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November 2018 - Market Activity

by The Worrell Group

November 2018

The booming U.S. economy continues to prop up home sales and new listings in much of the nation, although housing affordability remains a concern. Historically, housing is still relatively affordable. Although Freddie Mac recently reported that the 30-year fixed rate is at its highest average in seven years, reaching 4.94 percent, average rates were 5.97 percent ten years ago, 6.78 percent 20 years ago and 10.39 percent 30 years ago. Nevertheless, affordability concerns are causing a slowdown in home price growth in some markets, while price reductions are becoming more common.

Closed Sales were up 0.4 percent to 2,828. Pending Sales increased 4.8 percent to 2,491, and Inventory shrank 5.7 percent to 7,841.

Median Sales Price was up 8.6 percent to $179,000. Percent of Original List Price Received increased 0.1 percent to 94.9%. Absorption Rate was down 7.4 percent to 2.5.

The Bureau of Labor Statistics recently reported that the national unemployment rate was at 3.7 percent. Low unemployment has helped the housing industry during this extensive period of U.S. economic prosperity. Home buying and selling activity relies on gainful employment. It also relies on demand, and builders are showing caution by breaking ground on fewer single-family home construction projects in the face of rising mortgage rates and fewer showings.

October 2017 - Market Actvity

by The Worrell Group

OCTOBER  2018

If the last few months are an indication of the temperature of housing markets across the country, a period of relative calm can be expected during the last three months of the year. A trend of market balance is emerging as we approach the end of 2018. Prices are still rising in most areas, and the number of homes for sale is still low, but there is a general shrinking of year-over-year percentage change gaps in sales, inventory and prices. 

 
Closed Sales were up 1.7 percent to 3,198. Pending Sales increased 9.4 percent to 3,017, and Inventory shrank 8.0 percent to 8,339. 
 
Median Sales Price was up 6.4 percent to $174,500. Percent of Original List Price Received increased 0.3 percent to 95.4%. Absorption Rate was down 10.0 percent to 2.7. 
 
Stock markets experienced an October setback, but that does not necessarily translate to a decline in the real estate market. The national unemployment rate has been below 4.0 percent for three straight months and during five of the last six months. This is exceptional news for industries related to real estate. Meanwhile, homebuilder confidence remains positive, homeownership rates have increased in the key under-35 buyer group and prices, though still rising, have widely reduced the march toward record highs. 

September 2018 - Market Activity

by The Worrell Group

September 2018

Some economy observers are pointing to 2018 as the final period in a long string of sentences touting several happy years of buyer demand and sales excitement for the housing industry. Although residential real estate should continue along a mostly positive line for the rest of the year, rising prices and interest rates coupled with salary stagnation and a generational trend toward home purchase delay or even disinterest could create an environment of declining sales. 

Closed Sales were down 2.5 percent to 3,144. 
 
Pending Sales increased 8.5 percent to 3,043, and Inventory shrank 13.6 percent to 8,288. 
 
Median Sales Price was up 9.0 percent to $179,900. Percent of Original List 
Price Received increased 0.5 percent to 95.9%. Absorption Rate was down 15.6 percent to 2.7. 
 
Tracking reputable news sources for housing market predictions makes good sense, as does observing trends based on meaningful statistics. By the numbers, we continue to see pockets of unprecedented price heights combined with low days on market and an economic backdrop conducive to consistent demand. We were reminded by Hurricane Florence of how quickly a situation can change. Rather than dwelling on predictions of a somber future, it is worth the effort to manage the fundamentals that will lead to an ongoing display of healthy balance.

August 2018 - Market Activity

by The Worrell Group

August 2018

Rising home prices, higher interest rates and increased building material costs have pressured housing affordability to a ten-year low, according to the National Association of Home Builders. Keen market observers have been watching this situation take shape for quite some time. Nationally, median household income has risen 2.6% in the last 12 months, while home prices are up 6.0%. That kind of gap will eventually create fewer sales due to affordability concerns, which is happening in several markets, especially in the middle to high-middle price ranges. 

 
Closed Sales were up 8.0 percent to 3,802. 
 
Pending Sales increased 19.0 percent to 3,731, and Inventory shrank 18.0 percent to 8,059. 
 
Median Sales Price was up 9.0 percent to $179,000. Percent of Original List Price Received increased 0.3 percent to 96.2%. Absorption Rate was down 18.8 percent to 2.6. 
 
While some are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures, others are taking a more cautious and research-based approached to their predictions. The fact remains that the trends do not yet support a dramatic shift away from what has been experienced over the last several years. Housing starts are performing admirably if not excitingly, prices are still inching upward, supply remains low and consumers are optimistic. The U.S. economy is under scrutiny but certainly not deteriorating.

July Market - Sales Snapshot

by The Worrell Group

Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cooldown are present.

Wages are up but not at the same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices. At the same time, demand is still outpacing what is available for sale in many markets.

Closed Sales were up 7.0 percent to 3,702. Pending Sales increased 24.9 percent to 3,765, and Inventory shrank 19.8 percent to 7,720.

Median Sales Price was up 6.3 percent to $180,254. Percent of Original List Price Received increased 0.9 percent to 97.2%. Absorption Rate was down 21.9 percent to 2.5 months of inventory on the market.

July 2018 - Market Activity

by The Worrell Group

July 2018

Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cooldown are present. Wages are up but not at the same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices. At the same time, demand is still outpacing what is available for sale in many markets. 

Closed Sales were up 7.0 percent to 3,702. Pending Sales increased 24.9 percent to 3,765, and Inventory shrank 19.8 percent to 7,720. 
 
Median Sales Price was up 6.3 percent to $180,254. Percent of Original List Price Received increased 0.9 percent to 97.2%. Absorption Rate was down 21.9 percent to 2.5. 
 
Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.

June 2018 - Market Activity

by The Worrell Group

June 2018

Housing markets across the nation are most assuredly active this summer, and buyer competition is manifesting itself into several quick sales above asking price. While the strength of the U.S. economy has helped purchase offers pile up, the Fed recently increased the federal funds rate by 0.25 percent, marking the second rate hike this year and seventh since late 2015. Although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability. 

 
Closed Sales were down 2.5 percent to 4,064. Pending Sales increased 8.5 percent to 3,811, and Inventory shrank 21.5 percent to 7,313. 
 
Median Sales Price was up 8.6 percent to $188,200. Percent of Original List Price Received increased 0.8 percent to 97.5%. Absorption Rate was down 22.6 percent to 2.4. 
 
Inventory may be persistently lower in year-over-year comparisons, and home prices are still more likely to rise than not, but sales and new listings may finish the summer on the upswing. The housing supply outlook in several markets is beginning to show an increase in new construction and a move by builders away from overstocked rental units to new developments for sale. These are encouraging signs in an already healthy marketplace.

May 2018 - Market Activity

by The Worrell Group

May 2018

Just like last year at this time, prospective home buyers should expect a competitive housing market for the next several months. With payrolls trending upward and unemployment trending downward month after month in an extensive string of positive economic news, demand remains quite strong. Given the fact that gradually rising mortgage rates often infuse urgency to get into a new home before it costs more later, buyers need to remain watchful of new listings and make their offers quickly. 

 
Closed Sales were up 1.8 percent to 3,739. Pending Sales increased 18.1 percent to 4,089, and Inventory shrank 24.9 percent to 6,771. 
 
Median Sales Price was up 10.1 percent to $185,000. Percent of Original List Price Received increased 1.1 percent to 97.4%. Absorption Rate was down 26.7 percent to 2.2. 
 
Although home sales may actually drop in year-over-year comparisons over the next few months, that has more to do with low inventory than a lack of buyer interest. As lower days on market and higher prices persist year after year, one might rationally expect a change in the outlook for residential real estate, yet the current situation has proven to be remarkably sustainable likely due to stronger fundamentals in home loan approvals than were in place a decade ago.

April 2018 - Market Activity

by The Worrell Group

April 2018

Many sellers and builders are in a good position for financial gains, as the economy continues to favor putting existing homes on the market and building new homes for sale. We are finally beginning to see some upward movement in new listings after at least two years of a positive outlook. There may not be massive increases in inventory from week to week, but a longer-term trend toward more new listings would be a good sign. Low inventory should continue to create a competitive situation for buyers, causing price increases over the next several months.

Closed Sales were up 3.0 percent to 3,212. Pending Sales increased 15.9 percent to 3,920, and Inventory shrank 32.0 percent to 6,046.

Median Sales Price was up 9.4 percent to $175,000. Percent of Original List Price Received increased 1.4 percent to 97.0%. Absorption Rate was down 33.3 percent to 2.0.

This winter and spring exhibited unseasonal weather patterns in much of the country. As the seasons change to something more palatable, wages and consumer spending are both up, on average, which should translate positively for the housing market. Being quick with an offer is still the rule of the day as the number of days a home stays on the market drops lower. If that wasn't enough for buyers to mull over with each potential offer, being aware of pending mortgage rate increases is once again in fashion.

March 2018 - Market Activity

by The Worrell Group

March 2018 

New residential real estate activity has been relatively slow in the first quarter of 2018, yet housing is proving its resiliency in a consistently improving economy. Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower inventory compared to last year at this time. Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future. 
 
Closed Sales were down 7.5 percent in March compared to March 2017. 
 
Pending Sales increased 30.5 percent to 4,285, and Inventory shrank 34.7 percent to 5,708.* Median Sales Price was up 11.2 percent to $173,500. 
 
Average Sales Price rose 10.6 percent in March. Absorption Rate was down 34.5 percent to 1.9. The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year. Borrowing money will be more expensive, particularly for home equity loans, credit cards and adjustable rate mortgages, but rising wages and a low national unemployment rate that has been at 4.1 percent for five months in a row would seem to indicate that we are prepared for this. And although mortgage rates have risen to their highest point in four years, they have been quite low for several years.

Displaying blog entries 11-20 of 144

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The Randy Worrell Team
RE/MAX Legends Group
5645 Castle Creek Pkwy N
Indianapolis IN 46250
Direct: 317-819-3330
Voicemail: 317-644-0086

Randy Worrell  -  RE/MAX Legends Group       317-819-3330  Direct       317-590-5709  Mobile