to look forward to!

Current Market Trends

Story from the Press Democrat

The real estate industry is full of clichés and metaphors, for example: “location, location, location,” “a wave of foreclosures is about to hit the market,” “are we at the bottom of the market?” and “interest rates are the lowest they’ve been since the Macedonian Period!”

These clichés and metaphors are spewed out more frequently than the phrase “bailout” flashes across the ticker on Fox News, MSNBC and other media conglomerates who attempt to shape our economic thought process and buying habits. The million-dollar question: “Is this the right time to buy real estate?”

Although we can’t look into the future and give an accurate answer to that question, we can look at history and trends.

According to Kiplinger’s Personal Finance, “It’s a good time to snag a bargain if you’re confident in your job prospects and you don’t plan to sell for at least five years.” Over the past decade, real estate lost its way. Real estate was typically purchased to have a place to call “home” and raise a family or create lifelong memories. However, when real estate rose faster than a kindergartner’s hand when asked by their teacher “who wants a cookie?” real estate became a commodity and the American dream of owning a home changed overnight to an appreciation feeding frenzy.

Consumers thought it was their right to gain 20 percent appreciation year after year until they were ready to sell and retire from the proceeds or refinance with a less risky loan and take cash out for exotic vacations, vehicle and boat purchases or trips to the local home improvement store where homes were transformed from an outdated and sometimes unlivable dwelling to the neighborhood Taj Mahal.

With all of that aside, it does seem like now is a good time to buy real estate. In fact, according to Forbes.com, the number one item on their list of things to buy before the economy improves is housing. “This may be the best time in a generation to buy a home.”

The Pew research center reported that 75 percent of Americans said it was a “good” or “very good” time to buy (people-press.org). The Wall Street Journal reported that median home prices in the San Francisco Bay Area are up 9.2 percent year-to-date and MSN Money.com/Case Shiller posted the following statistics regarding return on investment from Jan. 1, 2001 through Dec. 31, 2008: The Dow Jones down 19.8 percent, the S&P down 35.2 percent, the Nasdaq down 59.9 percent and real estate up 69.8 percent.

I am often told by consumers that they’re waiting for the market to go down even more before they decide to buy. However, keep in mind that if homes decrease another 10 percent, you’ll save $50,000 on a $500,000 purchase, but if interest rates increase by more than 1 percent it will offset the $50,000 you saved on your purchase price and your monthly cost will increase.

USA Today is currently estimating that California’s excess supply of homes will be substantially depleted and new construction will be needed to meet demand, thus leading to a housing recovery. Over the past six years, 30-year mortgage interest rates have hit historical lows on five different occasions, followed by quick and dramatic increase in rates as reported by the Federal Reserve.

Again, one cannot predict the future, but with data and statistics one can be informed and make an educated decision. Our market place (especially homes priced under $400,000) is very competitive. Buyers in this price range are often bidding against multiple offers, homes are selling for above asking price and inventory is very low — all creating a demand for a supply that has decreased dramatically. It is a good time to buy, so contact a real estate professional, get pre-qualified with a loan officer and let the shopping begin!

Triangle Home Sales Dip, But Positives Emerge

Story from Triangle Business Journal

The number of Triangle homes sold in April was down year over year, but new data from the Triangle Multiple Listing Service show a couple of welcome trends.

First, while the 1,623 homes sold last month represented a 30 percent drop from the 2,324 sold in April 2008, it is the highest monthly total posted in six months. The triangle remains strong for those seeking Chapel Hill, Durham, or Raleigh relocation services.

Even better, the number of houses on the market represented a 7.5 month supply, down almost half from a high of 14.9 months in November. April 2008 featured a 6.9 month supply.

The median price for houses sold in April dipped 4 percent, to $177,600, from $184,922 in the same month last year. While a negative number, it’s still much better than the double-digit declines seen across much of the U.S.

The MLS figures, which are supplied by Stacey Anfindsen of research company Metrostudy, cover the Raleigh-Cary and Durham metropolitan areas. The numbers also are broken down by county.

• In Wake County, the number of homes sold dropped 35 percent, to 862. The inventory for sale represented a 7.3-month supply, up from 6.3 a year ago. The median price fell 2.5 percent, to $195,000.

• In Durham County, the number of homes sold slipped 20 percent, to 245. The inventory for sale for each Durham real estate agency represented a 4.9-month supply, down from 5.2 a year ago. The median price rose 3 percent to $170,000.

• In Orange County, the number of homes sold plunged 48 percent, to 57. The inventory for sale represented a 6.5-month supply, up from 5.9 a year ago. The median price fell 11 percent to $258,000.

• In Johnston County, the number of homes sold dips 22 percent, to 173. The inventory for sale represented a 8.9-month supply, up from 8.1 a year ago. The median price fell 5.6 percent, to $150,100.