Housing starts to regain ground in November 2009

Nationwide housing production rose 8.9% to a seasonally adjusted annual rate of 574,000 units in November 2009

RISMEDIA, December 18, 2009—Nationwide housing production rose 8.9% to a seasonally adjusted annual rate of 574,000 units in November 2009, according to figures released by the U.S. Commerce Department. The gain represented a partial bounce-back from an exceptionally slow month for housing activity in October, and was largely attributed to a big increase on the multifamily side.

“The fact that both starts and permits for new housing production rose last month is a good sign that we’re headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “That said, the November improvement was primarily on the multifamily side, and poor job markets and other economic factors are still keeping many potential buyers on the fence for the time being.”

“Home builders remain very cautious about starting new homes, and overall housing production is still down on a three-month average basis,” noted NAHB Chief Economist David Crowe. “Understandably, it will take some time for the newly extended and expanded home buyer tax credit to start boosting sales in individual markets–just as it did the last time such an incentive was enacted. However, the fact that permits increased in November is a hopeful indication that the desired impact of the tax credit on housing demand may be forthcoming early in 2010. In the meantime, credit for new housing production remains extremely difficult to come by, posing significant obstacles to builders with viable projects.”

Single-family housing starts made up some of the ground they lost in October, posting a modest 2.1% gain to a seasonally adjusted annual rate of 482,000 units in November. Meanwhile, multifamily starts rebounded from an all-time record low in the previous month with a 67.3% gain to a seasonally adjusted annual rate of 92,000 units in November.

Gains in housing production were registered across all regions of the country in November, with a 16.4% increase in the Northeast, a 3% gain in the Midwest, a 12.3% increase in the South and a nearly 2% gain in the West.

Permit issuance, which can be an indicator of future building activity, rose 6% in November to a seasonally adjusted annual rate of 584,000 units, its highest level in a year. Single-family permits rose 5.3% to 473,000 units, while multifamily permits rose 8.8% to 111,000 units.

Three out of four regions posted gains in housing permits for November, with a 4.7% increase reported in the Northeast, a 10.7% increase posted in the South, and a 2.7% gain registered in the West. The Midwest posted a 1.9% decline.

For more information, visit http://www.nahb.org.

Read more: http://rismedia.com/2009-12-17/housing-starts-regain-ground-in-november-2009/#ixzz0a46aXBRe

Posted by Mark Gipple on 12/18/2009 in Kansas City Market, — Add a Comment

Has the Housing Industry hit bottom?  As demand disappears, builders say 2009 marks housing bottom

Despite significantly lower traffic and sales this month, Southern California retained pricing strength

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RISMEDIA, December 18, 2009—Despite significantly lower traffic and sales this month, Southern California retained pricing strength and the majority of surveyed builders expect revenues to increase in 2010, according to John Burns Real Estate Consulting’s December survey of home builders.

“At this point, it’s clear that the extension and expansion of the tax credit weren’t enough to drive demand through the seasonally slow time of the year,” said Jody Kahn, a vice president with the firm. “This month’s survey results, backed by numerous channel checks and our Consulting team’s work in the market, confirm that buyers feel little urgency to buy homes today, and probably won’t until the tax credit expiration nears next Spring.”

This month’s survey consists of 264 home building industry executives from public and private companies. In total, their insight is reflective of on-the-ground conditions in 93 MSAs and 2,000+ communities.

Also of interest, 57% of respondents reported that they are planning for more revenue in 2010 than 2009, driven by increased community count, better orders and slightly higher prices. The most optimism came from the Northeast, Southwest, Texas and Southern California. “If they are correct, and we believe they are, the trough for this cycle was 2009 for single-family starts, new home sales and new home prices,” said CEO John Burns. “That being said, the continued shift to smaller, simpler homes may drive the headline new home price down a bit, and the recovery will be slowed by rising distressed sales.

Conditions are likely to vary dramatically by submarket and price point, which we have addressed in our Land Acquisition and New Home Strategy report for 23 MSAs.”

Additional survey highlights include:
-Average net sales per community declined to 1.4 nationally from 1.6 last month, and from a recent high of 2.0 in September. Only the Southern Florida and Southeast regions reported increased net sales per community, while the Southern California, Midwest and Northern Florida regions reported flat net sales rates.
-The average unsold, finished inventory per community increased to 3.3 units, rising from a recent low of 2.8 units. We believe the rise is explained by aggressive speculative starts by a few builders who are betting on strong sales in the Spring. In addition, higher cancellations during November from sales that did not close within the original tax credit deadline were reported.

Read more: http://rismedia.com/2009-12-17/has-the-housing-industry-hit-bottom-as-demand-disappears-builders-say-2009-marks-housings-bottom/#ixzz0Zz25vjUf

Posted by Mark Gipple on 12/17/2009 in — Add a Comment

House Prices Increase Slightly in 3rd Qtr 2009

U.S. house prices rose modestly in the third quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA)

RISMEDIA, November 25, 2009—U.S. house prices rose modestly in the third quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.2% higher on a seasonally adjusted basis in the third quarter than in the second quarter of 2009. Over the past year, seasonally adjusted prices fell 3.8% from the third quarter of 2008 to the third quarter of 2009.

FHFA’s seasonally adjusted monthly index for September 2009 was unchanged from August. The monthly change for the July-to-August period was revised to -0.5%, from an initial estimate of -0.3%. “These data provide some evidence of short-term stabilization in housing prices, a likely result of the many ongoing efforts to stabilize markets,” said DeMarco. “Given the headwinds facing markets across the country, including high unemployment rates and continued high levels of delinquency and foreclosures, the longer-term view remains uncertain.”

While the national, purchase-only house price index fell 3.8% from the third quarter of 2008 to the third quarter of 2009, prices of other goods and services fell 2.8%. Accordingly, the inflation-adjusted price of houses fell approximately 1.0% over the latest year.

Unlike the FHFA purchase-only index, FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, fell over the latest quarter. The index declined 2.4% in the latest quarter and 4.1% over the four-quarter period.

Additional findings include:
-Of the nine Census Divisions, the Mountain and Pacific Divisions, both in the Western U.S., experienced the most significant price movements in the latest quarter. Prices fell 1.4% in the Mountain Division, while prices increased 1.9% in the Pacific Division.

-Seasonally adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 19 states and Washington, D.C. Prices rose over the latest four quarters in only seven states.

-The purchase-only index for California rose 2.1% between the second and third quarters of this year.

-Of the purchase-only indexes for the 25 most-populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Phoenix-Mesa-Scottsdale, AZ Metropolitan Statistical Area. In that area, prices declined 22.0% between the third quarters of 2008 and 2009. Prices held up best in the Denver-Aurora-Broomfield, CO Metropolitan Area, where prices rose 3.3% over that period.

Read more: http://rismedia.com/2009-11-24/house-prices-increase-slightly-in-third-quarter-2009-first-quarterly-increase-since-second-quarter-2007/#more-42152#ixzz0Xzssf9Nj

Posted by Mark Gipple on 11/26/2009 in Kansas City Market, — Add a Comment

Homebuyer Tax Credit Extended until April 30, 2010

President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit

RISMEDIA, November 9, 2009—President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The http://www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

For more information, visit http://www.nahb.org [2].

Posted by Mark Gipple on 11/09/2009 in Financing, — Add a Comment

Appraisers Not Responsible for Low Appraisals

The appraiser organizations recommended four specific areas of guidance to mortgage lenders and financial institutions

RISMEDIA, October 20, 2009—Responding to recent testimony before the House Small Business Committee, the Appraisal Institute, one of the nation’s largest organizations of real estate appraisers, reminded the Committee’s leaders that appraisers are not responsible for so-called low appraisals.

The Appraisal Institute joined the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers in a letter reacting to recent testimony by National Association of Home Builders President Joe Robson. The four appraiser organizations, representing more than 35,000 members, urged Committee Chair Nydia Velazquez, D-N.Y., and Ranking Member Sam Graves, R-Mo., not to “shoot the messenger.”

“It is important for the Committee to understand that appraisers do not create value in the housing market; they report on what is occurring in the market,” the letter stated. “The fact that some home sales have failed to close is largely the result of the housing market we are in today. Accordingly, we urge caution in connection with those who would prefer to ‘shoot the messenger’ rather than face the realities of today’s distressed market.”

Robson’s testimony to the Committee alleged the improper use of foreclosed properties and properties from distressed sales as comparables in determining values of single family homes where no adjustment had been made to reflect the relative condition of the properties. His testimony also suggested that a high number of new home sales have fallen through because the appraisal reflects a value below the contract sales price for the property.

“Professional appraisers fully understand and agree that if foreclosure and/or distressed property sales are used as comparables, they must be treated carefully,” the letter stated. “Appropriate adjustments must be made by a qualified appraiser to reflect the physical condition of such properties as compared to the subject property. This is common practice. It is the professional real estate appraiser’s responsibility to be aware of these conditions and analyze the market, considering all relevant data and applying proven techniques and methods.”

The letter also stated that, “Given the complexity of this issue in today’s market, the competency and qualifications of the real estate appraiser is of critical importance in our system of real estate financing. Lenders or their agents–including appraisal management companies–would be well served by retaining the services of highly qualified appraisers where such conditions exist.”

The appraiser organizations recommended four specific areas of guidance to mortgage lenders and financial institutions:

-Seek out the services of highly qualified appraisers for complex appraisal assignments.
-Recognize that sales concessions are as important as the condition of a property to the credibility and reliability of the appraisal.
-Provide sufficient time for the real estate appraiser to conduct the proper analysis of the subject property and comparables used.
-Promote communication between appraisers, builders and real estate agents.

Read more: http://rismedia.com/2009-10-19/appraisers-not-responsible-for-low-appraisals/#ixzz0UPslnTQi

Posted by Mark Gipple on 10/19/2009 in Home Buying Tips, — Add a Comment