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Existing home sales in the United States are 11% higher than a year ago
Existing home sales in the United States crept up in January to the highest annual rate in six months, and sales are now 11% higher than a year ago. The data from the National Association of Realtors shows that the West was the only region to see a decline in sales in January after a nationwide rise of 0.4% compared to December. The median existing home price for all housing types in January was $213,800, up 8.2% from January 2015, the largest rise since April 2015 and the 47th consecutive month of year on year gains. Lawrence Yun, NAR chief economist, said it was the largest year on year gain since July 2013. ‘The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints,’ he pointed out. ‘Despite the global economic slowdown, the housing sector continues to recover and will likely help the US economy avoid a recession,’ he added. Total housing inventory at the end of January increased 3.4% to 1.82 million existing homes available for sale, but is still 2.2% lower than a year ago. Unsold inventory is at a four month supply at the current sales pace, up slightly from 3.9 months in December 2015. ‘The spring buying season is right around the corner and current supply levels aren't even close to what's needed to accommodate the subsequent growth in housing demand. Home prices ascending near or above double digit appreciation aren't healthy, especially considering the fact that household income and wages are barely rising,’ Yun explained. The share of first time buyers remained at 32% in January for the second consecutive month and is up from 28% a year ago. First time buyers in all of 2015 represented an average of 30%, up from 29% in both 2014 and 2013. All cash sales were 26% of transactions in January, up from 24% in December 2015 but down from 27% a year ago. Individual investors, who account for many cash sales, purchased 17% of homes in January compared to 15% in December 2015, matching the highest share since last January. Some 67% of investors paid cash in January. Properties typically stayed on the market for 64 days in January, an increase from 58 days in December but below the 69 days in January 2015. Short sales were on the market the longest at a median of 77 days in January, while foreclosures sold in 57 days and non-distressed homes took 61 days and 32% of homes sold in January were on the market for less than a month. Distressed sales, that is foreclosures and short sales, rose slightly to 9% in January, up from 8% in December but down from 11 a year ago. Some 7% of January sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 13% below market value in January compared to 16% in December, while short… Continue reading
Home lending in Scotland up in 2015, but tailed off at end of year
More first time buyers took out a loan for a home in Scotland in 2015 than in any year since 2008, the latest data shows. Home owner house purchase lending in the fourth quarter of 2015 totalled 17,200 loans, down 4% on the third quarter but up 14% in the fourth quarter 2014, according to the figures from the Council of Mortgage Lenders. A breakdown of the figures shows that first time buyers took out 8,000 loans, 2% down on the previous quarter but up 14% on the last quarter of 2014. They borrowed £870 million, down 2% on the previous quarter but up 14% on the fourth quarter 2014. Home mover lending totalled £1.4 billion, down 4% on the previous quarter but up 18% on the fourth quarter 2014. The number of loans in the period was 9,200, down 5% quarter on quarter but up 14% on year on year while remortgage lending went up by volume quarter on quarter and year on year. Annual home owner house purchase lending in Scotland totalled 64,800 loans, up 9% on 2014. This came to £8.5 billion, up 14% on 2014. First time buyers took out 30,000 loans worth £3.3 billion, up 8% by volume and 12% by value, on the previous year. Meanwhile, home movers took out 34,800 loans worth £5.2 billion, up 9% by volume and 15% by value, compared to 2014 while remortgage lending came to £3.1 billion, up 18% on 2014. This totalled 26,200 loans, up 12% on the previous year. ‘The sustained year on year growth in house purchase lending seen since 2012 continued in Scotland this quarter,’ said Linda Docherty, CML chair for Scotland. ‘This meant more first time buyers and home movers in 2015 took out a loan to purchase a home than in any year since 2008. With an economic climate of low interest rates and competitive mortgage deals, we would expect this growth in the Scottish market to continue into 2016,’ she added. Continue reading
Urban development land outperforms greenfield in the UK
Urban development land values across the UK have continued to increase more than those for greenfield land, according to the latest research. Urban land values increased by 1.5% in the fourth quarter of 2015, up from 0.2% in the third quarter, taking annual growth to 7.1% while greenfield land values increased by 0.7%, up from a fall of 0.1% in the previous quarter and year on year by 2%. The latest residential development report from real estate firm Savills says that the increase in urban land values reflects a rise in demand due to an improved economy, stronger markets and increased viability. Additionally, the report says that urban values have greater scope to increase than greenfield values because they are further below their 2007 peak, an average of 42% below peak compared to 21% below peak for greenfield land. In general, development land values are linked to the supply of land and the demand from developers. The largely stable values of development land are in part due to the increase in supply of new permissions with the annualised number of planning permissions in Great Britain up by 21% in between 2010 and 2015. And it adds that a lack of new players in the market and 46% fewer house builders registered with NHBC in 2015 compared to 2005 has reduced competition for sites. Savills agents report that there is increasing demand for land in urban locations close to good transport links on which, more commonly, apartments are built such as Birmingham and Coventry in the Midlands. This is reflected in the shift in the type of new homes built. Between 2008 and 2014 houses accounted for an increasing proportion of new build homes, however, since March 2014 this trend has been reversed and we are seeing flats accounting for higher proportions of delivery at 35% in the year to March 2015 up from 29% the previous year according to data from the Department of Communities and Local Government. The report explains that the change in type of home being built reflects the improving viability and ability to finance denser sites. Immediately following the economic downturn, housebuilders focused more on developing houses because they require less upfront capital, can be built one at a time and sold as they are finished. However, now that market strength is picking up, there is greater appetite to take on the risk required to build a block of apartments where, apart from off-plan sales, flats are sold only when the whole block is complete. But not everywhere is seeing growth. For example, sentiment for development land in Aberdeen has become less positive and has impacted negatively on the overall Scottish greenfield development land index which was down 0.5% in the final quarter of 2015. Indeed, land values in Aberdeen have fallen 2.9% in the year to quarter four of 2015 for greenfield land and this is due to the continued low oil price and uncertainty over the future of the… Continue reading
