Tag Archives: real-estate
US homes sales tumble but partly due to change in time frames rather than demand
Existing home sales in the United States fell considerably in November to the slowest pace in 19 months, according to the latest monthly report from the National Association of Realtors. However, some of the decrease was likely because of an apparent rise in closing time frames that may have pushed some transactions into December, the report says. It shows that all four major regions saw sales declines in November with total existing home sales down 10.5% to a seasonally adjusted annual rate of 4.76 million in November, the lowest since April 2014. After last month's decline, the largest since July 2010 at 22.5%, sales are now 3.8% below a year ago, the first year on year decrease since September 2014. According to Lawrence Yun, NAR chief economist, multiple factors led to November's sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule. ‘Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales. However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand,’ he explained. Yun believes that while estate agents are adjusting accordingly to the Know Before You Owe initiative, the main result so far has been the need for longer closing times. According to NAR's Realtors Confidence Index some 47% of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37% in October. ‘It's possible the longer time frames pushed a latter portion of would be November transactions into December. As long as closing timeframes don't rise even further, it's likely more sales will register to this month's total, and November's large dip will be more of an outlier,’ Yun pointed out. The index also shows that pries are still rising. The median existing home price for all housing types in November was $220,300, 6.3% percent above November 2014 and the 45th consecutive month of year on year gains. Total housing inventory at the end of November decreased 3.3% to 2.04 million existing homes available for sale and is now 1.9% lower than a year ago. Unsold inventory is at a 5.1-month supply at the current sales pace, up from 4.8 months in October. NAR president Tom Salomone said that real estate agents worked hard to prepare for Know Before You Owe. ‘We knew there would be some near term challenges as the industry continues to adapt. Nonetheless, an early trend of longer lead times to closings is cause for concern,’ he commented. He added that the NAR will continue to work with the Consumer Financial Protection Bureau to ensure as little disruption as possible to the business of real estate. The latest data also shows that properties typically stayed on the market for 54 days in November, a decrease from… Continue reading
London prime property prices still falling and expected to be flat in 2016
Prime property prices in London fell by an average of 0.8% in the final quarter of 2015 and are expected to remain flat in 2016 and into 2017, the latest residential index shows. The latest fall in the prime London homes sector leaves prices a marginal 0.5% above the levels seen at the beginning of the year, while prime regional town and city markets averaged 4.4% annual growth, according to the research by international property adviser Savills. The marginally positive average annual house price growth across all prime London is attributable to the performance of property below £2 million, which recorded growth of 2.2% over the course of the year, according to the report. However, over the course of 2015 prices fell in all of the submarkets above this price level in London. Prime central London has seen prices fall year on year by 3.4% and 1.5% quarter on quarter and are 6% below the peak of 2014. Overall in prime London prices are up 0.5% year on year, down 0.8% quarter on quarter and down just 0.9% since the peak. Prices have been affected by the stamp duty changes a year ago. In the under £2 million sector they are up 2.2% year on year and 1.7% above the peak but down 0.4% quarter on quarter while all other sectors have seen prices fall. In the £2 million to £3 million market prices are down 1.4% quarter on quarter, down 0.2% year on year and down 2.7% since the 2014 peak. In the £3 million to £5 million sector they are down 1.2% quarter on quarter, down 1.3% year on year and down 3.8% from peak. The higher end of the market is also affected with price growth down all round. In the £5 million to £10 million market prices are down 1.5% quarter on quarter, down 3.3% year on year and down 5.9% from peak. In the £10 million plus market prices are down 1.3% quarter on quarter, down 3.7% year on year and down 7.5% since peak. ‘This reflects a continued adjustment to a less hospitable tax regime and successive increases in stamp duty rates in particular. This is particularly impacting the higher value markets of prime central London,’ said Lucian Cook, the firm’s head of UK residential research. ‘Since the credit crunch, is has been common practice to index price growth in prime London to the previous peak of 2007/2008. It is now clear that 2014 is the new peak reference point for a market that has continued to adjust to higher taxation, introduced at a time when the market was already looking fully priced,’ he added. He also pointed out that while the prime central London market remains price sensitive, data from LonRes indicates that transaction levels in the first 11 months of the year were 75% of the levels seen in the year previous for stock sold for over £1million. ‘In addition,… Continue reading
UK property prices set to rise by 3% to 8% in 2016, even with a rate rise
Residential property prices in some locations in the UK could increase by as much as 8% in 2016 as the recovery that has taken hold in London ripples out across the country. But overall price growth is expected to be around 6% across the country during the year, according to the forecast from the Royal Institution of Chartered Surveyors. One location tipped to see strong growth is Cambridge because of its buoyant jobs market and good commuter links to London. However, the RICS report also suggests that the current shortages of supply in the market is set to continue and this will push up prices with this growth likely to outstrip any rises in household income. According to RICS surveyors the average number of properties for sale have fallen to a record low of 46 and 40% of chartered surveyors believe that it is this lack of stock which is the main reason sellers are not entering the market, leading to a vicious circle. After East Anglia, the strongest growth is expected to be in the South East and the West Midlands, where 7% rises are forecast. The lowest level of increase is forecast for the North East of England where prices are forecast to rise by a much lower 3%. Areas with the highest number of transactions are likely to be the North East, Wales, Scotland and Northern Ireland, where prices remain low relative to the rest of the UK. RICS chief economist, Simon Rubinsohn, explained that an interest rate rise of 0.25% has been taken into account when making the forecast but he does not expect there to be a big rise in mortgage rates. ‘Housing has clearly leapt up the government’s agenda, but despite the raft of initiatives announced over the past year the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months,’ said Rubinsohn. ‘Lack of stock will continue to be the principal driver of this trend but the likely persistence of cheap money will compound it for the time being. Critically our principal concern with the measures announced by the government is that they are overly focused on promoting home ownership at the expense of other tenures,’ he pointed out. ‘Discouraging buy to let could see private rents take even more of the strain if institutional investment doesn’t increase significantly, particularly given the likely reduced flows of social rent property going forward,’ he added. Continue reading
