Tag Archives: investment
Metro area home prices soar in US with first plus $1 million median value recorded
Home prices are continuing to rise in the United States with the median value for a single family home reaching more than $1 million in a metro location for the first time. The record prices was reached in San Jose, California, while the vast majority of metro areas seeing prices rise in the second quarter of 2016, the data from the National Association of Realtors shows. Overall the median existing single family home price increased in 83% of measured markets, with 148 out of 178 metropolitan statistical areas showing gains based on closed sales in the second quarter compared with the second quarter of 2015. Just 29 metros recorded lower median prices from a year earlier and 25 saw double digit increases. According to Lawrence Yun, NAR chief economist, a faster pace of home sales amidst languishing inventory levels has pushed home prices higher in most metro areas during the second quarter. ‘Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle tier cities,’ he said. ‘However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent and in many markets at a rate well above income growth,’ he added. The national median existing single family home price in the second quarter was $240,700, up 4.9% from the second quarter of 2015, which was previously the peak quarterly median sales price. The median price during the first quarter of this year increased 6.1% from the first quarter of 2015. Total existing home sales, including single family and condos, rose 3.8% to a seasonally adjusted annual rate of 5.5 million in the second quarter from 5.3 million in the first quarter of this year and are 4.2% higher than the 5.28 million pace during the second quarter of 2015. ‘Primarily from repeat buyers moving up or trading down, existing sales increased each month last quarter and could’ve been even higher if not for a few speedbumps. Closings were slowed a bit by meagre supply levels and home prices in many areas that are still rising too fast,’ Yun explained. At the end of the second quarter, there were 2.12 million existing homes available for sale, which was below the 2.25 million homes for sale at the end of the second quarter in 2015. The average supply during the second quarter was 4.7 months, down from 5.1 months a year ago. According to Yun, without enough new construction being built, existing inventory seriously failed to keep up with the growing demand for buying. As a result, homes typically stayed on the market for around a month throughout the second quarter and over 40% of listings sold at or above list price, with June being the highest share since NAR began tracking in December 2012. Yun pointed out that many listings in… Continue reading
Mortgage arrears in UK at lowest level since records began 20 years ago
The number of mortgages in arrears in the UK continued to fall in the second quarter of this year and is now at its lowest level since records began more than 20 years ago, the latest data shows. At the end of June 2016 there were 92,500 mortgages in arrears of at least 2.5% of the balance, 0.84% of the total, down from 95,900 at the end of March, according to the figures from the Council of Mortgage Lenders (CML). The number of mortgages in arrears was 13.4% lower than a year ago, when the total stood at 106,800, and is now at its lowest level since the run of figures began in 1994. The number of properties taken into possession also fell in the second quarter, to 1,900, down from 2,100 in the first three months of the year. There was a decline in both the numbers of owner occupied and buy to let properties taken into possession. The CML says that if the present trend continues, the number of mortgaged property repossessions this year is on course to be the lowest since 1982 when there were 6.5 million mortgages, compared to 11.1 million today. A more detailed breakdown of the data shows that there was a fall in the number of borrowers in each band of arrears, apart from those owing more than 10% of the mortgage balance. The number in this category edged up from 23,500 to 23,700, the same number as at the end of last year. Ministry of Justice figures also continue to reflect a pattern in which the number of mortgage possessions is significantly lower than in the rental sector. Those figures showed, for example, that there were 42,729 rental evictions in England and Wales in 2015, compared to 5,592 mortgaged property repossessions, even though the rented sector accounts for only around one third of the housing stock. CML data also shows different patterns of arrears and possessions in the owner occupied and buy to let mortgage markets. As before, arrears rates are higher among owner occupiers than among buy to let landlords, while rates of possession are lower. The CML says that this is because lenders try to avoid repossession wherever possible to help owner occupiers recover from a temporary period of payment difficulty, but may move more quickly to protect their position on rental properties as tenants move out in the more commercial buy to let sector. ‘Another welcome reduction in arrears and possessions shows that borrowers are continuing to prioritise their mortgage commitments and that lenders remain committed to helping them through a period of temporary difficulty, wherever possible,’ said CML director general Paul Smee. ‘As ever, the key to success in dealing with any payment problems is to address them as soon as possible. Any borrowers anticipating difficulty in paying their mortgage should therefore speak to their lender at the earliest opportunity,’ he added. Meanwhile, new figures from the Finance and Leasing Association (FLA) show… Continue reading
Stamp duty change more of an impact than Brexit on prime central London
Stamp duty change is more of an issue for the prime central London sales market than the UK leaving the European Union, new research suggests. However, the vote to leave the EU has created a backdrop of short term uncertainty that is affecting behaviour in the prime central London property market. As a result prices are now down 1.5% compared to a year ago and the number of new prospective buyers has fallen by 6.2% over the same period, according to the latest index from real estate firm Knight Frank. The index report also shows that the number of exchanges, including new build properties, fell by 10.5% in the first half of 2016 but the number of viewings was 40.8% higher than in 2015. However, the sub-£1 million market registered a relatively stronger performance, with annual price growth of 1.1%. According to Tom Bill, head of London residential research, early indications suggest the Brexit vote is reinforcing existing pricing trends and viewing the referendum in the context of the preceding two-year period is helpful. In June 2014, annual growth in prime central London was 8.1%, the last peak before a period that saw growth fall steadily to -1.5% in July 2016. ‘This slowdown was a natural consequence of strong price rises between 2009 and 2013, however the process was accelerated by two stamp duty increases and a series of other tax measures,’ said Bill. ‘Despite the widespread media coverage devoted to the EU referendum and its potential impact on house prices, the primary factor curbing demand in prime central London remains stamp duty. The result of this two year slowdown is that vendors had already begun to adapt to the new pricing environment and in many cases Brexit has been a trigger to make overdue reductions to asking prices,’ he explained. ‘Indeed, had the result of the referendum been a victory for Remain, it is likely there would have been a similar mismatch between expectations and reality that followed the 2015 general election. Following the formation of a majority Conservative Party government, high stamp duty costs acted as a brake on demand that was widely expected to surge. Since the vote, a number of buyers have requested discounts due to the climate of political and economic uncertainty,’ he pointed out. ‘However, where the asking price was set at an appropriate level before the vote, deals are proceeding with no reductions. In other cases, the Brexit vote has encouraged vendors to show increased flexibility. It is too early to say whether the reductions are likely to trigger higher transaction levels,’ he added. Bill also pointed out that there is no uniform picture across London and the situation is compounded by thin trading during seasonal summer lull. However, it is possible to see the benefit of recent downward repricing in some markets. In Belgravia overly ambitious vendor expectations, which had led to weak trading over the past two years, has been replaced by a more realistic approach from… Continue reading
