U.S. home prices rose in July for the fourth straight month to reach their highest level in nearly two years, according to an index released Tuesday. The S&P/Case-Shiller 20-city composite posted a 1.6% increase in July, following 2.3% advance in June. For the third month in a row, all 20 cities in the index recorded prices gains.
A jump in sales of previously occupied homes and further gains in home construction suggest the U.S. housing recovery is gaining momentum… “The U.S. housing recovery is for real,” said Sal Guatieri, an economist at BMO Capital Markets, in a note to clients. “Great affordability, pent-up demand and strong investor interest in rental units are driving the market.”… New-home sales are up, builder confidence is at its highest level in more than six years and increases in home prices appear to be sustainable… “Housing is clearly in recovery mode,” Sullivan said.
To be sure, the real-estate market hasn’t come close to recovering from its worst slump in modern times. Sales of new and pre-owned homes and construction on new units are still far below the historical norm. Yet like the turtle in the tale of The Tortoise and the Hare, the market continues to inch forward.
Southern California home sales reach six-year high
Posted by kpanchuk on 9/13/12 at 1:48pm
Investors, cash buyers and low mortgage rates are turning Southern California into a turnaround market, research firm DataQuick said Thursday…. “August was the strongest month for home sales so far this year, and the strongest for an August in six years. That’s really saying something given the drop in low-end sales, especially foreclosure resales,” DataQuick said. “Much of the pickup in activity reflects a continuation of trends we’ve seen for months, like the unleashing of pent-up demand in move-up markets and high levels of cash and investor buying.”
HousingTracker reported that the early September listings, for the 54 metro areas, declined 22.6% from the same period last year. This decline in active inventory remains a huge story, and the lower level of inventory is pushing up house prices.
#4. Indianapolis-Carmel, Ind. Median housing price: $114,000, The metropolitan area of Indiana’s state capital has an HOI of 91.7, finding most homes on the market affordable for families earning the median income of $66,900.
The housing market has turned—at last…. Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own.
On a price-to-rent basis, the Case-Shiller National index is back to Q4 1998 levels, the Composite 20 index is back to March 2000 levels, and the CoreLogic index is back to April 2000. In real terms – and as a price-to-rent ratio – prices are mostly back to late 1990s or early 2000 levels. In real terms (inflation adjusted), the National index is back to Q4 1998 levels, the Composite 20 index is back to March 2000, and the CoreLogic index back to February 2000.
It wasn’t hard to see this coming: Home prices rose in April after a spring that brought more buyers chasing fewer homes. The number of homes for sale has been much lower this year than in the past few years, even though demand has returned to levels last seen in 2010, when tax credits boosted demand and sent prices up. The function of falling supply and rising demand means prices are already going up in more markets… The share of homes selling out of foreclosure has fallen. This “distressed share” is important for home-price indexes that measure repeat sales, such as the Case-Shiller index.
Flush with cash and keen to diversify their portfolio, Indians are busy snapping up property in the US. And they are not Indian-Americans, but desis from Mumbai, Delhi, Bangalore and Hyderabad, who are picking up single-family homes and condos as vacation homes or just investment.
A survey released Monday showed that the six-year slide in U.S. housing prices, coupled with the rising value of some foreign currencies and continued instability in Europe, is fueling a property-buying binge in the U.S. by wealthy foreigners… Some foreigners buyers view U.S. real estate as a safe place to park cash amid fears of a property bubble or political instability at home. Others are buying as a hedge against inflation because real assets like property tend to hold their value better than other investments during periods of high inflation. At a time when most securities have low yields, some investors believe they can earn higher returns by buying U.S. real estate and holding it as a rental investment or reselling in a few years at a profit.
Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover.
New-home sales increased 3.3 percent in April from March… Sales rose sharply in every region of the country but the South. The gain pushed the annual sales pace to its second-highest level in two years.
“Consistent with other housing market indicators, the FHFA HPI showed stronger house prices in the first quarter, most notably in March,” said FHFA Principal Economist Andrew Leventis. “Increased affordability and a somewhat smaller inventory of homes for sale are positively impacting house prices.”
On the national level, inventory of for-sale single family homes, condominiums, townhouses and co-ops declined by -18.85% in April 2012 compared to a year ago, and declined in all but five of the 146 markets covered… These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery.
I believe we’re very close to the inflection point (on housing). People look at prices that are still coming down but all the other signs are flashing green,” [CEO Jamie Dimon] said… “the shadow inventory everyone talks about is lower today than it was 12 months ago. It will be a lot lower 12 months from now,” he said. Distressed inventory “is actually coming down, not going up. Homes for sale are about half what they were four years ago. You could come up with a pretty bullish case.
Sales in 2011 were at record levels, more than during the bubble, and it looks like 2012 will be an even stronger year – even with some new rules that slow the foreclosure process. The total number of local homes, condominiums and townhomes sold in February was 3,794. That’s up from 3,591 in January, and up from 3,371 total sales in February 2011. An important component is the decline in inventory. Total single family inventory was down 15.4% and excluding contingent listings, it was down 45.6% year over year!
The Southland housing market posted the highest number of February home sales in five years as record levels of investor and cash buyers helped spur robust activity under $300,000. The median price paid for homes across the six-county region inched up from January but dropped below the year-earlier level for the 12th consecutive month, a real estate information service reported. The increase in sales between January and February was larger than usual. On average, sales have risen 1.1 percent between those two months since 1988, when DataQuick’s statistics begin. Southland sales have increased year-over-year for two consecutive months and for six out of the last seven months.
Warren Buffett makes several key USA housing points in the Berkshire Hathaway Shareholder meeting: Housing completions have been at record lows; there are currently more households being formed than new housing units completed, and this is decreasing the excess supply; the excess supply will be “sopped up” at different rates across the country; housing is a key reason for the sluggish economy (not the only reason).