Existing-Home Sales Up in June, Unsold Inventory Shows Continued Progress

July 26, 2014

WASHINGTON (July 22, 2014) – Existing-home sales increased in June and reached an annual pace of 5 million sales for the first time since October 2013, while rising inventory continues to push overall supply towards a more balanced market, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June from an upwardly-revised 4.91 million in May. Sales are at the highest pace since October 2013 (5.13 million), but remain 2.3 percent below the 5.16 million-unit level a year ago.

Lawrence Yun, NAR chief economist, said housing fundamentals are moving in the right direction. “Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country. This bodes well for rising home sales in the upcoming months as consumers are provided with more choices,” he said. “On the contrary, new home construction needs to rise by at least 50 percent for a complete return to a balanced market because supply shortages – particularly in the West – are still putting upward pressure on prices.”

Yun also noted that stagnant wage growth is holding back what should be a stronger pace of sales. “Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month,” he said. “However, the lack of wage increases is leaving a large pool of potential homebuyers on the sidelines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability.”

Total housing inventory2 at the end of June rose 2.2 percent to 2.30 million existing homes available for sale, which represents a 5.5-month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5 percent higher than a year ago, when there were 2.16 million existing homes available for sale.

The median existing-home price3 for all housing types in June was $223,300, which is 4.3 percent above June 2013. This marks the 28th consecutive month of year-over-year price gains.

Distressed homes4 – foreclosures and short sales – accounted for 11 percent of June sales, down from 15 percent in June 2013. Eight percent of June sales were foreclosures and 3 percent were short sales.

Foreclosures sold for an average discount of 20 percent below market value in June, while short sales were discounted 11 percent.

The percent share of first-time buyers continues to underperform historically, rising slightly to 28 percent in June (27 percent in May), but remain at an overall average of 28 percent over the past year.

NAR President Steve Brown, co-owner of Irongate, Inc., Realtors® in Dayton, Ohio, said Realtors® are reporting that some prospective buyers who have above average credit scores but low down payments are deterred from homeownership by the high cost of FHA mortgage insurance. “Access to affordable credit continues to hamper young, prospective first-time buyers,” added Brown. “NAR recommends that FHA reduce high annual mortgage insurance premiums for all qualified homebuyers and eliminate the insurance requirement for the life of the loan. FHA’s HAWK program is a good start, but it should offer further reductions for participating home buyers.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped for the second consecutive month to 4.16 percent in June from 4.19 percent in May, and is the lowest since last June (4.07 percent).

Properties sold faster for the sixth consecutive month in June; highlighting the fact that inventory is still lagging relative to demand. The median time on market for all homes was 44 days in June, down from 47 days in May; it was 37 days on market in June 2013. Short sales were on the market for a median of 120 days in June, while foreclosures sold in 54 days and non-distressed homes typically took 42 days. Forty-two percent of homes sold in June were on the market for less than a month.

For the third consecutive month – as well as the average of the previous 12 months – all-cash sales in June were 32 percent of transactions, up from 31 percent in June 2013. Individual investors, who account for many cash sales, purchased 16 percent of homes in June, unchanged from May; they were 17 percent in June 2013. Sixty-nine percent of investors paid cash in June.

Single-family home sales rose 2.5 percent to a seasonally adjusted annual rate of 4.43 million in June from 4.32 million in May, but remain 2.9 percent below the 4.56 million pace a year ago. The median existing single-family home price was $224,300 in June, up 4.5 percent from June 2013.

Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in June from 590,000 in May, and are 1.7 percent above the 600,000 unit pace a year ago. The median existing condo price was $215,700 in June, which is 3.2 percent higher than a year ago.

Regionally, existing-home sales in the Northeast rose 3.2 percent to an annual rate of 640,000 in June, but are 3.0 percent below a year ago. The median price in the Northeast was $269,800, slightly below (0.1 percent) June 2013.

In the Midwest, existing-home sales jumped 6.2 percent to an annual rate of 1.20 million in June, but remain 2.4 percent below June 2013. The median price in the Midwest was $177,900, up 4.6 percent from a year ago.

Existing-home sales in the South inched 0.5 percent higher to an annual level of 2.06 million in June, and are up 1.0 percent from June 2013. The median price in the South was $192,600, up 3.4 percent from a year ago.

Existing-home sales in the West rose 2.7 percent to an annual rate of 1.14 million in June, but remain 7.3 percent below a year ago. The median price in the West was $301,000, which is 7.2 percent above June 2013.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

3The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

4Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

Realtor.com®, NAR’s listing site, posts metro area median listing price and inventory data at: http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx.

The Pending Home Sales Index for June will be released July 28, and existing-home sales for July is scheduled for August 21; release times are 10:00 a.m. EDT.

Realtors® Commend FEMA for Effective Implementation of Flood Insurance Reforms

July 26, 2014

WASHINGTON (July 23, 2014) – Congressional action and the timely implementation of the Homeowner Flood Insurance Affordability Act relieved property owners of costly premium hikes and stabilized housing markets where flood insurance is required for a mortgage, said the National Association of Realtors® today in testimony before the U.S. Senate Appropriations Subcommittee on Homeland Security. There are additional steps that need to be taken, however, to fully address remaining issues.

“The Federal Emergency Management Agency appears determined to get implementation right,” said NAR Flood Insurance Task Force Chair Donna Smith, broker-in-charge of Berkshire Hathaway Home Services, C. Dan Joyner Realtors® in Greenville, South Carolina. “In the four months since the law’s enactment, FEMA Administrator Craig Fugate and Director David Miller have engaged Realtors® and other stakeholders to ensure a successful rollout of the law’s rate relief and refund provisions for property owners, who are still reeling from the wide swings in insurance costs over the past few years.”

Within a month of the legislation’s implementation, FEMA issued rate-relief guidelines to insurers so that homebuyers would not have to pay more than current owners would at the time of their next flood insurance policy renewal. The relief also applies to current homeowners who bought a new policy or let one lapse, not just to owners who bought property after the Biggert-Waters Flood Insurance Reform Act went into effect last year.

Within two months of implementation, FEMA announced its intention to hold 2013 rates constant through 2015 and in some cases even reduce rates. The agency has also provided guidance to insurers to issue refunds this fall to property owners who paid amounts in excess of 2013 rates.

“The progress so far has been encouraging, but there is still more work to be done,” said Smith. “FEMA still needs to set up an Office of the Advocate called for by the Biggert-Waters Act to provide property buyers with the timely help they need to address problems with flood insurance and other rate issues that they face. It is also critical that FEMA and the NFIP ensure the long-term accuracy of flood rates and maps. Homeowners need an independent government advocate who has experience and access to the necessary information to fully investigate and resolve suspect rate quotes.”

NAR looks forward to keeping the dialogue open and working with FEMA to build on the positive early efforts happening only four months after implementation of NFIP reforms.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

SunRail moving forward with phase connecting to Orlando airport

July 25, 2014

The Florida Department of Transportation has started the process of extending SunRail into Orlando International Airport.

Known as SunRail Phase 3, the transportation department last month submitted a project development proposal to the Federal Transit Administration for a 5.5-mile extension of Central Florida’s commuter rail from just north of the planned Meadow Woods Station into the airport’s planned $215 million intermodal transit facility.

The transportation department’s Tawny Olore told the Central Florida Commuter Rail Commission at a June 21 meeting that this is the first step in making this portion of SunRail a reality.

Sunrail Cover Image

UCF releases four-year Fla. economic forecast

July 25, 2014

ORLANDO, Fla. – July 23, 2014 – Between now and 2017, the University of Central Florida projects an annual economic expansion in the state of 3.7 percent and payroll job creation of 2.6 percent. The projection comes form its quarterly report, the July 2014 Florida Forecast.

Report highlights
As of May 2014, 41.7 percent of single-family home transactions were cash sales, down slightly from 46 percent one year earlier. It’s the fourth year that cash sales were at 40 percent or higher, suggesting that investors continue to play a role in Florida’s housing market.
Housing starts continue their ascent and will be more than double their 2013 levels by 2017. Total starts will be over 95,200 in 2014, just over 136,000 in 2015, 162,700 in 2016 and 166,200 in 2017. This growth in residential construction activity will catalyze growth in the commercial sector and “push employment growth in the construction sector into double-digits.
Real personal income growth for 2013 slowed to 1.8 percent. From 2014-2017 real personal income growth will accelerate steadily and average 4.2 percent, with 2014 growth at 2.8 percent, which will rise to 5 percent in 2017.
Low inventories and rising house prices have triggered a surge in home construction. Housing starts will average 31.3 percent growth during 2014-2017. The most rapid growth will be in 2014 and 2015 when starts will grow at an average rate of 51.6 percent.
Payroll job growth year-over-year should average 3 percent in 2014, 2.6 percent in 2015, 2.7 percent in 2016 and 2.3 percent in 2017. Bye the third quarter of 2015, payrolls should fully recover to their pre- recession highs.
Labor force growth in Florida will average 2.3 percent from 2014-2017. In the four previous years, it was just 0.9 percent.
The unemployment rate may not accurately show the increase in jobs as more unemployed Floridians reenter the labor pool. The pace of decline will slow dramatically and could reverse direction at times. Still, the unemployment rate is forecast to fall to 5.6 percent by the end of 2017.
Underemployment in Florida, a broader measure of labor market weakness than headline unemployment remains at 14.3 percent through the 1st quarter of 2014, down from 19.3 percent in 2010.
Sectors projected to have the strongest average job growth during 2014-2017: Construction (11.3 percent), Professional and Business Services (4.6 percent), Trade, Transportation & Utilities (4 percent), Education & Health Services (2.5 percent), and Leisure & Hospitality (2 percent).

The full UCF economic report is available online.

© 2014 Florida Realtors®

Housing buoyed by 20-year high for vets’ loans

July 25, 2014

WASHINGTON – July 23, 2014 – After a series of fits and starts, the national housing recovery is now enjoying a burst of activity from the military population. The withdrawal of U.S. troops from overseas war zones means that a large number of enlisted persons are coming home and ready to buy homes.

Hazard pay, combined with tax-free housing and food allowances, has positioned many to amass a sizable downpayment; and even those who cannot afford to put a large amount down can benefit from one of the easiest and least expensive financing options available: Veterans Affairs mortgages.

“VA buyers are coming into the market in higher and higher proportions and tend to be first-time buyers, one of the missing drivers in the recovery in housing demand,” notes CoreLogic deputy chief economist Sam Khater.

VA financing for purchase loans jumped 19 percent to 241,190 loans in fiscal 2013, the most since at least 2000. And for the first three months of this year, they made up 8.1 percent – $19.5 billion – of mortgage activity, up from 6.9 percent in the same quarter of last year.

Besides the return of deployed soldiers, the VA loan program is gaining market share because of its newfound popularity in light of FHA changes that have made its products more costly for borrowers.

Source: BusinessWeek (07/22/14) Gopal, Prashant; Shenn, Jody

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

‘Hurricane tax’ on policies to end 18 months early

July 25, 2014

TALLAHASSEE, Fla. – July 23, 2014 – An extra charge on property-insurance and auto-insurance policies to cover claims paid for the 2004 and 2005 hurricane seasons will end Jan. 1.

The Office of Insurance Regulation formally issued orders Tuesday for insurance companies to move up by 18 months the end of a 1.3 percent “emergency assessment” for the state-run Florida Hurricane Catastrophe Fund, which provides backup coverage to insurers.

The assessment has hit policyholders for $2.9 billion, which has gone to reimburse insurance companies for claims from the eight hurricanes that hit Florida in 2004 and 2005, the last time a hurricane made landfall in Florida.

“It’s been nine years since (Hurricane) Wilma,” said Sam Miller, executive vice president of the Florida Insurance Council. “If anything, the assessment helps us remember how devastating these storms may be.”

Miller said the industry had been waiting for the orders so it could begin preparing for the new end date for the assessment, which previously had been set for July 1, 2016.

The orders make official a decision Gov. Rick Scott and the Cabinet made last month to end the assessment, Amy Bogner, a spokeswoman for the Office of Insurance Regulation, said in an email.

The assessment, which first appeared at 1 percent in 2007 and was raised to the current rate in 2011, collectively hits policyholders for between $350 million and $500 million a year.

In addition to the state’s near-decade luck at avoiding hurricanes, the early termination is due to claims for Hurricane Wilma coming in $498 million less than what had initially been thought. Wilma hit South Florida in October 2005. Also, the fund received more money than expected due to an increase in policies statewide.

The charge is imposed on most property and casualty policies other than medical malpractice and workers compensation.

The catastrophe fund, better known as the Cat Fund, currently has about $13 billion on hand and is expected to be able to raise an additional $4 billion, which is considered solid ground for covering most post-storm claims.

In addition to the Cat Fund assessment, the state-backed Citizens Property Insurance Corp. adds an extra 1 percent charge on most policies to cover losses from the 2005 storms. First imposed in 2007, the state expects that charge to be paid off in June 2017.

Source: News Service of Florida, Jim Turner

Related Topics: Property insurance

Media Center
Privacy Policy
Copyright Notice
Terms of Use

Florida Realtors® Headquarters – Orlando: (407) 438-1400
Office of Public Policy – Tallahassee: (850) 224-1400

© 2014 Florida Realtors®

Top 10 Beach Camping Spots in Florida!

July 12, 2014

Wow! Here’s a great idea for the summer…combine camping with the beach! Click the link below to see the top 10 beach camping spots in Florida.


So, what do you prefer…camping and the outdoors or the hotel experience?