Fla.’s housing market: Median prices, new listings rise in April 2016

Fla.’s housing market: Median prices, new listings rise in April 2016

 

NAR: Existing-home sales rise in April for 2nd straight month

ORLANDO, Fla. – May 20, 2016 – Florida's housing market reported increased new listings, rising median prices, fewer days to a contract and fewer cash closed sales in April, according to the latest housing data released by Florida Realtors®. With inventory still constrained, statewide closed sales eased last month: Single-family home sales totaled 24,144, remaining relatively the same (down 0.6 percent) as April 2015.

"Still-low mortgage interest rates and a strong jobs outlook are positive trends for Florida's housing market," says2016 Florida Realtors®President Matey H. Veissi, broker and co-owner of Veissi & Associates in Miami. "We're also seeing a rising number of new listings added to the market, which is a trend that needs to continue as many areas still face a shortage of supply, particularly for single-family homes. New listings for existing single-family homes rose 3.1 percent compared to a year ago while new listings for townhouse-condo properties rose 3.7 percent."

Meanwhile, sellers continued to get more of their original asking price at the closing table. Sellers of existing single-family homes in April received 95.9 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.5 percent (median percentage).

The statewide median sales price for single-family existing homes last month was $213,000, up 9.2 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in April was $160,000, up 4.4 percent over the year-ago figure.

In April, statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year for the 53rd month in a row, Veissi noted. The median is the midpoint; half the homes sold for more, half for less.

Accordingto the National Association of Realtors®(NAR), thenational median sales price for existing single-family homes in March 2016 was $224,300, up 5.8 percent from the previous yearthenational median existing condo price was $209,600.In California, the statewide median sales price for single-family existing homes in March was$483,280; in Massachusetts, it was $329,505; in Maryland, it was $252,068; and in New York, it was $230,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 10,738 last month, down 5.3 percent compared to April 2015. However, the closed sales data reflected fewer short sales and cash-only sales in April: Short sales for townhouse-condo properties declined 43.2 percent while short sales for single-family homes dropped 35.9 percent. Closed sales may occur from 30 to 90-plus days after sales contracts are written.

"The positive growth we're seeing in sales for homes priced above the $150,000 mark is being offset by a continuing decline of homes for sale in the most affordable price ranges," says Florida Realtors®Chief Economist Brad O'Connor. "This trend is due in part to the ongoing decline in sales of distressed properties. In April, distressed sales accounted for less than 12 percent of all closed Multiple Listing Service (MLS) sales in Florida – the lowest such percentage we've recorded since the initial stages of the downturn last decade."

Inventory was at a 4.5-months' supply in April for single-family homes and at a 6.3-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.61 percent in April 2016, down from the 3.67 percent average recorded during the same month a year earlier.

Realtors also have access to local market stats (password protected) on Florida Realtors' website.

© 2016 Florida Realtors®

NAR: New condo rules may help student debt challenge

NAR: New condo rules may help student debt challenge

 

WASHINGTON – May 11, 2016 – Many young adults struggle to become homeowners, with the student-debt burden delaying, in part, their ability to buy, according to speakers at a regulatory issues forum on student debt and homeownership at the 2016 Realtors® Legislative Meetings & Trade Expo going on this week in Washington, D.C.

U.S. Housing and Urban Development (HUD) Secretary Julián Castro led the session on student loan debt and its impact on first-time buyers. During his remarks, Castro announced that some regulatory changes were coming soon for young men and women, many of whom are currently repaying loans they borrowed to earn a college degree.

Castro said the prescription to the American Dream has always been working hard, saving money and investing in yourself, often by getting a great education. What has changed in recent times: The third step – getting a great education – is more expensive than ever.

Castro highlighted a change in condo financing that could have an outsized effect on Florida due to state's high number of condos.

Castro noted that the Federal Housing Administration (FHA) announced changes to condo rules last November that address a complex recertification process, owner-occupancy requirements, and limits on the types of property insurance that FHA considers acceptable coverage. According to Castro, the proposed condo rule has left the HUD building and is at the Office of Management and Budget for review.

"Today's exciting news about the big changes coming to condos are a long-fought win for Realtors, and we're eager to see it come to fruition," said NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "Realtors know that condos are an important option for buyers, especially for first-time buyers looking for affordable options in the marketplace."

"Realtors help make the dream of homeownership for so many Americans a reality, and HUD is committed to partnering with them to ensure that the hard-won progress we're seeing in our housing market continues to grow for many years to come," Castro concluded.

A panel discussion followed Castro's presentation, led by Rohit Chopra, a senior official at the U.S. Department of Education; Meta Brown, senior economist at the Federal Reserve Bank of New York; Jessica Lautz, NAR managing director of survey research; and Mabel Guzman, chairwoman of NAR's student loan debt work group.

The panel agreed that affordability concerns, inventory shortages and lifestyle factors such as marrying later and having to student loan debt, burden a segment of creditworthy buyers by making it difficult to save for a downpayment.

Chopra discusses some of the ways the Education Department is addressing student loan debt. He said income-based repayment options and holding student loan servicers more accountable during the repayment process would help. "We need to make sure the pillars of the American Dream of graduating from college and owning a home go together – and not compete with each other," he said.

Sharing research from the New York Fed, Brown explained how student debt has defied the current business cycle of the past 10 years. Non-mortgage debt balances, such as debt from auto loans and credit cards, declined immediately after the Great Recession, and have since either flatlined or rebounded slowly. Student debt balances, however, have been the exception and ballooned from about $300 billion at the end of 2004 to over $1.2 trillion debt today.

Brown concluded that high student debt is likely creating a growing share of young student borrowers who are retreating from the housing market and ultimately having to live with their parents.

Pointing to NAR survey data, Lautz said even with the numerous obstacles they face, millennials do make up the largest share of buyers among all generations, and over 90 percent of them currently renting have indicated a desire to become homeowners in the future.

"With home prices and rents on the rise, saving for the downpayment is a challenge for many would-be buyers," said Lautz. "Unfortunately, among other factors, repaying student debt is delaying a typical individuals' path to homeownership by roughly five years."

The final speaker, Guzman, said that in addition to Congress passing legislation that helps ease borrowers' debt burden, Realtors can play a big role by working with their young clients at the beginning stages of their housing needs, particularly during the leasing process when they're renting their first place.

"Realtors can be a resourceful advocate for their young clients repaying student debt by educating them about their housing options and pointing them to credible resources, such as the Consumer Financial Protection Bureau's information on student debt," said Guzman. "The urge to be a homeowner is not lost among young adults, and we can all work together early in the process to make sure they're able to buy when they're ready."

© 2016 Florida Realtors®

NAR: Military niche has younger buyers, bigger homes

NAR: Military niche has younger buyers, bigger homes

WASHINGTON – May 3, 2016 – Out of all adults younger than 35, the share of active-service military members who buy a home significantly outpaces the share of non-military homebuyers.

According to the National Association of Realtors® (NAR) first-ever study of military clients, the 2016 Veterans & Active Military Home Buyers and Sellers Profile, young military buyers jump into the market due to household demographics and affordable financing options.

The survey also found that while nearly all veteran and non-military buyers and sellers use an agent, usage is practically universal among military members who are still on active duty.

NAR's survey compared military buyers and sellers to the general population. Of all homebuyers, 18 percent identified as veterans and three percent as active-military. Of all home sellers, 21 percent identified as veterans and one percent as active-military.

The results revealed quite a few contrasts, NAR says. At a median age of 34 years old, the typical active-service buyer was a lot younger than non-military buyers (40 years old) and more likely to be married and have multiple children living in their household. As a result, they typically bought a larger home that cost more than those purchased by both non-military buyers and veterans.

Active-service buyers (ages 18-35) bought homes at a far greater rate (51 percent) than non-military buyers (34 percent), says Lawrence Yun, NAR chief economist.

"More stable job security and no-downpayment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers," says Yun. "Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option."

Veterans Affairs (VA) loans – which offer over 100 percent financing for veteran and active-service homebuyers – were the most popular loan type for active-service and veteran buyers, leading to the majority of active-service buyers financing their entire home purchase and veterans putting down a median downpayment of 5 percent. For non-military buyers, the median downpayment was 11 percent.

"Current data shows that VA loans perform remarkably well and are a safe and affordable choice," says Yun. "Their current seriously delinquent and homes in foreclosure rate is 2.78 percent versus 3.44 percent for non-VA loans."

A place to call home is often times one of the few constants for the families of the brave men and women defending our country, says NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "That's why it's so important to ensure that homeownership opportunities and affordable financing options exist for qualified military personnel, veterans and their families."

Only five percent of veterans and three percent of active-service buyers said saving for a downpayment was the most difficult step. Of those, only four percent of veterans and 13 percent of active-service buyers said student loan debt delayed saving. Sixty-two percent of veterans cited having other types of debt and 43 percent of active-service military referenced credit card debt.

While a larger share of active-service military buyers had student loan debt compared to non-military buyers and veterans, their debt balances were typically lower. Among active-service members, 37 percent had student loan debt under $10,000 compared to 21 percent for those who've never served.

Active-service buyers prefer large single-family homes

The median income of veteran and active service member homebuyers in the survey was slightly lower than buyers who've never served in the military, which was $86,500. Active-service buyers typically bought a 2,170-square-foot home that cost more ($226,000) than those purchased by non-military buyers and veterans. Veteran buyers had a median income of $84,000, and they typically bought a 1,980-square-foot home costing $220,000.

Mirroring the general population of buyers, over 80 percent of both veterans and active-service buyers purchased a single-family home, with those currently serving purchasing single-family homes at the highest rate (87 percent).

The primary reason for the home purchase for active-service military was job relocation, followed closely by the desire to own a home of their own. Compared to non-military buyers, veterans were more likely to want to be closer to friends and family or moving for retirement.

Active service and veteran buyers and sellers rely on real estate agents

Veterans and active-service buyers purchased a home a lot further away from their previous residence (at 75 miles and 28 miles, respectively) than buyers who never served in the military (10 miles). Among the biggest factors influencing neighborhood choice, veterans were most influenced by the quality of the neighborhood, while active-service members desired convenience to their job the most.

While nearly all buyers predominantly used the Internet and a real estate agent during their home search, active-duty buyers used a real estate agent at an even higher rate (95 percent versus 88 percent for non-military buyers). As a group, they were also most likely to use mobile or tablet search engines and relocation companies during their search.

"Many Realtors are veterans themselves, and they understand the unique housing needs of those serving our country," says Salomone. "Whether it's relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors are committed to helping active-service members and veterans succeed in their homeownership goals."

Some of the characteristics of active-service sellers differed from non-military sellers:

• Military sellers were younger, far more likely to have multiple children living in their household and sold a home in a suburban area at a far higher rate.
• The use of an agent was highest for active-service military sellers (94 percent), who – likely dealing with relocating to a new area in a short timeframe – cited both wanting help marketing the home to potential buyers and help negotiating and dealing with buyers at a far higher rate than non-military sellers and veterans.
• 89 percent of veterans used an agent, on par with non-military sellers (90 percent).
• For non-military sellers, the most commonly cited reason for selling their home was that it was too small (18 percent), while the most common reason cited by veterans was to be closer to friends and family (23 percent).
• Job relocation for active-service military sellers was the most common reason for selling (43 percent).

© 2016 Florida Realtors®