Spike in New-Home Sales 'Negate' Interest-Rate Trouble?

Single-family new-home sales posted a sharp rise in October, up 25.4 percent from September, according to newly released Census Bureau data. That was a similar rate to last spring when the new-home market was taking off in recovery mode. 

Across the country, all regions posted double-digit gains in new-home sales in October. In the Midwest, they jumped 34 percent; 28.2 percent in the South; 19.2 percent in the Northeast; and 15.2 percent in the West. As sales gained, inventory levels fell to a 4.9-month supply. 

"The strong October results return us to the sales levels we saw earlier this year and negate the pause caused by the sudden jump in interest rates," says David Crowe, chief economist for the National Association of Home Builders. "We expect sales to continue to rise as pent-up demand is released and first-time home buyers creep back into the market."

However, some economists and analysts point to several headwinds that persist and could dampen sales in the coming months. 

“The market is stabilizing, but maybe it hasn’t come back to the degree that today’s data would suggest,” says Mark Zandi, chief economist for Moody’s Analytics. Several recent homebuilder surveys have shown new-home sales posting much more modest increases — or even falling. 

Builders have blamed a 1 percentage point rise in interest rates between May and September as one big culprit in slowing new-home sales in their markets. Also, double-digit percentage increases in the price of new homes has sidelined some buyers. 

The average price for a new home was $321,700 in October, according to Census data. That puts it on par with the average price during the 2006-07 boom times.  

But with a slight pullback recently in interest rate increases and a small increase in economic confidence, some buyers have come off the fence this fall. 

“It’s more active now,” Brendan Wright, a real estate professional at Atlanta Fine Homes Sotheby’s International, told The Wall Street Journal. “There was so much activity in the spring and summer that the people who missed the boat then are circling back now as opposed to waiting for next spring.”

Source: National Association of Home Builders and “Boost in New-Home Sales Greeted With Skepticism,” The Wall Street Journal (Dec. 4, 2013)

Top 10 Reasons To Hire A Real Estate Agent 

After hitting the highest level in nearly four years, existing-home sales declined in September, but limited inventory conditions continued to pressure home prices in much of the country, according to the National Association of Realtors®.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 1.9 percent to a seasonally adjusted annual rate of 5.29 million in September from a downwardly revised 5.39 million in August, but are 10.7 percent above the 4.78 million-unit pace in September 2012. Sales have remained above year-ago levels for the past 27 months.

Lawrence Yun, NAR chief economist, said a decline was expected. “Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” he said. “Expected rising mortgage interest rates will further lower affordability in upcoming months.  Next month we may see some delays associated with the government shutdown.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.49 percent in September from 4.46 percent in August, and is the highest since July 2011 when it was 4.55 percent; the rate was 3.47 percent in September 2012.

The national median existing-home price² for all housing types was $199,200 in September, up 11.7 percent from September 2012. This is the 10th consecutive month of double-digit year-over-year increases.

Distressed homes³ – foreclosures and short sales – accounted for 14 percent of September sales, up from 12 percent in August, which was the lowest share since monthly tracking began in October 2008; they were 24 percent in September 2012. Lower levels in the share of distressed sales account for some of the growth in median price.

Nine percent of September sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in September, while short sales were discounted 12 percent.

Data from realtor.com,⁴ NAR’s listing site, show some of the strongest increases in listing price from a year ago are in the Detroit area, up 44.6 percent; Las Vegas, up 30.7 percent; and Sacramento, up 28.9 percent.

Total housing inventory at the end of September was unchanged at 2.21 million existing homes available for sale, which represents a 5.0-month supply⁵ at the current sales pace, compared with a 4.9-month supply in August. Unsold inventory is 1.8 percent above a year ago, when there was a 5.4-month supply.

NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said there are far-ranging consequences from the repeating stalemates in Washington. “Just one impact of the recent government shutdown – delays in tax transcripts needed for approval of mortgage loans – put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report,” he said.

Thomas said flood insurance also is a concern. “Realtors® report that approximately 10 percent of transactions in September were located in flood zones, and that nearly one out of 10 of those transactions were delayed or canceled due to concerns over rising insurance rates.”  Notably higher flood insurance rates went into effect on October 1, and could impact future sales in flood zones.

The median time on market for all homes was 50 days in September, up from 43 days in August, but much faster than the 70 days on market in September 2012. Short sales were on the market for a median of 93 days, while foreclosures typically sold in 43 days, and non-distressed homes took 49 days. Thirty-nine percent of homes sold in September were on the market for less than a month.

First-time buyers accounted for 28 percent of purchases in September, unchanged from August, but down from 32 percent in September 2012.

All-cash sales comprised 33 percent of transactions in September, up from 32 percent in August, and 28 percent in September 2012. Individual investors, who account for many cash sales, purchased 19 percent of homes in September, up from 17 percent in August, and 18 percent in September 2012. Last month, 74 percent of investors paid cash.

Single-family home sales slipped 1.5 percent to a seasonally adjusted annual rate of 4.68 million in September from 4.75 million in August, but are 10.9 percent above the 4.22 million-unit pace in September 2012. The median existing single-family home price was $199,300 in September, which is 11.4 percent higher than a year ago.
Existing condominium and co-op sales fell 4.7 percent to an annual rate of 610,000 units in September from 640,000 in August, but are 8.9 percent above the 560,000-unit level a year ago. The median existing condo price was $198,600 in September, up 14.2 percent from September 2012.

Regionally, existing-home sales in the Northeast declined 2.8 percent to an annual rate of 690,000 in September, but are 15.0 percent above September 2012. The median price in the Northeast was $240,900, up 2.3 percent from a year ago.

Existing-home sales in the Midwest fell 5.3 percent in September to a pace of 1.25 million, but are 12.6 percent higher than a year ago. The median price in the Midwest was $158,400, which is 9.0 percent above September 2012.

In the South, existing-home sales declined 1.4 percent to an annual level of 2.10 million in September, but are 9.9 percent above September 2012. The median price in the South was $171,600, up 13.9 percent from a year ago.

Existing-home sales in the West rose 1.6 percent to a pace of 1.25 million in September, and are 7.8 percent higher than a year ago. With ongoing inventory restrictions, the median price in the West rose to $286,300, which is 16.8 percent above September 2012.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visitwww.houselogic.com and http://retradio.com. 

# # #

NOTE:  For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

¹Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

²The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to a seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

³Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

⁴Realtor.com, NAR’s listing site, posts metro area median listing price and inventory data at:http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx.

⁵Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

The Pending Home Sales Index for September will be released October 28 and existing-home sales for October is scheduled for November 20. The2013 National Association of Realtors® Profile of Home Buyers and Sellers, a large survey that evaluates the demographics, preferences, motivations, plans and experiences of recent home buyers and sellers, will be published November 4; all release times are 10:00 a.m. ET.

Cook County home prices continue recovery

Cook County home prices continue recovery

By Mary Ellen Podmolik

Single-family-home prices rose strongly in Chicago and suburban Cook County during the year's second quarter, according to a local home price index, validating the sentiment that a housing recovery has taken hold in the Chicago area.

However, the pace of the recovery varies widely, depending on how hard-hit the area was by foreclosures.

Second-quarter prices of single-family homes rose 11.8 percent within the city of Chicago, compared with a year ago, and were up 8.8 percent from the first quarter, according to a Cook County home price index calculated by the Institute for Housing Studies at DePaul University.

Meanwhile, home prices in suburban Cook County rose almost 7.8 percent from a year ago and 4.7 percent from the first quarter.

"The city has always had stronger price increases over time," said Geoff Smith, the institute's executive director. "The Loop, the North Side: Some of the biggest price growth is in those areas. The suburbs are not as volatile. They're more stable so you don't see as much price change."

The methodology of DePaul's index is similar to that of the national S&P/Case-Shiller home price index that is released monthly. Instead of looking at total sales, the index looks at repeat sales of properties over time, so it is not skewed by atypically high or low sales that can affect median price changes.

Based on the index, single-family-home prices remain down 34 percent from their peak in late 2006.

On Thursday, the Illinois Association of Realtors will report August home sales. That report is expected to show another double-digit, year-over-year increase in sales and a rise in the number of homes newly listed for sale. However, the overall inventory of homes on the market last month was down by about a third or more from a year ago in some submarkets, according to data provided by Midwest Real Estate Data LLC to the Chicago Association of Realtors.

That supply-demand imbalance has driven sales volume and prices higher for months, fueling multiple-offer scenarios and some homes selling above list price. Higher mortgage interest rates also have nudged potential buyers into action; the average interest rate on a 30-year mortgage has increased by 1 percentage point since late May, to 4.57 percent last week, according to Freddie Mac.

By year's end, Fannie Mae chief economist Doug Duncan predicts home purchase mortgage originations will account for more than half of all loans written, as mortgage refinancing winds down because of the higher rates.

The outlook for mortgage rates is expected to get more direction Wednesday, following the end of the Federal Reserve Board's two-day meeting.

"There are still a lot of unusual factors in the housing market right now," Smith said. "The presence of investors and their role is different than in previous housing recoveries. The impact of underwater mortgages and people holding back on listing their properties is creating a price spike. When people start listing their properties again, it is going to slow price growth."

Economists are starting to voice concerns that the housing market is cooling. Monthly sales reports reflect homes that went under contract one to two months beforehand. Nationally, the National Association of Realtors' July measure of pending home sales decreased by a greater amount that was expected; it was the second consecutive monthly decline.

In DePaul's home price index, the second-quarter pricing gains were better in neighborhoods less affected by foreclosures. In areas in Cook County where less than 10 percent of properties went into foreclosure during the past seven years, second-quarter home prices rose 8.8 percent from a year ago, meaning they were down only 16.8 percent from late 2006's peak.

In high foreclosure areas, where at least one-quarter of the properties went into foreclosure between 2005 and 2012, single-family-home prices were down 58 percent from their peak, and rose only 5.3 percent year-over-year in the second quarter.

Buff up those hardwood floors so, they become a selling feature .

By Brooke McDonald, guest contributor

Wood floors (like people) look best with regular TLC. Aside from daily cleaning, sensitive wood floors require occasional in-depth maintenance that goes beyond a sweep or vacuum. Think of tired professionals and run-down moms. What do you do to revive their dull pallor? You send them to the spa to experience the health benefits of a massage, exfoliating body wrap, or facial. Then, voila – spa-goers come home revived!

To maintain a healthy glow, a hardwood floor has its own menu of spa treatments that must be followed regularly. For starters, after they’ve been in use for some years, wood floors needs to be sanded and finished afterwards by a protective sealer that will give them a natural sheen. Other wood floors may require patching in spots that undergo intense damage. Some wood floor owners also choose to have their wood floors stained to change their color.

But a “screen and recoat” might just be the ultimate spa experience for a floor, resulting in the best-looking floor you’ve ever seen. It’s an essential, routine step in-between standings that will guarantee a longer-lasting floor.

You may have also heard it referred to as a “buff and recoat,” because a “screen” is basically a light buffing to prepare the floor for a fresh coat of polyurethane — the recoat. Contrasted with sanding, which is more expensive, time-consuming, and intensive, a screening simply removes a top layer of life’s little mishaps — dents, scratches, basic wear and tear.

Every hardwood flooring business may give you a different quote on when to screen and recoat, but it really just depends on the condition of your floors. The rule of thumb is to be alert for noticeable wear and catch the damage before you start to see bare wood surface.

Polyurethane can’t protect a floor forever — it will eventually wear off. Typically this can start to really be evident anywhere from 3-5 years after the floors were sanded. Watch highly trafficked areas for the first signs of scratching or wear to the floor, like entryways, kitchens, or doorways.

Most people have a hard time justifying this process of beautifying a floor that still looks pretty good. But trust me — you don’t want to skip it. Think about the consequences of skipping sunscreen in the blazing hot sun. Without that protective layer, a few bad sunburns can do terrible harm to your skin.

Even minimal hardwood damage left unchecked could create damage that will only require greater and greater repairs over time.

First, rent a buffer

To prepare for a screen and recoat, you’ll want to rent a buffer machine from a store that specializes in hardwood floors, and get a pad and screen from them to use with the machine. A buffer contains a mesh with abrasive particles cushioned underneath a soft floor pad, which protects the floor from too much wood being removed, and ideally prepares it for the protective layer.

Other materials you’ll need

• A 120-grit screen for the edge of the room (to be used by hand)
• A T-bar (for applying finish)
• Rags or towels
• Floor finish/polyurethane
• Solvent to match your finish
• A mop

Before you begin

Make sure there are no loose boards or nails sticking up to get in the way of your screening process. Clear the floor area. Vacuum the floor and mop it with a vinegar/water mixture (one cup vinegar to one gallon of water). Let the floor dry completely.

Test the floor!

Test the floor first, especially if you are a relatively new owner of these floors and don’t have total knowledge of their cleaning history. Why? Certain grease-based or acrylic cleaning products that have been used on the floor could prevent polyurethane from bonding to the floor. Even worse, the recoat could end up peeling and looking really bad. If you do find evidence of one of these products on your floor, you can chemically strip the floor before proceeding.

How to test the floor for cleaning products

Grease-based: Clean a small out-of-the-way spot, and place several drops of paint thinner on the floor. Wait several minutes and wipe it up with a light-colored towel. If there is yellow or brown residue on the towel, you have a contaminant on your hands! You’ll want to use steel wool and paint thinner to scrub the entire floor to get every bit of residue off before you proceed.

Acrylic: Mix ammonia and water in a 1-1 ratio. In a similarly low-trafficked area as above (the same spot is fine!), drip a bit onto the floor and let it sit for 5-10 minutes. Does the floor turn white? If so, you’ll want to scrub everything with a 1:4 ammonia-water solution.

Screen

Screen by hand around the perimeter of the room. If you’ve never screened before, it’s basically just sanding. The floor should become duller (you’re only removing the top layer, remember). Use the buffing machine for the majority of the room. When you’re done, vacuum up the dust.

Recoat

Ensure that your floor is free of any particles before you recoat through a process known as “tacking.” Dampen a microfiber towel with water for a waterborne finish, or paint thinner for a solvent-based finish. Finally, apply the finish according to the instructions on the label. Let it dry for at least 24 hours until you walk on it or replace furniture.

And there you have it — a floor that is protected, newly buffed, and freshly shined, refreshed and ready for another three years of living.

The new White Ice premium exterior finish borrows elements from Apple.

The stainless steel appliance hegemony has ended.

On Monday, Whirlpool introduced a new premium exterior finish that they call "White Ice." With clean lines, silver accents and streamlined controls, the new collection's refrigerator, range, dishwasher, and microwave are a departure from the flash and glitz of stainless steel and its many lookalikes. In fact, the combination of a white finish, stainless handles and mirrored glass appear to have a lot in common with Apple's popular design language.

White Ice gives your kitchen a clean slate.

The streamlined new look combines with simplified features that Whirlpool says will make the appliances easier to use. "In addition to the intuitive technology, the line takes a fresh look at appliance design and features flawless exteriors that add beauty to any home," said Pat Schiavone, Whirlpool's VP of Global Consumer Design.

Because the whole suite of appliances have such a unique style that's exclusive to one manufacturer, it's a safe bet that Whirlpool is hoping customers will upgrade their entire kitchen instead of taking a piecemeal approach.

Whirlpool seems to be aiming their new finish at customers who have grown weary of stainless and its numerous imitators. Indeed, the manufacturer says the new finish is "signifying a shift in the culture of home appliances." Because it's essentially an update of the classic white exterior, White Ice may appeal to consumers who are bored by stainless but also don't want their kitchens to look dated. For Whirlpool, it's an attempt to appeal to homeowners in a bottomed-out housing market, where renovating is less about increasing resale value and more about appealing to an individual's own tastes.

Before the recession, investors looking to flip a house for profit wanted to install upscale finishes that could cheaply and easily update the look of a home. So from the HGTV-era onward, the most popular kitchens have combined granite countertops along with stainless steel appliances. Go to any home improvement store and you'll be sure to see rows upon rows of fridges and dishwashers with stainless steel and stainless-style exteriors.

It wasn't always that way, and all it takes is a look at classic sitcoms to see how far kitchens have come. If I Love Lucy were in color, the Ricardo's kitchen likely would've had pastel finishes alongside white and stainless. Along with shows like Maude andSoap, the '70s and early '80s brought in earth tones, like avocado, harvest gold and almond. Later on, white and bisque became popular -- even on the upscale appliances that Geoffrey tended to in The Fresh Prince of Bel-Air.

In addition to the modern White Ice, there are several other alternative finishes available on premium appliances. Smeg, an Italian company, builds retro-looking fridges that could easily be mistaken for your grandmother's Norge. They're available in a whole rainbow of shades, from bright yellow to deep purple. AGA, a British manufacturer, puts hard vitreous enamel surfaces in a variety of different colors on their ovens and dishwashers. Whirlpool's own Amana division also introduced a series of colorful refrigerators in 2009, including an exterior called Green Tea which features a floral motif.

The new White Ice refrigerator, range, dishwasher and microwave will be on display at New York City's Rockefeller Plaza this week for House Beautiful magazine's Kitchen of the Year event.

Home prices rose in June to their highest levels in nearly five years, increasing 2.2 percent, according to the Case-Shiller Home Price Indices released Tuesday. The 20-city index was up 12.1 percent from a year earlier, and the companion 10-city index was up 11.9 percent.

Economists surveyed by Bloomberg had expected the 20-city index to increase 2.3 percent from May and 12.2 percent from a year ago.

Case-Shiller’s national index, reported quarterly by Standard & Poor’s, was up 7.1 percent in the second quarter to 146.32, its highest level since third quarter 2008.

All 20 cities included in the survey improved both month-to-month and year-to-year.

The two surveys have improved monthly and yearly for 13 consecutive months.

The national index has improved in four of the last five quarters, dropping only in the fourth quarter of 2012 in that stretch. The 7.1 percent quarter-over-quarter matched the increase in the second quarter of 2012 as the largest quarterly improvement since the national index began in 1987.

The national index was up 10.1 percent year-over-year, matching the gain in the first quarter as the largest annual jump since the first quarter of 2006.

The 10-city index rose to 173.37, up 3.73 from May, to the highest it has been since August 2008 when it was 173.35. The 20-city index rose 3.41 to 159.54, its highest since September 2008 when it was 161.64

In the same month, according to the National Association of Realtors, the median price of an existing single-family home rose 5.4 percent, up 13.3 percent from a year earlier.

According to the NAR, homes prices were held back by sales of distressed homes. Foreclosures, eight percent of transactions, the NAR said, sold for an average discount of 16 percent below market value in June, while short sales, seven percent of transactions, were discounted 13 percent.

Home values improved as well despite higher mortgage rates, which could have both a positive and negative impact: rising rates themselves might bring prices down as buyers look for affordable monthly payments, but also increase demand as buyers try to lock in rates before further increases. The increased demand against weak inventories would send prices up.

While good news for home sellers, the continued sharp increases—the indices have shown double-digit year-year increases for four months in a row —are likely to revive concerns of a growing housing bubble as personal income growth continues to stagnate.

Still the increase in home values, according to economic theory, should mean improved consumer spending. The “wealth effect” theory holds that consumers spend based on increase in net worth, not income. Home values accounted for about 25 percent of the increase in net worth in the first quarter, according to the latest data from the Federal Reserve.

The Case-Shiller Indices have gone up for seven straight months and 13 times in the last 15; each index dipped last October and November.

The monthly increases were led by Atlanta, where prices rose 3.4 percent from May to June. The price index for Atlanta is at its highest level since July 2010. The price index rose 3.3 percent in June in Chicago, bringing prices there to their highest level since October 2010. Prices rose 2.8 percent each in San Diego and Las Vegas, while prices were up 2.7 percent in San Francisco.

Prices have increase for 16 straight months in San Francisco to the highest level since February 2008. Prices in Las Vegas have increased for 15 straight months and are at their highest level since February 2009.

Prices were up 1.8 percent in Phoenix, the 21st straight month-over-month gain, and 2.3 percent in Los Angeles, the 16th consecutive monthly improvement.

Year-over-year the price gains were led by Las Vegas, where prices were up 24.9 percent since June 2012 and San Francisco, where prices rose 24.5 percent in the last 12 months. Those year-over-year price increases were followed by Los Angeles, up 19.9 percent, Phoenix, up 19.8 percent, and Atlanta, up 19.0 percent.

Despite the June improvement, the 10-city index is down 234 percent from its June 2006 high of 226.29, and the 20-city index is off 22.7 percent from its July 2006 peak of 206.52.

Come join us at the Palatine Street Fest
Downtown Palatine Street Fest has been the premier suburban street festival since 2000.  Downtown Palatine Street Fest features live music, local cuisine, and family entertainment and activities over a 3 days in August.

http://www.palatinestreetfest.com/index.htm

Street Fest Dates
Friday, August 23, 2013
Saturday, August 24, 2013
Sunday, August 25, 2013

Festival Hours:
Friday: 5:00 pm - Midnight
Saturday: 11:00 am - Midnight
Sunday: 11:00 am - 8:00 pm

Kids Zone:
Saturday: 11:00 am - 8:00 pm
Sunday: 11:00 am - 6:00 pm

Admission to Palatine Street Fest
is free, and all are welcome.

Music

Friday, August 23
Old School	5:30 pm
Purple Apple	6:30 pm
Dot Dot Dot	8:00 pm
Sixteen Candles	10:00 pm

---

Saturday, August 24
TBA	11:00 am
Brother Tim	12:30 pm
Lakeshore Vibe	2:00 pm
Ralph Covert     of Ralphs World           (In Kids Zone)	3:00 pm
Rod Tuffcurls and        The Bench Press	3:30 pm
Rock Candy	5:30 pm
Wedding Banned	7:30 pm
Cherry Poppin’ Daddies	10:00 pm

---

Sunday, August 25
Selective Amnesia	11:00 am
Nothing Yet	12:00 pm
Serendipity	1:00 pm
97Nine	2:30 pm
7th heaven	4:00 pm
BritBeat	6:00 pm

Inventory is Down

(Photo: Nam Y. Huh, AP)

The number of homes listed for sale ticked up by almost 2.4% in March from February but remained down 15% from a year ago, new data shows.

The low inventory of homes for sale in many markets is helping drive up prices and is being closely watched as the spring selling season takes hold.

"The newest data shows that the outlook is optimistic for the overall real estate recovery," said Steve Berkowitz, CEO of Move, which operates Realtor.com. "Things are slowly picking up steam."

In February, the supply of homes for sale stood at 4.7 months, meaning they would all sell in that time if no new supply was added, the National Association of Realtors says.

A more balanced market has a 6-month supply. Meanwhile, prices were up 10.2% in February from the year before, market watcher CoreLogic says.

Realtor.com tracks the number of homes listed for sale. That number generally increases as the spring selling season takes off.

But home inventories have a long way to go to get back to last year's levels.

Of 146 markets tracked by Realtor.com, fewer than a dozen showed a year-over-year increase in listings last month. Those markets included Shreveport, La.; Springfield, Ill.; Huntsville, Ala.; and El Paso, Texas.

Nine of the 10 markets to see the biggest year over year drops in listings were in California.

Stockton and Sacramento posted more than 60% drops. Orange County, Oakland and San Jose saw more than 50% declines.

Seattle also was in the top 10 biggest decliners, with inventory down 40% year over year.

Some cities with the largest drops in listings also posted the biggest increases in list prices.

Nationwide, median list prices were up .05% in March year over year, Realtor.com says.

But median list prices were up year-over-year almost 28% in Los Angeles and Orange County, 32% in Oakland and 48% in Sacramento, the data shows.

Buy now or pay more later.

Now is a great time to buy a home.

Prices Set to Increase

In the recent Home Price Expectation Survey, 105 leading housing analysts called for a 3.1% increase in home values by the end of 2013.

Mortgage Interest Rates Projected to Increase

According to the Mortgage Bankers Association, after reaching record lows in 2012, the 30 year mortgage rates are expected to creep up slowly in 2013 to 4.4%.

Now is a great time to buy the home you always dreamt of owning. However, the longer you wait, the more it will cost.

House Prices: When Will 2006 Values Return?

House Prices: When Will 2006 Values Return?

There is a lot of optimism regarding house prices. The most recent Home Price Expectation Survey projects a 3% -3.5% increase in values for each of the next 5 years. We concur that most parts of the country will see varying levels of appreciation over that time. However, we must realize that we will not see 2006 values any time soon.

Barclays’ U.S. residential credit strategy team recently predicted that 2006 values would return in 2021. From an article in DSNews:

“While the floor appears to have materialized, they stress that home prices are likely to recover slowly over the next 4 to 5 years.

“We expect on average a 3-4 percent annual increase in home prices [nationally] in coming years,” they said in an updated market outlook.

At that rate, Barclays’ analysts explained, home prices will be slightly below their 2006 peaks even in 2020, finally returning to pre-crisis peak levels in June 2021.

In an article for CNNMoney, the analytics firm Fiserv projected that 2006 prices would not return until 2023:

“Fiserv forecasts prices will bounce back an average of 3.7% a year for the next five years — a rate that would still leave prices 20% below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.”

If you are waiting for 2006 values to return before selling your house, realize it will take years.

First impressions are made at the front door

Home's entrance is seldom high on remodeling priorities

By Arrol Gellner

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January 11, 2013

Have you ever been to a house where you had to skirt the gas meter or sidle around garbage cans to get to the front door? Or one where there was such a bewildering array of doors, you weren't sure which one to knock at?
The front entrance is seldom high on people's remodeling priorities. Yet, just like that old saw about first impressions, it's your home's entrance that people notice first. It's practically impossible to rectify a bad impression made at the front door.
Tract-home builders have known this for years; even in the cheapest house, they'll never cut corners on the front door. They know that a strong impression of quality here subtly colors a visitor's perception of the whole house.
For much of architectural history, front entrances have been a focal point of a home's design. In colonial New England, for example, the front door was often flanked by sidelights and topped by a pediment, setting it apart from an otherwise austere facade.
The entrance should also be clearly apparent from the street. That doesn't mean it has to be glaringly exposed to view -- just that its location should be easily deduced by an unfamiliar passerby. Architects call this principle "demarcation."
There are lots of subtle ways to demarcate a front entrance. The most common is to surround the door with an architectural form such as a pediment or other type of trim. Another traditional strategy places the door in a recess, on a projection, or under a roofed porch. You can find a well-known example of the latter on the back of a $20 bill.
Here are some thoughts for planning your own grand entrance:

• Don't place an unsheltered entrance door flush with the front wall of the house; it'll create an unwelcoming "side door" or trailer-door effect.

• Don't bring the path to the front door past utilities such as gas or electric meters, or past unsightly storage areas for trash or the like. Keep these kinds of features out of the visitor's line of sight.

• Don't force visitors to walk on a driveway to get to your front door. Provide a separate walking path, or at least set aside a portion of the driveway paving using a different color or texture so it's clearly meant just for those on foot.

• If you plan to provide a covered entrance porch, make it at least 6 feet wide -- enough for a person to stretch out both arms without touching either wall. Anything less will feel cramped and uncomfortable. Also, make the porch at least 4 feet deep (6 feet is better), or it'll feel cramped when more than one person is waiting outside the front door. A cheaper alternative to building a projecting porch is simply to recess the front door. Again, make the recess at least 6 feet wide, and not less than 2 feet deep.

• Lastly, if your house has several doors facing the street, make sure your front approach aims your visitors toward the main entrance. Your front door may seem obvious to you, but, hey, you live there.

'Microstudio': Is 325 Square Feet the

Future of Housing for City Dwellers?

Unless you're in college, the prospect of living in a tiny, 325-square-foot apartment probably sounds like a nightmare. But according to a new exhibit at the Museum of the City of New York, this living situation could be the future for many single city-dwellers.

MCNY's latest exhibit, "Making Room: New Models for Housing New Yorkers," explores the future of housing in dense urban areas such as New York City. Through the exhibition of innovative new housing models, provided by architects affiliated with the Citizens Housing Planning Council and New York Mayor Michael Bloomberg's adAPT NYC program, ideas surrounding the changing demographic of cities and a need for greater efficiency were explored.

CHPC research, for example, has shown that almost half of New York City's population is comprised of single adults. But this is not reflected in the housing options and needs available to city dwellers: Only 1.5 percent of New York City's rental housing stock is made up of studios or one-bedroom apartments ready for occupancy, said Sarah Watson, senior policy analyst at CHPC. This has caused the rampant growth of illegal living situations.

"Currently, laws in New York City are still based on the demographics and living arrangements of the 1960s," said Watson. "We need to move forward."

Moving forward could take the physical form of a 325-square-foot "microstudio" apartment with transformable furniture. (See the gallery below.) Though apartments under 400 square feet are illegal in most of the city, Mayor Bloomberg is currently exploring ways in which such micro-units could be tested in New York City.

Real Estate Recovery: See it,
Believe it... and Then Invest in It!
Dear Wall Street Daily Reader,

A smart investor recognizes that the market is a forward-looking beast. He also knows that the market regularly scales "walls of worry," and that prices rise before everyone realizes a recovery is imminent.

The average investor? Well, he sits on the sidelines and, in turn, misses out on significant profits.

Don't believe me? Look no further than the real estate sector for proof...

Be Greedy When Others Are Fearful

Back in February, when I predicted the real estate market hit rock bottom, my inbox overflowed with venom for making such a preposterous claim. Hundreds of readers unsubscribed, too.

Of course, homebuilding stocks were already telegraphing a recovery. But nobody wanted to believe it because home prices were still falling across the country. They let the "wall of worry" blind them from the opportunity.

As I wrote at the time, though, "prices are going to be the last thing to bottom out." Well, they just officially did.

The latest reading of the Case-Shiller House Price Index went positive on a year-over-year basis for the first time in 21 months.

Now that people can finally see the real estate recovery, they're starting to believe it, too. It's not just investors, either. It's the mainstream press.

Case in point: Mentions of the phrase "Housing Recovery" in news articles went completely vertical this summer. Take a look:

The only problem? Those who were waiting to see it to believe it lost out on killer profits.

More specifically, average investors who waited for real estate prices to actually increase - instead of acting when homebuilding stocks bottomed out in October 2011 - missed out on profits of about 100%.

I guess Warren Buffett was on to something when he said it pays to be greedy when others are fearful, huh?

Double-Digit Upside Remains...

Rest assured, the purpose of today's column isn't to scold anyone for being average instead of smart. Truth is, I'm no stock market Einstein. It took almost five months of rallying by homebuilding stocks for me to wise up to the opportunity. So I'm only slightly better than average on this one.

Instead, I want to encourage you to invest in the recovery before it's too late. Especially since the latest data points indicate the recovery's gaining steam.

Take the National Association of Home Builders/Wells Fargo Housing Market Index, for instance. It rose for the fifth straight month to its highest level since June 2006.

This Index happens to be a reliable leading indicator of single-family housing starts. Take a look:

And wouldn't you know it? Yesterday's report from the Commerce Department revealed single-family housing starts rose 5.5%, to a rate of 535,000 homes - the fastest pace since April 2010.

As you can see, though, a huge gap still exists between the two data sets, indicating that an even more sizeable increase in housing starts is imminent.

Translation: The recovery should pick up steam in the coming months. Especially in the wake of the Fed's decision to keep mortgage rates low.

I'm not the only one who expects the real estate recovery to accelerate, either.

On Tuesday, Goldman Sachs (NYSE: GS) issued a note to clients saying, "Our confidence in our forecast for a 20% to 30% housing activity growth for each of the next few years has risen."

Goldman's favorite homebuilding stocks are MDC Holdings (NYSE: MDC), KB Home(NYSE: KBH), PulteGroup (NYSE: PHM) and Toll Brothers (NYSE: TOL).

So, how do we play it? I'm convinced that spreading our bets is the smartest strategy at this stage in the recovery. By that, I mean investing in an ETF that gives us exposure to multiple homebuilders at the same time, instead of trying to focus on one or two homebuilders like Goldman suggests.

We have two options: the SPDR Homebuilders ETF (NYSE: XHB) and the iShares Dow Jones Home Construction ETF (NYSE: ITB). I favor the latter because it gives us more direct exposure to a real estate rebound.

How so? Well, six of the top 10 holdings in ITB are homebuilding stocks, whereas XHB only includes two in its top 10. And in terms of the total portfolio, 85.6% of the Dow Jones Home Construction ETF is invested in homebuilders and building materials stocks. The SPDR Homebuilders ETF only has 56% of such exposure.

Long story short, ITB is a purer play. Accordingly, it's rewarding investors with higher returns. Case in point: Over the last six months, ITB is up 30%, nearly doubling the returns of XHB.

Bottom line: The time to be a smart investor in the real estate recovery has passed. But all the profits have not. So don't be dumb. Now that you can see it, believe it. And then invest in it!

Ahead of the tape, 

 

Louis Basenese
Truth Seeker and Chief Investment Strategist
Wall Street Daily