Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
May 3, 2012
Buying Is Cheaper than Renting!!!
Taken from: baltimorehomemarkets.com
Buying is more affordable than renting in 98 out of the nation's 100 largest metropolitan areas — even in New York, Los Angeles and Boston, according to real estate company Trulia's rent vs. buy index.
The index is based on asking prices for rental units and homes for sale on the company's website between Dec. 1, 2011, and Feb. 29.
“As rents rise and prices stagnate, homeownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face.”
Homeowners are choosing, or being forced, to rent rather than buy even though the latter is cheaper in key markets Trulia reviewed.
But as they turn to renting, the influx of demand squeezes the nation's rental supply, pushing monthly rents higher.
The nation's median rent stands at $712 per month — well above the average monthly mortgage cost of $647, Paul Dales, senior economist at Capital Economics, recently found. He estimated decreased vacancies in the home-rental market will push average rental rates up as much as 5% by early 2013, compared to 2.4% in January.
As a consequence of less willingness and ability to buy a home, households in rentals will rise by at least 850,000 a year over the next few years, Dales said.
He expects rents to rise at an annual rate of 3% this year and remain at that level in 2013. "Assuming that the economic recovery gains firmer footing, in future years there is scope for rents to rise by around 4% a year," Dales said.
Only in Honolulu and San Francisco is renting often a better deal than buying. However, Trulia points out that buying a home in these markets might make sense for people who plan to stay in their next home for at least five years and can benefit from the mortgage-interest tax deduction.
“Metros where homeownership is expensive tend to have stronger long-term economic growth and little room to build new homes, like Boston and the San Francisco Bay Area, where people expect home prices to increase over time," Kolko says.
"Buying is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future," he says.
May 2, 2012
Real Estate Professionals Optimistic About Home Values
Taken from: realestate.aol.com
With signs that a real estate recovery may be kicking into gear, a new survey shows a sharp increase in optimism among real estate professionals about the direction of home values.
A survey conducted by home valuation website HomeGain found that the number of real estate professionals who expect home values to increase has more than doubled over just one quarter. Thirty-seven percent of respondents surveyed so far in 2012 said they anticipate that home values will rise in the next six months, up from 15 percent in the fourth quarter of 2011.
"The trend has been stay the same or decrease. And here it flipped for the first time," HomeGain General Manager Louis Cammarosano told AOL Real Estate. He added that since HomeGain began administering the survey in the second quarter of 2009, the percentage of respondents who have expressed a bullish outlook on the market has never risen above 25 percent, and for much of the time, has sputtered around 15 percent.
The spike in optimism about home values follows recent reports that corroborate the view that the housing market is stabilizing. Home sales are trending upward and homebuilders are reportedly more optimistic than they've been in many years. Home prices continue to fall, but a number of industry observers say that price direction isn't necessarily the most important bellwether of a recovery.
Budge Huskey, president and chief operating officer of Coldwell Banker Real Estate, says he sees confidence among real estate agents that he hasn't observed since the housing meltdown. "What is consistently being represented out there today is that there is a sense of optimism in the real estate business that has not been seen in the last five to six years," he told AOL Real Estate.
While cautioning that real estate agents "tend to always be optimists," Huskey stressed that "this time it's based on what we believe to be some clear trends."
Prominent among the hopeful signs, Huskey says, is the state of the housing inventory, which had fallen to 2.3 million homes, or approximately a six-month supply of for-sale homes, as of January. That's the lowest level of inventory since March 2005, according to the National Association of Realtors, which released the statistic.
Meanwhile, total home sales have risen by 13 percent in the last six months, Capital Economics says. And while construction of new homes, dropped marginally in February, they still were at the second-highest level since October 2008, the National Association of Homebuilders says.
A last sign, much ballyhooed by industry optimists, is the state of homebuilders' confidence: The National Association of Home Builders sentiment index reached 28 in February and remained at that level in March. Not since 2007 have homebuilders expressed such confidence in the housing industry.
Despite sprouting green shoots in the market, home prices continue to slide, and even when they do eventually trend upward, many economists say, the increase will be gradual. That fact has led some industry observers to call for a rethinking of what actually constitutes a housing recovery, and to avoid treating price movement as the all-important indicator of a recovery.
Capital Economics, for instance, recently stated that even though prices declined last year (around 4 percent according to various estimates) and mortgage rates are finally ticking up, theeconomic analysis firm still believes that the real estate market is making inroads.
But CoreLogic senior economist Sam Khater advises against buying too much into the hype. "I would be cautious about folks getting too optimistic," he says.
The 1.6 million homes that are in a state of foreclosure are about to hit the market at a faster pace in the wake of an agreement reached between the government and major mortgage servicers over acceptable foreclosure practices, Khater says. That'll drive down prices, he says, as banks begin to push through foreclosures that they previously halted during negotiations of the $25 billion settlement reached last month.
"There's going to be a really long tail to this," he cautions. Still, Khater says that rising sales and the fact that fewer homes are flowing into the "shadow inventory" -- homes in a state of foreclosure -- are positive signs for the real estate market.
Huskey says the next healthy housing era will be a more "traditional market" that will stand in stark contrast to what he calls the "steroid years," when prices rose at an unsustainable pace.
As CNNMoney recently put it, "If you're waiting for home prices to go up, then you're missing signs the troubled housing market has finally turned around."
Gallery: 10 Places Where Home Prices Are Soaring
Real estate professionals also stress that a housing recovery should not be judged from a birds-eye view, since market conditions vary dramatically from state-to-state and city-to-city. In states walloped by the real estate market collapse, real estate agents are significantly more optimistic that home prices will rise in the next six months.
Eighty percent of Arizona real estate agents and homeowners, 75 percent of Nevada agents and homeowners and 51 percent of Florida agents and homeowners told HomeGain that they believe home values will rise in the next six months. The optimism in Florida dovetails with dramatic price gains recently reported by Realtor.com. The online marketplace reports that out of the 10 metropolitan areas that saw the highest price increases in their database in February of 2011, seven were in Florida. Miami median home prices increased by 26.19 percent, the listing service says.
Meanwhile, in states that weathered the housing crisis relatively well, a much higher percentage of real estate agents and homeowners believe that prices will drop. In Connecticut, 60 percent of agents surveyed said that they thought prices would continue to fall.
Apr 26, 2012
Apr 25, 2012
'Severely' overburdened homeowners, renters
Taken from: weblogs.baltimoresun.com
How many people spend more than half their income on housing costs? More than you might think.
In the Baltimore area, one in five households with workers pulling down middle-income or lower-income wages fell into that pinched group in 2010, according to a new report by the Center for Housing Policy. That's nearly 85,000 households "severely burdened by their housing costs."
But it's not quite as bad as the nation overall, with nearly one in four of what the center dubs "working households" falling into that category.
The center, which looked at regions and states across the country, considered all renter and owner households with adults who made no more than 20 percent over their area's median income and worked at least 20 hours a week on average in 2010. That means retirees weren't part of the calculation -- and neither were those who were out of work or had their weekly hours cut below 20, a situation that plenty of Americans were stuck in that year.
"Had they been included, the number and share of low- and moderate-income households with severe housing cost burdens would have been higher: overall, 27 percent of low- and moderate income households in the United States — or 18.2 million of the more than 67 million households — had a severe housing cost burden in 2010, up from 25 percent in 2008," wrote the report's author, Laura Williams.
The share of severely burdened working households in the Baltimore area has fluctuated a bit the last few years. It was 19 percent in 2008 and 21 percent in 2009 before dipping to 20 percent in 2010.
The United States, by contrast, has steadily inched upward: 22 percent, 23 percent, 24 percent.
The report looked at both homeowners and renters, finding that tenants were hit with rising rents (up 4 percent) and declining income (down 4 percent) while homeowners' income fell faster than their housing costs (down 5 percent and 2 percent, respectively).
"Median housing costs for working homeowners declined modestly between 2008 and 2010," the center noted. "Meanwhile, the incomes of working homeowners declined even more, driven in large part by a decrease in the median number of hours worked per week."
Where do you stand?
Apr 24, 2012
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