Tag Archives: united-states
New home building increases in the US as demand outstrips supply
New home building in the United States increased by 5.2% to a seasonally adjusted annual rate of 1.178 million units in February, according to newly released data. The figures from the US Department of Housing and Urban Development and the Commerce Department show that single family production increased 7.2% to 822,000 units, its highest level since November 2007while multifamily starts remained virtually unchanged, inching up 0.8% to 356,000 units. ‘This month’s report is consistent with positive builder sentiment and other economic indicators showing that the housing market continues to recover at a gradual pace,’ said Ed Brady, chairman of the National Association of Home Builders (NAHB). ‘February’s single family gains indicate that this sector is strengthening in line with our forecast. As the US economy firms, job creation continues and mortgage interest rates remain low, we should see further growth in housing production moving forward,’ said NAHB chief economist David Crowe. Combined single and multifamily starts rose in three of the four regions in February, with the West, Midwest and South posting respective gains of 26.1%, 19.9% and 7..1% The Northeast registered a 51.3% loss. A decline in the volatile multifamily sector pushed overall permit issuance down 3.1% in February. Multifamily permits fell 8.4% to a rate of 436,000 while single family permits were up 0.4% to 731,000. Regionally, permits increased in the Northeast by 40.4%. The Midwest, West and South registered respective permit losses of 11.4%, 7.2% and 4.4%. Continue reading
Prime property country locations set to outperform London, new analysis suggests
Country locations are set to outperform London as the prime property markets enter the next stage of the housing cycle, according to a new analysis report. Stamp duty changes introduced in the 2014 autumn Statement have had a bigger impact than many forecast, the effect initially being masked by the uncertainty in the run up to the General Election, according to the report from property firm Savills. However, it points out that both the prime housing markets of London and the country have reacted relatively rationally to the changes. Indeed, small price falls were recorded in the higher value markets where the stamp duty liability has increased but by contrast, in the lower value prime markets where there is now a tax saving, values have continued to rise, albeit at a slower rate than in 2014. The challenges faced by the prime markets of late are reflected by the fact that the total value of housing stock in Kensington and Chelsea fell in 2015, though the loss of £693 million is dwarfed by the gains of £68 billion over the preceding 10 years, the report explains. Transaction levels, though undoubtedly lower than in 2014, have not collapsed as some would argue. Figures from the Land Registry indicate a 5 to 10% fall above £1 million across England and Wales. ‘While this suggests there is still a market for appropriately priced stock, it also means we are unlikely to see cuts to rates of stamp duty at the top end,’ said Sophie chick of Savills research team. ‘Indeed, in the 2015 autumn Statement, more stamp duty changes were announced for buyers of additional homes (second homes and buy to let) causing further small price falls in markets with high concentrations of such buyers in the last quarter of last year,’ she explained. Chick pointed out that to understand what lies ahead it is helpful to look back and identify what happened between 2002 and 2005 when the market was at a similar stage in the housing cycle. ‘In prime London, over the three and a half year period from June 2002, prices increased by just 5%. Currently, average values have seen no net growth since the first quarter of 2014, so if the market follows a similar trend we would expect prime London values to remain broadly flat through 2016 and most of 2017,’ she said. ‘Over the same period, prices in the prime country markets outperformed London with an average increase of 17%. We expect a similar trend this time round as the ripple effect took hold and more equity flows to the housing markets beyond London,’ she explained. The analysis shows that in terms of how residential value is concentrated, Kensington and Chelsea sits far ahead of any other borough or local authority across the UK, not just by virtue of high property prices but also the relative density of housing in the borough. The combination of the two means that on average in… Continue reading
Lack of homes for sale hampering buyers in the United States
A lack of homes for sale across the United States continues to limit choices available to potential buyers, putting a strain on markets across the country, new research reveals. In January buyers had 8.6% homes to choose from than they did last year, according to the latest real estate market report from property firm Zillow. It also shows that housing starts reached a three month low in January, indicating that newly built homes will not be a significant benefit for buyers, either. The firm says that a restricted supply of homes for sale will mean increased competition for homes that are available, and bidding wars that can price out entry level or first time buyers. Low inventory, along with a strong job market has been driving up home prices, especially on the West Coast. Across the country, only a quarter of markets saw inventory increase over the past year. Among the largest metros in the country Atlanta saw the largest increase in available homes for sale at 6.8% while buyers in San Diego have significantly fewer options with inventory down 30%. Besides inventory, Zillow looks at price cuts and days on market to help identify whether markets are better for buyers or sellers. It found that markets that benefit sellers are mostly grouped in the West, where buyers are more likely to face bidding wars. Buyers will find themselves with more bargaining power in the East, in markets like Philadelphia and Baltimore. ‘If you're looking for a home or trying to sell, it's important to know what kind of market you're in. Hopeful buyers in a strong sellers' market should be prepared to move quickly, since homes don't stay on the market as long,’ said Zillow chief economist Svenja Gudell. ‘In a buyers' market, they can afford to take their time and be more selective. However, low inventory is a factor affecting the majority of the country, so buyers should be prepared for a limited selection as we enter the home buying season,’ she explained. National home values rose 4.2o % $184,000, according to the Zillow data meaning that the pace of home value appreciation has increased for 10 months in a row. Denver and Dallas continue to lead the way, with strong double digit increases in home values. Rents, on the other hand, continued their recent trend of levelling off, growing 2.9% year on year from January 2015. San Francisco was the only large metro to see double digit rent increases. Continue reading
