Tag Archives: market
US home prices growing at fastest rate for a year
Existing home sales increased modestly in the United States last month but prices are growing at their fastest pace for a year, the latest index data shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 1.25% in February and are 4.7% higher than a year ago and above year on year totals for the fifth consecutive month. The data from the National Association of Realtors also shows that the median existing home price for all housing types in February was $202,600, some 7.5% above February 2014. This marks the 36th consecutive month of year on year price gains and the largest since last February when it was 8.8%. According to Lawrence Yun, NAR chief economist, although February sales showed modest improvement, there’s been some stagnation in the market in recent months. ‘Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,’ he said. ‘Stronger price growth is a boon for home owners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise. Severe below freezing winter weather likely had an impact on sales as more moderate activity was observed in the Northeast and Midwest compared to other regions of the country,’ Yun explained. The data shows that total housing inventory at the end of February increased 1.6% but remains 0.5% below a year ago. For the second month in a row unsold inventory is at a 4.6 month supply at the current sales pace. The share of first time buyers was 29% in February, up slightly from 28% in January and the first increase since November 2014. First time buyers represented 28% of all buyers in February 2014. All cash sales were 26% of transactions in February, down from 27% in January and down considerably from a year ago when it was 35%. Individual investors, who account for many cash sales, purchased 14% of homes in February, down from 17% in January and 21% in February 2014. Some 67% of investors paid cash in February. Distressed sales, that is foreclosures and short sales, amounted to 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago. Some 8% of February sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 17% below market value in February compared to 15% in January, while short sales were discounted 15% compared to 12% the previous month. ‘Investor sales are trending downward due to the continued rise in prices and fewer bargains available from distressed properties coming onto the market,’ said Chris Polychron, NAR president. He added that real estate agents in areas popular with foreign buyers, such as South Florida and the West Coast, are reporting tempered demand from international clients who typically pay in cash and this… Continue reading
Will Farmland Bust? Here Are 3 Key Variables
Is the farmland market — one many experts say is starting to level off from the boom in values over much of the last decade — just taking a “breather” from its rocket ride higher, or is the expected leveling an inevitable function of the marketplace? History has certainly proven the cyclical nature of the land market; the last century of land market observations reveals a few common drivers of that cycle. But is today different? “Speculation on what is and what will happen to Iowa farmland values abounds,” says Iowa State University Extension ag economist and farmland values expert Mike Duffy. Obviously farm income’s the primary key to rising or falling land values. And, just as it’s so important to the farmland equation, it’s also far from clear exactly where the average farm’s income is headed in the near future, and how that’s going to manifest itself as a key land variable, Duffy says. “What happens to farm income will have a direct bearing on land values. While it isn’t a perfect correlation, it is a strong one,” he says. “I think some of the factors that created the busts we saw after the past 2 booms haven’t been as strong this time.” So since income’s something of a wildcard right now, Duffy has stepped back to examine those 2 “land booms” of the last century, how they’ve unfolded and what ultimately happened to the land market and those with stakes therein. The first of these “golden eras” was from 1900 to 1920, Duffy says, a time when rising corn prices sent land in Iowa up almost 500% in the first 19 years of the century. Then came the early 1970s. “The second boom period, 1973 to 1981, has been referred to as the second golden era in agriculture. Land values in Iowa increased by over 30% per year in 1973, 1974 and 1975. Over the entire boom period Iowa farmland values went from $482 an acre in 1972 to $2,147 an acre in 1981, an increase of 345%,” he says. Prices & returns Those 2 past boom times have some similarities and some differences when viewed with the meteoric rise in land values of most of the last 8 to 10 years. But, though these cloud the crystal ball, there are 3 common features of the boom cycles that could shed light on how the current one’s going to unfold. The first is a simple matter of dollars and cents. “One feature is the booms were driven by increasing prices and returns. A 1967 publication by the State Historical Society described the first boom period as, ‘For agriculture this was prosperity piled on top of prosperity,'” Duffy says. “The second boom in the early 1970s was fueled by the rapid rise in commodity prices due in part to the opening of major export markets. Corn prices in Iowa averaged $1.04 per bushel in 1972 and they averaged $2.58 per bushel in 1974.” Continue reading
US Leads Global Advanced Biofuels Market
The US is the dominant force in the advanced biofuels market, with 67 percent of current global projects based in America, according to a study by Navigant Research. The US’ Renewable Fuel Standard, which calls for 21 billion gallons of advanced biofuel production by 2022, will help keep the US at the epicenter of the market in the coming years, according to Advanced Biofuels Country Rankings. However, emerging opportunities for advanced biofuels growth, across a diverse range of non-food feedstocks and conversion platforms, are beginning to coalesce in a number of countries outside the US, the report says. Growth in advanced biorefinery infrastructure will be moderate through 2015, according to the report, as new commercial facilities seek to demonstrate viability at scale and government support retreats from post-stimulus highs across the US, Europe and China. Over the medium term (2015-2018), however, a wave of retrofits and capital light deployments co-located alongside conventional biorefinery infrastructure is expected to usher in an expansion of advanced biorefinery capacity, followed by an increase in greenfield projects, the report says. In other biofuels news, Chempolis, a Finland-based biorefining technology corporation, has signed a memorandum of understanding with Indian oil and exploration company ONGC that investigates building India’s first biorefinery project. Further to the first biorefinery, Chempolis and ONGC are targeting at larger production of sustainable biofuels in India. California-based biofuels company Biosynthetic Technologies has announced that operations of its demonstration production plant within chemical company Albemarle’s existing Baton Rouge facility have commenced. Biosynthetic Technologies is now moving forward with development of a full-scale commercial production plant. Additionally, Iowa Gov. Terry E. Branstad has launched a public-private partnership that aims to expand the market for mid-level biofuels blends. Through the use of current funding, “Fueling Our Future” aims to establish more blender pumps containing petroleum with a high ethanol content and biodiesel at gas retailers around the state. According to research released this week by the National Renewable Energy Laboratory there is no evidence that petroleum blends containing higher amounts of ethanol cause damage to engines, contradicting an earlier study. The NREL study found that the available literature did not show any “meaningful differences” between a 15 percent ethanol blend, or “E15,” and a 10 percent blend, or “E10,” in “any performance category,” directly conflicting a controversial study released by Coordinating Research Council earlier this year. Continue reading
