Home Builder Confidence Rises Driven by Apartment Construction

Home Builder confidenceApartment Construction drove Home Builder Confidence to it’s highest level in nearly 8 Years.   Have you seen the large cranes dotting the blue skies of Metro Phoenix. South and central Scottsdale is so built out with subdivisions of single family homes, the city is now adding more apartment buildings to accommodate our population growth. There is still land available for single family housing in North Scottsdale as well, but the price point is high and therefore limits any but custom luxury home builders opportunities.

Some of  the confidence among builders is still likely growing in connection with stronger housing markets and high demand for homes. These conditions are being driven by short supplies of homes for sale in many markets, including the southeast and west  valley where open land is still available.

Apartment Construction Factors into Rising Home Builder Confidence?

Housing starts rose in July, but were led by the volatile apartment sector rather than single- family homes.

On Friday, the U.S. Department of Commerce reported 896,000 housing starts on a seasonally adjusted annual basis. This reading fell short of expectations of 915,000 housing starts, but exceeded June’s reading of 846,000 housing starts.

Starts for residential buildings with five or more units rose by 20.90 percent year-over-year while construction of one of one-to-four family residential buildings fell by 2.20 percent. Demand for rental properties and a shortage of available single family homes was seen by economists as contributing to increasing multi-family housing construction.

Analysts said that some home builders may be holding back on single-family home construction due to increasing materials and labor costs, but this doesn’t reflect the record level of builder confidence reported in the NAHB Housing Market Index.

Building homes at less than optimum capacity isn’t good news for the shortage of available single-family homes. Rising mortgage rates are also a concern for home builders, as fewer borrowers may be able to qualify for mortgage loans needed for financing home purchases.

Building permits numbers were also released on Friday, and presented a more positive picture than housing starts. July’s reading for building permits issued rose by 2.70 percent in July to an annual reading of 943,000 permits against expectations of 953,000 permits issued and exceeded June’s reading of 918,000.

Building permits issued provide an indication of future housing starts.

Want to enlist the expertise of a local Realtor?
Give Debra Obrock a call (480) 688-2000.

Housing Market Trends for Metro Phoenix

Phoneix HOusing Market TrendsThe Phoenix housing market trends are not the same across the Valley. As you can see from the stats provided by Fidelity National Title below. However the housing market trends continues to lean towards a  strong Seller’s Market across the board.

If you have been thinking about selling your home this is an ideal time to find out what your home is worth.  There is an over-abundance of Buyers seeking homes in all areas of the valley and at all different price points.

Take advantage of the strong Sellers market and avoid having “Sellers Remorse” when the market shifts once all the investors who purchased homes at rock bottom prices during the downturn of the housing market decide it’s time to collect on their investment and flood the market with homes for sale.

Phoenix Housing Market Trends by Area

Northeast Valleyactive listing count is 1.5% higher than in the same period in 2012. However, sales rate is 4% lower, representing a 3.6 month supply, up from 3.4 same time last year. This area’s price per square foot is now 17% higher than May 2012 and the median sales price is up 18% to $485,000, the highest since June 2008 (and January 2005).

Southeast Valleyactive listing count is 5% lower than the same period in 2012. However, this does represent a 3% increase over the previous month. On a positive note, monthly sales were up by 11% from this time last year, representing a 1.6 month supply. This areas pending $/SF continues to climb which will result in higher sales prices next month and months’ supply is at an unusual low in many zip codes within the Southeast Valley.

West Valleyactive listing count has declined 5% from previous month, additionally; it dropped 11% from same time last year. Sales have jumped a whopping 9% since last month and 12% since the same period 2012. This puts the months’ supply at a very low 1.6 month supply. This area remains the toughest for buyers right now.

Central Valleycomprising Phoenix itself (excluding Ahwatukee) active listing count has increased 1.4% from previous month, additionally; it dropped 7% from same time last year. Monthly sales are up 10% from this time last year, representing a 1.6 month supply (normal level 4.5). The prices in this area continue on a strong upward climb and the average $/SF is up 23% from last year.

Phoenix Housing Market Trends Stats

Phoenix Housing Market Trends

Wondering What Your Home is Worth in Today’s Market?
Let Debra Obrock Show You. (480) 688-2000

RE/MAX: Home Prices Up Yearly for 17th Straight Month in June

Remax 40 yearsAccording to RE/MAX’s housing report, which covers 52 metropolitan area, home prices and home sales posted annual gains for at least 17 straight months in June

At $193,750, the median price of a home in June sat 12.6 percent above the year-ago level and increased 5 percent from May.

Out of the 52 metros tracked, Albuquerque, New Mexico, was the only market to experience a yearly decrease after prices fell 4.2 percent.

Home sales also stood higher compared to last year, increasing 4.1 percent in June. The improvement marks the 24th month of consecutive gains. On a monthly basis, sales decreased, falling 4.3 percent from May to June.

Thirty-one out of the 52 metros experienced an annual increase in sales, and 13 of those areas reported double-digit gains.

The metros that stood out for their gains in June included Albuquerque, New Mexico, where sales surged 42.9 percent, as well as Providence, Rhode Island (+25.3 percent); Chicago (+20.7 percent); Charlotte, North Carolina (+19.6 percent), and Baltimore (+18 percent).

“Summer sales are traditionally the strongest of the year, but this year we’re seeing sales at a double-digit pace above last summer,” noted Margaret Kelly, CEO of RE/MAX, LLC. “Even after the recession, interest in homeownership remains quite high. Low mortgage rates and attractive home prices are still creating opportunities with the best home affordability the market has seen in years.”

According to RE/MAX, it’s still a seller’s market, with supply at 3.9 months. In addition, inventory fell 23.9 percent from June 2012, and from May to June, inventory decreased 2.3 percent.

On an annual basis, 49 out of the 52 metros had lower levels of inventory compared to last year.

On the upside, 18 metros saw inventory increase on a monthly basis, though RE/MAX stated, “the problem of low home inventories may be in the early stage of a rebound.”

Homes were taken of the market at a faster pace in June, with days on the market at the lowest level in a year. Last month, it took 65 days for a home to get sold after getting listed, down from 84 days in June 2012 and 70 in May.

Source: DSNEWS.com

Wondering What Your Home is Worth?  Let Debra Obrock show you: (480) 688-2000.

Phoenix Monthly Market Analysis for July 2013

Phoenix Monthly Market AnalysisHere’s the Phoenix Monthly Market Analysis for July using ARMLS stats and commentary. As spring moves into summer and temperatures rise in Phoenix, it is not uncommon for sales volumes to slip, as was the case in June.

Wondering What your Home is Worth?  Give Debra a Call:480 688-2000

Sales numbers in June were unremarkable totaling 8,228, down from 9,436 in May.8,228, down from 9,436 in May. Sales volume for this year is slightly ahead of the pace set last  year at 8,130; however fell short of the 2009, 2010, and 2011 sales figures. The peak sales volume for June occurred in 2011 when 11,125 homes were sold.

Sales in July are almost always lower than in June. The current number of pending sales is  8,889, which is down from last month’s 9,813 and we should expect a further decline next
month. This is not unusual, prospective home buyers can’t be blamed for preferring mountains and beaches to shopping for homes. Climate has always been a major selling point in
Phoenix, but not when it’s 119 degrees, unless of course they’re coming from the scorching  130 degree weather in Death Valley.

Demand is not our problem, as homes attractively priced are selling quickly as demonstrated by an average of 66 days on the market. Our issue is low supply and the imbalance between
the two is clearly reflected by continued price appreciation. The monthly median sales price rose 2.9% from $175,000 to $180,000. The year-over-year increase in the median sales price  for all ARMLS sold listings showed a dramatic 27.7% increase. The median sales price is  $39,000 higher than last year at this time, up from $141,000.
The average sales price for June was $236,954 which is down from $237,000 in May. The modest decline in the average price in June is not indicative of softening prices, but instead is reflective of fewer sales on the high end. With the current shortage of supply, 19,511 listings in  total, upward pricing pressure will continue.

ARMLS is currently showing 15,725 Active and 3,786 UCB listings, 30,000 total active listings is considered typical. UCB listings are down 45% to 3,186 from 6,859 this time last year, which is  a significant change. UCB listings are comprised almost entirely of short sales. Pair dwindling  short sale numbers with active notices declining 55% year-over-year(17,910 to 8,027) and we  have a rapidly declining distressed inventory. While distressed sales still account for 21.5% of  our total sales, one year ago they accounted for 46.8%. ARMLS defines distressed sales as a  combination of short and REO. If we look at the median price by category in June, the median  price for a normal sale was $210,000 and the distressed median was $142,000.

As the level of distress continues to decline in our marketplace, prices will gravitate to the  higher price point. New inventory in June was at 9,246 compared to 9,271 a year ago. With the
current shortage of supply, and no significant changes coming with new inventory, upward  pricing appreciation is inevitable. The Pending Price Index projects an increase in July in both  the average and median sales prices.

Phoenix Monthly Market Analysis Charts

Phoenix Monthly Market Report Sales

Monthly Market Report List & Sales


Wondering What your Home is Worth?  Give Debra a Call:480 688-2000

What’s Ahead For Mortgage Rates This Week

Mortgage Rates  The past week was active for mortgage rates. The aftermath of the Fed’s indication that it may start dialing back its multi-billion dollar monthly purchases of Treasury and mortgage backed securities has sent mortgage rates to record highs.

What Impacted activity on Mortgage Rates

Tuesday’s Case-Shiller Composite Indices for April demonstrate the momentum of recovery in many housing markets. As of April, national home prices had increased by 12.10 percent as compared to April 2012. April’s reading also exceeded March’s reading of 10.10 percent year-over-year.

FHFA released its home prices report for April and noted that the average price for homes with mortgages owned by Fannie Mae or Freddie Mac increased by 7.40 percent, which slightly surpassed the March reading of 7.20 percent.

RE/MAX reported a double digit yearly gains in sales prices in May.

The Department of Commerce released New Home Sales for May and reported 476,000 new homes sold on a seasonally-adjusted annual basis. This exceeded expectations of 453,000 new home sales and also surpassed April’s reading of 454,000 new homes sold.

Wednesday brought the Gross Domestic Product (GDP) report for the first quarter of 2013. The GDP grew by 1.80 percent against expectations of 2.40 percent and the previous quarter’s growth, also 2.40 percent.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) brought the days of bargain basement mortgage rates to a halt as average mortgage rates for a 30-year fixed rate mortgage moved from last week’s 3.93 percent to 4.46 percent. Average rates for a 15-year fixed rate mortgage rose from 3.04 percent 3.50 percent. This was the largest weekly jump in mortgage rates in 26 years.

Home buyers may also consider a 5/1 adjustable rate mortgage, which provides an average 5 year fixed rate of 2.74 percent.  The fixed mortgage rate converts to an adjustable rate after five years.

The National Association of REALTORS ® reported that Pending Home Sales in May rose by +6.70 percent to their highest level in 6 years.

Last week ended on a positive note with the Consumer Sentiment Index for June beating expectations of 83.0 and coming in at 84.1. May’s reading was 82.1; higher consumer confidence is likely driving demand for available homes.

Whats Ahead This Week

Next week’s scheduled economic news includes Construction Spending due on Monday and the ADP private sector jobs report is set for Wednesday.

Thursday the financial markets are closed as we celebrate the July 4th holiday.

Friday brings the Department of Labor’s Non-farm Payrolls Report and the National Unemployment Rate. If the unemployment rate stays steady at 7.60 percent, this may reduce fears that the Fed will start reducing its monetary easing program any time soon, which should help to slow the recent increases in mortgage rates.

If you’re thinking of buying a home, this may be the last chance for finding the best deal on mortgage rates; meanwhile, home prices continue trending up as well. Get started on looking for your new home by giving me a call: (480) 688-2000

RE/MAX Reports Double-Digit Yearly Gains in Sales, Prices in May

RE/MAXRE/MAX said in its National Housing Report for May that after staging a turnaround last year, the housing market is continuing on the road to stabilization in 2013.

Both home sales and prices rose at double-digit rates above May 2012, and inventory is showing signs of stability, the company reported.

According to the report, closed transactions increased in May 13.2 percent over April and 11.6 percent over the same month last year. May was the 23rd consecutive month to post higher sales on a year-over-year basis.

Of the 52 metros surveyed last month, 45 reported higher sales than May 2012, with 30 posting double-digit gains.
For all homes sold in May, the median price was $185,000, a 4.2 percent gain over April and a 10.8 percent increase over May 2012.

RE/MAX Reported

Of the markets surveyed, only three experienced a year-over-year price drop: Trenton (0.2 percent); Albuquerque (2.7 percent); and Burlington, Vermont (0.6 percent).Twenty-one metros posted double-digit price gains.

May was the fourth straight month in which both home sales and prices rose on a monthly and yearly basis.“After a few years of disappointing data, we are so pleased that a housing recovery is finally in full swing. The month of May continues the trend we’ve been seeing in 2013, steady and consistent growth,” said RE/MAX CEO Margaret Kelly. “Last year was the year of the housing turn-around and this year represents a start on the road to sustainability.”

Reduced inventory continues to be a concern, however, though recent monthly changes have been promising. The number of homes for sale was down just 0.9 percent from April, showing inventories “may be in the early stages of a return to more balanced levels.” Year-over-year, inventory was down 28.4 percent. The corresponding months supply in May was 3.5, far below the balanced level of 6 months.

The combination of low supply and high demand led to a significant drop in listing times for homes sold in May. According to RE/MAX, the average days on market was 70, a full week lower than the April average and 22 days lower than last year.

Wondering what your home is worth? Let me show you.

Existing Home Sales Numbers Highest Since 2009

Existing Home SalesThe National Association of REALTORS reported that existing home sales in April reached 4.97 million on a seasonally-adjusted annual basis.

Although this reading fell short of Wall Street’s expectations of 5.00 million existing homes sold, it surpassed the March 2013 upwardly revised reading of 4.94 million existing home sales. This represents a 0.60 percent increase from March to April, and a 9.70 increase year-over-year.

Low Mortgage Rates Contribute To Rise in Existing Home Sales

Low mortgage rates and pent-up demand for homes are driving sales of existing homes, which reached their highest level since November 2009.

Lawrence Yun, chief economist for the National Association of REALTORS, indicated that housing market momentum is overcoming obstacles: “The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing home sales would be well above the five million unit pace.”

Inventories of homes for sale are gradually increasing; at the end of April, the total inventory of existing homes had increased by 11.9 percent to 2.16 million existing homes for sale. This represents a 5.20 month supply of available homes in April as compared to a 4.7 month supply of homes in March 2013. Listed inventory is 13.60 percent below April 2012, when there was a 6.60 month supply of homes available.

Average Home Sales Prices Up 14 Months In A Row

The national average price for all housing types was $192,800, and increase of 11.0 percent over April 2012. This represents the fourteenth consecutive month of rising average home prices; the last time this occurred was between April 2005 and May 2006.

Homes sold through foreclosure or short sales fell by three percent to 18 percent of existing homes sold in April.  Of these sales, 11.0 percent were foreclosure sales and 7.0 percent were short sales. Foreclosure sales averaged 16.0 percent below market value and short sales averaged 14.0 percent below market value.

The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, provided more positive news for U.S. housing markets as of March 2013. Average home prices for homes mortgaged by Fannie Mae and Freddie Mac increased by 7.20 percent year-over-year, and were up by 1.20 percent from February 2013. FHFA also reported that home prices had risen by 6.70 percent in the first quarter of 2013 as compared to the same period in 2012.

New Home Sales Show Rising Trend As Well

In related news, the Department of Commerce reports that New Home Sales are up by 2.30 percent from March to 454,000 units on a seasonally-adjusted annual basis.  This handily exceeds Wall Street’s consensus of 430,000 new homes sold in April, and is also higher than March’s reading of 444,000 new homes sold.

Buyers are turning to new homes due to pent-up demand in housing markets caused by low inventories of existing homes and low mortgage rates. It’s also likely that with home prices rising, would-be buyers are acting on indications that record low rates and home prices are expected to increase.

Rising home prices suggest that as demand increases, mortgage rates may not be far behind. Buyers in the market today can still gain the advantage of historically low mortgage rates.

Wondering what your home is worth? Let me Show You.