Pending Home Sales gain for 12th straight month:

The August Pending Home Sales report was just released this morning by the National Association of Realtors (NAR) and it showed a year-over-year gain of 6.2% and marks the 12th consecutive month of year-over-year gains.

Lawrence Yun, NAR chief economist, says even with the modest decline in contract signings, demand continues to outpace housing supply and elevate price growth in numerous markets. "Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," he said. "Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago."

According to Yun, sales in the coming months should be able to roughly maintain their current pace.

The national median existing–home price is expected to increase 5.8 percent in 2015 to $220,300. Yun forecasts total existing–home sales this year to increase 7.0 percent to around 5.28 million, about 25 percent below the prior peak set in 2005 (7.08 million).

The bottom line is that the overall housing market is still trending very strongly, hampered only by a shortage of quality inventory in the specific price points.

Home Sales strong but hindered by inventory:

The August Existing Home Sales report was just released this morning by the National Association of Realtors and its clear that there are some bright spots and some headwinds in the largest segment of the housing market.

Total existing–home sales for August, which are completed transactions that include single–family homes, townhomes, condominiums and co–ops, have risen year–over–year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).

The median existing–home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August's price increase marks the 42^nd consecutive month of year–over–year gains.

Ok..things are looking good...so where are the headwinds?  Here they are - inventory.  While we have 11 straight months of year-over-year gains in sales and 42 straight months of home price increases, the August data compared to July actually fell -4.8%.  Why?  Inventory.  There simply isn't enough homes available for sale in the most popular price points for buyers to purchase. Total housing inventory at the end of August rose 1.3 percent to 2.29 million existing homes available for sale, but is 1.7 percent lower than a year ago (2.33 million). Unsold inventory is at a 5.2–month supply at the current sales pace, up from 4.9 months in July.  But anything below 6 months of supply is very constrictive to our housing market.

 Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. "Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers," he said. "The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."

"With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors," adds Yun. 


Source:
Brian Woolley
Prospect Mortgage

THINGS ARE MOVING FORWARD IN SANTA CLARITA TRULIA REPORTS:

Average price per square foot for Santa Clarita CA was $263, an increase of 5.2% compared to the same period last year. The median sales price for homes in Santa Clarita CA for Jun 15 to Sep 15 was $435,000 based on 701 home sales. Compared to the same period one year ago, the median home sales price increased 3.6%, or $15,000, and the number of home sales increased 8.7%.

There are currently 161 resale and new homes in Santa Clarita on Trulia, including 2 open houses, as well as 419 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Santa Clarita CA was $523,166 for the week ending Sep 09, which represents an increase of 2%, or $10,308, compared to the prior week.

The Real Estate market is definitely moving ahead in the Santa Clarita Valley with the Sellers market really starting to come in strong. With consistent improvements in market value month after month it looks like we can expect to see this trend continue possibly through to the end of the year!


Source:
Gene Bleecker
First American Title

Your Major Could Determine How Much House You Can Afford:

Is your major at the top of this list?   It’s the classic college-age query: “What’s your major?” But maybe the real question should be: What kind of house do you want to live in? Here’s a non shocker: Not all college majors are created equal, especially when you consider those four years of tuition as an investment in future earnings. A few years down the road, when you’re ready to settle down and purchase a home, your specific college concentration may very well have a lot to do with how much you can afford. This, it turns out, is very good news for engineers. But it’s not so great, sadly, for horticulturists. Despite the controversy around rising tuition and student debt that make some doubt whether a college degree is still worth it, a 2014 analysis by the Federal Reserve Bank of New York shows the average value of a college degree has remained near its all-time high since 1970. According to Pay Scale, a mid career employee with a bachelor’s degree earns a median salary of $77,006, meaning he or she can afford a house costing up to $341,000. That’s about 60% more than a high school graduate. Out of all 300-plus majors, petroleum engineering came out on top: With a mid career salary of $168,000, these grads can afford to buy as high as $744,000, more than three times the national median list price. Even those fresh out of college land impressive starting salaries of $101,000. Unsurprisingly, other engineering branches (e.g., chemical engineering, computer science engineering) are also more likely to earn six-figure salaries with a few years’ experience. At the bottom of the list: liberal arts and education majors. Early-childhood education brings up the rear with a mid career salary of $38,000—barely enough to buy a house priced at $168,000 (not even the national median). Social work, another popular major for an awfully good cause, is also among the lowest paid, with a mid career salary of just $45,700. Don’t be too discouraged, however! Those numbers don’t factor in geographic differences. Teaching jobs are up for grabs all over the country, but engineering positions are concentrated in a few technology hubs where the booming economy has driven housing prices up significantly.  Source: Brian Woolley

New labor laws could cripple new construction:

Just when New Home Sales, Building Permits and Housing Starts are all trending in the right direction, leave it to the government to detail it.

Home builders are balking at a new labor law ruling that puts them on the hook for issues involving millions of subcontractors. Roofers, plumbers, electricians, framers are just some of the 25 categories of subcontractors used to build a home. The National Labor Relations Board (NLRB) could, in some cases, now deem them "joint employees" of the home builders.

"The home building industry, which is primarily made up of small businesses who rely greatly on the work of subcontractors would overwhelmingly be harmed by the new standard," said Tom Woods, chairman of the National Association of Home Builders (NAHB) in a release. "It will cripple small businesses across the country, including the home building industry as it is in its fragile recovery."

The vast majority of home construction is carried out by subcontractors. While the larger, public home builders have more specialty workers on staff, they still contract a significant amount of their work out to subs.

The NLRB's ruling was based on a case in another industry, so it remains to be seen exactly how it would apply to the builders.

"It obviously depends on the facts of each case, but in the construction industry in particular, these kinds of relationships have been in place for decades, and so even before the test tightened in the 1980s not every contracting relationship in the building industry was considered a joint employer," said Wilma Liebman, a former chairman of the NLRB.

Builders say they stand ready to fight the ruling as soon as a case arises, which they clearly expect will happen soon. "If it is applied to the home builder sector ... it is impossible to comply with and use the same business model that has been working successfully for 200 years," said Jerry Howard, CEO of the NAHB. 

Source:

Brian Woolley

Prospect Mortgage

Pending Home Sales Rise Again:

U.S. home buyer demand remained steady in July, an index of pending home sales from the National Association of Realtors, which represents signed contracts, not closings, rose 0.5 percent from an upwardly revised June reading.

The index is now up 7.4 percent from one year ago. The index has increased year-over-year for 11 consecutive months and is the third highest reading of 2015.

Just about every metric showed a very vibrant housing market that is constrained only by the lack of good quality available inventory.  If there were more of it...it would be snapped up.

"Contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer," said Lawrence Yun, chief economist for the NAR in a release. "While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust."

Looking ahead, with inventory shortages likely to persist into the fall, Yun expects the national median existing-home price to increase 6.3 percent in 2015 to $221,400. Yun forecasts total existing-home sales this year to increase 7.1 percent to around 5.29 million, about 25 percent below the prior peak set in 2005 (7.08 million). 



Source: Brian Woolley
Prospect Mortgage