Up to Date Real Estate News from the Experts in Urban Living, October 2012

Up to Date Real Estate News from the Experts in Urban Living October, 2012

Can Real Estate rescue the economy?

Source: OC Register, July 27, 2012

Things are looking, more than relatively speaking, upbeat when it comes to numerous parts of the property game. Let’s take a peek at the progress in this key economic driver!

  • Home-buying: By any measure, U.S. house shopping was strong this spring — and has remained so in early summer. Look at sales of existing single-family houses, as measured by the National Association of Realtors. This count ran 4.5 percent higher this June than in 2011.Or ponder Data-Quick’s tracking of sales of all residences in 98 major cities showing that buying is up 12.4 percent in July vs. a year ago. And if you want a vision of what’s next, try the Realtors’ Pending Sales Index — tracking deals in the works. This metric, which hints at what closed sales will look like in two months or so, in June ran 9.5 percent higher than 2011.
  • Loan Rates: Could financing be any cheaper? This week’s Freddie Mac lender survey showed average 30-year fixed rate at another record low at 3.49 percent vs. 4.55 percent a year ago. For a borrower getting that average deal – and borrowing $417,000, the conforming mortgage limit – the drop’s meant a savings of $255 a month to a $1,870 payment. This trend, and huge price cuts since the crash, means nationwide housing adorability – by many measures – hasn’t been better. The National Association of Home Builders/Wells Fargo Housing Opportunity Index says 77.5 percent of homes sold in this year’s first quarter were affordable to families earning the national median income. The big catch? Getting a mortgage is tricky these days.
  • Home Pricing: By no means is anybody seeing go-go style appreciation despite improved buying patterns. But there are plenty of hints that housing values have bottomed. For example, the Zillow Home Value Index rose 0.2 percent in the second quarter vs. 2011 — first gain on an annual basis since 2007. And the Federal Housing Finance Agency¹s monthly House Price Index for May was up 3.7 percent vs. a year ago — fourth consecutive gain and the largest since 2006.
  • Foreclosures: The dark side is a tad rosier. Core-Logic said that in May completed U.S. foreclosures ran 18 percent lower than a year ago. Note: the pace of foreclosures if off 27 percent from the 2010 peak. This means roughly 1.4 million homes, or a supply equal to 3.4 percent of all residences with a mortgage, were in lender’s nationwide foreclosure inventory. That’s down 100,000 in a year. Whether this is true improvement, or just lender reluctance to act, is a question mark.
  • Home building: The better real estate news convinced numerous developers it was time to build again. June’s U.S. new-home starts, by Commerce Department math, are up 42 percent in a year to the most activity since October 2008. It’s a key factor in overall U.S. construction spending for May running 7 percent above a year ago to its fastest pace since December 2009?
  • Apartment rents: Those looking for a rental are paying up. Job growth plus folks with enough financial confidence to leave parents and roommates are a winning combination for apartment owners. According to researchers at Reis Inc., the number of empty units is at an 11-year low — with only a 4.7 percent vacancy rate. As a result, landlords have the power to raise rents at a 2.2 percent annual rate nationally– and Reis found rents up in all of the 82 big markets it tracks. Tight supply and rent hikes show renter optimism – and help create to a boom let in new apartment construction.
  • Real estate jobs: Like the overall economy, construction-job growth — as an example — has been spotty. A steep pullback in public projects, due to government spending cuts, offset new private projects. In June, for example, just half the states had construction job gains, the Associated General Contractors of America found. California’s construction bosses added the most 27,200 — or a 5 percent jump — in the year. Nationwide, the construction trades added 14,000 workers in a year — or a 0.4 percent gain — to 5.5 million. The unemployment rate for construction workers fell to 12.8 percent, the lowest since 2008. (It was 20.1 percent rate in June 2010!) But the sad truth is many tradespeople have turned to other industries for work.
  • Investment returns: Commercial real estate continues to be a hot property, as investors choose the recovering industry as a way to boost returns in an era where bank accounts earn little and stock markets are volatile. By one measure — the FTSE NAREIT index of traded real estate investment trusts — commercial real estate values were literally sliced in half in the crash. Since that downturn, though, real estate trusts stormed back — essentially doubling in value from the start of 2009 through 2012’s first half. By another metric, Morning star’s tracking of real estate mutual funds saw this group average 33 percent annual gains in the past three years — best returns in the fund industry. Clearly, some investors saw a real estate rebound coming – and profited handsomely.

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Financial Update by Maurice

What a great week for mortgages. With rates at all-time lows the purchase activity in the market has been explosive. Clients are constantly battling for properties and we find that often times we are fighting against multiple offers. Lately I have been able to help clients get their offers accepted even with lower down payments. This has happened by our ability to obtain a Desktop Fannie Mae approval ahead of time. We quickly furnish this to the listing agent showing them the client has completed their application and we are ready to quickly move forward. We recognize the need to be proactive in helping you get your buyers in escrow and we are here to help in every way possible.

Take a look at the 15 year fixed rates. They are incredible. We have never seen rates like this before and for many clients, this may be the perfect way to have a home owned free and clear as they head toward retirement.

Our quote this week goes back to good old fashioned work ethics: You cannot plow a field by turning it over in your mind, (author unknown). Let us know how we can put our hard work ethic in place for you.

Based in Orange County, California, The Soussé Group is ranked number one in total sales in Irvine, California, 92612. Topped $120 million in sales in 2011, 2010, 2009, 2008, 2007 alone with 320 completed transactions and have successfully risen to the top 50 along the 25,000 agents in Orange County.
Kerry and Maurice Soussé
Realtor / Broker
The Soussé Group
HÔM Real Estate Group
1200 Newport Center Drive, Suite 100
Newport Beach, CA 92660
Direct Line: (714) 412-9014
Direct Line: (714) 412-8512
Direct Fax : (949) 640-7606
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