Could fewer cash sales be good 1st-time homebuyers?

 Investment, Real Estate Market, Residential Mortgage  Comments Off on Could fewer cash sales be good 1st-time homebuyers?
Sep 162015
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Based on the most recent data from Corelogic, cash sales of homes fell for the 29th consecutive month in May to 31.9% of total sales, which represents the lowest share since 2008. The percentage of cash sales peaked in Jan 2011 at 46.5%. Prior to the housing crisis, cash sales averaged about 25% of the market.

While this statistic may reflect a healing housing market on a national level, it’s interesting to view the data on a more local level. Cash sales still represent almost half of all sales in FL, GA, NY, and NJ. Given that the strengthening dollar is dissuading cash sales to foreign buyers, it’s likely these elevated percentages still indicate distress in these markets. In TX, the share of cash sales has dropped to 28%.

One positive takeaway from declining cash sales is it may indicate less competition from investors for a tight housing inventory. Given that investors tend to purchase lower-priced homes, this may open up more inventory for first-time homebuyers.

Are we heading for another housing crash?

 Real Estate Market  Comments Off on Are we heading for another housing crash?
Jun 252015
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

The recent run-up in home prices has led some to speculate that another bubble is forming. And bubbles tend to end spectacularly, like the 2008 housing crash. What are the chances of another crash?

The biggest difference between today’s housing market and the pre-crisis market is the level of leverage. Before the crash, mortgage debt amounted to 63% of real estate value. Today, that leverage rate is down to 44%. Thus, the market today should be more insulated from a rapid decline in prices.

Much of the decline in mortgage debt is the result of the elimination of delinquent debt through foreclosures, short sales, and other mechanisms. It also appears to be the result of the elimination of most of the no-money down payment loan programs that ruled in the pre-crisis era.

Will we see a surge of homebuying this fall?

 Real Estate Market  Comments Off on Will we see a surge of homebuying this fall?
Oct 242014
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

With the froth off the housing market, this fall could be a good time for home shopping. At least one real estate firm, Redfin, expects activity to pick up this fall. It reports that price growth in all markets has slowed significantly, and it reported that this summer saw the biggest drop of the year in the number of homes that sold above list price.

Zillow confirms this trend. Home appreciation based on its home value index has dropped in every month since peaking in Apr. It forecasts that the rate of appreciation will continue to slow to 3% next year.

According to Redfin, flattening home prices coupled with still low mortgage rates could result in a surge of sales through the remainder of the year. If you’ve been sitting on the homebuying sidelines, it might be a good time to see what’s available before the before this combination disappears.

Fannie Mae housing survey shows improving sentiment

 Real Estate Market  Comments Off on Fannie Mae housing survey shows improving sentiment
Oct 162014
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

The results of the Sep Fannie Mae housing survey turned positive after two down months. The results seem to track the general improvement in consumer confidence noted in other surveys at the end of the summer.

The share of respondents who think it’s a good time to buy a home ticked up 4 points to 68%, and the share who thinks it’s a good time to sell ticked up 2 points to 66%. An improved 66% percent said they would buy if they were going to move as more (55%) also expect rents to rise over the next year.

Folks finally seem to have clued into falling mortgage rates as the same percentage (45%) think rates will stay steady as think they will rise. Only 5% think rates will fall.

One disconcerting result was that despite improving sentiment about the overall economy, fewer respondents see their personal financial situation improving. This tracks rather well with economic reports that show very little growth in personal incomes.

You can find a link to the survey results at the end of my blog.

http://www.fanniemae.com/portal/research-and-analysis/housing-survey.html

Looking for nuggets in latest Fannie housing survey

 Real Estate Market  Comments Off on Looking for nuggets in latest Fannie housing survey
Sep 122014
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae’s Aug housing survey was a bit of downer. The percentage of folks who thinks now is a good time to buy a home dropped another 3 points, and the percentage who thinks now is a good time to sell dropped 5 points. This seems to correlate with industry reports of a slow summer. It also correlates with consumers’ concerns about their personal financial situation and flat income growth.

But if you get past the headlines, the survey results do contain a few positive points that may bode well for the coming year. An increasing share of respondents think rents will rise in the next year, and the expected rate of increase also rose. An increasing percentage also think it would be easy to get a home mortgage. These are people who may be poised to buy a home given an incentive. And that incentive could be rising interest rates. Fifty percent of respondents expect interest rates to fall in the coming year, yet interest rates have been rising, albeit slowly, since the start of Sep. If this trend continues, it might push a few folks off the fence while home affordability is still favorable.

You can find a link to the survey results at the end of my blog.

Fannie Mae housing survey

Fewer bargain homes but still opportunity for home buyers

 Real Estate Market  Comments Off on Fewer bargain homes but still opportunity for home buyers
Aug 222014
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Corelogic, a real estate analytics company, reported this week that distressed home sales, short sales and foreclosed homes, fell again last month to 11.4% of all sales, their lowest level since 12/07. The diminishing share and the competition for those homes have contributed to home price increases, as distressed sales typically sell at a discount.

The improvement in this measure of home industry health is susbtantial. At the height of the housing bust, distressed sales accounted for almost 1/3 of the total. However, a more sobering view is to compare it to the share before the bust. At that time only 2% of the market was distressed sales.

But let’s take the glass half full view. Other data also points to an improving market. Existing home sales rose for the 4th straight month in Jul, the inventory of homes for sales is increasing, and home prices are moderating. With still very low mortgage rates, this fall could be great opportunity for homebuyers.

East coast, left coast, no coast

 Real Estate Market  Comments Off on East coast, left coast, no coast
Aug 202014
 

The fastest growing US cities now are in the middle of the country in states like TX. This is a big change from last decade. The reason is simple – more affordable housing. Before the financial crisis, easy credit allowed folks with even modest means to buy expensive homes. Those homes on the coasts are now out of reach.

The census bureau reports that of people moving more than 500 miles, 18% now say they were chiefly motivated by housing. This is up from 8% before the financial crisis.

Redfin reports that 6 TX cities rank among the 10 most affordable, including San Antonio, Ft. Worth, Dallas, and Houston. Notice that Austin is not on the list as its housing costs have risen faster than the rest of the state.

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.