Friday, April 27, 2012

S&P/Case-Shiller Home Price Indices

The S&P/Case-Shiller Home Price Indices measure the average change in the total value of all existing single-family housing prices in a particular geographic market.
They are calculated monthly and cover 20 major metropolitan areas (Metropolitan Statistical Areas or MSAs), which are also aggregated to form two composites – one comprising 10 of the metro areas, the other comprising all 20.
The S&P/Case-Shiller indices do not sample sale prices associated with new construction, condominiums, co-ops/apartments, multi-family dwellings, or other properties that cannot be identified as single-family.
The factors that determine the demand, supply, and value of housing are not the same across different property types. Consequently, the price dynamics of different property types within the same market often vary, especially during periods of increased market volatility. In addition, the relative sales volumes of different property types fluctuate, so indices that are segmented by property type will more accurately track housing values.
The S&P/Case-Shiller Home Price Indices originated in the 1980s by Case Shiller Weiss's research principals, Karl E. Case and Robert J. Shiller. At the time, Case and Shiller developed the repeat sales pricing technique. This methodology is recognized as the most reliable means to measure housing price movements and is used by other home price index publishers, including the Office of Federal Housing Enterprise Oversight (OFHEO).

Thursday, April 26, 2012

Low-ball bidders in many markets learn they can no longer get a steal on a house

It’s not something that economists routinely track, but it provides a rough sense of what’s happening in local real estate markets. Call it the low-ball index.
A year ago, according to researchers at the National Association of Realtors, one out of 10 members surveyed in a monthly poll complained about low-ball offers on houses listed for sale. In the latest survey — conducted in March among 4,500 agents and brokers across the country but not yet released — there were hardly any. Instead, the focus of volunteered comments has shifted to declining inventory levels — fewer houses available to sell — and multiple offers on well-priced listings.

A low-ball offer typically involves a contract submitted to a seller where the price proposed by the purchaser is 25 percent or more below list. Low-balls increase sharply when there’s a glut of properties available, asking prices are out of sync with local economic realities and values are depressed or uncertain. Buyers figure: Hey, why not? Maybe I’ll get lucky.

Based on the latest survey results, that sort of strategy is not a winning move in many communities this spring. In fact, in local markets where inventories are tight and competition for homes rising, realty agents say that buyers looking to steal houses by low-balling their offers are ending up at the back of the line, their contracts either rejected out of hand or countered close to the original asking price.
Even when buyers submit shockingly low bids, sellers no longer are so insulted that they send the contract back without a counteroffer. Now they negotiate aggressively, and the final number ends up close to the original asking price.

The takeaway here: Rolling low-balls at sellers may have been an effective approach between 2008 and early 2011. But in 2012’s environment — at least in rebounding markets — it could be counterproductive if you truly want to buy.

Click here for full article

Friday, April 20, 2012

The housing market continued to struggle in March, despite low home prices and record low interest rates. Existing-home sales decreased 2.6% in March from a month earlier to a seasonally adjusted annual rate of 4.48 million, the National Association of Realtors said Thursday.

Not all of the news was bad, however. Even with the monthly decline, the first three months of 2012 were the strongest start to the year for existing-home sales since 2007. And March’s sales were 5.2% above the same month last year.

The inventory of previously owned homes listed for sale, meanwhile, increased to 2.37 million at the end of February. That represented a 6.3-month supply at the current sales pace, a pace considered healthy by economists.

The median sales price in March was $163,800, up 2.5% from $159,800 a year earlier. One reason for the price increase, the Realtors group said, is a declining share of foreclosures and other distressed properties. Those made up 29% of March’s sales, down from 40% a year earlier, according to a monthly survey taken by the Realtors’ group.

For full article click here

Tuesday, April 17, 2012

Expect a Turnaround In Housing By This Time Next Year

The National Association of Home Builders today reported its first decline in homebuilders' confidence in seven months, but that may be just a blip in the fledgling housing recovery.
"The housing crash is now over...and by this time next year, housing will no longer be a drag for the economy but a tailwind," Mark Zandi, chief economist of Moody's Analytics tells The Daily Ticker.
Zandi says this year's spring selling season is off to a pretty good start, although by historic standards prices are still low. But that may not be all bad: Low prices means homes are more affordable to buy.
"House prices are now low enough relative to incomes that single family housing is about as affordable as its ever been in the data we have going back to World War II," Zandi says.
Low prices also attract investor interest, which is helping to stabilize the housing market. "Investors can come in, buy homes, rent them, cover costs and look for a capital gain down the road," he says.
Rising rents have been attracting those investors, but at some point they may compel consumers to buy homes.
"Another year from now if prices stay flat and rents rise another 4, 5 or 6%, then the decision to rent or buy will be firmly in favor of buying rather than renting," Zandi says, adding that's already the case in some parts of the country.
Demand to buy homes will also increase when potential buyers get a whiff of rising interest rates.
"At that point …. they will want to jump in and buy that home before they lose those very advantageous mortgage rates," says Zandi. The rate on a 30-year fixed mortgage is currently 3.88%, according to Freddie Mac.
Until there is a substantive recovery, Zandi says housing will continue to be divided between a distressed market -- filled with homes in foreclosure or on the verge of it -- and a non-distressed market, which is holding up well. He also expects multifamily housing will continue to outpace the single-family market.
Zandi says the government could help accelerate the housing recovery by making it easier for homeowners to refinance and to reduce principal owed.
The market will get more data on how housing is holding up when the government reports March housing starts tomorrow and the National Association of Realtors reports existing sales for March on Thursday.

For the full article click here.

For more information on the houseing market contact the Andrea Crossman Group 616-355-6387

Tuesday, April 3, 2012

Michigan Economic Development Corp. President and CEO Michael A. Finney will showcase Pure Michigan to some of the nation’s top site selectors March 28-29 in New York City at The Summit hosted by Development Counselors International.
“Michigan offers business advantages and opportunities unmatched across America,” said Finney. “We have an exciting story to tell. We are reinventing our state in a way that works better for everyone and moving forward with a new economic certainty this is very attractive to investors and businesses making new location and investment decisions.”

In addition, a Michigan location offers companies a direct line to some of the best talent in the world and a location within 500 miles of half of North America’s population and income.

The nation is taking notice of all that’s happened here of late. Confidence that Michigan is on the right track helped to create 80,000 private-sector jobs in the state last year. Newsweek ranked the state No. 1 for job growth in August, Bloomberg ranked Michigan’s economic health second in the nation and CNN called Detroit the next Silicon Valley. The Federal Reserve projects that Michigan is on track to lead all other states in job growth over the next six months.
Click here to view full article.
For more information on purchasing a home in Michigan contact Andrea Crossman Group or call us today 616-355-6387