Source: USA TODAY
Publication date: June 22, 2011
By Julie Schmit, USA TODAY
Cash buyers are snapping up homes in markets nationwide, betting that deals won't get much better.
Last month, all-cash buyers accounted for 30% of existing home sales, up from 25% in May 2010, and 12% two years ago, says the National Association of Realtors.
Cash buyers, who are mostly investors, accounted for at least 30% of existing-home sales for the fifth-straight month, the association says. They hit 35% of buyers in March.
The cash buyers are enticed by low prices and potential rental income, economists say. But while their activity has helped curb price drops, price increases have yet to follow.
In May, the median price of an existing single-family home fell 4.5% to $166,700 from a year ago, the association reported Tuesday. Volume also dropped. Existing home sales in the month including single family, condos and townhouses were down 15% from the previous May, when a federal tax credit boosted sales.
Without cash buyers, "We would be in much worse shape than we are," says Jim Gillespie, CEO of Coldwell Banker Real Estate. "They recognize that this is the smartest time to buy," because U.S. home prices are 33% below their 2006 peak.
Cash buyers are especially prevalent in markets where prices have fallen the most, often areas hard hit by foreclosures.
In Las Vegas, the foreclosure capitol of the U.S. for the past four years, cash buyers accounted for 49% of first-quarter sales vs. 20% in the first quarter of 1997, says data from real estate site Zillow.com. In that area, home prices are almost 60% off their 2006 peak.
In the Miami-Fort Lauderdale area, 63% of first-quarter buyers paid in cash, vs. 39% in 1997's first quarter, Zillow says.
Phoenix is also seeing more cash buyers, 44% in the first quarter up from 25% in the same 1997 period, Zillow data show.
The big numbers are "positive news," says Stan Humphries, Zillow chief economist. "These are people who're getting back into the market because they see good value."
Cash buyers often get better deals because sellers know their offers won't fall through for lack of financing, says Walt Danley, president of the luxury real estate firm The Walt Danley Group in Arizona. A discount of up to 5% is typical, he says.
While Danley sees many foreign buyers paying cash, investors looking for rentals are also big cash buyers.
Given low prices, they can buy homes, rent them and be immediately cash-flow positive, says Paul Dales, an economist for Capital Economics.
(c) Copyright 2011 USA TODAY, a division of Gannett Co. Inc.
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Friday, June 24, 2011
Thursday, June 23, 2011
Wednesday, June 15, 2011
San Diego home prices, sales fall from one year ago
County saw the steepest year-over-year sales drop among the SoCal counties
By Lily Leung
Home sales and prices in San Diego County declined in May from a year ago, in line with the rest of Southern California, DataQuick Information Systems reported Monday.
Some industry experts say the region’s real estate market continues to feel the effects of weak consumer confidence, low job creation and the absence of government incentives that boosted sales a year ago.
“(The numbers) show we’re still not in recovery territory,” said Michael Lea, director of San Diego State University’s real estate center.
San Diego County recorded 3,087 total sales in May, a 20.4 percent drop from the same time a year ago and a 5.8 percent decrease from April. DataQuick records show the local market was 27 percent below its average sales volume for a May, which is 4,257.
The median price for all home types was $324,500, falling 4.6 percent from last year but up 0.9 percent from April.
Throughout Southern California, sales remained at a three-year low in May and the median price fell by 8.2 percent, the largest year-over-year drop in 20 months, DataQuick researchers found.
One year ago, federal and state homebuyers’ tax credits played a big part in luring buyers to the market and causing sales numbers to swell in San Diego County and throughout the state. Without that “artificially induced demand,” Lea said, sales and prices fell.
“It’s just a low number,” he said. “It wasn’t that great last year historically.”
Andrew LePage, a DataQuick analyst, said some neighborhoods in San Diego and throughout the state are “really close” to their post-boom price lows in 2009, while many are about 5 percent above that level.
May’s S&P/Case-Shiller Home Price Index, another key housing monitor, also showed home prices declining in San Diego County. Prices fell 4 percent in March, the biggest year-over-year decrease in 18 months. The Case-Shiller report, which tracks sales of the same properties, has a two-month lag.
Distressed properties continue to influence the San Diego market, LePage said. Foreclosures made up 30.9 percent of the resale market, up from 29.6 percent one year ago. About 19 percent of total sales in May were short sales, down slightly from last year, at 20.5 percent.
Other factors that analysts say are likely pushing down prices: hesitant consumers waiting for prices to bottom out, strict lending guidelines and homeowners unwilling to move because they’re severely underwater on their mortgages.
Come back to signonsandiego.com for expert weigh-in on May numbers.
Reach reporter Lily Leung at lily.leung@uniontrib.com or 619-293-1719. Follow her on Twitter @LilyShumLeung and on Facebook.
By Lily Leung
Home sales and prices in San Diego County declined in May from a year ago, in line with the rest of Southern California, DataQuick Information Systems reported Monday.
Some industry experts say the region’s real estate market continues to feel the effects of weak consumer confidence, low job creation and the absence of government incentives that boosted sales a year ago.
“(The numbers) show we’re still not in recovery territory,” said Michael Lea, director of San Diego State University’s real estate center.
San Diego County recorded 3,087 total sales in May, a 20.4 percent drop from the same time a year ago and a 5.8 percent decrease from April. DataQuick records show the local market was 27 percent below its average sales volume for a May, which is 4,257.
The median price for all home types was $324,500, falling 4.6 percent from last year but up 0.9 percent from April.
Throughout Southern California, sales remained at a three-year low in May and the median price fell by 8.2 percent, the largest year-over-year drop in 20 months, DataQuick researchers found.
One year ago, federal and state homebuyers’ tax credits played a big part in luring buyers to the market and causing sales numbers to swell in San Diego County and throughout the state. Without that “artificially induced demand,” Lea said, sales and prices fell.
“It’s just a low number,” he said. “It wasn’t that great last year historically.”
Andrew LePage, a DataQuick analyst, said some neighborhoods in San Diego and throughout the state are “really close” to their post-boom price lows in 2009, while many are about 5 percent above that level.
May’s S&P/Case-Shiller Home Price Index, another key housing monitor, also showed home prices declining in San Diego County. Prices fell 4 percent in March, the biggest year-over-year decrease in 18 months. The Case-Shiller report, which tracks sales of the same properties, has a two-month lag.
Distressed properties continue to influence the San Diego market, LePage said. Foreclosures made up 30.9 percent of the resale market, up from 29.6 percent one year ago. About 19 percent of total sales in May were short sales, down slightly from last year, at 20.5 percent.
Other factors that analysts say are likely pushing down prices: hesitant consumers waiting for prices to bottom out, strict lending guidelines and homeowners unwilling to move because they’re severely underwater on their mortgages.
Come back to signonsandiego.com for expert weigh-in on May numbers.
Reach reporter Lily Leung at lily.leung@uniontrib.com or 619-293-1719. Follow her on Twitter @LilyShumLeung and on Facebook.
Wednesday, June 1, 2011
More than 500 cities see more homes become rentals
By Julie Schmit and Barbara Hansen, USA TODAY
In the aftermath of the nation's housing-market collapse and recession, more than 500 midsize and large cities have seen a rise in the share of homes that are rented rather than owned, according to a USA TODAY analysis of Census data.
Almost 4 million homes have been lost to foreclosures in the past five years, turning many former owner-occupied homes into rentals.
The shift to rental housing is potentially long-lasting and portends changes for neighborhood stability and how people build wealth, economists say.
"The changes are big but glacial," says Mark Zandi, economist at Moody's Analytics.
INTERACTIVE:Should you rent or buy?
The swing from owner- to tenant-occupied homes in the past decade has been dramatic in some places:
•Of the 100 largest cities, some of those with the largest shifts were Irvine, Calif., which went from about 40% of occupied homes rented in 2000 to 49.8% in 2010; Philadelphia, from 40.7% to 45.9%; and Birmingham, Ala., 46.3% to 50.7%.
•Twenty-five cities — including Baltimore, Minneapolis, Salt Lake City and Sacramento — swung from having more than half homeowners in 2000 to majorities of renters in 2010. In one — Reading, Pa. — 57.6% of occupied homes were rentals in 2010, up from 49% in 2000.
•Florida, California and Arizona had the most cities where the share of renter-occupied housing grew by at least 5 percentage points. All three states have been hit hard by foreclosures.
Nationwide, 34.9% of occupied homes were rented in 2010, up from 33.8% in 2000. The Census data that USA TODAY analyzed for cities covered only housing within the cities' boundaries, not their much larger metropolitan areas.
Vacant properties, excluding seasonal or vacation homes, accounted for 7.9% of U.S. housing units in 2010. It's not clear how many of those have since become rentals or owner-occupied homes.
The renter household market remained fairly stable from 1990 to 2006, says Daniel McCue, senior research analyst at Harvard University's Joint Center for Housing Studies.
Since 2006, when housing prices peaked, the number of renter households in the U.S. has grown an average of 692,000 a year, while owner households have fallen an average of 201,000 a year, Census surveys show.
Several factors will boost rental growth for years to come, Zandi says, including continued foreclosures, continued drops in home prices that frighten buyers and potential cuts to government subsidies supporting homeownership. On the other hand, 74% of renters think owning is superior to renting, said a recent survey by mortgage giant Fannie Mae.
"There's still a pull toward homeownership, although it's been diminished," McCue says.
Contributing: Paul Overberg
In the aftermath of the nation's housing-market collapse and recession, more than 500 midsize and large cities have seen a rise in the share of homes that are rented rather than owned, according to a USA TODAY analysis of Census data.
Almost 4 million homes have been lost to foreclosures in the past five years, turning many former owner-occupied homes into rentals.
The shift to rental housing is potentially long-lasting and portends changes for neighborhood stability and how people build wealth, economists say.
"The changes are big but glacial," says Mark Zandi, economist at Moody's Analytics.
INTERACTIVE:Should you rent or buy?
The swing from owner- to tenant-occupied homes in the past decade has been dramatic in some places:
•Of the 100 largest cities, some of those with the largest shifts were Irvine, Calif., which went from about 40% of occupied homes rented in 2000 to 49.8% in 2010; Philadelphia, from 40.7% to 45.9%; and Birmingham, Ala., 46.3% to 50.7%.
•Twenty-five cities — including Baltimore, Minneapolis, Salt Lake City and Sacramento — swung from having more than half homeowners in 2000 to majorities of renters in 2010. In one — Reading, Pa. — 57.6% of occupied homes were rentals in 2010, up from 49% in 2000.
•Florida, California and Arizona had the most cities where the share of renter-occupied housing grew by at least 5 percentage points. All three states have been hit hard by foreclosures.
Nationwide, 34.9% of occupied homes were rented in 2010, up from 33.8% in 2000. The Census data that USA TODAY analyzed for cities covered only housing within the cities' boundaries, not their much larger metropolitan areas.
Vacant properties, excluding seasonal or vacation homes, accounted for 7.9% of U.S. housing units in 2010. It's not clear how many of those have since become rentals or owner-occupied homes.
The renter household market remained fairly stable from 1990 to 2006, says Daniel McCue, senior research analyst at Harvard University's Joint Center for Housing Studies.
Since 2006, when housing prices peaked, the number of renter households in the U.S. has grown an average of 692,000 a year, while owner households have fallen an average of 201,000 a year, Census surveys show.
Several factors will boost rental growth for years to come, Zandi says, including continued foreclosures, continued drops in home prices that frighten buyers and potential cuts to government subsidies supporting homeownership. On the other hand, 74% of renters think owning is superior to renting, said a recent survey by mortgage giant Fannie Mae.
"There's still a pull toward homeownership, although it's been diminished," McCue says.
Contributing: Paul Overberg
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