Home Builder Optimism at Highest Level Since 1999:

Builder confidence in the market for newly-built single-family homes increased five points to a level of 74 in December on the National Association of Home Builders Housing Market Index (HMI) which is the highest reported level since July 1999, over 18 years ago.

“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” said NAHB Chief Economist Robert Dietz. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components registered gains in December. The component measuring buyer traffic jumped eight points to 58, the index gauging current sales conditions rose four points to 81 and the index charting sales expectations in the next six months increased three points to 79.

Looking at the three-month moving averages for regional HMI scores, the Midwest climbed six points to 69, the South rose three points to 72, the West increased two points to 79 and Northeast inched up a single point to 54.

Source: NAHB

How to Make an Open Floor Plan Work for You

Once a trend, open floor plans have become a staple of most modern homes. An open floor plan generally means the living room, kitchen, and dining room are combined into a large space or great room. Before taking a hammer to all interior walls, it's important to know the structure of your home, as well as the benefits and ways you can accomplish an open concept.

Benefits of an Open Floor Plan

Space
Small, cluttered homes can be transformed into airy, more breathable spaces by knocking down a few dividing walls. A demolition project may seem daunting, but the average cost is just over $3,000. Just be sure to have a professional take a look before wielding a sledgehammer. Hiring a structural engineer will cost you about $500, but you'll save yourself the headache of rebuilds, fines, or structural problems.

Natural Light
Without walls blocking the windows, natural light is able to stream in your home, making the open space seem even larger and more airy. Along with knocking down walls, you can bring natural light into your home by connecting the outdoors to your home's interior with large patio doors. On average, you can install glass doors for about $1,600. 


Inclusivity
It's right there in the title: an open floor plan means more openness and inclusivity in your home. When you're preparing dinner in the kitchen, for example, you won't be closed off from the rest of the house. This is great for both entertaining and every day. When you're entertaining, you can still be a part of the party, even while preparing food and drinks. And as an everyday solution, you're able to keep an eye on children, pets, or—let's be honest—the TV, while still going about your daily tasks. 

3 Reasons Your Smaller House Can Sell for More Than Ever Before

It can seem like having a small home is a liability. After all, there's a certain feeling that home buyers are always looking for something bigger and better. But that trends has shifted over the last few years. Smaller homes are beginning to sell faster than many of their larger competitors. Here are three reasons why. 

Area Over Square Footage. Buyers have also become incredibly conscious about the areas in which they live. With some buyers now targeting hip new areas, they are willing to put aside some of their size concerns in order to get into the hottest neighborhoods. These trends are especially true among younger buyers who don't plan on having large families; they now know that they can get a good space near everything they loved without having to travel.

Bigger Means More Costs. Since the housing market crash in 2008, the way that people buy homes has changed and buyers are considering factors other than square footage in order to make a smart investment. Many buyers consider lower maintenance costs an important asset in a property. This, in turn, allows owners of smaller homes to be more competitive than their larger neighbors, especially when selling to investors.

Minimalism is In. Quite a bit of what's been discussed goes back to a single, overriding trend among younger buyers: minimalism. There are many who now see having a smaller, nicer home as a lifestyle statement. These are the same kinds of buyers who would have paid top dollar for a larger space years ago, but are now following current trends. 

Pending Home Sales Best Since June:

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.5 percent to 109.3 in October. The index is now at its highest reading since June (110.0).

Lawrence Yun, NAR chief economist, says pending sales in October were primarily driven higher by a big jump in the South, which saw a nice bounce back after hurricane-related disruptions in September. “Last month's solid increase in contract signings were still not enough to keep activity from declining on an annual basis for the sixth time in seven months,” he said. “Home shoppers had better luck finding a home to buy in October, but slim pickings and consistently fast price gains continue to frustrate and prevent too many would-be buyers from reaching the market.”

According to Yun, the supply and affordability headwinds seen most of the year have not abated this fall. Although home builders are doing their best to ramp up production of single-family homes amidst ongoing labor and cost challenges, overall activity still drastically lags demand. Further exacerbating the inventory scarcity is the fact that homeowners are staying in their homes longer. NAR's 2017 Profile of Home Buyers and Sellers – released last month – revealed that homeowners typically stayed in their home for 10 years before selling (an all-time survey high). Prior to 2009, sellers consistently lived in their home for a median of six years before selling.

“Existing inventory has decreased every month on an annual basis for 29 consecutive months, and the number of homes for sale at the end of October was the lowest for the month since 1999¹,” said Yun. “Until new home construction climbs even higher and more investors and homeowners put their home on the market, sales will continue to severely trail underlying demand.”

With two months of data remaining for the year, Yun forecasts for existing-home sales to finish at around 5.52 million, which is an increase of 1.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 6 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

Source: National Association of Realtors

Housing Market Update

We keep hearing concerns that tight existing home inventories and rising prices will shrink sales, but the latest data lays those worries to rest. October Existing Home Sales increased 2.0%, to a 5.48 million annual rate. Sales grew in every major region, with single family homes leading the way, although condos/coops went up a bit too. Yes, sales are down (less than 1%) versus a year ago, but we're still seeing the effects of Hurricanes Harvey and Irma, which sidelined home buyers. Once we start getting reports not colored by these storms, many expect an upward sales trend.

Nearly half the homes sold In October were on the market less than a month, indicating demand is there. This is put to increasing incomes, a strengthening economy, near historically low mortgage rates and a growing appetite for home ownership. Freddie Mac's November 2017 Outlook expects this to be the best year for housing in a decade, with 6.13 million homes sold and 1.2 million housing starts. Their chief economist said, "construction will gradually pick up, helping to supply more homes in inventory-starved markets." The Fed's latest data reveals home equity hit $13.9 trillion in mid-2017, an all-time high.

The Housing Market Update

New Home Sales Hit 10 Year High, Average Sales Price above $400K for First Time Ever:

The U.S. Census Bureau and the Department of Housing and Urban Development reported that New Home Sales for October hit a 10  year high with 685K units which beat out expectations of 620K.  This was a 6.2% monthly gain over September.

Sales Price
The median sales price of new houses sold in October 2017 was $312,800. The average sales price was $400,200 which is the first time on record that the average sales prices topped $400,000.

Inventory and Months’ Supply
The seasonally-adjusted estimate of new houses for sale at the end of October was 282,000. This represents a supply of 4.9 months at the current sales rate.

The Northeast is the standout sales region for the second month - up 30 percent to 56,000. Year-on-year sales in the Northeast are up 65 percent. The Midwest also was strong, up 18 percent in October for a yearly gain of 16.2 percent.  These are very strong metrics as it shows strong sales were not due a temporary demand spike related to the hurricanes in the South.

The biggest contributor in size to the month's sales is the West, up 6.4 percent to 167,000 for a yearly 14.0 percent gain. The South, which did not show any effect from the heavy hurricane season, rose 1.3 percent in October for a year-on-year increase of 14.0 percent.

Source: U.S. Census Bureau

'Inelastic' Inventory: It's Fate

Affordability is a complex web. Home prices, incomes and mortgage rates all factor in. Land use limitations also play a role—but not as large and unchanging a role as location overall, according to a recent analysis by Freddie Mac.

Home builders often cite compliance costs related to land use and zoning as a factor—expenditures that, over the last 30 years, have pushed home prices into unaffordable terrain. A rollback in regulations, however—which constituents and policymakers have suggested—could be ineffective in markets where home-building is physically impossible, Freddie Mac's latest Insight shows.

"A thought experiment can illustrate the impact of regulatory relief and the limits on that relief in a city that also is constrained by geography," says Sean Becketti, chief economist at Freddie Mac. "Imagine that San Francisco's land use regulations were relaxed significantly. The ensuing reduction in house values would encourage migration to San Francisco, but the city's geographic constraints guarantee that housing would still be inelastically supplied despite the reduction in regulation."

Analysts determined that even when applying Kansas City's relatively loose regulations, home prices in San Francisco would be as much as three times higher than the national median because of its constraints geographically. Builders, in other words, would still have scarce options.

"Inelastic" inventory, the analysts found—even with ideal conditions in land use and zoning, and demand—equals stifled supply. 

4 Reasons Why Bamboo Is Taking Home Decor by Storm

Homeowners are often looking for home improvement options that strike the right balance between affordability, functionality, aesthetics and eco-friendliness. Bamboo has been marketed as something of a panacea—a kind of wonder wood that checks all the boxes. Designers, contractors and consumers have all taken note, as bamboo has made its way into homes as flooring, walls, window treatments, furniture and more. Here are the properties that are making this popular material a go-to green choice for interior design materials,

Affordability
Bamboo is a readily available wood…except for the fact that bamboo isn't a wood at all, but a grass! Therein lies the secret to bamboo's ascendant success as a housing material: It grows like a weed because it essentially is one. At a maximum of three feet per day, it is, in fact, the fastest growing plant on Earth.

Versatility
Just the one word "bamboo" doesn't do justice to the range of looks the material offers. It can vary greatly in shades and textures, making it a versatile option for decorators and designers.

Durability
Whether natural or man made, few materials can match bamboo's physical properties pound for pound. Because bamboo grows in wet, tropical climates, it is well-suited to resisting rain and wind. In fact, this unassuming reed beats out hardwood, brick and concrete alike in terms of compression strength, while rivaling steel in tensile strength.

Sustainability
As a growing number of homeowners look for eco-friendly materials in their decor, perhaps no single factor has contributed to bamboo's modern vogue in interior design more than its sustainability. As it is a grass rather than a tree, it can grow to a harvestable size (often over 100 feet) in a matter of months. This is in stark contrast to the years of water, fertilizer and pesticide required by other timber woods. 

Single Female First Time Home Buyers Increase to 2011 Levels:

The National Association of Realtors® 2017 Profile of Home Buyers and Sellers, which also identified numerous current consumer and housing trends, including: mounting student debt balances and smaller down payments; increases in single female and trade-up buyers; the growing occurrence of buyers paying the list price or higher; and the fact that nearly all respondents use a real estate agent to buy or sell a home, which kept for-sale-by-owner transactions at an all-time low of 8 percent for the third straight year.  Here are some key highlights from the report:

Single females make up larger share of sales:
Solid job prospects, higher incomes and improving credit conditions translated to continued momentum in the growing share of single female buyers. At 18 percent (matches highest since 2011), single women were the second most common household buyer type behind married couples (65 percent). Furthermore, single women purchased slightly more expensive homes than single men despite earning less. The overall share of single male buyers (7 percent) remained below unmarried couples (8 percent) for the second straight year.

Age of first-timers stays flat; climbs to new survey high for repeat buyers:

For the second straight year, the median age of first-time buyers was 32 years old. First-time buyers had a higher household income ($75,000) than a year ago ($72,000) and purchased a slightly smaller home (1,640-square-feet; 1,650-square-feet in 2016) that was more expensive ($190,000; $182,500 in 2016). Fewer first-time buyers purchased a home in an urban area (17 percent; 20 percent in 2016).

The age of repeat buyers increased to an all-time survey high this year (54 years old; 52 years old in 2016) as older households, perhaps with plans to stay in the workforce longer but with an eye towards retirement, felt more comfortable about buying. Overall, repeat buyers had roughly the same household income than last year ($97,500; $98,000 in 2016) and purchased a 2,000-square-foot home (unchanged from last year) costing $266,500 ($250,000 in 2016).

Nearly all buyers choose a single-family home in a suburban location:

A majority of buyers continue to choose a home in a suburb, small town or rural area (85 percent) as opposed to an urban one (13 percent; 14 percent in 2016). Eighty-three percent of buyers purchased a detached single-family home, which for the third straight year remains the highest share since 2004 (87 percent). Purchases of multi-family homes, including townhouses and condos, were at 11 percent.

Supply scarcity leads to increase in buyers paying list price or higher:

Underscoring the supply and demand imbalances prevalent in many parts of the country, 42 percent of buyers paid the list price or higher for their home, which is up from a year ago (40 percent) and a new survey high since tracking began in 2007. Buyers in the West were the most likely (51 percent) to pay at or above list price.

Source: Realor.org 

How Many Hours do Americans Need to Work to Pay their Mortgage?:

The visualization uses data from the U.S. Census for household income and Zillow for median home listing price, while calculating mortgage payments based on a standard 30-year term.

With about 170 hours in a normal work month, the worst is in New York City and Los Angeles, where at least 65% of income is going towards housing.

But in a city like Memphis, TN it takes only 18.4 hours of work a month to pay down the average mortgage. That’s equal to only about 10% of monthly household income.

The red bars represent places where you have to work the most hours to keep the roof over your head. In cities like New York, Los Angeles, Miami, and San Francisco, you put in more than 100 hours to make enough money just to pay for housing. That’s longer than two-and-a-half weeks, meaning well over 50% of your take-home pay! Not surprisingly, unaffordable places are all located on the either coastline. In fact, 8 of the 10 most expensive places are all located in California

Home Sellers Are Making Bank in Today's Market

Home sellers are making bank in today's market, realizing an average profit of 24.1 percent, or $39,900, in 2016, according to a recent study.

Sellers on the West Coast—where home prices have skyrocketed since the recession—saw higher returns. Sellers in Oakland, California took home the highest profits at 78 percent, or $235,000.

Duration is key. The average seller turning a $39,900 profit, the analysis shows, held on to their home for seven years and five months. The average seller in Oakland hung on to their home for seven years and three months.

The top 10 markets: 

City Median Years Owned Dollar Gain on Sale Annual Dollar Gain on Sale Percent Gain on Sale Oakland, CA 7 years, 3 months $235,000 $33,913 78.0% Portland, OR 9 years, 1 month $145,026 $16,714 64.7% San Jose, CA 9 years, 8 months $271,150 $30,562 56.5% Denver, CO 7 years, 7 months $119,500 $18,162 56.0% Los Angeles, CA 9 years, 8 months $200,000 $23,200 53.7% Sacramento, CA 6 years, 11 months $82,500 $12,000 53.6% Seattle, WA 9 years, 2 months $185,000 $20,840 53.1% Philadelphia, PA 7 years, 11 months $40,225 $4,194 51.7% New Orleans, LA 8 years, 7 months $81,000 $10,475 51.5% Boston, MA 7 years, 10 months $182,500 $25,036 49.6%

"The housing market can change a lot in 10 years, and you see that reflected in this top 10 list," says economist Dr. Svenja Gudell. "Buying a home is one of the biggest financial decisions people will make in their lifetime, and it really paid off for sellers in these cities. Every city on this list has been growing extremely fast over the past decade, with the majority passing peak home value hit during the housing bubble."

The ability to amass wealth over the long term makes real estate the No. 1 investment for most Americans, despite proven results from stocks and other vehicles.

"It's extremely difficult to time the market, but if you're a longtime homeowner in one of these cities, you could potentially see a great return on your investment," Gudell says. 

Home Purchaser's Sentiment Matches All-Time High:

The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 0.3 points in September to 88.3, matching the all-time high set in June.

The rise can be attributed to increases in three of the six HPSI components. The good time to buy component rose the most month-over-month, with the net share increasing 10 percentage points compared to August. Renter respondents, in particular, buoyed the net good time to buy component, showing a substantial upward change in optimism in September. The net share who reported that now is a good time to sell a home rose 2 percentage points in September and is now up 23 percentage points compared to the same period last year.

Meanwhile, the net share who said home prices will go up in the next 12 months fell 8 percentage points. Even so, respondents continue to cite high home prices as the most important reason behind the bad time to buy and good time to sell indicators. The net share of those who believe mortgage rates will go down decreased 2 percentage points. Americans also expressed a slightly increased sense of job security, with the net share who say they are not concerned about losing their job increasing 1 percentage point. Finally, the net share of consumers who reported that their income is significantly higher than it was 12 months ago fell by 1 percentage point.

“The biggest driver for the increase in the HPSI is the rebound in the good time to buy sentiment, which outweighed the largest drag—a sizable reduction in the net share of consumers expecting home prices to rise over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

Duncan also said that the “details in the survey showed a meaningful pickup in the good time to buy component, especially from the renter respondents. Additionally, perceptions of easing inventory helped boost the net share saying that now is a good time to buy, which is consistent with less bullish home price appreciation sentiment during the month. Overall, we believe that the devastating impacts of the hurricanes will likely weigh on home sales in coming months, posing downside risks for our forecast, which already calls for only a modest gain in home sales this year.”

You can read the official release from Fannie Mae here.

What’s Feeding the Affordability Perception?

Affording a mortgage payment is possible for many prospective homeowners. Why then, by all accounts, is unaffordability plaguing the market?

Researchers at Freddie Mac offered several answers to that question in its latest Insight, the first one being perception. Home buyers struggling to find reasonably-priced listings perceive the housing market in general as unaffordable — a reasonable conclusion, if their only options to date have been out-of-reach stock. 

Secondly, the high likelihood for competition (i.e., bidding wars) is off-putting, both for first-time homebuyers and for sellers re-entering the ma

rket. The latter's hesitation is notably tamping down already tight inventory.

"Thanks to very low mortgage rates, monthly mortgage payments are affordable for the average household despite currently high house prices," says Sean Becketti, chief economist at Freddie Mac. "Nevertheless, hurdles to home ownership arise from the difficulty of finding a house. The supply of homes for sale is very tight, especially starter homes, and underwriting requirements are more rigorous than they were in the past."

Would-be homeowners are also not confident about their prospects because their incomes have stayed relatively flat compared to home prices. Incomes have grown by an average 2.4 percent annually since 2012; home prices, however, have grown an average 6 percent.

"Many potential first-time borrowers are stymied by variable employment and income histories and the challenge of accruing a down payment while simultaneously paying down their student loans," Becketti says. "In fact, a high level of household debt, particularly student debt, poses perhaps the largest obstacle to first-time homebuyers."

Homeownership — stripped down to just the mortgage payment — is affordable, the researchers concluded, but challenged by barriers that play a hefty role in the home-buying process. Perception, after all, is reality.

Source: Freddie Mac 

The Housing Market Update

The Mortgage Bankers Association of America along with HUD and FHFA are all working together to offer financial relief to homeowners with mortgages.

Currently the affected area is limited to damaged caused by Harvey, however with an even powerful "Irma" on the way, there could be many more states added to the "disaster area" list:

The following forms of relief are available to people in impacted counties (Aransas, Atascosa, Austin, Bee, Bexar, Brazoria, Brazos, Caidwell, Calhoun, Cameron, Chambers, Colorado, Comal, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Grimes, Guadalupe, Hardin, Harris, Jackson, Jasper, Jefferson, Jim Wells, Karnes, Kerr, Kleberg, Lavaca, Lee, Leon, Liberty, Live Oak, Madison, Matagorda, Montgomery, Newton, Nueces, Refugio, San Patricio, Tyler, Victoria, Walker, Waller, Washington, Wharton, Willacy and Wilson counties.)

Foreclosure Relief.  HUD is granting a 90-day moratorium on foreclosures and foreclosure forbearance on Federal Housing Administration (FHA)-insured home mortgages located within the geographic boundaries of the disaster area.  A borrower can also qualify for foreclosure relief if he or she is a household member of someone who is deceased, missing or injured directly due to the disaster, or if his or her financial ability to pay mortgage debt was directly or substantially affected by  the disaster.  Separately, VA, Freddie Mac and Fannie have all announced a 90-day moratorium on Foreclosures.

Mortgage Insurance.   HUD’s Section 203(h) program provides FHA insurance to disaster victims who have lost their homes, enabling them to finance the purchase or rehabilitation of a home. Borrowers working with participating FHA-approved lenders may be eligible for 100% financing.  Additionally, HUD’s Section 203(k) loan program enables the purchase, refinance, and rehabilitation of a home that has been lost or damaged.

Wells Fargo, the nation's largest mortgage lender, said Monday that it was suspending all negative reporting to credit bureaus, collection calls and foreclosure procedures against customers in the impacted communities at least through the end of September.

Fannie and Freddie have also announced a Disaster Relief Forbearance Plan where homeowners do not have to make any mortgage payments during the forbearance period without any negative impact to their mortgage or credit rating.  Homeowners can request a second or extended forbearance term if they need it.

In order to get a forbearance, you must first contact your mortgage servicer. You can visit the MBAA.org website here for a contact list ofmortgage servicers.

Another scheme for storm water taxes gathers steam in Sacramento

Another scheme for storm water taxes gathers steam in Sacramento: Susan Shelley

By Susan Shelley, LA Daily News

Posted: 08/22/17, 9:14 PM PDT - Click to read this column on the Daily News website

Money is no object when you’re spending somebody else’s.

If those words haven’t yet replaced “Eureka” as the official state motto of California, they soon will. The Legislature is back in session.

The chairs were barely warm when lawmakers advanced yet another sneak attack on property owners. This time it’s a gut-and-amend bill to allow the Los Angeles County Flood Control District to levy special taxes for stormwater management projects.

Created in 1915, the L.A. County Flood Control District provides flood control and water quality services to 85 cities and the unincorporated county area. Assembly Bill 1180 would give the district a new method to raise revenue, or, as the analysis prepared for the Senate Governance and Finance Committee put it, “yet another way for the District to exact monies from taxpayers.”

If AB 1180 becomes law, it’s likely that the flood control district would put a new parcel tax on the 2018 ballot for voter approval.

The bill is currently in the state Senate. It has already passed in the Assembly, except that when the bill was in the Assembly it was about tires, not taxes. When AB 1180 arrived in the Senate, it was gutted like a fish and stuffed with an entirely new bill to allow the L.A. County Flood Control District to levy special taxes. If the bill is passed by the Senate, it will return to the Assembly for a vote to approve the “amended” version.

How much could property owners pay if a parcel tax for stormwater projects is approved?

The San Gabriel Valley Council of Governments estimated that the cost per parcel to comply with the most recent stormwater regulations could be as much as $1,400 per parcel per year. The total cost for L.A. County’s compliance is estimated at $20 billion. Local governments that don’t comply face fines of up to $250,000 per day.

You might expect that any requirement that triggered such enormous costs would have been debated and passed by elected officials, but you’d be wrong about that. The regulations were created by the Los Angeles Regional Water Control Board, in cooperation with the State Water Resources Control Board and the federal Environmental Protection Agency, as part of the implementation of the 1972 Clean Water Act.

The Clean Water Act allows the federal government to regulate “the waters of the United States,” which had traditionally been defined as navigable waters. Over the decades, regulators expanded the definition to include “waters” in storm drains, ditches and even temporary ponds that only appeared during rainy seasons.

President Donald Trump has directed the EPA to go back to the traditional definition of “waters of the U.S.,” but California is ignoring him. The Los Angeles Regional Water Control Board is hanging on to the ghostly mandate that storm drain and flood-control systems must clean the water to drinking water standards in order to comply with the Clean Water Act.

And somebody has to come up with $20 billion to do it.

Stormwater regulations are enforced through a permitting system. L.A. County’s MS4 (municipal separate storm sewer system) permit has uniquely tough requirements, adopted in late 2012.

If you were buying a new dishwasher, and there was one for $400 that would get the dishes clean, and another one for $20 billion that would get the dishes a little cleaner, which one would you buy?

Suppose there was a fine of $250,000 per day for not buying the one that costs $20 billion.

You probably still wouldn’t buy the $20 billion dishwasher, because you probably don’t have $20 billion.

Neither does the L.A. County Flood Control District, or the county, or the 84 cities that have to comply with this permit. That’s why they’re all looking for a way to get you to pay hundreds or thousands of dollars per year in new taxes.

Sen. Bob Hertzberg’s SB 231 would make it possible for local governments to raise taxes for stormwater projects without voter approval, simply by redefining “sewer” to include stormwater. Unless a majority of property owners filed a protest in time, the huge new charge would just show up on property tax bills.

Wouldn’t it make more sense to demand a full review of the MS4 permit to see if it meets any reasonable standard of cost-effectiveness and feasibility?

This would be a good time to call the L.A. County Board of Supervisors (213-974-1411) and your representatives in the state Senate and Assembly (http://findyourrep.legislature.ca.gov) and ask them that question.

Existing Homes Sales Show Tight Market:

The National Association of Realtors released their recent Existing Home Sales report for July and it showed a very tight housing market.  Existing Home Sales are the single best measure of the health of the housing market as they are completed transactions of single family homes, townhomes, condominiums and co-ops.

Here are some highlights:
 - On average, homes listed for sale went under contract in under 30 days for the fourth straight month. Fifty-one percent of homes sold in July were on the market for less than a month.
 - The median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July’s price increase marks the 65^th straight month of year-over-year gains.
 - Inventory is still a major issue (not enough of it) with only 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
 - First-time buyers were 33 percent of sales in July, which is up from 32 percent both in June and a year ago.
 - All-cash sales were 19 percent of transactions in July, up from 18 percent in June but down from 21 percent a year ago
 - Existing Home Sales came in at a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July’s sales pace is still 2.1 percent above a year ago, but is the lowest of 2017.
You can read the official NAR release here

Overall, the above data is very solid showing steady appreciation and demand, it appears that only the lack of available inventory is keeping Existing Home Sales from grown at an even faster pace. 

New Housing Inventory Update

The housing market pundits who love looking at what we don't have, had a field day with last week's data. What we didn't have was growth in starts and permits in July. Housing Starts dipped 4.8% last month, to a 1.155 million annual rate, while Building Permits slipped 4.1%, to a 1.223 million yearly rate. Before we get caught up in talk about the end of the housing recovery, let's note that most all the drop was in multi-unit starts, which, because of the size of those projects, are very volatile, month to month. Single-family starts were off just 0.5% in July but their trend continues to rise, up 10.9% year-over-year.

Yes, multi-family starts are off 33.7% from a year ago, but that just reflects a shift in the mix. In 2015, 35.7% of starts were multi-family. Last month, multi-family made up just 25.9% of all starts. This is good for the economy, since each single-family home contributes about twice what a multi-family unit does to GDP. Finally, the EVP of an online real estate company explained why today's home prices are not near bubble-era: "while prices nominally have surpassed the 2006 peak, we're not talking about 2006 dollars. We've had 9 years of inflation... home prices today have basically recovered to about where they were in 2004." How about that.

New Construction Expected to Increase:

The biggest issue with our housing market over the past two years is a huge shortage of available inventory with supply sitting well below 7 months at current sales paces.  So, it is welcome news that construction rates of new home builds are projected to hit 1.4 million units on a yearly basis. 

The LegalShield Housing Activity Index rose 3.9 points to 115.3 in July, driven by improvements in both the foreclosure and real estate components of the Law Index. The Housing Activity Index is up 1.8% for 2017 and is currently at its highest point since May 2006. Housing starts improved in June (as the Index has been signaling for several months) but remain below forecast levels, and year-over-year growth is essentially flat. The housing market continues to face significant headwinds, including higher prices for inputs (particularly lumber) and regional shortages of both skilled construction labor and land. However, the combination of existing home inventories near historic lows and nationwide housing prices now exceeding pre-recession levels should lead to increased housing activity. If the housing supply finally picks up to match current demand, construction investment should rise and housing starts may climb to an annual rate of 1.4 million or more by the end of the year.

"The LegalShield Housing Activity Index has a strong record of closely tracking U.S. housing starts over the last 15 years – and the Index continues to suggest that housing starts should be stronger than they currently are," said James Rosseau, LegalShield's chief commercial officer. "The Index is consistent with the fact that U.S. consumers are employed – as underscored by a strong June employment report – with solid credit, manageable debt levels, and heightened confidence about the economy. These factors, combined with historically low home inventories, point to a revival in housing activity."

The LegalShield data was released in public news release, you can read the official press release here.

Real Estate Inventory Market Update

In markets across the U.S., you hear that high home prices and low inventory are slowing things down. So it was nice to see the report that almost 300 markets throughout the country registered an increase in economic and housing activity from the first quarter to the second. The CEO of the National Association of Home Builders, which co-authored the study, said, "This report shows that the housing and economic recovery is widespread across the nation and that housing has made significant gains since the Great Recession." Yet we're not at full strength with "the lagging single-family permit indicator."

One answer to the supply shortage was seen in a realtor.com study, which found that 35% of Millennial homeowners are planning to sell their homes in the next year. Another 6% are unsure, but may do so. These are the starter homes that are at the most sought-after price point in today's market. The realtor.com chief economist said, "Our survey data reveals that we may see more of these homes hitting the market in the next year."  Increased demand is clearly helping new home sales. The Mortgage Bankers Association reports, "through July, applications for new homes remain up by more than 7% compared to the same period last year.".

News from National Association of Realtors (NAR)

The National Association of Realtors (NAR) Pending Home Sales Index is a measure of contracts signed on existing homes. It's a forward-looking indicator of where sales may be a few months out when those contracts go to closing. Monday we got the good news that Pending Home Sales in June were 1.5% ahead of May's upwardly revised reading. This reverses a three month decline, and the NAR now predicts existing home sales will end the year at about 5.56 million, up 2.6% from 2016's 5.45 million. The median existing home price is forecast to end the year up 5%, just below 2016's 5.1% gain.

The NAR's chief economist commented: "Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria." Freddie Mac's chief economist concurred, "the spoiler is the lean inventory... nationally, just over five months of supply." Yet he remains positive: "A decade after the Great Recession, the housing market is rebounding. House prices today are higher than they were at the peak in the summer of 2006, near record low mortgage rates have boosted housing demand, and sales volume is robust."

No AC? No Problem: 5 Cooling Tips for Summertime

If air conditioning your home seems like a far-off dream, you’re not alone. Each summer, thousands of Americans battle the heat in their homes, especially at night. Below are a few helpful tips to help you stay cool all summer.

Point that fan out. It might feel good to have air blow over you as you sleep, but to cool your room quicker without AC, grab a boxy window fan and point it out, not in. This will pull warm air from the room and push it outside.

Reverse ceiling fans. In the summer, program your ceiling fans to run counter-clockwise. This will pull hot air up and out, instead of blowing the warm air on you.

Choose the right bedding. When it comes to staying cool during those hot summer nights, cotton is the way to go. Choose a light sheet made of 100 percent cotton, and avoid polyester and synthetics at all costs. 

Frosty bottle. You’ve heard of a hot water bottle, right? Well these helpful toe warmers can also keep you cool during the summer. Stick the bottle in the freezer, and slide it between your sheets before bed.

Make use of your bathroom fan. Have a bathroom right off the bedroom? Turn on the overhead fan and leave the door open to let the fan pull the rising hot air out of your room as you sleep.  

Pending Home Sales Increase Despite Inventory Shortages:

After declining for three straight months, pending home sales reversed course in June as all major regions, except for the Midwest, saw an increase in contract activity, according to the National Association of Realtors®.

The Pending Home Sales Index*, www.nar.realtor/topics/pending-home-sales, a forward-looking indicator based on contract signings, climbed 1.5 percent to 110.2 in June from an upwardly revised 108.6 in May. At 0.5 percent, the index last month increased annually for the first time since March.

Lawrence Yun, NAR chief economist, says the bounce back in pending sales in most of the country in June is a welcoming sign. "The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs," he said. "Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria."

Added Yun, "Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago."

Yun does note that there could potentially be a sliver of increased hope in the months ahead for prospective first-time buyers, who continue to struggle reaching the market¹. Sales to investors last month were the lowest of the year (13 percent), which helped push all cash transactions to 18 percent – the smallest share since June 2009 (13 percent).

"It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market," said Yun. "Fewer investors paying in cash is good news as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market."

Heading into the second half of the year, Yun expects existing-home sales to finish around 5.56 million, which is an increase of 2.6 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.

The PHSI in the Northeast inched forward 0.7 percent to 98.0 in June, and is now 2.9 percent above a year ago. In the Midwest the index decreased 0.5 percent to 104.0 in June, and is now 3.4 percent lower than June 2016.

Pending home sales in the South rose 2.1 percent to an index of 126.0 in June and are now 2.6 percent above last June. The index in the West grew 2.9 percent in June to 101.5, but is still 1.1 percent below a year ago.

Real Estate & Mortgage Update

We got hit with a variety of housing market news last week, starting with Monday's reveal that Existing Home Sales took a bit of a breather in June, dipping 1.8%. But they're still at a healthy 5.52 million unit annual rate, and up by 0.7% over a year ago. Economists expect real estate to maintain its overall upward trend of the last few years. Of course we do have the headwinds of tight supply and rising prices, with median existing home prices hitting new record highs two months in a row. But demand stays strong, as 54% of the listings sold in June were less than a month old.

Tuesday we learned New Home Sales moved up 0.8% in June to a 610,000 unit annual rate, putting them up 9.1% versus a year ago. The supply increased to 5.4 months, aided by a 3,000 unit gain in inventories. Plus, the median price of new homes sold was down 3.4% versus last year, indicating builders are moving in the right direction. More evidence of this came with the news the homeownership rate increased in Q2 and is up 0.8% from a year ago, to a three-year high. The chief economist of an national real estate site believes "we may have turned a corner when it comes to the steep dive in homeownership we've seen over the past 10 years."

Americans Upbeat on Housing:

A recent survey by Digital Risk showed that over half of homeowners believe the housing market in their region and nationwide has improved. It also found that the majority of homeowners (91%) and renters (83%) view home ownership as a good investment. The survey of 1,057 U.S. homeowners and 509 renters was conducted between May 26 and June 2.

Confidence in the housing sector is being driven by a noticeable increase in home values. Eighty-seven percent of homeowners have seen their appraisal values holding or increasing, while just 12% saw a decrease. Sixteen percent saw gains of more than 20% in value.

Barriers to the housing market remain, however. Forty percent of renters said they could not afford the down payment. Insufficient income was cited by 37% of respondents, while 33% said they preferred renting to ownership. When asked what would make the decision easier to purchase a home, 40% percent cited debt forgiveness, 36% said a life event such as marriage or children and 31% percent said lower credit requirements would push them into the market.

Home ownership is still popular.

 The National Association of Realtors (NAR) 2017 National Housing Pulse Survey reports 84% of respondents believe buying a home is a wise financial decision. The NAR president summarized the findings: "Building equity, wanting a stable and safe environment and having the freedom to choose their neighborhood remain the top reasons to own a home." The survey also revealed buyers need to be educated about down payment options: 40% think they have to put at least 15% down. Black Knight reported total "tappable" (lendable) equity increased $695 billion in the last year.

The chief economist at property information firm CoreLogic says "the market continues to benefit from improved economic growth." Their CEO adds, "the rebound in the U.S. housing market continues to gather steam." A national listing site found that the biggest homeowner regret was not choosing a larger home, while the biggest renter regret was continuing to rent instead of buying. Credit scores are rising, as the national average FICO score hit 700 for the first time in history. FICO's vp for scores and analytics said a 700 score is considered "very good credit." Better credit scores can get buyers more favorable mortgage terms.

Pending Home Sales Sluggish as Low Supply Rears Its Head

Pending home sales were sluggish in April as low supply reared its head, down 1.3 percent in the National Association of REALTORS^® (NAR) Pending Home Sales Index (PHSI). The PHSI posted 109.8 in April, down from 111.3 in March. The Index is based on contract signings.

"Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market," says Lawrence Yun, chief economist at NAR. "REALTORS^® are indicating that foot traffic is higher than a year ago, but it's obviously not translating to more sales.  

The West fared best in April, with pending home sales up 5.8 percent to an Index reading of 100.0, though still down 4.2 percent from one year ago. The Midwest saw a 4.7 percent decrease in the Index to 104.4, while the South saw a 2.7 percent decrease to 125.9, and the Northeast, a 1.7 percent decrease to 97.2.

Scarce supply will remain the status quo, according to Yun, unless more homes are made available, especially from the investor side.  

For more information, please visit www.nar.realtor

Apartment Occupancy Rate Nears Record High

The number of apartment dwellers nationwide is nearing a record, as 95 percent of units are now occupied, according to rental data from RealPage, a real estate analytics firm. “Solid job formation, continued limited loss of renters to home purchase, and widespread availability of appealing new apartments” are continuing to boost rental demand, says RealPage CEO Greg Willett.

But supply isn’t keeping up with demand: 86,431 units were added nationwide in the last quarter, but RealPage analysts say the demand was closer to 175,645 units. Here are the cities with the highest apartment occupancy rates in the U.S., according to Axiometrics.

1. Minneapolis-St. Paul, Minn.: 97.4%
2. Milwaukee: 97%
3. New York: 96.9%
4. Detroit: 96.8%
5. Providence, R.I.: 96.6%
6. Sacramento, Calif.: 96.4%
7. San Diego: 96.3%
8. Columbus, Ohio: 96.3%

Strong demand pushed rental rates 1.8 percent higher year over year in the second quarter of 2017, with monthly costs averaging $1,339, according to RealPage. The cities with the fastest rental growth this year are Sacramento, Calif.; Seattle; Riverside, Calif.; Fort Worth, Texas; Salt Lake City; Las Vegas; San Diego; Atlanta; and Orlando, Fla.

DAILY REAL ESTATE NEWS | THURSDAY, JULY 06, 2017

Source: “U.S. Apartment Inventory Nearly Full, Highlighting Supply Crunch,” Curbed.com (June 30, 2017)