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Is Home Seller Enthusiasm Waning?

The latest report from Redfin shows that home sale prices in March were still on the way up—they were 9 percent higher than a year ago, closing the month at a median $297,000 nationally.

But homes for sale were down across the board as well. Compared to March 2017, the number of on the market in the United States was down 12 percent. More telling, the number of newly listed homes fell 5.6 percent from last year, something Redfin classifies as “a sign of possible waning seller enthusiasm and ongoing tight market conditions.”

Redfin Chief Economist Nela Richardson said one explanation for the dropoff in housing movement this March might have been the fact that Easter came so early.

“Sellers are slow to list this year and we aren’t seeing enough new construction homes to fill the gap,” Richardson said. “If we don’t see the new listings number turn around next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year.”

If seller enthusiasm is waning, buyer demand is still strong. According to Redfin, the typical home went under contract in 43 days in March. That’s eight days faster than a year earlier and faster than any March on record.

Among homes that sold last month, 24 percent sold above their list price, up from 22.3 percent last March. One in five homes that sold in March went under contract within two weeks of their debut, compared to 18.4 percent last year. The Bay Area had much higher numbers than the average, though. In San Jose, 83 percent of houses sold above list price. In San Francisco and Oakland, three-quarters of houses sold higher than listed.

Seattle (for the second month in a row) and Denver were the fastest-moving markets in the country. Houses there were on the market for a median of just seven days in March. The Bay Area also saw houses close in less than two weeks.

As is typically the case, prices grew most in the Bay Area. San Jose saw prices leap by 32 percent from a year ago; San Francisco almost 17 percent.

But less-typical markets showed price growth as well. Allentown, Pennsylvania, saw prices climb 22 percent since last year, just 1 percent more than the prices in Detroit.

At the same time, inventory dropped in 65 of the 73 most populous metros Redfin tracked. In 48 of those metros, inventory fell more than 10 percent compared to last year. Baton Rouge; Washington, D.C.; and Allentown bucked the declining inventory trend, respectively adding 26.6 percent, 11.8 percent, and 11.4 percent to housing supply from last year.

What to Expect in the Homebuying Season

What to Expect in the Homebuying Season

Homebuyers will need to be on their toes this homebuying season if they are to snag their dream abode if the typical time taken to sell a home in 2017 is any indication. According to a report by Zillow, sold faster than ever in 2017, with a typical median-priced house flying off the market in 81 days. And this has been the case for the past three years, the report said citing data that indicated homes sold slightly faster at 80 days in 2016.

In 2017, the fastest-selling market was San Jose, California, with the typical home sold in 41 days. Homes in Miami, on the other hand, took 110 days to sell in both years, the report indicated.

What do these numbers indicate for 2018? “As demand has outpaced supply in the over the past three years, buying a home has become an exercise in speed and agility,” said Aaron Terrazas, Senior Economist at Zillow. “This is shaping up to be another competitive home shopping season for buyers, who may have to linger on the market until they find the right home but then sprint across the finish line once they do. Being prepared—working with a great , getting financing pre-approved—can help a buyer make a stand-out offer.”

According to an earlier Zillow report on Group Consumer Housing trends, a typical buyer spends around four months searching for a home and makes two offers before successfully closing on a home. But the latest data indicates that homes sold in lesser time than that in 2016 and 2017, making it imperative for homebuyers to be ready to move quickly when they find a home they want to purchase, the report said.

The report also indicated that homes sold the fastest in June when the typical U.S. home sold in 73 days flat. In San Jose, the report said, homes sold fastest last year in October within just 39 days of being listed.

Here are Central Florida’s 25 Wealthiest ZIP Codes ranked by per capita income

If you’ve ever wondered where individuals making the most money live, we’ve got you covered.

Here, we compiled a ranking of the area’s wealthiest ZIP codes ranked by per capita income in the slideshow above, using data collected by OBJ parent company American City Journals.

Here’s how the ZIP codes break down by county:

Click through to see if your ZIP made the list.

And later this year, we’ll give you the region’s wealthiest ZIP codes ranked by median household income.

Developer preps site for apartments, shops near SunRail station

 

An 18.4-acre property adjacent the SunRail Sand Lake Road station is being readied for site work.

Landowner Sandlake Station Partners LLC, an affiliate of the Aventura-based Master Real Estate, is seeking Orange County approval to mass grade the property for a new development that would include a 38,000-square-foot commercial building and 196 apartments on vacant land at 7803 S. Orange Ave., according to the April 11 application. TRI3 Civil Engineering Design Studios Inc. is the applicant.

The mixed-use project, north of Sand Lake Road and on the east side of South Orange Avenue, is being marketed by MIR Developments as the Sandlake Station Condominiums and Sandlake Station Shops, Orlando Journal previously reported.

TRENDING

Central Florida neighborhoods where home values are surging

Tavistock exec’s commitment is building Lake Nona’s sports empire

Lake Nona is one of Central Florida’s fastest-growing regions and a hotbed for new development in all aspects including and wellness.

Inside Lake Nona is a burgeoning 300-acre sports district that’s home to the U.S. Tennis Association’s $100 million USTA National Campus and the future $20 million Orlando City Soccer training facility.

The sports district also has plans for a new eight-story Lake Nona Resort catering to sports performance and well-being, plus a planned water sports park.

Further, the region intends to seek to become the home of USA Gymnastics. The team is leaving its Texas home for a new location and Lake Nona executives have voiced their desire to bring the team here.

At the head of many of those discussions is Andy Odenbach, vice president of sports ventures with Development Co. He is spearheading many efforts by the firm to develop Lake Nona into one of the most cutting-edge sports communities in the world.

Here, Odenbach tells Orlando Journal more about future plans, his goals for 2018 and more:

What are your business goals for 2018? We are working on a number of significant projects right now at Lake Nona. Unfortunately, a number of non-disclosure agreements have been signed that keep me from getting too specific, but if we can announce at least two, then it will be a great 2018.

What are your personal goals for 2018? To make sure I am maximizing quality time with my teenagers. We already have one at Florida State University, and before you know it, the other three will be out of the house, too. I also am looking to shave a few minutes off my time at St. Anthony’s Triathlon in St. Petersburg at the end of this month.

What’s the latest on the efforts to bring USA Gymnastics to Orlando? They still have plenty of things they are working through with a new CEO. I wouldn’t be surprised if a request for proposals is released in the next few weeks.

If you could add anything sports-related besides gymnastics to Lake Nona, what would that be? We recently announced a 110,000-square-foot-plus, medically-integrated fitness facility, in partnership with Signet and Integrated Wellness Partners, last month during the Lake Nona Impact Forum. We need to nail the design, programming and partners. If we do this right, it will become a resource that other national governing bodies, professional athletes and amateur athletes all will want access to, regardless of where they live. You will love being a member to access everything this center will have.

What about the culture of Lake Nona impresses you most?People generally want to be a part of something bigger than themselves. At Lake Nona, people recognize that we are building a city within a city – together. The “together” part is critical to the culture. It’s not about a developer and the residents who happen to live there. It’s an entire ecosystem of people, families, workers, companies, ideas and values that together create this place where great things can happen.

What’s a motto you live by? If you’re going to commit yourself to something, then make sure you are “all in” and give it everything you’ve got. This isn’t just a work thing, it’s a parent thing, it’s a spouse thing, it’s a personal thing, as well. If you can’t give a maximum commitment, then don’t do it. I learned it the hard way, by having those moments when I didn’t fully commit and ended up being disappointed with myself.

Who inspires you to get up and work every day? I used to get up and grind every day for me, but now it’s for my kids. I’m simply hoping the hustle wears off on them.

What do you do to wind down after a busy day? Cook or have a glass of wine with my wife on the couch. Sometimes both.

What are your top three sports or physical activities? Swim, bike, run and golf — oops, that’s four.

What’s your guilty pleasure food? Do India pale ales count? There are lots of carbs and calories in there.

What current businessperson inspires you? I was invited to a KPMG women’s leadership summit and was really impressed with Ginni Rometty, CEO of IBM. She is intelligent, well-spoken and knew the ins and outs of her business. Nothing was given to her and, most importantly, she really seemed to care about her employees and customers. I truly believe if you care about your customers and care about the people who work for you, the results will be there.

Who is a non-living businessperson that inspires you? Anyone who had the courage to create something incredible when society told them they were nuts. Think Henry Ford, Walt Disney, Steve Jobs or the Wright Brothers. I’m a sucker for big ideas and perseverance.

What is the biggest lesson you’ve learned in your career? Stay humble, stay hungry, listen, help everyone you can and don’t take yourself too seriously.

What Does The 2018 Housing Market Look Like?

Oftentimes, it’s difficult to predict the . In the last decade alone, we’ve seen a market crash and slow rebound.

However, while some experts are focused on yet another housing bubble, real estate has been on the rise. In October, sales of new U.S. single-family homes hit their highest level in 10 years across the country.

What’s the market forecast for next year? Industry insiders and top experts have similar predictions.

As a future or current homeowner, it’s important to stay on top of the changes in real estate. Read on to learn what the 2018 housing market has in store.

Inventory Shortages

New home sales may be on the rise, but the number of available is on the decline.

Low home inventory has made home prices more expensive in recent years. This trend will continue in 2018, making it more difficult for first-time and budget-focused buyers to enter the market.

There are 12 percent fewer homes on the market than there were a year ago. If this trend continues, homebuyers will be faced with stiffer competition and higher prices. This will make the demand for home purchase loans even greater.

What’s contributing to this low inventory? There are several theories.

Rising housing costs have added emphasis to high-end construction. More expensive homes are being built, which is making it more difficult to find affordable homes.

Homeowners might also be less likely to sell their homes than they were pre-crash. Despite it being a seller’s market, they aren’t looking to enter the market. They’d rather stay locked into their current mortgage.

Whatever the reason, the inventory shortage is expected to continue. Low inventory and high prices will force new homebuyers to get creative if they want to find an affordable home.

Housing Market Opportunities

Certain demographics have seen an abundance of housing opportunities. They can expect these opportunities to be even greater in 2018.

One such demographic is sellers of mid-priced single-family homes. These are some of the most in-demand homes across the nation.

Developers and sellers can make big money on this valuable sector of the market. More millennials are seeking to buy starter homes while baby boomers are scaling back.

The housing shortage isn’t all bad for buyers. Experts are predicting that housing prices will slow down in the coming year.

Forecasts show that the average U.S. house price growth will be 4.9 percent in 2018, which is lower than the 6.6 percent growth seen in the second quarter of 2017.

Prices might be curbed thanks to mortgage rates. A moderate increase in mortgage rates should help decrease refinancing activities.

You can still expect higher growth in big markets such as Seattle and San Francisco. Yet good mortgage rates, limited refinancing, and market stability will still help buyers in 2018.

Your Next Move

Predictions show low-inventory, high-prices, and market stability in 2018.

You don’t have to wait until these predictions come to fruition. Contact us now to learn more about buying your dream home. We offer free loan advice with no cost or obligation.

Here’s 2 spots where the Osceola Parkway Extension may be built — both are controversial

Would you rather see a major road built through a costly wildlife/nature preserve or a neighborhood?

This is the dilemma the Central Florida Expressway Authority, which soon must decide where to put the Osceola Parkway Extension, has been facing since last year.

The proposed Osceola Parkway Extension begins one mile west of the Boggy Creek Road and Osceola Parkway intersection, and extends eastward along the Orange/Osceola County line for six miles before turning south into Osceola County to meet the northern terminus of the proposed Northeast Connector Expressway. The project also includes a potential north/south segment linking to State Road 417 in the general vicinity of the Boggy Creek Road interchange.

The goal of the project is to relieve congestion and have regional connectivity. It’s part of the authority’s overall 2040 master plan, which includes other alignments.

One of the current alternatives shows that the extension could go through the 1,700-acre Split Oak Forest preserve, acquired in the 1990s, which is south of the Clapp Simms Duda Road. Environmental conservationists say doing so would defeat the purpose of having protected land that involved millions in funding.

However, if the project does not go through Split Oak, it could mean nine would be taken in the St. Cloud community Lake Ajay Village.

“The board is going to look at all the options. Our job is how are we going to move people in the next 40 years here in Central Florida,” Fred Hawkins, chairman of the Central Expressway Authority, told  Business Journal after the board’s Feb. 8 meeting. “We have to move those people and the to-do list is now, before more development occurs.”

Roughly $70 million has been allocated for the project so far, which would go toward property acquisition and engineering.

He added that going through a community such as Lake Ajay Village, located off Narcoossee Road, likely would be more expensive than going through Split Oak

“The properties directly affected are worth $450,000-$600,000. The property taxes they pay are between $3,000-$5,000 each. Not only will those properties will be affected, but all of them running along this area,” said Stacy Ford, a resident of Lake Ajay Village, during the public comments segment of the meeting. “The worst case for us isn’t that CFX will go through our homes, it’s that CFX puts this road right next to our homes because we don’t get compensation for the impact of that, which is our property values. At minimum, it’s going to be 20 percent.”

And if the project does go through Split Oak forest, Hawkins said there may be land compensated for that loss.

At the next expressway authority meeting on March 8, the board will go over the feasibility and cost of alternative corridors so it can move forward with project development and environment studies.

There are multiple public meetings for those who want to express their concerns regarding how the project may affect their property or commute. The meetings all will run from 5:30-7:30 p.m., and will be held:

  • Feb. 13 at St. Cloud High School
  • Feb. 15 at Lake Nona Middle School
  • Feb. 21 at the Association of Poinciana Villages Community Center

US Economic Observations: January 2018

It is well known that there are issues in the home purchase market, but there is less information on the single-family rental market, which makes up one-half of residential rentals. The CoreLogic Single Family Rental Index reflects rents paid on single-family houses and condos, and using this index we can dissect rent growth by both price tier and metro area.

LPI Blog

Figure 1 shows the 12-month change in our national rental index from 2005 to today. Rents for single-family fell during the Great Recession but then bounced back strongly from their low point in mid-2009 and have been trending up, mirroring home price growth. In October 2017, the index measured rent growth of 2.7 percent from a year ago. We can also show rent changes for the high-end (those rents 25 percent or more above the median rent in that market) and the low end (those rents 25 percent or less below the median in that market). The low-end single-family rental tier lagged the high-end tier from mid-2009 to early 2014, but then the low-end began steadily outpacing the high-end and the difference is growing. This mirrors the same high demand, low- supply forces that have caused low-end home prices to outpace high-end prices, as evidenced by shorter days-on-market and tighter inventory for low-end homes. Investors who entered the market to buy up distressed properties during the housing crisis might be exacerbating this trend in the rental market. High-end rents increased 2 percent in October from a year ago, while low-end rents increased by more than twice as much – 4.2 percent.

LPI Blog

We can also look at the difference between low-end and high-end rent growth by metro area. Figure 2 shows that low-end rents have been increasing in the largest 20 markets, with Seattle leading the large metros with the biggest increase in rents at 7.9 percent in October. Austin had the smallest increase in low-end rents of the large metros. In most of the 20 markets shown in the chart, low-end rents are increasing faster than high-end rents, and the trend is happening all over the country, not just in one region. The one exception is Warren, Mich., where low-end and high-end rents are increasing at about the same rate. The biggest spread in low-end and high-end rent increases was in Charlotte, N.C., where the low-end increased 5.6 percent and the high-end showed no increase.

The single-family rental market is an important and often overlooked segment of the and is affected by rising demand and constrained supply just like the rest of the housing market. The demand and supply pressures are especially apparent for lower-cost homes, for which rents are increasing at a much faster rate than for higher-cost homes

February 06, 2018, Irvine, Calif. –

  • Largest Price Gains During 2017 Were in California, Idaho, Nevada, Utah and Washington
  • Affordability Continues to Erode, Especially in Low-Price Range
  • Home Prices Projected to Increase by 4.3 Percent by December 2018

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI) and HPI Forecast for December 2017, which shows home prices are up both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from December 2016 to December 2017, and on a month-over-month basis home prices increased by 0.5 percent in December 2017 compared with November 2017,* according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.3 percent on a year-over-year basis from December 2017 to December 2018, and on a month-over-month basis home prices are expected to decrease by 0.4 percent from December 2017 to January 2018. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The number of homes has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of December 2017. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also, as of December, 28 percent of the top 100 metropolitan areas were undervalued and 37 percent were at value. When looking at only the top 50 markets based on housing stock, 48 percent were overvalued, 14 percent were undervalued and 38 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

*November 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Methodology

The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—“Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

More Than A High Appraisal

Homes appraised above contract price had above-market appreciation rates

Housing Trends

For homebuyers, the outcome of appraisal is one of these three scenarios: (1) appraised value closely matches sales price, (2) appraisal falls short of sales price or (3) appraisal is higher than sales price. If a home sells for less than its appraised value, does that mean that the buyers got ‘a bargain,’ and should anticipate above-average appreciation during their ownership period?  Conversely, if a home sells for more than its appraised value, does that mean the buyers may have ‘overpaid,’ and could expect a below-market rate of price growth during the length of time they own the home?

Evidence seems to support the hypothesis that there is “money left on the table” in high-appraisal transactions. When property price appreciation was calculated for twice turned-over in the California market – first sale observed with a full appraisal and sales closing price in 2010 or later, and then a second time with a sale by the owner – homes previously appraised with a sizable premium above the contract sales price were found to have above-market appreciation rates.

Yanling Mayer Blog Post

As shown in Figure 1, excess rates of price appreciation averaged about 3.3 percent per year.  By comparison, closely appraised homes appreciated at about the market average, while homes with appraised value below their contract sales price appreciated 0.3 percent per year slower than the market.  Excess appreciation rates were annualized price gains at re-sale—annualized percentage difference between prior purchase price and subsequent re-sale price, in excess of average market appreciation during the same ownership period.  The CoreLogic county-level Home Price Index (HPI) was used as the benchmark of market-wide appreciation.

Yanling Mayer Blog Post

Figure 2 shows that high-appraisal homes – whether a distressed sale or not – had above-market price appreciation, averaging 3.15 percent among non-distressed sales or 3.9 percent among distressed sales. Real estate owned (REO) and short sales exhibited above-market appreciation rates across all three appraisal valuation outcomes, likely driven by their below-market pricing to motivate sales.  Investors’ value-enhancing repair and refurbishing work could also be a factor for their higher re-sale values – despite that only homes that were held for at least 18 months since initial purchase/appraisal were included in the analysis.  For both non-distressed and distressed sales, median prices of high- and low-appraisal homes were lower than closely appraised homes. Since both high- and low-appraisal homes may have drawn disproportionately from lower-priced homes, faster price appreciation experienced by low-valued homes alone could not explain away the large disparities in price appreciation between the two.[1]

In Figure 3, sample homes were further sub-grouped by the year in which they were initially purchased and appraised. Given significant market dynamics during 2010-2015, property appreciation rates were likely to vary depending on the timing of initial purchase.  They ranged between 2 and 5 percent, reaching the highest during the 2012 market bottom when market-wide underpricing was likely the severest.

Yanling Mayer Blog Post

A city-level breakdown is shown in Figure 4. Stockton (5.87 percent) and Riverside (5.22 percent) had the highest excess price gains, followed by San Francisco (4.62 percent), Los Angeles (4.35 percent), Bakersfield (4.24 percent), and San Jose (4.04 percent).  Due to the use of county-wide HPIs for benchmarking, some cities – such as Oakland, Riverside and others – that may have experienced faster-rising prices than its county as a whole could well see across-the-board positive excess price appreciation.

Regardless of the reason(s) why a home may have sold for less than its appraised value, the buyers appear to have benefitted by having a faster-than-market appreciation during their ownership tenure.

How Will the New Tax Changes Affect You?

Tax Changes

The first change you need to be aware of is the requirements of the sale of your principal property. The second is the reduction of the limit on mortgage interest. The third is the elimination of state and local taxes.

Regarding the requirements of the sale of your principal property, the original proposal was that if the property was a homestead property, you would have to live in it for five out of the last eight years in order to avoid paying any capital gains taxes when selling it. That’s been changed so you only have to stay in the home for two out of the previous five years to sell the property without having to pay any capital gains taxes.

This change doesn’t impact you very much if you’re looking to sell your home. If you’re living in the property as part of a married couple, then you have up to $500,000 in gains that you don’t have to pay taxes on. If you’re single, you have up to $250,000 in gains that you don’t have to pay taxes on.

Regarding the reduction of the limit on mortgage interest, previously you could buy a home for up to $1 million and get the mortgage deduction when doing your taxes. They were proposing reducing that sum from $1 million to $500,000, but they agreed that you could reduce the itemized deduction on your mortgage for up to $750,000.

This change will only affect people who are buying homes in a higher price range—primarily those buying over the $750,000 range. However, if you’re buying a home for $1 million and you’re putting down 20% or more, it may not affect you that much. If you’re buying a home that’s more expensive than that, there will probably be tax implications.

Lastly, regarding the deduction of local and state taxes in relation to your property, the original law was to take that away completely so you weren’t allowed to claim that on your taxes. The new change allows you to do so for up to $10,000. Basically, if your taxes are more than that, it will have an effect on you whether you’re buying or selling.

If you have any other questions about these new tax rules and how they affect the real estate market, don’t hesitate to reach out to us. We’d be happy to help you.