Flowers & Weeds

Even though the spring market should be in full flower as it were, this hasn’t been the best month for home sale news. Earlier we reported downturns in April’s new and existing sales; this week pending sales followed suit.
The National Association of Realtors (NAR) said its Pending Home Sales Index (PHSI), a leading indicator based on home purchase contract signings, slumped for the second month in a row, falling 1.3% from its March reading of 111.3 to 109.8. This meant it was also down by 3.3% from the April 2016 pace.
Econoday noted that, thus far in 2017, the Index has done what it was supposed to do, accurately telegraph the month-to-month performance of upcoming sales. The PHSI fell 0.8% in March and this was followed by an even more sizable decline (2.3%) in existing home sales the next month.
Lawrence Yun, NAR chief economist, said “weak supply levels” are behind the fading spring contract activity. Inventory issues are, in turn, spurring deteriorating affordability conditions. “Realtors are indicating that foot traffic is higher than a year ago,” Yun said, “but it’s obviously not translating to more sales.”
Yun isn’t expecting relief any time soon. He notes that homebuilding activity is still below what might be hoped and too few homeowners are listing their home for sale.

Home Price Appreciation Up Significantly
Home prices continue to rise; the last two indices for March, those from S&P Case-Shiller and Black Knight Financial Services verified that this week–and they are showing no sign of slowing down. Both indices put the annual increase at 5.8% and for both that was an 0.1% uptick from February’s reported gain. On a month-over-month basis, Case-Shiller put the March appreciation at 0.8%, while Black Knight said it was 1.3%; both were significantly larger gains than their February counterparts.
This last item takes us into the weeds, but since it will be good news for some readers, we will go there. Fannie Mae announced a new version of its automatic underwriting system will go into effect at the end of July. Among the changes is a loosening of the acceptable debt-to-income ratios. They were previously capped at 45% but, with compensating factors–for example, a low LTV (loan to value ratio) or a high FICO score–lenders could go as high as 50%. There are also some positive changes to the documents needed for self-employed borrowers. Freddie Mac is expected to follow suit.
With easing credit and interest rates down for the third straight week, it’s a good time to give me a call.
Posted on June 2, 2017 at 4:40 pm
Greg Timms | Category: Economical Updates | Tagged , , , , , , ,

Headwinds Ahead?

Home sales encountered some headwinds in the first full month of spring. April sales of both new and existing homes fell off the strong sales figures posted in March although neither the Census data on new home sales nor the National Association of Realtors’ (NAR’s) existing home sales numbers particularly surprised the experts.
New home sales took the bigger hit. They dropped 11.4% from March to a seasonally adjusted annual rate of 569,000. Sales had been expected to retrench after three months of solid increases, but analysts did expect they would remain above what seems to have become a prized 600,000-unit marker.
March sales had been especially strong, reported as the best of the recovery at 621,000 units. They got even better, revised upward in this week’s report to 642,000 units, besting last July as the best month since well before the housing crisis.
Existing home sales advanced a solid 4.2% in March but retreated by 2.3% in April to an annual rate of 5.57 million. Inventories increased, (they did for new homes as well) but marketing time fell to the shortest since NAR started tracking it in 2011, a median of 29 days. Analysts had expected sales to decline, but were looking for a number in the 5.65 million range.
The West was particularly hard hit in both sales reports. The region’s new home numbers fell by 26.3% for the month and were down 13.7% on an annual basis. Existing home sales were better, but still 3.3% lower month-over-month, remaining about that same amount above sales a year earlier.

Price Increases Moderating
NAR always has the first home price report each month and their April figures did show prices might be moderating their earlier manic pace. The year-over-year increase was estimated at 6.0%, the lowest since December, and well below the 7.2% average reported by NAR over the previous three months.
The Federal Housing Finance Agency (FHFA) Housing Price Index (HPI) for March contained quarterly as well as monthly and year-over-year data and those numbers also showed a slight slowdown. Appreciation in the first quarter was 1.4% compared to 1.5% in Quarter 4, and the monthly rate dipped to 0.6% from 0.8% in February. The annual rate, at 6.0%, was down 0.4% from the year-over-year gains the previous month.
Freddie Mac’s monthly Outlook reversed an earlier forecast for lower home sales in 2017 and predicted interest rates will continue to linger in the 4.0% range. Low rates and the strong jobs market, will push home sales to the highest level since the housing crisis.
Then, just as we went to press, Freddie Mac announced rates hitting a 2017 low; down 7 basis points to 3.95%. This should help keep home-buying affordable and refinancing beneficial.
Posted on May 26, 2017 at 8:56 pm
Greg Timms | Category: Economical Updates | Tagged , , , ,

On The Brink

Last week we reported that the rate of homeownership remains stagnant. This week we learned of a new survey from the Gallup people that seems to show that could be on the brink of change–maybe even massive change. The survey, conducted among both homeowners and non-homeowners, indicates that more than half of the latter don’t plan to stay that way.
Forty-nine percent of those who don’t currently own one said they expect to buy a home within the next five years, (10% within one year) and another 20% have a ten-year plan. That leaves only 28% with no current intention to buy. When Gallup conducted the same survey in April of last year, 38% of respondents were content with their status quo.
As might be expected, these homeowners-in-waiting are clustered on the low end of adulthood. Fifty-two percent of 18 to 34-year-olds have a five-year window (for more than half, that window is a year) as do 58% of those aged 35 to 54. Less than a third of non-homeowners 55 years or older have homebuying plans.
Let’s hope they can find a home to buy. Gallup says the homeowners it questioned were prepared to stay put. Only 4% expect to sell within 12 months and another 20% within five years. Nearly two-thirds say they won’t be moving “in the foreseeable future.”

April Jobs Report Raises Hopes
The only hard economic numbers this week were those for employment in April. They were much better than those for March (which got even worse in the retelling.) The Labor Department said there were 211,000 new jobs created during the month and the unemployment rate ticked down to 4.4% the lowest rate since 2001. The March report originally reported a dismal 98,000 new jobs; that number was revised down this month by another 19,000.
The chicken and the egg has long been a “thing” in real estate–should a homeowner find a new home before he sells the old one or vice versa. Freddie Mac’s blog this week suggests a variation. When it comes to home buying, the house or the mortgage?
Experts agree, Freddie says, that you should fit your mortgage to your finances, not to a house. The key is knowing, not just to know how much mortgage you can afford, but if your budget can cover expenses for upkeep, utilities and major repairs like a new furnace.
In other words, before there is either a chicken or an egg, there is a need to get a handle on your finances. It’s what we do–give us a call.
Posted on May 12, 2017 at 8:14 pm
Greg Timms | Category: Economical Updates, Real Estate News | Tagged , , , , , ,

JUST LISTED! 14302 Sandhill, Poway 92064

You’ll love the private, gated courtyard entry into this Gorgeous single level home. Immaculate and meticulously maintained inside & out.

Awesome solar pool & spa with cascading water flowing into the pool.

Enjoy entertainer patio areas, large living room & family room with dual faced fireplace and built-in cabinets.

Open kitchen with granite counter tops, large center island plus breakfast area. Formal dining room.

The master suite is 20 X 16 with fireplace & walk in closets.

 

Walk to Poway High School & Lake Poway. No Mello Roos

Currently offered at $1,225,000

Please call me today if you or someone you know is interested in seeing the home.

Posted on April 28, 2017 at 9:29 pm
Greg Timms | Category: Real Estate Activity | Tagged , , , , ,

Green Shoots

As if you didn’t know, lack of housing inventory has been cited over and over (and over) as hampering homebuying. To a lesser extent, consumer confidence has been a drag both on homebuying and the economy. This week there were green shoots of hope for both.

A National Association of Realtors (NAR), survey broke down homebuying trends by generation. Gen X, currently aged 37 to 51, (NAR appears to have “disappeared” the quite small Gen Y into this cohort), never gets much attention, but they presented some of the survey’s more interesting findings. They appear to have delayed homebuying (usually of a “move-up” house) longer than Millennials and are the generation to have most often lost a distressed home or been locked out of the market by debt or being underwater in their existing home. They also carry the most student debt, $35K against $25K for Millennials.

NAR says that generation has now recovered enough equity to sell and buy another home. Xers accounted for 28% of sales last year, up 2 points from the previous year. Millennials had a 35% share, but there are a lot more of them.

NAR chief economist Lawrence Yun says that Gen Xers who bought last year had been in their existing homes a median of 10 years; many of them buying when “home values were on the precipice of declining.” He said more of the generation are expected to sell this year and that should help ease the inventory shortages in much of the country. That these are likely to be mostly starter homes is even better news.

Fannie Mae’s National Housing Survey has tracked homeowner and renter attitudes toward homeownership and the economy since 2011. The survey has 100 questions, six of which are distilled into a single number, the Home Purchase Sentiment Index (HPSI).

The February survey blew the roof off. The HPSI jumped 5.6 points to 88.3, an all-time high. Five of the six components were higher than the previous month, and three set records of their own.

Asked if it was a good time to buy a house, 66% said yes, 26% said no, a net of 40%, 11 points higher than in January. A net of 22% think it is a good time to sell, a survey high.

Financial confidence is also on the rise. The net of those unconcerned about losing their job jumped 9 points to 78% while a net of 19% reported their household income higher over the last 12 months. Both were survey highs.

Doug Duncan, Fannie Mae’s chief economist said, “Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers.”

Lots of housing news next week–including a resumption of the Fed Watch–will they or won’t they raise rates?

Tune-in next week to find out.

Posted on March 10, 2017 at 5:16 pm
Greg Timms | Category: Economical Updates | Tagged , , , , , ,

It’s All About Inventories

Sales of new homes in January were every bit as good as those released last week for existing homes. There were an estimated 41,000 newly built homes sold during the month compared to 38,000 in December. On a seasonally adjusted annual basis that works out to a pace of 555,000 units, up 3.7% from December and 5.5% higher than in January 2016. Sales of existing homes had risen by 3.2% for the month and 3.8% year over year so the two reports together bode well for a strong spring market.

If we could, we would just leave it there. Our sense of duty, however, compels us to also mention pending home sales. They sort of took the bloom off the rose. The National Association of Realtors’ (NARs’) Pending Home Sales Index, a leading indicator of existing home sales for the upcoming two months, slipped 2.8% to the lowest level since last January and the December number was revised down to half its previously announced 1.6% gain. Because? Inventories of course.

The West is also looking a little weak and worrisome. Existing sales were up a strong 6.6% for the month although they had fallen in both November and December, but new home sales, strong in the other three regions, were down more than 4% and pending sales plunged by nearly 10% and were fractionally lower than a year earlier. Hopefully, it is just a blip.

That home prices are continuing to escalate was confirmed by the last two of the December reports. Case Shiller’s National Index was up 5.8% year-over-year compared to a 5.6% annual gain in November. Black Knight Financial Services said the annual increase of 5.7% in December tied with November for the largest of the year. Again, no question about what is behind this appreciation.

Inventories are now news beyond the real estate industry. This week the Washington Post headlined the difficulties millennials are having with competition and shortages now that they have finally decided to enter the housing market. Among the stories about failed offers and multiple bids, the Post does offer some encouraging words from the director of Harvard’s Joint Center for Housing. Christopher E. Herbert reminds us that Baby Boomers entered the market in the early 1980s, faced with a double-digit recession and double-digit interest rates. “But then homeownership rates and housing prices boomed in the 1990s. That group started out on a slower trajectory, then caught up. When you’re young you have some time to make up for a slower start.”

Please call or email if you have any questions.

Posted on March 3, 2017 at 5:42 pm
Greg Timms | Category: Economical Updates | Tagged , , , , , ,

JUST SOLD! 18724 Caminito Pasadero, San Diego 92128

160057063

Greg Timms Blog | 8724 Caminito Pasadero

Just Sold this gorgeous 3 bedroom model with loft office/study. Ideal location with privacy & garden views.

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Open kitchen with granite counter center island off family room with fireplace & lots of kitchen cabinets. Spacious living room with dining adjacent to it.

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Spacious master suite with walk-in closet, dual vanity & views.

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Sought after gated community with multi-million dollar clubhouse with 2 pools, BBQ area, lighted tennis courts, exercise room, banquet room and more! No Mello Roos. Poway School District.

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

Greg Timms Blog | 8724 Caminito Pasadero

I can get the same results for you! If you are having thoughts of buying or selling (sell early in 2017) then call me now!

Posted on January 23, 2017 at 6:07 pm
Greg Timms | Category: Real Estate Activity, Real Estate News | Tagged , , , , , ,

Playing Catch-Up

The Old Year and our two-week break has left us with a lot of make-up work. While sales and pricing data dominated the usual end-of-month flood and was largely positive, the Census Bureau’s construction numbers took some of the edge off.
The two backward looking reports on home sales–new, and existing–continued to show a strong fall selling season while pending sales, a leading indicator, were a little unsettling.
New home sales, which seem to alternate good months with not-so-good ones, rose 5.2% in November, pulling out of a 1.9% slump the month before. The seasonally adjusted rate of 592,000 units was second only to June for the year-to-date and was 16.5% higher than the pace a year earlier.
Existing home sales were higher for the third straight month. Sales topped October’s by only a fraction, 0.7%, but it was good enough to make November the strongest month since February 2007.
Pending sales were the lowest since January and the 2.5% loss is discouraging vis-à-vis the sales outlook for the next few months. Lawrence Yun, chief economist for the National Association of Realtors (NAR) said the “brisk” uptick in mortgage rates during the month along with inventories that continue to be far from adequate, “dispirited some would-be buyers.”
Construction data indicates that little inventory relief for “dispirited” new home buyers is in the immediate offing. While housing completions were up strongly (15.4% from October), permitting and housing starts lost a lot of ground. Permits fell 4.7% for the month and 6.6% year-over-year. Housing starts dropped even more dramatically; they were 18.7% lower than in October and 6.9% below the November 2015 level.
All the numbers from the five home price reports issued in the last two weeks were exuberant to say the least. Three of the reports were for October and Case-Shiller, the Federal Housing Finance Agency, and Black Knight Financial Services, while not agreeing among themselves on exactly how much prices were up, posted October estimates that were very true to those in recent months; two showed even faster increases. All three put the year-over-year appreciation at 5.6 to 6.0%
If October was exuberant, two November reports were ebullient. CoreLogic upped the annual change from 6.7% in October to 7.1% in November while NAR’s year-over-year number jumped 8 basis points to 6.8%. Nary a sign of the slowdown that analysts have been predicting for months.
There was no holiday respite for Interest rates. The 30-year fixed-rate mortgage hit 4.32% during Christmas week, a 32-month high, but reversed course this week, falling 12 basis points (bps). Despite the 90 bp increase since October 1, Freddie Mac says the average rate for the entire year was 3.65%; the lowest since it started keeping records in 1971.

Don’t forget that new loan limits kicked in on January 1. The increases were not huge–conventional limits went from $417,000 to $424,100 with limits in “high cost areas” rising proportionally–but maybe up just enough to make your purchase or refi more doable.


Greg Timms Blog | FreddieMac 010617

Posted on January 6, 2017 at 5:26 pm
Greg Timms | Category: Economical Updates | Tagged , , , , , , ,

SOLD IN 7 DAYS! 8228 Station Village Ln 1512, San Diego 92108

Greg Timms Blog | 8228 Station Village Ln 1512

Gorgeous 3rd floor corner unit with views. Freshly painted interior including baseboards & crown molding. New upgraded carpeting throughout. Private patio balcony off living room.

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Stainless steel appliances, breakfast nook, granite counters throughout kitchen & plenty of cabinets. Interior laundry room & open living room.

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Spacious master bedroom & 2nd bedroom. Two full baths with tubs.

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

One car garage at entry level & parking space close by. Close to pool & BBQ area.

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Greg Timms Blog | 8228 Station Village Ln 1512

Sold for all Cash at $410,000!

I can get the same results for you! If you are interested in seeing this home, please contact me today!

Posted on December 16, 2016 at 9:58 pm
Greg Timms | Category: Real Estate Activity, Real Estate News | Tagged , , , , , , ,

They Finally Did It!

The Fed raised rates…and having done it, apparently may do it again.
The Federal Reserve Open Market Committee (FOMC) ended their monthly meeting on Wednesday with an announcement of a quarter point increase in the federal funds rate. This brings the target for the overnight lending rate between banks–to a range of 0.5% to 0.75%.
It wasn’t the rate increase itself that made the news, but the Fed’s accompanying statement, which was more hawkish than expected. The central bankers said they were looking toward three more quarter-point increases in 2017. They had signaled as recently as last September that there would be two.
Futures traders had put the probability of an increase in December at 100%, but the Fed has pulled back from the brink before, confounding experts who, at the beginning of this year had anticipated two increases in 2016. It was only the second time since 2006 the FOMC has raised rates. They cut them to zero during the recession, trying to get the economy going. The first post-recession increase was at the December 2015 meeting.
In raising the ante for 2017, the Fed cited increased expectations for inflation and indications the labor market is tightening. The subdued rate of inflation this year has often been cited as the reason for holding the rate steady.
Fed Chair Janet Yellen said “This is a very modest adjustment in the path of the federal funds rate.”  She called the decision to raise rates “a vote of confidence in the economy.”
The ten-year T-bill rate jumped by 6 basis points in the wake of the announcement and analysts noted that most lenders repriced mortgage interest rates at least once Wednesday afternoon.
The National Association of Homebuilders’ (NAHB’s) Housing Market Index, a measure of builder confidence in new home sales, has drifted for months but posted a strong gain in December, rising 7 points to 70. It was the highest level since 2005. The index component measuring perceptions of buyer traffic has dragged on the index for years even as other components recovered from the recession. This month it crossed the milestone 50 mark for the first time in 11 years.
Freddie Mac and Fannie Mae announced a new foreclosure prevention program that will eventually replace the crisis era Home Affordable Modification Program that expires at the end of this year. “Flex Modification” will enable eligible homeowners who are delinquent on their mortgages to reduce payments by as much as 20%.

We will not publish during the two weeks leading up to Christmas and New Years. We wish all of you a wonderful holiday season!


Greg Timms Blog | Freddie Mac - 121616

Posted on December 16, 2016 at 6:39 pm
Greg Timms | Category: Economical Updates | Tagged , , , , ,