As Skittish Investors Back Off, First-Time Buyers Step In

May 28, 2020
RE investors base a purchase price on future expectations, but the pandemic created market confusion. As a result, first-timers face less competition for starter homes.

CHICAGO – The mix of homebuyers has been shifting since the pandemic began: Investor numbers are shrinking, as the number of first-time homebuyers is on the rise. First-timers don’t have to sell one home before purchasing another, and many have a newly boosted appreciation for homeownership after weeks of isolation.

In April 2020, the share of first-time buyers rose to 36%, a year-to-year increase from 32%, according to the National Association of Realtors®’ April 2020 Realtors Confidence Index Survey.

“Homebuyers are facing less competition from investors, and they are also benefiting from low mortgage rates,” says Scholastica “Gay” Cororaton, a, NAR researcher on the Economists’ Outlook blog. With fewer investors, cash sales dropped to 15% of existing-home sales in April, down from 20% a year earlier.

Record low mortgage rates also entice some first-time buyers. The estimated monthly mortgage payment on a home purchased at the median price of $286,800 with a 10% down payment on a 30-year fixed-rate mortgage was $1,131 – $90 less than the median rent of $1,041 in the first quarter of 2020.

Meanwhile, as first-time buyers increase in the marketplace, investors retreat. Those who plan to rent out a home to fix up and rent may perceive greater financial risk associated with renters due to the COVID-19 pandemic. Cororaton thinks investors are unlikely to purchase single-family properties at the rate they did during the Great Recession, which had sparked a wave of discounted foreclosures.

“In the current health and economic crisis, properties are not being foreclosed,” Cororaton notes. Also, so far, home prices are standing firm.

Source: “5 Housing Market Trends as Of April 2020,” National Association of REALTORS® Economists’ Outlook blog (May 22, 2020)

© Copyright 2020 INFORMATION INC., Bethesda, MD


New-home sales rise as Americans freed from lockdowns go house-hunting

May 27, 2020

Demand is being boosted by mortgage rates near record lows, says NAHB’s chief economist

New-home sales rose in April as Americans went on a buying spree as soon as state lockdowns were lifted.

Builders sold 623,000 houses at an annualized and seasonally adjusted pace, a gain of 0.6% from the revised March rate of 619,000, the Commerce Department said Tuesday in a report that records signed contracts as sales. Economists had expected sales would drop for a third consecutive month in April because of the economic shock caused by the COVID-19 pandemic.

“I was among the group expecting to see a decline in sales, but instead we’re seeing the stabilization of the housing market in April,” said Robert Dietz, chief economist for the National Association of Home Builders. “March may have been the low point.”

New-home sales are being boosted by mortgage rates near the lowest levels ever recorded, said Dietz. It’s helping to overcome “headwinds” such as a spike in the jobless rate and a tightening in requirements to get a mortgage, he said.

“Housing demand is responding to the low interest rates,” Dietz said. “There’s a pent-up demand as states begin to reopen, and it’s showing us that housing really is going to be a sector that helps to lead the economy into recovery mode.”

Three of four U.S. regions posted gains in April, compared to March, led by an 8.7% increase in the Northeast and gains of 2.4% in the South and Midwest. The West region that includes California, the nation’s most populous state, dropped 6.3%, the report said.

The average U.S. rate for a 30-year fixed mortgage fell to 3.24% last week, within one basis point of an all-time low set two weeks earlier, according to Freddie Mac.

The Federal Reserve began buying mortgage-backed securities in mid-March to keep credit flowing amid the economic jolt caused by the pandemic, which boosted competition for the bonds and put downward pressure on rates.

The average 30-year fixed rate probably will continue dropping through the rest of 2020, Fannie Mae said in a forecast earlier this month. It likely will average 3.2% in the current quarter, 3.1% in the third quarter, and 3% in the final three months of the year, Fannie Mae said.

 

Call Imagination Realty (Kathleen Carlson, Owner/Broker)  to start your search!            321-939-1300


Studies Suggest Buyers Prepared to Hit the Ground Running

May 22, 2020
Google and realtor.com report a big uptick in buyer activity – time spent searching for homes, viewing specific listings and sharing homes with friends – and two Fla. cities rank near the top for increased buyer interest: No. 3 Jacksonville (up 96.08%) and No. 4 Miami (up 81.82%).

ORLANDO, Fla. – While listing inventory remains a wild card, realtor.com and Google Searches released data that suggests a lot of buyers see the pandemic as a pitstop on the way to homeownership rather than an end-point.

According to realtor.com, “listing visits, saves and shares are all up significantly since the first wave of shelter-in-place orders took effect on March 16 – especially for those listings with virtual tours.”

Google Searches compared a metro area’s lowest day of home searches during 2020 to home searches at the end of April to measure improvement. Out of 50 cities listed, two Florida cities ranked in the top 10. At No. 3, the Jacksonville metro area had 96.08% more home searches at the end of April than it had on its slowest day of 2020 so far. And at No. 4, Miami had 81.82% more searches at the end of last month.

Tampa ranked as No. 35 with a 44.26% increase in buyer interest, and Orlando ranked No. 39 with a 34.92% increase. Tucson, Arizona was number one for home search increases with 164.71%; Indianapolis bottomed out at No. 50 on Google’s list, but home search activity still was up 8.62%.

Realtor.com listed the increased use by home-search function on its website:

  • Up 30%: Listing views for single family homes and condos
  • Up 76%: Saved homes
  • Up 95%: Sharing home listings with other users
  • Up 14%: Time spent per unique user

“Data suggests that home shoppers who had paused their search are now picking it back up, and the spring homebuying season won’t be lost, but merely pushed into the summer months,” says Danielle Hale, chief economist at realtor.com. “Tools such as virtual tours and Livestream Open Houses are enabling consumers to safely continue their home search while maintaining social distancing guidelines.”

“There are probably people who think there are going to be bargains in the marketplace,” says Tendayi Kapfidze, LendingTree’s chief economist. “They might be anticipating … fewer buyers competing because many people have had a disruption to their incomes or are uncertain about the outlook for their jobs. The low interest rates also make it an attractive time.”

Since shelter-in-place orders began, the growth rate for listing visits to homes that offer virtual tours has been twice as high as those without virtual tours. User visits were also 29% higher for listings featuring virtual tours, with increased engagement and a greater likelihood of a consumer connecting with an agent. According to realtor.com:

  • Two thirds (64%) of its users took a virtual tour, and of those, 45% prefer listings that offer virtual tours
  • 65% of home buyers believe virtual tours will continue to be a great resource in their home shopping process even after the pandemic
  • An additional 8% think virtual tours can be a replacement for in-person tours
  • When asked what they like about virtual tours, top responses include: They help me eliminate homes that aren’t for me (52%); they help me see the details of a home without having to step inside (43%); they help me create a shortlist of homes I want to see in person (38%); and they allow me to see more homes quickly without having to drive around to open houses (30%)

By Kerry Smith

© 2020 Florida Realtors®


Celebration Florida – A Small Town In The Middle Of The Madness

October 13, 2017

Such a great article about Celebration – Our Home!

Click this link to read the article…

http://www.disneydining.com/celebration-florida-a-small-town-in-the-middle-of-the-madness/


Windsor at Celebration

June 2, 2017
Office Located at 715 Bloom St., #140
Celebration
Developer/Owner Big Rock Partners announced that preleasing of its 239 independent living, assisted living and memory care residences began on June 1st.
Windsor at Celebration is on track to open in Spring, 2018.
Resort-style amenities will consist of the building’s rooftop sky bar to enjoy views of Disney fireworks nightly and first-run movies in the community’s state-of-the-art, stadium style Screening Room.
As a rental alternative to traditional continuing care retirement communities, Windsor at Celebration does not require an up-front entrance fee.
Life Care Services, an LSC Company, is manager of the new community.
Designed by global architectural firm Gensler, the community’s plan promotes an engaged lifestyle and offers an array of choices for dining and entertainment.

Assisted Living coming to Celebration

May 17, 2017

Celebration will welcome assisted living in March 2018.

Windsor at Celebration is the Assisted Living Community currently under construction on Celebration Blvd. in Celebration Florida.

See the model photos to get an idea.

Call Imagination Realty for more information, 321-939-1300.

 


New Luxury Enclave

April 18, 2017

The first two model show-homes are complete! Central Florida’s newest enclave featuring in-home spa services and extra kitchens geared for catering is a reality through the Four Seasons Resort.

These are the country’s first single family homes affiliated with Four Seasons, according to Walt Disney World.

Buyers in the new neighborhood may use the resort’s golf course, clay tennis courts, adult-only and family pools, lazy river, water slides and weekly “dive-in” movies. They may dine at the resort’s six restaurants or book in-home catering and spa services.

Like other residents of Golden Oak, Four Seasons home buyers also can use the Summerhouse club with its concierge services, lounge, fitness center, restaurant and entertainment rooms.

All buyers become club members and the annual dues are $16,889. Homeowner association dues cost $24,514 for Four Seasons Residences, compared to $5,735 in most neighborhoods within Golden Oak.

 


Feb. pending home sales up 3.5%

March 29, 2016

WASHINGTON – March 28, 2016 – Pending home sales rose solidly in February to its highest level in seven months, according to the National Association of Realtors® (NAR). Led by a sizeable increase in the Midwest, all major regions except for the Northeast saw an increase in February contract activity.

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 3.5 percent to 109.1 in February from a downwardly revised 105.4 in January and it’s 0.7 percent higher year-to-year. The index has now increased year-over-year for 18 consecutive months, though last month’s annual gain was the smallest.

“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” says Lawrence Yun, NAR chief economist.

“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers,” Yun adds. “Without adequate supply, sales will likely plateau.”

According to Yun, last month’s noticeable slump in existing-home sales had one silver lining: Price appreciation lessened to 4.4 percent, which is still above wage growth but more favorable than the 8.1 percent annual increase in January.

“Any further moderation in prices would be a welcome development this spring, particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition,” adds Yun.

Existing-homes sales this year are forecast to be around 5.38 million, an increase of 2.4 percent from 2015. The national median existing-home price for all 2016 is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.3 percent and prices rose 6.8 percent.

The PHSI in the Northeast declined 0.2 percent to 94.0 in February, but it’s still 12.6 percent above a year ago. In the Midwest, the index shot up 11.4 percent to 112.6 in February, and it’s now 2.5 percent above February 2015.

Pending home sales in the South increased 2.1 percent to an index of 122.4 in February but it’s 0.4 percent lower than last February. The index in the West climbed 0.7 percent in February to 96.4, but it’s now 6.2 percent below a year ago.

© 2016 Florida Realtors®


Pending Home Sales Tick Up in December

February 19, 2016

WASHINGTON (January 28, 2016) — Pending home sales were mostly unchanged in December, but inched forward slightly, fueled by a large increase in the Northeast that outpaced declines in the other three major regions, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, crawled 0.1 percent to 106.8 in December from a downwardly revised 106.7 in November and is now 4.2 percent above December 2014 (102.5). The index has increased year-over-year for 16 consecutive months.

Lawrence Yun, NAR chief economist, says contract activity closed out the year on stable footing but lost some momentum, except for in the Northeast. “Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month,” he said. “Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With homebuilding still grossly inadequate, steady price appreciation and tight supply conditions aren’t going away any time soon.”

According to Yun, although healthy labor market conditions will persuade more households to buy, it’s possible overall demand could be somewhat curtailed in coming months. The stock market’s sizeable losses since the start of the year and the effect slowing manufacturing activity is having in some areas — especially in the energy sector — could cause some to hold off on buying.

“The silver lining from the market turmoil in recent weeks is the fact that mortgage rates have slightly declined,” says Yun. “Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4 percent.”

Existing-homes sales this year are forecast to be around 5.34 million, an increase of 1.5 percent from 2015. The national median existing-home price for all of this year is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.5 percent and prices rose 6.8 percent.

Rents — which have far outpaced wages in recent years — are expected to slightly slow to 3.3 percent growth in 2016 from 3.6 percent a year ago. Multifamily housing starts are expected to reach 420,000 units this year, the highest level since 1987.

The PHSI in the Northeast increased 6.1 percent to 97.8 in December, and is now 15.3 percent above a year ago. In the Midwest the index decreased 1.1 percent to 103.6 in December, but is still 3.6 percent above December 2014.

Pending home sales in the South declined 0.5 percent to an index of 119.3 in December but are 1.0 percent higher than last December. The index in the West decreased 2.1 percent in December to 97.5, but remains 3.4 percent above a year ago.

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.

# # #

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Fourth quarter of 2015 metropolitan area home prices will be released February 10, Existing-Home Sales for January will be reported February 23, and the next Pending Home Sales Index will be February 29; release times are 10:00 a.m. ET.


Forbes lists top investment cities – 7 are in Fla.

February 5, 2016

NEW YORK – Feb. 3, 2016 – Where should real estate investors put their money in 2016? Forbes teamed up with North Carolina-based data company Local Market Monitor to produce its list of 2016 Best Buy Cities – the top 20 housing markets to invest in this year – and Florida dominates the list.

According to Forbes, Florida offers good values “where investors get the best bang for their housing buck, and where aspiring homeowners have the best prospects of making an economically sound purchase.”

Orlando took second place and was followed by six other Sunshine State cities. Among them, average home prices are highest in West Palm Beach (No. 19) at $285,000 and lowest in Tampa (No. 14) at $193,000. The averages, though, have been accelerating at a rate of 9 percent to 14 percent in all the Florida cities.

Florida’s domination of the list makes a lot of sense in light of the national economic recovery, says Ingo Winzer, founder and president of Local Market Monitor. “Since the national economy has stabilized and is growing again, the factors that prompt people to go to Florida have recovered,” he reasons.

“Best-buy” markets for 2016 housing

1. Grand Rapids

2. Orlando, Florida

3. San Antonio, Texas

4. Charlotte, North Carolina

5. Salt Lake City

6. Dallas

7. Austin, Texas

8. Fort Lauderdale, Florida

9. Seattle

10. Cape Coral, Florida

11. Indianapolis

12. North Port, Florida

13. Nashville, Tennessee

14. Tampa, Florida

15. Charleston, South Carolina

16. Denver, Colorado

17. Madison, Wisconsin

18. Jacksonville, Florida

19. West Palm Beach, Florida

20. Boise, Idaho

Forbes’ full list is also posted online.

Source: Forbes (01/27/16) Carlyle, Erin

© Copyright 2016 INFORMATION, INC. Bethesda, MD