Posts Tagged ‘Local Market Conditions’

Meanwhile, though sales activity was up, the median condo selling price for the country, the median being the point at which half the homes sold for more and half for less, was very similar in October as it was in September, at $165,000. We’ve seen pretty steady statewide prices for a few months in a row now and It’s really rather good to see those median prices holding as steady as they have been because it gives us a better idea of what regular sale prices are compared to when they’re up and down from month to month.

Taking a quick look at how condos and co-ops sold by region in October, sales were good almost across the board both month to month and year to year. The Northeast was the only place where we saw a drop from September, but only by about 5 percent, though sales are still way higher than a year ago. The Midwest saw some of the best month to month sales, rising 11 percent from September, and that puts them at a very respectable 27 percent higher than the same time last year. The South was dead even on condo sales from the month before but up 14 percent from last year. The West was another place where we saw great gains, up 11 percent from September. And that’s almost a 10 percent rise from a year ago.

One of the reasons we might be seeing such strong condo sales is that prices continue to remain at affordable levels, and are still downright bargains in some parts of the country. Prices in the Northeast stayed on an even keel at about $224,000. And we saw prices inch up a hair in the South to $110,000. The Midwest saw the biggest price drops, showing a median of $120,000, but we’ve been seeing a lot more action at the lower end of the market in the Midwest over the past couple of months. But prices in the West are on the rise again, all the way up to $178,000.

So looking at October’s sales of existing condos and co-ops, they continue to be a strong arm of the nation’s real estate market. If prices persist in remaining affordable, we could see sales carry on at this pace and perhaps even a bit more as we head on towards the winter.

The NAR thinks that the commercial real estate market is expected to follow the mood of the general economy. Mr. Yun expects vacancy rates to trend lower and rents should rise modestly next year.

The big winner here could be the multifamily market, which already has the tightest vacancy rates in any commercial sector. Apartment rents will be rising at faster rates in most of the country next year and the NAR’s chief economist thinks that if new multifamily construction doesn’t ramp up, rent growth could potentially approach 7 percent over the next two years.

Now let’s take a moment to break the details down into the four major commercial sectors.
In the office space market, vacancy rates are expected to fall to 16.1 percent in the fourth quarter of 2012 from the fourth quarter of this year. Whereas rents are expected continue to rise through the fourth quarter of this year and nearly TWO percent further by the end of next year.

In the industrial market, vacancy rates are projected to decline to 11.7 percent in the fourth quarter of 2012. Industrial rents should see a bit of a drop off at the end of this year, by about one half of one percent, but then they’re expected to rise nearly 2 percent in 2012.

When it comes to the retail markets, vacancy rates are expected to decline to 11.8 percent in the coming 12 months. Similar to the industrial markets, we may see a slight drop off in rents by the end of the year, but then we should see them heading up again by about SEVEN-TENTHS-OF-ONE percent in the year to come.

Finally the multifamily market, or apartment rental market, is expected to see vacancies drop even further, from FIVE percent in the fourth quarter of this year, down to 4.3 percent in the fourth quarter of 2012. Multifamily vacancy rates below FIVE percent generally are considered a landlord’s market with demand justifying higher rents, and higher rents are what we will be seeing as the average apartment rent is projected to rise 2.5 percent this year and another 3.5 percent in 2012.

So the big news in commercial real estate is that we should be seeing vacancies decrease and rents rising across the board through 2012. The market to really keep an eye on appears to be the multifamily, or apartment, market as rents are projected to go up dramatically as we enter a stronger landlord’s market. How will that affect the existing home sales market? Well, we’ll have all the details you need right here on Real Estate Today.

When we take a look at the numbers, the Pending Home Sales Index, or PHSI, which is a forward looking indicator based on contract signings, surged ahead into double digits from September, rising over 10 percent. And the national year-to-year comparisons are almost as good, with the PHSI up well over 9 percent from October 2010.

Now, because it’s a forward looking indicator based on contracts signed, this should give us a pretty good idea of the direction the market will take over the next few months when these signed contracts come to closing. And judging by these numbers it looks like we may have a promising winter market ahead.

N.A.R Chief Economist Lawrence Yun is also encouraged by these figures, saying that improved contract activity is definitely a hopeful sign. He adds that home sales have been kind of plodding along at sub-par levels–despite interest rates hovering at record lows—creating a pent-up demand from buyers who normally would have already entered the market in years past. Mr. Yun hopes these figures are indicative that more buyers are taking advantage of the excellent affordability conditions.

However, as good as these pending numbers are, we also have some words of warning for those hoping to enter this buyers’ market.

As we said earlier, pending home sales are a forward looking indicator reflecting contracts signed, but not all contracts lead to closings. Many lenders are applying more stringent standards for accepting loan applications. So make sure your credit score is the best it can be before applying for a mortgage and for tips on that you can always go to houselogic.com.

Now let’s take a quick look at the PHSI across the country.

The PHSI in the Northeast surged nearly 18 percent in October. When it comes to a year-to-year comparison, it’s well over 3 percent above October 2010’s PHSI.

If you thought the Northeast’s figures were good, listen to this. In the Midwest the index jumped over 24 percent from September to October. That’s the highest jump in the nation and remains over 13 percent above a year ago.

Pending home sales in the South rose nearly 9 percent in October. And they are nearly 10 percent higher than October 2010.

The West is the only place we saw the index slip, but only by a negligible 0.3 percent in October. But compared to last year, the PHSI in the West is still over 8 percent above a year ago.

So there you have it, excellent pending home sales in October pretty much across the board and certainly a good step up from September. It’ll be interesting to see how these translate into closed sales as the months continue and, as always, we’ll keep you posted with those figures and all the latest news as it happens.

Let’s crunch the numbers. Total existing home sales, which are completed transactions that include single family, townhomes, condominiums and co-ops, rose to a seasonally adjusted annual rate of nearly 5 million in October from September. Not only that, but those figures are 13 and one half percent above the level in October 2010, so we’re really seeing some great year over year sales gains.

But even though it’s great to see sales on the rise, NAR chief economist Lawrence Yun says he’d like to see those levels go even higher. Stating that home sales have been stuck in a narrow range, Mr. Yun pointed to several factors that should cause even greater growth such as job creation, rising rents, and high affordability conditions. Many people who are attempting to buy homes are being unnecessarily thwarted in the process by increased levels of contract failures.

Now, as we said earlier another ongoing positive trend is a steady decline in the number of homes on the market. Total housing inventory at the end of October fell a couple of percent to 3.3 million existing homes available for sale. That represents an 8 months’ supply at the current sales pace, own from the supply levels in September. Inventories have actually been trending gradually down since July 2008.

But when we look at prices, it’s good news for buyers as there are still plenty of bargains out there. The national median existing home price for all housing types was about $162,000 in October. That’s still around 5 percent below October 2010.

Now let’s examine the existing home sales data by region.
Existing home sales in the Northeast fell about 5 percent in October, but sales are still above October 2010. The median price in the Northeast was $224,000, so there are still some good deals to be had there.

Existing home sales in the Midwest on the other hand, rose nearly 3 percent in October. Even better than that, they are nearly 20 percent higher than October 2010, the greatest year-to-year gains in the US. The median price in the Midwest was around $133,000, which also makes it some of the most affordable real estate in the country.

In the South, existing home sales also increased over 2 percent. Again, we’re also seeing high year-over-year sales gains in the South, 14 percent more than a year ago. And the median price in the South was about $145,000, which is some of the more stable pricing we’re seeing.

In the West existing sales had the greatest month-to-month increase, nearly 5 percent. And they’re 15 and a half percent higher than October 2010. The median price in the West was $207,000, again pretty stable compared to October last year.

As we ease into the winter market, we’ll have all the data to keep you informed here on Real Estate Today.

And you can’t deny that what we have been seeing across the country in September is some serious sales increases from last year. The highest rise has been in the 0 to $100,000 Dollar category, which has seen 22 percent more sales than in September 2010.

Across the country in September, over 25 percent of all sales fell below the $100,000 figure. The biggest single category of September sales went to those priced between $100,000 and $250,000. More than 44 percent of the sales fell in that range, and that’s a big slice of the housing pie. When you add it all up, well over half of the sales activity is happening at this lower end of the market. Not only is that 100 to 250K market the most active in the country, we’re also seeing 15 percent more activity in that category than we were seeing in September 2010

The next highest category of sales in September was for those homes priced between $250,000 and half a million dollars, and that took up about 22 percent of the pie. But while year over year sales in this category were up nearly 5 percent, the most activity is still happening below 250K.

But it’s not all the action that’s happening on the lower side of the market. Homes priced over 1 million dollars accounted for just a tad less than 2 percent of the overall September sales. But we’re still seeing increased activity at that end of the spectrum. Year over year sales increased by nearly 5 percent in this category.

Breaking this down by region, here are some of the standout numbers: Homes priced under $100,000 jumped 42 percent in the West from over a year ago, those are the best numbers we’ve seen in the country. It seems that throughout the country, those bargain homes took up double digit percentages of all the sales, though the Northeast saw most of its action in the $750,000 to 1 million dollar bracket, which was up from last September by over 16 percent.

Some of the highest jumps from last September to this September have been in the Midwest, with an 18 percent year over year increase in the 100,000 to $250,000 dollar range. Add to that an additional 11 percent increase in sales in the $750,000 to 1 million bracket. After the difficulties that the Midwest in particular has had over the past few years, it’s encouraging to see such broad increases at both ends of the spectrum.

And a lot of the big money appears to be continuing to head south. That’s where we saw the greatest increase in million dollar plus sales activity through last year, with nearly 10 percent more homes being sold this September in that category. That’s the biggest increase in million dollar homes in the country in September.

So will these high figures continue through the winter? Well, from what we’ve seen over the past few months, it’s certainly looking good for the rest of the autumn at least and, as always, we’ll continue to keep you posted on home sales figures across the country as we get them.

So we’d been looking for some stability in the housing market this year and it looks like we’re well on the way to getting it. NAR chief economist Lawrence Yun said that he thinks the market is holding fairly even, as home sales need to recover first, and then we can look at prices stabilizing. Existing home sales are little changed from the second quarter but are notably higher than a year ago.

When we look at the numbers, total state existing home sales, including single family and condo sales, slipped just a tenth of a percent to a seasonally adjusted annual rate of 4.88 million in the third quarter. But those numbers were 17 percent higher than the pace set during the third quarter of 2010. And this wasn’t just a sales jump in select busy pockets spread through the land. Every state and the District of Columbia saw sales rise from a year ago, with 45 states posting double digit gains which is great news for buyers and sellers across the country.

When we look at prices, the national median existing single family home price, the median is where half sold for more and half sold for less, was about $169,000 in the third quarter, which is down about 5 percent from a year earlier, but distressed sales made up a portion of the 3rd quarter sales which can make prices look lower than they are.

Regionally, existing home sales in the Northeast increased in the third quarter of 2011 to a level of 770,000. In addition, sales were nearly are 12 percent above the third quarter of 2010. However the median existing single family home price in the Northeast fell 6 and a half percent.

In the Midwest, existing home sales also rose 2 and a half percent in this third quarter. The Midwest also saw the best year over year gains in the country where they were over 25 percent higher than a year ago.

Existing home sales in the South were unchanged in the third quarter this year but were 15 and a half percent above the third quarter of 2010. The median price in the South was about $153,200 in the third quarter, down a hair from a year earlier.

Existing sales in the West declined just about 3 percent in the third quarter. But like the rest of the country we saw big year over year gains, nearly 17 percent higher than a year ago.

So all in all, some pretty good news from the 3rd quarter of 2011 with things looking promising as we head into the winter market.