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Home prices are still going up! In LA county the median prices increased 6% when compared to a year ago. The spring buying season is off to a great start!

Southern California home sales jump sharply month-to-month

 

Southern California home sales followed their usual pattern in March, which means big increases over the previous month and mostly slight increases over the same month last year. (File photo by Keith Birmingham/Pasadena Star-News) 

By Gregory J. Wilcox, Los Angeles Daily News

Posted: 04/18/16, 1:14 PM PDT |

 

Southern California’s spring home buying season got off to a typically strong start across the six-county region in March, with sales surging from the previous month, a market tracker said Monday

Prices also increased from the year-ago level, according to Irvine-based CoreLogic.

Last month, sales on new and previously owned houses and condominiums in the region rose 34.5 percent from February to 20,370 transactions, the company said.

That is close to the average monthly increase of 35 percent between February and March, dating back to 1988, when record keeping began.

“Last month, the housing market experienced a normal, seasonal spike from February in the number of recorded transactions, which reflects more buyers and sellers entering the market as the holidays and winter faded,” said CoreLogic research analyst Andrew LePage.

During March, the region’s median price rose 6 percent from a year ago to $449,000. That price also marks a 4 percent increase from February.

The report also said that:
• In Los Angeles County, sales fell 1 percent from a year ago to 6,610 but increased 33 percent from February. The median price rose 6 percent from a year ago to $506,000, which is also up 4 percent from February.

• In Orange County, sales rose 0.8 percent from a year ago to 3,181, and they soared 37 percent from February. The median price increased 7 percent from a year earlier to $625,000 and gained 2.5 percent from February.

• Orange County’s median price is now just 3 percent under the record high of $645,000 in June of 2007, CoreLogic said. It is the closest of any of the counties to a pre-recession price level.

• In Riverside County, sales increased 5 percent from a year earlier to 3,583 and increased 32 percent from February. The county’s median price rose 8 percent from a year ago to $330,000, up 5 percent from February.

• San Bernardino County’s sales increased 8 percent from a year ago to 2,528 and were up 33.5 percent from February. The median price rose 5 percent from a year earlier to $272,000 and fell 1.1 percent from February.

But LePage warned that scant inventory and decreasing affordability might hold back sales in the coming months.

“Prices have come a long way in the last three years, and credit is still moderately tight,” he said.
The median sales price has risen year-over-year for 48 consecutive months, and the increases have been in the single digits for the last 22 consecutive months, CoreLogic said.

Source: http://www.dailybulletin.com/business/20160418/southern-california-home-sales-jump-sharply-month-to-month

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Cash buyers accounted for 23 percent of March sales, down from 25 percent in February and also down from 25 percent a year ago. The cash sales share peaked in February 2013 at 37.5 percent.
“Over the next few months, we’ll find out whether or not several years of rising home prices will trigger a more significant run-up in inventory than we’ve seen during the spring-summer season over the past couple of years,” LePage said. “In recent months, the new-home market has registered a stronger heartbeat, contributing more to the overall inventory.”

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The people mover is finally coming to LAX. Yay!

Potential ballot measure: what you need to know about the Airport Metro Connector

One in a series of posts that will look at projects and programs that would receive funding from the potential sales tax ballot measure that Metro is considering. 

What is it? A new station at Aviation Boulevard and 96th Street to be served by both the future Crenshaw/LAX Line and an extension of the existing Metro Green Line. This new station will also provide transit passengers with a direct connection to the LAX airport people mover which will take passengers to the airport terminals. The Airport Metro Connector won’t be a traditional at-grade train station. Rather, the multimodal transportation hub is envisioned to include a number of amenities, including larger rail platforms to accommodate passengers with luggage, a bus plaza, pick-up and drop-off area for private vehicles, real time transit information, retail, wi-fi service, public art, a bike hub and a pedestrian plaza.

When can I use the station? Metro has a target completion date of 2024. The Crenshaw/LAX Line has a 2019 target opening date.

What about the people mover? Los Angeles World Airports is planning on building and operating the people mover, which will include three stations near airport terminals, two stations at new ground transportation centers, including the Airport Metro Connector station, and a sixth station at a new planned consolidated rental car center near the 405 freeway. Environmental studies are underway for the people mover and airport officials have said they would like to begin construction in late 2017. The people mover and Airport Metro Connector are viewed as key projects if Los Angeles wins the right to host the 2024 Summer Olympics.

How does the potential ballot measure figure into this project? The Airport Metro Connector already has some funding and the potential ballot measure would add $337 million, allowing for a more robust facility to be built. Also, the funding would allow the project to be accelerated from its original 2028 completion date under Metro’s existing long-range plan.

Will this project make it easier to get to the airport? Yes. The Airport Metro Connection Station will be directly reachable from trains on the Crenshaw/LAX Line and the Green Line. The Crenshaw/LAX Line can also be reached via transfer from the Expo Line and the Green Line via transfer from the Blue Line and Silver Line. Looking into the future, the potential ballot measure also includes funding for a northern extension of the Crenshaw/LAX Line to the Purple Line subway and beyond to West Hollywood and Hollywood.

Metro’s potential ballot measure calls for a half-cent sales tax increase for 40 years and an 18-year extension of the existing Measure R sales tax, with both running through 2057. Metro staff have also proposed 45- and 50-year alternative plans to include more projects and funding for programs. Here’s a previous post about (and including) the draft spending plan for the ballot measure. Community meetings are underway: here’s the list. Please visit theplan.metro.net for more info and please use the hashtag #metroplan when discussing on social media. 

The Metro Board of Directors are scheduled to consider the spending plan and whether to put the ballot measure before voters at their June 23 meeting. 

Source: http://thesource.metro.net/2016/04/08/potential-ballot-measure-what-you-need-to-know-about-the-airport-metro-connector/

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The millennial home buyers have very discriminating taste. They would rather wait and buy their dream home rather than settle for a starter home like previous generations. It's been more of an emotional decision rather than a life priority decision. They are willing to pay more and do whatever it takes to truly afford the home they want. Smart generation but with historically low rates and lack of inventory in the lower price range of homes available they may need to compromise a bit in order to buy today.

Millennial homebuyers: Go big, or go home 

It could also be they just want more than their parents did. Three-quarters of first-time homebuyers say they are looking for a home that will serve them long term, perhaps accommodating a family. They claim they don't want a starter home. That's according to a new national survey by Bank of America of more than 1,000 adults age 18 and over who want to buy a home in the future.

The share of first-time buyers fell to just 30 percent in February, according to the National Association of Realtors. Historically, it should be at least 40 percent. The common explanation for this has been that there are too few low-priced homes for sale, and that tight credit standards and high student loan debt take homeownership off the table for young buyers. Those are still valid reasons, but playing into that could also be this young generation's need for something bigger and better.

Sixty-nine percent of those surveyed said they were willing to wait until they could afford that longer-term home, rather than pony up the cash now to buy a starter home. More than half said they didn't think they could afford the type of home they'd want. Just about one-third cited high debt as a reason for putting off buying. In fact, when looking by generation, more Gen Xers than millennials have deferred purchasing their first home because of debt.

"What the report brings out is the shift in how millennials are thinking about homeownership. A home is much more of an emotional decision and a life priority decision. Is this a place where I may ultimately want to retire?" said D. Steve Boland, consumer lending executive for Bank of America.

Not only are they willing to pay more, but they're willing to do what it takes to afford more. More than half say they would make sacrifices when it comes to their spending on a car, travel, clothing and even their social lives, in order to afford the home they truly want.

Part of the shift may also be due to the fact that millennials are starting to age into their prime homebuying years, and they've already waited longer than their parents to buy. The recession hit millennials hardest, in employment and wage growth. Millennials, defined as those ages 18 to 34, have waited longer to marry and have children than previous generations.

"I do agree there are some well-heeled educated millennials who are very specific about their wants and demands," said Nela Richardson, chief economist at Redfin, a real estate brokerage.
Richardson, however, does not believe that is the primary reason the young are opting out of starter homes. It's far more simple than that.

"There are not a lot of starter homes around. All the inventory increases we've seen have been at the high end of the market. For any affordable home that hits the market, there are not only tons of first-time buyers, but investors looking to flip it or rent it out," she said.

Source: http://www.msn.com/en-us/money/realestate/millennial-homebuyers-go-big-or-go-home/ar-BBrrfOc

Home prices are rising much faster than incomes

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The pace of home prices continue to rise driven in large part due to a lack of inventory. This keeps driving up prices as competition is fierce. With an improving labor market and low mortgage rates it's all about supply and demand. 


Home prices are rising much faster than incomes
Associated Press: Josh Boak  3/29/16


U.S. home prices climbed at more than double the rate of incomes in January, a trend that could ultimately create affordability challenges for buyers.

The Standard & Poor's/Case-Shiller 20-city home price index rose 5.7 percent from a year earlier, a slight increase from the 5.6 percent annual increase in December, according to a report Tuesday.

"The pace of U.S. home value growth has been picking up bit-by-bit over the past few months, driven in large part by stubbornly low inventory in most markets that creates competition and drives up prices for those homes that are available," said Svenja Gudell, chief economist at the real estate firm Zillow.

Home values have risen 2.6 times faster than average hourly wages, which have improved just 2.2 percent, according to a government report earlier this month. Tight supplies of homes on the market have fueled much of the price growth, as low mortgage rates and steady hiring have sparked demand.


Denver, Portland, San Francisco and Seattle each registered double-digit annual price increases. Home values rose in all 20 metro areas markets, which account for roughly half of the U.S. housing stock.

The index remains more than 11 percent below its mid-2006 peak, when subprime mortgages pushed the market to heights that triggered the Great Recession in late 2007.

Source: http://www.msn.com/en-us/money/realestate/home-prices-are-rising-much-faster-than-incomes/ar-BBr4Ac0?li=BBnbfcN
 

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The limited supply of homes not meeting demand is behind the latest home price increases. Even with home prices rising faster than wages the low mortgage rates have been the icing. We are facing an "above-normal home-price growth trend" and not a bubble but more a housing shortage.

3 Reasons We're Not in a Housing Bubble

Daily Real Estate News | Wednesday, March 16, 2016 

 

Home prices are rising three to four times faster than wages while credit conditions are loosening, Lawrence Yun, chief economist for the National Association of REALTORS®, notes in his latest column at Forbes.com. These kinds of conditions usually prompt housing analysts to start uttering the words "housing bubble," but Yun discounts those warnings.

"Even though the credit conditions appear to be easing somewhat, the move is from overly stringent conditions to not-so-overly-stringent conditions," Yun writes. "It is a far-fetched view to imply the current mortgage approval process in any way resembles the loosey-goosey, easy subprime mortgage access conditions of a decade ago."

Indeed, mortgage credit scores are nowhere near where they were during the housing bubble. Today, scores are at about 740 to 750 compared to 710 to 720 during the housing crisis, according to Fannie Mae data. Also, the no-doc requirements for subprime mortgages of yesteryear are nearly gone today.
Yun also notes that while home prices are rising above wages, low mortgage rates have been a silver lining.

"For someone making a 20 percent down payment, the monthly mortgage payment at today's mortgage rates would take up 15 percent of a person's gross income," Yun writes. "During the bubble years, it was reaching 25 percent of income."

Finally, Yun says you can squash those bubble fears by just looking at the housing supply. Inventories are at about four to five months today, which is similar to the bubble years. However, sales aren't moving at the same pace. Existing-home sales and new-home sales combined were at 8.4 million back then. In 2015, combined home sales were 5.76 million — about one-third lower, Yun notes.
The limited supply of homes for sale is what mostly is behind the latest home-price increases, he says.

"We are not in a housing market bubble in terms of an inevitable impending home-price crash," Yun says. "Rather, we are facing an above-normal home-price growth trend, which admittedly is unhealthy on several levels because of the simple economic law of insufficient supply. We need more homebuilding."

Source: http://realtormag.realtor.org/daily-news/2016/03/16/3-reasons-were-not-in-housing-bubble#sf22673570

 

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Inventory of homes is still tight. The spring season which is just around the corner is the busiest time of the year for the housing market. Even with upcoming new listings it will not be enough to meet the demand. A lot of the really good homes will be scooped up quick even before it hits the market. Inventory has been down this past December by 4% while sales were up by 8%. It's definitely still a buyers market and the closer the home is to urban centers the higher the demand.

Spring housing season kicks off with record short supply

 

Patrick T. Fallon | Bloomberg | Getty Images

Open House signage is displayed outside of a home for sale in Redondo Beach, California.

 By: Diana Olick: 12 hour ago

On a snowy Tuesday in early February, Jessie and Mark Sciulli toured a home in the northern suburbs of Washington, D.C., that wasn't listed for sale yet. Relocating their family back home from overseas, the couple was in town for just two days and had to see as much as possible. Their agent didn't have enough active listings to show, so she went after homes she knew were coming soon.

It is the same story for home buyers nationwide: There is precious, record little for sale.
"I feel like there is not a lot of inventory right now, so that does make us a little bit nervous, because we think there is going to be a lot more offered in two or three weeks, so I'd say for sure we feel that stress," said Jessie.

Presidents Day weekend is traditionally seen by real estate agents and homebuilders as the start of the spring housing market — the busiest time of year for home sales. The number of listings always rises, and it will this year as well, but inventory is already so low to begin with that even the new listings will not be nearly enough.


"I think inventory is going to remain tight. The closer you are to urban centers, the tighter the inventory, because the demand is strong, and a lot of that stuff gets scooped up before it hits the market," said Jane Fairweather, a real estate agent in Bethesda, Maryland.


The latest numbers paint an empty picture. Inventory at the end of December nationally was down nearly 4 percent from the previous December, but sales were up nearly 8 percent, according to the National Association of Realtors. The supply of homes for sale was the lowest since the start of 2005, and back then there were far more homes being built to add to overall supply. As for January, the NAR's listing site, Realtor.com, reported that listings were down a sharper 4.4 percent from a year ago

In local markets, the January readings are coming in even tighter. Total listings in Charlotte, North Carolina, dropped nearly 24 percent in January from a year ago, with the number of new listings down 6 percent. In Denver, more than 4,000 homes came onto the market in January, but total inventory remained at historically low levels. Buyers scooped up more than came on.


January inventory was down nearly 17 percent in Philadelphia from a year ago, and Washington, D.C., had so few listings it would take less than two months at the current sales pace to exhaust supply. A healthy housing market traditionally has four to six months' worth of inventory for sale.

"Half the [D.C.] homes sold in January were on the market for 26 days, and the competition among buyers pushed the average percent of asking price received at sale up to 98.6 percent," according to the Greater Capital Area Association of Realtors. "The $504,250 median price for the month was slightly higher than last year (1.9 percent) and marked the highest January level on record for the District."


"The inventory question is a puzzle," said Chris Herbert, managing director of Harvard's Joint Center for Housing Studies. "If you drill down and say, what's happening at the lower end of the market, what's happening in more affordable neighborhoods, those places had a much more dramatic boom-bust in house prices. Even though prices have come back there pretty strongly, they are much more likely to be underwater or low equity, so I think part of it is even though we think we have seen the market heal, there's still a lot of healing left to do."


Herbert also points to younger baby boomers, who lost home equity and more in the recession, and who are not trading up as much as their age group historically does. They are staying put in their homes, not adding to much-needed inventory. Add it up and it comes out to less — less inventory, which in turn puts upward pressure on prices.


Sellers, however, appear to be seeing a limit. They are not pricing their homes as aggressively as they did last fall, according to real estate brokerage Redfin. While homes are selling fast, not everything sells, especially if it's overpriced. Sellers know the only thing worse than not getting top dollar is sitting on the market and becoming a "stale" listing.


"Even with surging home prices, listings were still down in January from a year ago," said Redfin chief economist Nela Richardson. "Sellers are worried that today's buyers won't pay enough for their current home to finance their next-level house."


Back in suburban D.C., after an exhausting two days and 19 home tours, the Sciullis left without making any offers.

Source: http://www.cnbc.com/2016/02/12/spring-housing-season-kicks-off-with-record-short-supply.html

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Mortgage rates still falling loans as global markets continue to be rattled by a global slowdown. This keeps mortgage loans affordable as rates stay historically low.

Average long-term US mortgage rate falls fifth straight week 

AP - Associated Press: By PAUL WISEMAN, AP Economics Writer 5 days ago

WASHINGTON — Average long-term U.S. mortgage rates fell for the fifth straight week amid volatility in world financial markets.

Mortgage buyer Freddie Mac says the average rate on a 30-year fixed-rate mortgage slid to 3.72 percent this week, down from 3.79 percent last week and the lowest since it averaged 3.68 percent in April 2015.

The average rate on a 15-year fixed-rate mortgage slid to 3.01 percent from 3.07 percent last week.
Mortgage rates have continued to fall despite the Federal Reserve's decision in December to raise the short-term rate it controls for the first time since 2006.


Global markets have been rattled this year by signs of a global slowdown and big drops in the price of commodities, including oil. Investors have sought refuge in U.S. Treasurys, pushing down long-term U.S. rates.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.6 point. The fee for a 15-year loan was also unchanged at 0.5 point.

The average rate on five-year adjustable-rate mortgages fell to 2.85 percent this week from 2.90 percent last week; the fee slid to 0.4 point from 0.5 point last week.

Source:http://www.msn.com/en-us/money/realestate/average-long-term-us-mortgage-rate-falls-fifth-straight-week/ar-BBp7X4R