Home Values Rise for First Time in 5 Years

Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday.

Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter, the first annual increase since 2007, real estate listing site Zillow reported. Prices were up 2.1% from the first quarter.

Even though June marked the fourth consecutive month of home value increases, overall home prices are still down almost 24% since April 2007, when Zillow began to track home values.

“[I]t seems clear that the country has hit a bottom in home values,” said Zillow’s chief economist Stan Humphries. “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.”

Last winter, Zillow projected that the housing market turnaround would not arrive until the end of the year.

Other home price indexes have also recorded gains lately, including the S&P/Case-Shiller home price index. In it latest release, it reported that home prices in 20 major markets rose 1.3% in April, the first monthly increase in seven months.

Where home prices are rising the fastest

Zillow uses a different methodology in calculating home values than other home price indexes like Case-Shiller and the Federal Housing Finance Agency. Sales of foreclosed, bank-owned properties, for example, are not factored into Zillow’s data. Zillow does include short sales, however, which are more difficult to distinguish from conventional sales.

“Our index is geared to consumers, conventional sellers deciding whether they want to put their homes on the market,” said Humphries.

The indexes that include foreclosures in their market data show larger price declines. The peak-to-trough drop for the S&P/Case-Shiller home price index, for example, is about 34% compared with Zillow’s 24%.

Fewer than one third of the 167 metro areas Zillow surveyed recorded annual increases in home values, but the size of the price gains in these areas more than offset the losses posted by the remaining two-thirds of the markets.

In Phoenix, the biggest gainer, home values soared 12.1% year-over-year to a median of $136,200. Meanwhile, the biggest loss sustained by any of the 30 largest metro areas was in Chicago where median home values fell 5.8% to $158,600.

Foreclosures remain one of the biggest risks to the housing market recovery, Humphries said. In the wake of the national foreclosure settlement which clarified how banks can legally pursue foreclosures, Humphries expects the pace of foreclosures to pick up.

“That will translate to more homes on the market,” he said. “But we think demand will rise to absorb that.”

Zillow expects the housing market to continue to slowly recover, with median home values projected to climb 1.1% — relatively flat — over the next 12 months.

Most affordable cities for buying a home

Beaten down markets like Phoenix, Las Vegas and many Florida cities, will likely record greater-than-average gains over the next 12 months, said Humphries.

The results in those places, however, will be bumpy. Home price increases will cause some homeowners who have been patiently waiting for values to rebound to put their homes on the market. And those additional listings could cool prices for a while, resulting in a staircase effect with “price spikes followed by plateaus,” said Humphries. 

 

By Les Christie, CNNMoney


Hillsborough Title Dedicates Month of June to Helping Local Charities

Hillsborough Title’s Marie Combs and Jane Koy present a check to the Realtor Care Foundation.

Hillsborough Title dedicated the month of June to helping out local charities. Hillsborough Title ran a “like us for charity” contest on Facebook, and held a charity car wash. The Plant City location hosted the charity car wash which benefitted the United Food Bank of Plant City. Food and monetary donations collected totaled more than $1,200. Hillsborough Title, company-wide, ran a contest on Facebook that generated a donation of $1,000 for GTAR’s Realtor Care Foundation and the American Cancer Society’s Relay for Life.

“I am incredibly proud of the hard-work my team contributed to such great causes,” stated Aaron M. Davis, President/CEO of Hillsborough Title. “The United Food Bank of Plant City is hit hardest in the summer months because donations level out, so it’s astonishing to see the amount of generosity that is carried throughout the community.

The charity car wash was held June 9th where food and monetary donations were welcomed. The Plant City Hillsborough Title team delivered a total of 1,244 pounds of collected food items, and presented the Food Bank with a check for $340.

Hillsborough Title’s Facebook contest helped to raise funds for the Realtor Care Foundation and Relay for Life. The contest concluded with 781 page “likes”. The company generously rounded up the final number and donated a total of $1,000 to the selected charities.

“I was so pleased to see the Realtor Care Foundation as the charity selected to receive the donation in honor of our contest because they have so many wonderful programs in place to better the real estate market and the community as a whole,” explained Davis when asked about his charitable contribution.    

The REALTORS® Care is a charitable foundation that was formed to create and provide educational and housing programs and services. Tampa Bay’s REALTORS® are continually making a difference in the neighborhoods in which they live, work and serve. REALTORS® throughout the Tampa Bay Area have a long standing tradition of community involvement and regularly volunteer their time and efforts to numerous charities and worthy causes. From fundraising to volunteering, Tampa REALTORS® remain active in their communities and diligent in their goal to give back. So the formation of the REALTORS® Care Foundation of GTAR was an easy and natural extension of what it means to be a REALTOR® in Hillsborough County.  


Survey Shows Americans Are Increasingly Confident about Homeownership

Brookfield Real Estate and Relocation Affiliates Inc., owner of the Prudential Real Estate franchise network, recently released the quarterly Prudential Real Estate Outlook Survey showing that Americans’ confidence in homeownership and real estate continues climbing from the first quarter and a year earlier.

Signs of growing confidence are widespread, according to the national survey. For instance:

69 percent believe that real estate is a good investment despite the market volatility of the past few years, up 6 percentage points from the first-quarter 2012 survey and 17 percentage points from first quarter 2011.

72 percent expressed confidence that the real estate market and property values will improve during the next two years, including a 6-point jump among those “very confident” or “confident” vs. the first quarter 2012, and a 14-point gain in this subset over first quarter 2011.

Nearly two-thirds (64 percent) of respondents have a favorable perception of the U.S. housing market, up from 60 percent in first quarter 2012 and 52 percent in first quarter 2011).

“The American Dream is clearly on the mend,” says Earl Lee, president, Prudential Real Estate. “Americans are feeling better about homeownership and the ongoing recovery taking place in residential real estate. Many are increasingly optimistic about their personal circumstances and, with housing affordability near all-time highs, they want to act on the opportunity.”

Factors driving homeownership

Homeownership remains the central component to the American Dream, as 78 percent of respondents said owning a home was still “very important” – the same percentage reported in the first-quarter 2012 study. A full 98 percent said homeownership was at least somewhat important.

In addition, with interest rates at historically low levels, 96 percent of respondents at least “somewhat agree” that now is a great time to buy a home – the same percentage reported in the first-quarter 2012 study.

More than the financial reasons to buy a home, respondents placed higher priority on the emotional reasons for homeownership. “Control over living space,” “more space for family,” “safer neighborhood” and “good place to raise a family” rated higher than “a good investment,” “financial security” and “tax benefits.”

“Normalcy is returning to the U.S. real estate market and more people are buying homes for traditional reasons – to raise a family, feel secure and build a future,” says Lee. “Every last emotion is rolled up into owning a home – it’s where life happens – so it’s no surprise that the emotional side outweighs financial reasons for owning a home among respondents.”

Caution remains

The survey also shows that consumers remain cautious about the real estate market and process, as a full 30 percent “strongly agree” that the housing crisis reminds them to be more careful about buying or selling a home; up two percentage points from the first-quarter 2012 survey. In addition:

Nearly two-thirds (65 percent) of respondents indicated that financing or getting a mortgage is more challenging than it was before the market crisis, which is up from 58% in the first-quarter 2012 survey.

Among those considering a real estate transaction, 39 percent expressed concern they won’t be able to sell their current home, up 11 points from the first-quarter 2012 survey and 10 points from first quarter 2011.

Given the dynamics and challenges of today’s real estate market, nearly three out of four (74 percent) respondents think it is more important than ever to work with a good real estate agent for the best success in buying or selling a home (up from 71 percent in first-quarter 2012 and 67 percent in first quarter 2011).

“Real estate markets are improving around the country and consumers face many choices,” concludes Lee. “Consumers should seek out a real estate professional who can help them make the best choices to suit their needs.”

Source: RIS Media


Housing Passes a Milestone

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.

The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a housing data-analysis firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won’t happen again this year, he says.

Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.

“Even with the overall economy slowing,” Wells Fargo Securities economists said, cautiously, in a note to clients, “the budding recovery in the housing market appears to be gradually gaining momentum.”

Economists aren’t always right, but on this at least they agree: A new Wall Street Journal survey of forecasters found 44 believe the housing market has reached its bottom; only three don’t.

Housing is still far from healthy despite the Federal Reserve’s efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac’s latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. Americans’ equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction slowly.

Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. “A little tail wind is a lot better than a headwind,” says economist Chip Case, the “Case” in Case-Shiller.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. “Manufacturing had led growth and construction had lagged,” JPMorgan Chase economists said last week.”Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life.”

Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.

But the housing bust is over.

By David Wessel, Wall Street Journal


Clear Capital Reports Rising Prices Across All Regions

National home prices saw both quarterly and yearly gains in June, and all four regions across the U.S. posted quarterly increases, according to the Home Data Index (HDI) released by Clear Capital Tuesday.

Home prices rose by 1.7 percent in June from the previous quarter and a year ago, and growth is expected to continue into the second half of the year at a rate of 2.5 percent, Clear Capital reported.

Broad-based regional gains and expanding progress are reasons for the current gains and expected future growth.

Out of all four regions, the West saw the greatest quarterly increase at 3.5 percent, followed by the Midwest (1.2 percent), the South (1.5 percent), and the Northeast (0.8 percent).

“June home price trends provided further evidence that housing has turned the corner, with the momentum of the recovery picking up speed,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital.

Villacorta noted that even the Midwest started to catch up with the other regions, shedding the drag of recent declines.

With its 1.2 percent gain in June, the Midwest saw the greatest quarterly improvement after posting a 2 percent quarterly loss in May.

The West was also notable due to the region’s gains across all price levels as demand outpace supply for the region. Clear Capital explained in a report that recovery generally begins in lower priced segments for most markets, but the West is seeing price increases in higher priced homes.

Out of the top 50 metros areas, 7 saw quarterly price declines in June, but only four reported declines greater than 1 percent.

The 43 metros that posted increases averaged gains of 3 percent. Among the metros that saw values pick up, 10 experienced price growth greater than 5 percent.

Phoenix was highlighted as a market with consistent growth over the past 10 months. Quarterly growth for the metro was 8.7 percent and annual gains were 20.4 percent.

For the year, Seattle is expected to surpass all other markets, with prices projected to increase by 14.4 percent by the end of the year, the report stated.

“Looking forward over the rest of 2012, we expect to see national, regional, and most metro markets improve by varying degrees. And while it’s encouraging to see broad-based advancements coupled with positive forecasts, we remain cautiously optimistic. The current strength in housing fundamentals remains vulnerable to domestic and global economic challenges,” said Villacorta

By Esther Cho, DSNews


Bay Cities Bank Recognizes Hillsborough Title

Bay Cities Bank recognized Hillsborough Title as its’ “featured client” for the summer 2012 quarter. In an interview, Hillsborough Title President/CEO discusses how Hillsborough Title has garnered success in the industry, for “our success was formed on being a “Hometown” title agency, and we enjoy working with others who share that same formula for success”.

 To read the full article click here