Category: real estate market

How President Trump Will Change the U.S. Housing Market

To say the least – this has been the hottest topic around the water cooler – so what are your thoughts?  Mine – Real Estate is always a sound, long term investment….  Share you opinions!

 

How President Trump Will Change the U.S. Housing Market

By Clare Trapasso

By now everyone on the planet knows that the majority of polls were wrong. Dead wrong! Donald Trump was elected the 45th U.S. president in a stunning upset. And his presidency is expected to have a profound impact on the nation and world.

Sure, everyone right now is obsessing over what kind of impact the new president-elect will have on immigration, taxes, international relations, and trade policies. But we have a more specific query: What will the real estate mogul turned most powerful man in the world mean for the future of residential housing? (We are realtor.com® after all.)

In the short term, probably not all that much.

However, we do know that the incoming president will limit the federal government’s role in the real estate market, as was outlined in the 66-page Republican Platform 2016. So, longer term, the implications of this for home buyers, sellers, and owners could be sweeping.

As for now, “our November elections come at one of the slowest time of the year for sales, so I doubt we will see much disruption to the normal seasonal pattern” of home buying and selling, says realtor.com’s chief economist, Jonathan Smoke. “However, one short-term risk could be if the [election] has a big impact to financial markets that lasts more than a few days.

“About half of voters got what they wanted,” he adds. “If this does impact purchases, it is more likely to be in blue states and not the red heartland.”

Could Trump make the housing market ‘great again’ for buyers?

A Trump presidency could be a boon for home buyers struggling to save up for a hefty down payment.

That’s because he has promised to cut taxes and shrink the number of tax brackets from seven to three. This could, in theory, leave buyers with more money to spend on the homes of their dreams.

And it could give the luxury market, which has been slowing down as of late, a boost, says James Harris, one of the star real estate agents on “Million Dollar Listing Los Angeles.”

“For the high-end, luxury market, it may turn into something very positive,” he says.

But real estate analysts were quick to point out that some of the reforms laid out in the Republican platform could potentially force buyers to plunk down larger down payments or pay higher interest rates. That could be problematic for those without a few extra million dollars in their bank accounts.

“The heart of Republican support—blue-collar, middle-aged workers—are the people who will [be affected] the most,” says Bob Edelstein, co-chair of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. “It may be harder to get mortgages, and those that will be available will be less advantageous.”

Adios, Fannie Mae and Freddie Mac?

It appears that the Republican Party, now led by Trump, wants to do away with—or substantially shrink—both Fannie Mae and Freddie Mac, although the language in the platform was a bit vague. It referred to the business models of the pair as “corrupt” and allowing “shareholders and executives [to] reap huge profits while the taxpayers cover all losses.”

Trump hasn’t yet provided a replacement plan for the current system, which relies heavily on both Fannie and Freddie.

The Republicans will also stop the FHA from providing taxpayer-guaranteed mortgages to wealthy home buyers. The FHA typically insures loans for low-income, first-time, and other buyers who don’t have enough for a 20% down payment.

Hit the road, Dodd-Frank?

The Republicans have also said they want to repeal—or at the very least, limit—the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act provides more oversight of financial institutions in the wake of the housing bust that plunged the nation into a recession.

Trump’s party also wants to get rid of the Consumer Financial Protection Bureau (or subject it to congressional appropriation). The bureau, created through Dodd-Frank, is charged with protecting consumers against predatory financial services companies, including those providing mortgages.

Dodd-Frank and agencies such as the CFPB are key to ensuring financial markets are kept in check and act fairly, says Edelstein.

However, Republicans allege that its “regulatory harassment of local and regional banks, the source of most home mortgages and small business loans, advantages big banks and makes it harder for Americans to buy a home” in the platform.

Unfortunately, no one at realtor.com has a crystal ball to see into the future of residential real estate under America’s new commander in chief. But it doesn’t look like demand from aspiring home buyers will taper off any time soon.

The election is “going to absolutely create a short-term uncertainty like Brexit,” says Harris. “But in the long run, I think everything will be fine.”

Clare Trapasso is the senior news editor of realtor.com. She previously covered finance for a Financial Times publication and wrote for the New York Daily News. Clare also teaches journalism at a local college, loves food festivals and bike trips, and enjoys playing with her dog..

 

I read this article at: http://www.realtor.com/news/trends/donald-trump-mean-for-housing/?identityID=9851214&MID=2016_1111_WeeklyNL&RID=353497822&cid=eml-2016-1111-WeeklyNL-blog_1_trumpandhousing-blogs_trends

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Existing-Home Sales Lose Momentum in July

Existing-Home Sales Lose Momentum in July

Existing-home sales lost momentum in July because of stubbornly low inventory on the market across the country, according to the National Association of REALTORS®. Last month, existing-home sales posted their first year-over-year drop since November 2015.

Total existing-home sales, which includes completed transactions for single-family homes, townhomes, condos, and co-ops, dropped 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July. Sales are 1.6 percent below a year ago.

“Severely restrained inventory, and the tightening grip it’s putting on affordability, is the primary culprit for the considerable sales slump throughout much of the country last month,” says NAR Chief Economist Lawrence Yun. “REALTORS® are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”

Here’s a closer look at the data from July:

  • Home prices: The median existing-home price for all housing types was $244,100, up 5.3 percent from a year ago.
  • All-cash sales: Comprising 21 percent of transactions in July, all-cash sales were down from 23 percent a year ago. It is the lowest share of cash sales since November 2009 (when it was 19 percent). Individual investors account for the bulk of cash sales and purchased 11 percent of homes in July, down from 13 percent a year ago.
  • Distressed sales: Foreclosures and short sales made up 5 percent of sales, down from 7 percent a year ago. It is the lowest share since NAR began tracking distressed sales in October 2008. Broken out, 4 percent of sales last month were foreclosures, while 1 percent were short sales. Foreclosures, on average, sold for a discount of 18 percent below market value; short sales were discounted an average of 16 percent.
  • Days on market: Forty-seven percent of sold homes were on the market for less than a month. Properties typically stayed on the market for 36 days in July, down from 42 days a year ago. Short sales were on the market the longest, at a median of 95 days, while foreclosures sold in 54 days. Non-distressed homes averaged 34 days on themarket.
  • Inventory levels: Total housing inventory by the end of the month inched up by 0.9 percent to 2.13 million existing homes for sale. Still, that is 5.8 percent lower than a year ago. Inventories have declined year-over-year for the last 14 consecutive months. Unsold inventory is at a 4.7-month supply at the current sales pace.

“Although home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring, the housing market is undershooting its full potential because of inadequate existing inventory combined with new-home construction failing to catch up with underlying demand,” Yun says. “As a result, sales in all regions are now flat or below a year ago, and price growth isn’t slowing to a healthier and sustainable pace.”

Source: National Association of REALTORS®

 I read this article at: http://realtormag.realtor.org/daily-news/2016/08/24/existing-home-sales-lose-momentum-in-july?om_rid=AACmlZ&om_mid=_BXvfk$B9RrPPgx&om_ntype=RMODaily

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Houston, We Have a Problem – what’s happening in Houston – could it happen to us?

When I came across this article, it stopped me dead in my tracks. There is talk that our Bay Area Real Estate Market is in a bubble. I don’t agree with that statement 100%. However, affordability is becoming the major issue here, with home and rental prices soaring. Will our market come crashing down? It’s hard to say when our economy is booming and new companies are making our Bay Area their home. Enjoy this article and you can read more through the Wall Street Journal.

Houston, We Have a Problem

As demand ramps up for California real estate and prices soar while buyers engage in fierce bidding wars, other real estate markets in the country are suffering. What goes up must come down and that’s exactly what the Houston market is experiencing. Using Houston as evidence, can we expect the California market to experience a slump like this?

Home sellers are slashing prices and offering incentives to keep buyers from walking away from contracts as an 18-month oil slump clobbers Houston’s once-booming housing market. Home construction permits in the area dropped 26% from a year earlier in the third quarter, while December sales of existing single-family houses fell nearly 10% from the same month of 2014, according to the Commerce Department and Houston-area brokers.

Builders are scrambling to reverse declining sales and rising cancellation rates by beefing up incentives. KB Home in October advertised homes in several of its Houston developments with price cuts of up to $31,000 and commissions available to buyers’ agents of $2,000 to $10,000. Even the high end is hurting with the average sale price for luxury homes, defined as the top 5% of the market, fell 5% to $1.3 million in the fourth quarter from the same period a year earlier, according to real-estate brokerage Redfin.

Behind the slump is the plunge in oil prices from close to $100 a barrel in August 2014 to about $29 in January 2016. On the other hand, oil prices tripled between 2009 and 2014, helping Houston outpace every other U.S. metropolitan area in home construction in the period. Prices for existing Houston homes rose 37% since 2011.

“While Houston has figured out how to diversify [its industry makeup] a lot, we still are an oil-and-gas city,” said Scott Merovitch, Houston division president for closely held builder Chesmar Homes LP, which saw a higher cancellation rate in Houston in 2015 and notched 20% fewer sales. “We’re going to ebb and flow with oil and gas.”

The first sign of trouble came in mid-2014, when oil prices began their decline. Houston’s home sales managed to sustain their momentum until this past summer, when news of the Iran nuclear accord spurred concerns of increased Iranian oil production adding to a supply glut. At the same time, big Houston oil-and-gas employer ConocoPhillips warned workers of layoffs.

Michele Marano, a Houston real-estate agent who specializes in oil-and-gas clients and worked with Ms. Fagbemiro, said “my buyers have completely backed off.” She added, “I have an enormous number of buyers but they’re sitting.”

With the CA market as hot as it is now, will it come crashing down to the point where incentives will need to be implemented to lure buyers back?

Would you be willing to offer these kinds of incentives? Let us know what you think.

Read the full story here:

I read this article at: http://re-insider.com/2016/02/23/houston-we-have-a-problem/

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR INSTAGRAM PAGE: http://instagram.com/thecatonteam

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

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