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LAKEWOOD RECOVERING

by The Apples Team

 

The West is leading the nation’s housing recovery, according to a recent study from the National Association of Realtors’ Realtor.com.

When identifying the “Top 10 Turnaround Towns” for the third quarter of 2012, the association found nine of the top 10 are located in the West, and seven are located in California.

NAR considered changes in median list price, median age of inventory, size of inventory, and unemployment rate when determining the Top 10 Turnaround Towns.

The Top Turnaround Town in the third quarter was Oakland, California, up from the No. 2 spot in the second quarter. This is the first time Oakland has taken the lead.

The No. 2, 3, and 4 spots were also taken by California metros: Sacramento, San Jose, and San Francisco, respectively.

Seattle-Bellevue-Everett, Washington took the No. 5 spot with a 13 percent year-over-year rise in prices and reductions in inventory and age of inventory.

The bottom of the Top 10 list was rounded out by Bakersfield, California; Phoenix-Mesa, Arizona; Fresno, California; and the one metro outside the Western region, Miami.

Miami slipped from the No. 3 spot in the second quarter to the No. 10 spot in the third quarter.

Median listing prices in Miami increased 14.57 percent from the third quarter 2011 to the third quarter 2012. At the same time, inventory in Miami dropped 22.37 percent.

House flipping is increasing in Miami, contributing to its recovery. The number of houses flipped in the first half of this year is up 25 percent over the first half of last year.

The average profit for individual house flipping in Miami is $38,943, according to NAR’s research.

While foreclosures are falling in most of the Top 10 Turnaround Towns identified by Realtor.com, Miami continues to see high foreclosure rates, with one in every 229 homes facing foreclosure in Miami-Dade County in September.


 

 

 

Lakewood Homes - Fitch Forecasts Continued Improvements for Housing

by The Apples Team

 

A slowly growing economy combined with “somewhat diminished distressed home sales competition, less competitive rental cost alternatives, and new home inventories at historically low levels” led the ratings agency to predict growth for housing starts and home sales into 2012, with further moderate improvements into 2013.

In the report, Fitch said it expects single-family housing starts to improve 19 percent and new home sales should spike 19.5 percent.

“The public homebuilders generally reported a financially strong first half and excellent spring selling season. This seems to set the stage for a solid recovery year in 2012,” the report stated.

In addition, the ratings agency also forecasts strong sales, with new home sales expected to increase about 19.5 percent and existing home sales 8.5 percent.

The future of home prices also looks positive, with Fitch expecting the average and median single-family new home prices, as measured by the Census Bureau, to improve 3.2 percent in 2012 and further increase 2.5 percent into 2013.

While the report expects the housing market to be poised for gains in terms of construction, home sales, and prices, the report also pointed to challenges that could change the current direction of housing.

Fitch said a sharp rise in mortgage rates (which was said to be unlikely), a tightening in credit terms, or a double-dip recession could cause Fitch to revise its forecast into a more negative one.

The report also discussed the issue of inventory. While it seems supply is shrinking in many areas, there is still an excess supply of existing homes in certain markets. According to the report, as of August, supplies for new and existing homes equated to about 4.5 months and 6.1 months, respectively. In addition, the report noted estimates from Capital Economics on shadow inventory, which calculated about 4 million homes could be in the shadows as of September. Fitch said its most recent estimate shows there are about 6.20 million homes in the shadows, including 1.10 million non-agency properties.

 

by Esther Cho

 

Gap Between New and Existing Home Price

by The Apples Team

 

(NAR) — New homes should carry a premium because everything is new: carpets, appliances, paint, etc. Moreover, the new home tends to be larger. However, new homes may not necessarily be built in the best of neighborhoods simply because all the good land has already been taken. The price data still says that a typical new home is worth more than a typical existing home.

 

But note the big divergence above that occurred during the crash years. Because material costs and labor costs keep rising, a certain minimum price is required on a newly constructed home, otherwise builders will simply not produce. This minimum price on a typical new home was $220,000 or so. So when existing home values dramatically fell, a gap between new and existing home prices opened up. Even with recent gains in existing home values, the gap still persists. In addition, many economists expect higher commodity prices ahead in light of additional Quantitative Easing by the Fed. Therefore, if anything, new home prices have no choice but to move up further in order to cover those rising construction-material costs. The outlook for existing home prices are then very positive, particularly in those local markets where the gap between new and existing home prices remain very wide

Inventory Shrinking, California Metros Depleting Fastest

by The Apples Team

 

Sellers may begin to have the upper hand in the market as housing inventory shrinks, leaving first-time homebuyers left to compete with investors, a report from Zillow revealed.

“First-time homebuyers are being squeezed out of the market by falling inventory and the rapid influx of investors looking to buy basic homes to rent out to the growing population of people who have recently been foreclosed upon,” said Stan Humphries, Zillow chief economist, in a release Thursday. “Investors are paying in cash and can close sooner, which is more favorable to banks and homeowners looking to sell.”

Inventory across all price levels fell 19.4 percent year-over-year as of September 30, according to Zillow analysis, which tracked the number of homes listed for sale on its site.

Among the 30 largest metros, California cities saw the biggest annual reduction in inventory. When looking at changes across all tier levels (bottom, middle, and upper), Sacramento led with a 42.4 percent decline, with San Francisco ranking second after seeing inventory drop 42.2 percent. San Diego was third due to its 40.7 percent decrease.

Cincinnati saw the smallest yearly decline across all inventory tiers, falling 9.5 percent, followed by Portland (-10.8 percent), and St. Louis (-14.5 percent).

Surprisingly, the inventory category that declined the most on a yearly basis was upper tier homes, which fell by 22 percent, while lower tier homes fell 15.3 percent.

Phoenix ranked highest among the 30 metros for having the steepest drop in inventory for homes priced in the bottom tier. In Phoenix, bottom tier inventory plummeted 57.1 percent. Following Phoenix, California cities were most notable, leading with Sacramento, where bottom tier inventory fell 55.4 percent, then San Francisco (-53.2 percent), San Jose (-47.5 percent), and San Diego (-45.4 percent).

Declines in the upper tier category weren’t as dramatic, with Kansas City, Missouri leading with a 42.7 percent drop, followed by San Francisco (-35 percent) and Miami (-34.4 percent).


By Esther Cho

 

Displaying blog entries 1-4 of 4

Contact Information

Apples Team
Berkshire Hathaway HomeServices California Properties
11409 E. Carson Street
Lakewood CA 90715
562-884-1863 / 562-221-2794
562-900-6761
Fax: 562-809-0841

Angie BRE# 01292393, Kathy BRE# 00853237, Cathy BRE# 01255708

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