HomeVestors: Market Constraints Keep Housing from Another Bubble

Gains in home prices over the last year haven’t provided enough lift to offset the headwinds holding the recovery down—and that’s a good thing, says David Hicks, co-president of Dallas-based HomeVestors.

While reluctance from lenders, sellers, and appraisers has become something of a drag on sales and price improvements, Hicks asserts the market’s slow growth has kept the country away from another housing bubble.

“At the price point of the market we generally service, typically at or below the median price, securing a fair appraisal and financing are typically the major challenges our franchisees face when selling a property,” Hicks said. “Since we focus on ‘ugly houses’ that owners are anxious to sell, we’re not as affected by seller reluctance as is the general market. Everything our franchisees have for sale is selling quickly and in fact, the first quarter of the year was one of the best ever.”

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We Want Our Clients to Know the Facts Behind the Numbers!

While some might be rejoicing at the recent rising home prices and rising home sales seen across the nation, Fitch Ratings “still views these gains cautiously.” In fact, the agency predicts price gains will slow and perhaps even reverse over the next year.

Fitch expects a price “trough in the middle of 2014” but suggests inflation will keep prices from falling more than 3.5 percent.

“While rising prices and sales volumes suggest a recovery, they are not moving in sync with key economic indicators that would otherwise support a sustainable price level,” Fitch stated in its most recent quarterly report.

Fitch points to unemployment as one of these “key economic indicators.” Unemployment has declined from its high of 9.9 percent in 2010 to 7.7 percent.

However, the bulk of this decline is the result of fallout in labor force participation, not an improving employment situation, according to Fitch.

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We Want Our Clients to Know the Facts Behind the Numbers

 

Survey Reveals Top Regrets Among Buyers, Renters 

 Slightly more than half of Americans harbor at least one regret about their current home, according to Trulia’s Real Estate Regrets survey. In today’s seller’s market, Trulia says buyers are especially vulnerable to making decisions they may regret in the future. 

“Faced with limited inventory, many buyers will feel pressure to act fast—but snap decisions often end in regrets,” said Jed Kolko, chief economist at Trulia.

One of the common missteps of new homeowners, according to Kolko, is buying before reaching financial stability. “Many buyers would have fewer regrets if they waited until they were in strong enough financial shape to afford a house that really meets their needs,” he said.

The top regret listed among homeowners is not choosing a larger home. Thirty-four percent of homeowners cited this regret in Trulia’s survey.

The second most common regret among homeowners is not remodeling more when they purchased their current homes.

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Survey Reveals Top Regrets Among Buyers, Renter

Are Young Adults Buying Homes Again?

 Hi friends,  

I came across this article and thought it had some useful information. I wanted to share it with you and hear your thoughts.

  Sales of residential properties are back to the highs experienced at the expiration of the Home Buyers Tax Credit in April 2010. One of the reasons for this surge in purchasing is that young adults may again be entering the market.

Over the last few years, many young adults stayed on the sidelines (some in their parents’ homes) while waiting for the overall economy and the housing market to stabilize. This group represents a pent-up purchasing demand which is now coming to market.

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3 Financial Reasons to Buy a Home NOW! (Part I)

 

 

This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising at an accelerated rate, interest rates are increasing and rents are skyrocketing. – The KCM Crew

 Part I – Prices Are Rising at an Accelerated Rate

The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optomistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:

The Home Price Expectation Survey

The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.

Bank of America

In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:

“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”

Capital Economics

According to a report in DSNews, Capital Economics also upgraded their prediction:

“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.
These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”

Morgan Stanley

In an article from HousingWire, Morgan Stanley joined the party:

“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…
“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.”

Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.

  

The 5 Reasons You Should Sell Now!

 Hi friends,

 You don't want to miss the opportunity you have available in selling your house sooner than later. You can see 5 quick reasons to do so by visiting http://www.keepingcurrentmatters.com/sellertips. I would love to talk with you more about it and answer any questions you might have. 

Let me know your thoughts when you get a chance.

 

Real Estate: When She Speaks, We Should Listen

  Hi friends. I came across this article and wanted to  share the information with you.

 

Ivy Zelman is an industry expert consistently recognized by Institutional Investor, Greenwich Associates, StarMine and The Wall Street Journal as an industry-leading analyst. What separates her from many other analysts is the fact that she has accurately called the real estate market continuously over the last decade.

Her Position in 2006

She was one of the first to call the burst of the housing bubble. She was nicknamed ‘Poison Ivy’ for the harsh positions she took in combating the overly optimistic views of many in the industry at the time.
What happened next?
Existing home sales plummeted, new construction starts feel to historic lows and prices dropped by 50% in some areas of the country.

Her Position in 2012

Ivy Zelman, in a Wall Street Journal article in March Stunned Home Buyers Find the Bidding Wars Are Back, projected that the real estate market was about to rebound and that home prices would begin to appreciate. She emphatically claimed:

“We very much believe we’ve hit bottom.”

What happened next?
Pending sales (homes going into contract) surged in May and have remained above what is recognized as a healthy market level ever since. Starting in June, home prices began to appreciate on a year-over-year basis. This continued through the rest of the year with yearend appreciation coming in at 6.8%.

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