Report: Housing Market 61% 'Back to Normal'

The housing market made it to 61 percent “back to normal” in May, according to the latest Housing Barometer from Trulia.

May’s percentage is the first time the recovery has passed 60 percent since the crash. April’s barometer was 54 percent. A year ago, the barometer was at only 35 percent.

The monthly report measures three key housing market indicators—construction starts, existing-home sales, and the delinquency-plus-foreclosure rate—to track how quickly the market is recovering to its normal, pre-bubble state.

All three metrics improved in May, with starts and sales rising and the delinquency/foreclosure rate falling.

According to the May report from the Census Bureau, starts were at a seasonally adjusted annual rate of 914,000, up 7 percent from April but still below February and March. On the sales side, the National Association of Realtors reported a 4 percent increase in May to a seasonally adjusted annual rate of 5.18 million.

Overall, starts are about 43 percent back to their normal level of 1.5 million, while sales are 82 percent back to normal.

Meanwhile, the share of mortgages in delinquency or foreclosure dropped to 9.13 percent in May. The combined rate is 57 percent back to normal.

“The recovery has reached full-fledged teenager status, with awkward, sudden growth spurts and parents—the Fed—who now threaten to take away its allowance by winding down measures that pushed mortgage rates down to historic lows,” said Jed Kolko, chief economist at Trulia. “Before long, the recovery should make it into adulthood, but it will face some grown-up challenges in the next couple of years:

1. still-tight mortgage credit for many borrowers,
2. a slow jobs recovery for young adults, and
3. unaffordable housing in large coastal markets.”


Source: DS News

Survey: Agents Expect Prices to Rise, but in Smaller Increments

In concurrence with many industry analysts, real estate agents expect price gains to mellow in the near future, according to survey results released by Redfin, a Seattle-based national brokerage.

Agents also harbor a positive outlook for sellers and a somewhat less positive outlook for buyers in the current market, according to Redfin’s Real-Time Agent Survey of 380 real estate agents.

Eighty-six percent of agents believe prices will rise over the next few months. The same percentage of agents say now is a good time to sell a home. Both of these categories have increased from the first quarter of the year to the second.

However, while a majority of agents expect price gains, a minority expect prices to “rise a lot.” The percent of agents who anticipate prices rising “a lot” in coming months fell from 44 percent in the first quarter to just 16 percent in the second quarter, according to Redfin’s survey.

Factors leading agents to view the current market as a seller’s market include low inventory and an observance of multiple offers on the same homes. Ninety-three percent of agents cited these buyer challenges in Redfin’s survey. While still a significant majority, this is down three percentage points from the first quarter.

On the other hand, the most commonly-cited obstacle for sellers—cited by 40 percent of survey respondents—is low appraisals.

In the current environment, a decreasing percentage of agents are advising buyers to “use aggressive strategies such as waiving contingencies and expanding their budget when facing a bidding war.” About 11 percent of agents admitted to using these strategies, as opposed to 15 percent in the previous quarter.

Source: DS News