Market Trends and Condition

There are a couple of news items this week that together could point to some near term problems for housing and home prices. First, let’s be clear that poor housing market and home price news isn’t necessarily bad news for investors.
Millennial Home ownership Levels at New Lows

The aftermath of the housing bubble will likely be debated for years to come. Many analysts say the realestate market is on a path to recovery, but some are waiting for the house of cards to collapse once again, when the Federal Reserve steps back from the table. One thing is certain: Some housing markets in the country are currently stronger than others.

Recently wrote a nine-part series looking at the situation in Detroit (link below). It’s no secret that the city’s going through some rough times, but the doomsday stories conjured up by the press are misleading. As we demonstrated (citing many sources along the way) Detroit is very much on the road to recovery. Right now, investors are snapping up bargain properties and house prices are starting to rise. But, in a recent interview, one analyst from property valuation website, Trulia, believes now is a bad time to buy. Here’s why we disagree…

What Trulia thinks...

New articles over at DrHousingBubble.com are raining all over the sunny housing market reports about rising prices. First, the fact that more than 30% of all purchases over the past few years have been investors buying at deep discounts. Of course, the lack of adequate inventory in the past couple of years has contributed to competition among investors, and that has resulted in price increases. However, this really isn’t an indicator of the overall market.

A recent article at USNews.com presents some Census Bureau data and an interesting opinion about what it means. The Census Bureau data indicates that the size of newly built single-family homes is increasing. When the crash reached full speed back in 2007, there followed a decrease in home sizes of more than 7 percent from the 2,272 square foot average size at the start of the year.
Now that markets are improving, starting in 2012 home sizes have begun to rise again. As of the last quarter of 2013, the four-quarter moving average of median new home size rose to 2,471 square feet. That’s an increase of 17 percent from the cycle low. On first glance, one may assume that this is an indicator of an improving economy, but it’s really just the opposite.

Housing is local again! Our consultants and clients see vastly different housing markets all across the country. I categorize them into three groups (booming, busting, and muddling) in this article and provide anecdotes from our team members—but it is really more complicated than that.

Booming Markets

I find three primary reasons that certain housing markets are booming:

1.

I cam across this interesting article while looking for potential places to look for properties. In this article, it goes over the 10 cites with a big rise in inventory. Here is a link to the article: http://www.realtor.com/news/markets-rising-inventory/

It's no surprise that the majority of these cites are located in California and Florida respectively. One city (Stockton, CA) had a rise of 101 percent! With the markets rising with the temperature, these are places that you could find some good deals.

Home prices increased 12.2 percent from February 2013 to February 2014, marking the 24th consecutive month of year-over-year growth, according to the most recent CoreLogic Home Price Index Report. That trend is expected to continue, with a 10.5 percent year-over-year increase projected for March. There was also a slight month-to-month increase of 0.8 percent from January to February.

Prices in California grew the most, with a 19.8 percent year-over-year increase in February. Of the 100 metropolitan statistical areas studied by CoreLogic, 96 reported year-over-year increases in home prices. While prices across the nation have continued upward for two years, February's
"Price increases should moderate over the next year..."

I am a real estate broker in Salt Lake City and here is the lastest broker report from the Board of Realtors:

Dear Broker,
The Salt Lake Board of Realtors® is pleased to inform you of the Board’s most recent housing statistics. As a broker, this data is exclusively shared with you first. Please feel free to share this information with your agents and when talking with your clients.

In February, Realtors® sold 852 homes in Salt Lake County. That’s down 1 percent compared to 863 home sales in February 2013.

Three of the five wealthiest neighborhoods in America are in the Washington, D.C., area, and a quick look at residential real estate numbers shows that one of the area's housing markets is heating up.

Power House: Virginia real estate
Thursday, 27 Mar 2014 | 1:48 PM ET
Edward Berenbaum of Century 21 Redwood Realty, provides insight on the current housing market in Virginia. He shares three listings currently for sale.
CNBC's "Power House" talked to a real estate agent about Arlington, Va., just over the D.C. line, and looked at homes in three price ranges.
The median home price in Arlington stands at $514,500, up 6 percent in the last year. The average time on the market for a house is currently 50 days—down 15 percent from a year ago—indicating the market is getting hot.