New-home sales climb in February from a year ago

The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 411 thousand. This was down from a revised 431 thousand SAAR in January (revised down from 437 thousand). 

The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.

 

"Sales of new single-family houses in February 2013 were at a seasonally adjusted annual rate of 411,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.6 percent below the revised January rate of 431,000, but is 12.3 percent above the February 2012 estimate of 366,000.

The second graph shows New Home Months of Supply.

The months of supply increased in February to 4.4 months from 4.2 months in January.

The all time record was 12.1 months of supply in January 2009.

 

This is now in the normal range (less than 6 months supply is normal).

"The seasonally adjusted estimate of new houses for sale at the end of February was 152,000. This represents a supply of 4.4 months at the current sales rate."

On inventory, according to the Census Bureau:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.

This graph shows the three categories of inventory starting in 1973.



The inventory of completed homes for sale is just above the record low. The combined total of completed and under construction is also just above the record low.

The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

In February 2013 (red column), 33 thousand new homes were sold (NSA). Last year 30 thousand homes were sold in February. This was the eight weakest February since this data has been tracked. The high for February was 109 thousand in 2005, and the low for February was 22 thousand in 2011.

This was below expectations of 425,000 sales in February, but still a fairly solid report. 

By: Bill McBride

4 Musts When Hiring a Home Improvement Contractor

If you're searching the Yellow Pages, you haven't done your homework

1.  Know specifically what you want to have done. The more information you have available for the contractor, the better.

2. Try to get personal referrals, rather than relying on the phone book. If you have a friend or a relative who had some work done on their home that they were pleased with, that's a great starting point. You can get some honest feedback about the contractor's skill level, price, scheduling, level of cooperation, and much more. There are a lot of contractors out there to choose from, and, like most businesses, they succeed or fail mostly by their reputation, so a good referral is very helpful.

There are other sources of referrals as well. If you see some work going on down the street, stop and talk to the homeowner. Most people are more than willing to share their experiences -- good and bad -- about the contractor they've hired, and here again you can get some great firsthand information.

Material suppliers are also great sources. Ask the people where you buy your lumber or your plumbing supplies if they know of anyone who's particularly good at the type of project you have in mind. Retailers have a reputation to protect as well -- they want to keep you happy and coming back as a customer -- so they will typically refer only those contractors who they know are honest and will do a quality job.

Other good sources of referrals include real estate agents, insurance agents, property managers, your utility company, and your local building department.

3. When you have a referral or two, call the contractors to set up an appointment. Ask the following four questions:

• Do they do the specific type of work you're looking for? It could be they no longer do kitchens or room additions, or they now do remodeling and have stopped building new homes. Clarify that upfront.

• What is their schedule like? If you have a project that has to be done within the next month and the contractor can't even start until then, there's no point in wasting your time or theirs.

• Can they provide you with referrals? Most companies are more than willing to provide you with names and phone numbers of past clients. If they can't or won't provide you with referrals, don't hire them. Between the time you call the contractor and the time they come out, be sure to follow up on a couple of the referrals and get some feedback from the homeowners. If possible, see if the referral would mind if you came out to their home to view the contractor's work in person.

• What is the contractor's name and license number? Get the contractor's full legal business name, address and business phone number, as well as their contractor's license number. Immediately follow up on this information, and call the contractor's board to verify the status of the license and that all of the proper bonds and insurance policies are in place.

4. Have a written contract that describes all the details of your agreement with the contractor, including materials to be used, a description of what's to be done, beginning and completion dates, price, and a payment schedule.Never pay in full upfront, even if you're offered a discount. Make a reasonable down payment if it's requested, typically no more than 20 percent, then make payments as the job progresses. The payments should be tied to specific completions, such as completion of frame inspection, completion of final inspection, or something else that you can easily verify.

For more information about the proper steps in hiring a contractor, including state-by-state licensing information, you can also download my book, "Hire the Right Contractor for Your Home," from Amazon.com.

BY : Paul Bianchina

Are You Ready to Buy a House?

Answering these eight questions will help you decide.

 

The idea of owning your home is an exciting one, but how do you know if you’re ready? Before you take the plunge, answer the questions below.

 

What’s your financial situation?

Having a clear understanding of your finances is necessary when you’re considering buying a home. Prior to speaking with a real estate agent, you should make a budget to see how much you can reasonably afford to pay. Don’t forget to factor in the cost of taxes, insurance premiums, maintenance and other upkeep.

 

Can you afford even the initial costs?

Down payment amounts vary based on the type of loan you’re offered or if you’re eligible for a first-time homebuyers’ program, but remember that the more you put down, the lower your mortgage payments will be.

 

Other initial costs can be substantial: loan set-up fees, home inspections, insurance, property taxes and other fees will cost you about 2 to 4 percent of your home price.

 

Is your money organized?

Hopefully you’re the kind of person who balances your checkbook and understands where your money goes, but if you take a more lackadaisical approach to your finances, you’ll need to step up your game. Get organized, check your credit report and keep building your savings. Getting your affairs in order helps you improve your credit score, qualifying you for better interest rates, and good financial records will help you take full advantage of tax deductions.

 

What are your future expenses?

Think ahead to the next few years. Are you making any big life changes that will hit your wallet hard? If you’re planning to have children or start paying tuition soon, you should factor that cost into your decision now. It can become difficult to replace an aging car or take an expensive vacation once you’re paying a mortgage.

 

Do you have an emergency fund?

Before you devote all your savings into a down payment or upkeep for your house, look at the bigger picture. You need to build a financial cushion in case of financial setbacks like unexpected unemployment or serious illness.

 

It’s not just money that should affect your decision to buy a home.

 

Are you flexible when it comes to getting what you want?

Your first home may not have all the bells and whistles you’re looking for. Are you willing to defer on your wish list now in order to have a home of your own? In a few years, you may be able to find a home that better suits your needs, but in the meantime you could also consider fixing up a less expensive home, buying a home with friends or renting out part of your home for additional income.

 

Do you plan to move in three to five years?

There is a lot of effort, time and cost involved in buying a house – you want to make your investment pay off for you. In addition to the price of the house itself, you should also take into the set-up costs already mentioned.

 

If you’re planning to move in a year for work or school, you may want to wait until after that time. Otherwise, you might find yourself in a tough spot if you’re forced to sell your home for less than its purchase price in a slow market.

 

Do you enjoy home improvement?

If you’re already looking at homes, it’s hard not to imagine how adding a fresh coat of paint to the walls or changing the light fixtures will make a house truly yours. But if you’re used to calling the landlord for anything that goes awry in your home, owning a house might be a jarring wake-up call. When you own your house, any issue becomes your responsibility, from replacing blown electrical fuses to installing a new roof.

 

Now is the time to consider whether you enjoy home improvement projects. Are you confident in your ability to patch drywall or install a ceiling fan, or would you rather pay someone else to do it? If it’s the latter, consider that even if you hire someone else to handle your home improvement issues, you will still have to invest not only money but your time by researching contractors and supervising their work.

Taken from: Realtor.com By Tasha Schroeder

Craigslist Scams

Click on link below to watch Dan Smith's interview with  

Jeff Cole from Fox 29 News.

Housing Starts End 2012 on a High Note

The year 2012 was a promising one for housing. With consistent improvements in housing construction and prices, home building is once again contributing to economic growth. And the December housing starts report capped off the year with confirmation of these trends.  

Per Census data, solid gains in both single-family and multifamily production resulted in nationwide housing starts rising 12.1 percent to a seasonally adjusted annual rate of 954,000 units: the highest level of new home production since June 2008. Single-family starts rose 8.1 percent to a seasonally adjusted annual rate of 616,000 units in December, while multifamily production jumped 23.1 percent, to 338,000 units.
Combined single-family and multifamily starts activity was up across all regions in December. The Northeast posted a gain of 21.4 percent, the Midwest was up 24.7 percent, the South posted a 3.8 percent increase and the West was up 18.7 percent.

Permit issuance, which can be a harbinger of future building activity, held virtually steady at a 903,000-unit rate in December. Single-family permits rose for a fourth consecutive month, by 1.8 percent to 578,000 units while multifamily permits declined 2.1 percent to 325,000 units.

As an aside, according to data from the Census Bureau, the market share of single-family homes built for rent stands at 5.1 percent for the third quarter of 2012. This is only slightly lower than the recent peak of 5.35 percent set at the beginning of 2011, and is considerably higher than the 20-year average of 2.7 percent. Clearly there has been an increase in single-family development with an eye toward rental demand.
The December increase in starts is consistent with the upward path of builder confidence over the last few months, as measured by the NAHB/Wells Fargo Housing Market Index (HMI). The index held steady at a level of 47 in January, after increasing from 25 to its current level over the course of 2012. The January reading represents a pause in the rise of builder confidence and is perhaps related to policy uncertainty in the wake of the fiscal cliff debate and the impending decisions regarding big-picture issues like tax reform and the future of the housing finance system.

Nonetheless, the economic improvements witnessed in 2012 – at least compared to the terrible years that preceded it – manifested themselves in ongoing good news for housing. For the January reading, the NAHB/First American Improving Markets Index (IMI) increased to 242, adding a net 41 more markets to the 201 in December. The total represents two-thirds of all the eligible metropolitan areas. All but two states have at least one metro on the list (Wyoming and New Mexico). A metropolitan area makes the IMI list if three indicators of economic and housing health improve for at least six months: single-family housing permits, employment and home prices.

The improvement in home building in 2012 has boosted construction spending. Spending on private residential construction activity ticked 0.4% higher on a month-to-month basis during November 2012 per Census data. Spending has increased in each of the last eight months (and 15 of the last 16), rising to a 4-year high and nearly 33% above the trough during the third quarter of 2010.

New single-family home construction led the way in terms of spending growth among the private residential categories during November, posting a 1.3 percent increase versus October. Spending has climbed more than 29 percent above its nominal level of a year ago and stands 57 percent higher compared to the trough in mid-2009.

The multifamily construction sector registered its slowest rate of month-to-month growth in nearly a year, but November’s 0.5 percent still marked the 14th month in a row spending activity has increased. In the past year, nominal spending on multifamily projects has jumped 46 percent and stands nearly 83 percent higher than the low posted in August 2010.

Spending on home improvements dipped 0.7 percent in November, adding to the 1.9 percent contraction (revised downward from a 1.8 percent gain) reported for October. Expressed as a 3-month average, nominal spending on remodeling activity has hovered around a 5-year high for the past few months. Going forward, as part of the fiscal cliff deal, the tax code section 25C retrofit tax credit was extended for 2013, which may help boost remodeling spending in the near-term.

The overall improvement for house prices may also be partly responsible for an uptick in property tax receipts for state and local governments. According to the latest data from the Census Bureau, over a one-year period spanning the fourth quarter of 2011 to the　third quarter of 2012, approximately $475 billion of tax was paid by property owners, a slight increase.

As state/local income and corporate tax receipts recovered in recent years, the share of local tax collections due to property taxes fell from recession highs. However, according to the most recent data, the share has stabilized and is on the rise again. The average share of total state and local tax receipts for property taxes since 2000 is 32.3 percent, while the current share stands at 34.3 percent. Consequently, housing and other real estate owners are still paying a higher-than-average percentage of state and local taxes.

Despite the improvements for housing, there has not yet been a surge in residential construction employment. For the construction sector, Bureau of Labor Statistics data indicate that hiring levels picked up in November after a slight slowing in the fall. November hiring for the construction sector totaled 351,000, marking the seventh month in a row of hiring in the construction sector above a 300,000 level. The significant month-over-month gain in hiring was consistent with the October data, which showed an increase in job openings for the sector. But recent gains in housing have led, for the most part, in fuller employment of existing workers, rather than gains to total employment.

Job openings in construction remain elevated despite a downward revision for October’s spike in openings. The number of open positions for October (99,000) and November (93,000) marks the highest two-month total in a year and a half. These data lend evidence of increased demand for construction workers and future growth in construction sector employment.

The lack of significant uptick in construction hiring matches the overall job market picture. The BLS establishment survey indicated payroll employment increased by only 155,000, with private sector payrolls increasing by 168,000 and of the government sector losing 13,000. The household survey indicated the unemployment rate held steady at 7.8 percent in December after revising the November figure up to 7.8 percent from 7.7 percent. A more robust recovery would have job creation at twice this pace.

Original article on the NAHB blog, Eye on Housing

5 Signs the Market is Recovering Fast

1. Both asking price and rents jumped 5 percent from last year

Trulia’s latest Price and Rent Monitors showed a big boost in asking prices across the U.S. – up 5.1 percent year-over-year. This a drastic change from the double digit declines of previous years.
The relevant news for your buyer and seller prospects isn’t just that home prices are climbing, but that renting is getting more expensive as well. The statistics showed rents are up 5.2 percent year-over-year.
If you understand supply and demand, it’s obvious that these two facts point toward more real estate moves happening, and that consumers have gotten over the angst of previous years and shifted into the “recovery mindset.”

 2.  Mortgage rules got a renovation.

Predatory lending practices linger near the top of many economists’ blame lists for the most recent market decline.  And, after years of fallout from bad mortgages, capable buyers have been, understandably, slow to purchase.
For those buyers who’ve been anxious about the mortgage process and skeptical of the predatory lending, this Thursday brought great news and a sure “go” sign for them to jump into the market.
Thursday the Consumer Financial Protection Bureau released it’s new mortgage guidelines which are “a set of standards that protects consumers from bad loans” according to David Stevens, CEO of the Mortgage Bankers Association.
The new guidelines show that banks and the government are working out their differences to create a safer, more secure environment for homeowner hopefuls. In addition, the new guidelines give those buyers access to mortgage best practices upfront to help them ensure they’re ready for application and ownership from the start.
For a great summary of the new guidelines, check out CNN’s article “New Rules Aim to Make Mortgages Safer”.

 3. Delinquency & foreclosures are at record lows.

Declining delinquencies aren’t just fluffed headlines, the numbers support what it seems many agents are feeling.
Delinquencies are down. According to Trulia’s Chief Economist, Jed Kolko, “ In November, 10.63% of mortgages were delinquent or in foreclosure, down a hair from 10.64% in October. The combined delinquency + foreclosure rate is at its lowest level in four years and is 41% back to normal.”
These stats are good news for buyer’s agents whose clients and prospects need a boost of confidence.

 4. 93% of Millenials plan to buy.

Last quarter we released Trulia’s American Dream Survey and one of the top facts from our study showed that 93 percent of current millennial renters plan to buy.
This is good news for an industry that’s suffered from years of skittish home shoppers and a lot of talk about home buying no longer being a part of the American Dream.

5. Investors rush in.

Another sign that we’re on the way to a high-paced recovery is that investors are making major moves to capitalize on today’s opportunity.
A recent story from Bloomberg covered how Blackstone Group, the largest U.S. private real estate owners, sped up it’s purchases of homes to try to beat out fast rising prices.
This is a sign for on the fence buyers to start their hunt before the weather heats up and they face more competition than they can handle.
These are some of the national signs that show the recovery is well under way. Comment below and tell us what you’re seeing, reading, and witnessing in your local market.
 

Written By Jovan Hackley

IRS to accept electronic signatures on 4506-T form

The Internal Revenue Service (IRS) will begin accepting electronic signatures on the common mortgage origination document, Form 4506-T.
This is the beginning of an electronic trend for the 2013 mortgage market. The acceptance of electronic signatures on the request form will reduce paperwork requirements for lenders and borrowers, and should speed up the process for closing or modifying a loan, according to the Mortgage Bankers Association (MBA).
“The current process for requesting a borrower’s tax return transcript is labor intensive and time consuming,” said MBA president and CEO David H. Stevens in a statement on the company's website. “With this announcement, the IRS is making this process much easier and more efficient. As anyone who has purchased or refinanced a home can attest, the volume of paperwork involved can be quite burdensome. Allowing for electronic signatures will save time and reduce the likelihood of errors or loss of documents. This is a win for consumers and lenders alike.”
4506-T forms were the last remaining documents in the loan origination process that required a handwritten paper signature. The tax return transcript is a requirement for the majority of all mortgage originations and  loan modifications. Lenders use the form to verify the income of borrowers.
When signed by a taxpayer, Form 4506-T authorizes the IRS to release transcripts showing previous tax returns, W-2 data, and 1099 information to a third party. This third party can be a lender, employer or even one’s accountant. The great majority of requests for tax transcripts come from home lending institutions, mortgage brokers, and real estate firms serving their clients.
“The actual e-signing of the 4506-T is minimal. This has been the hold out document so to speak. The excitement is that ‘now I can do my total origination up front electronically,’” said Kelly Purcell, executive vice president of eSignSystems.

There are a number of electronic signature requirements that will ensure security for those using the newest technology. The IRS has indicated that other forms approved for electronic signature will follow.

                                                                                                  Taken from: www.parealtor.org
                                                                                                                    By: Diana Dietz