Florida's Housing Market: More Closed Sales, Rising Prices in June 2015

Florida's housing market reported more closed sales, higher median prices and tightening inventory in June, according to the latest housing data released by Florida Realtors^®. Closed sales of existing single-family homes statewide totaled 27,729 last month, up 19.6 percent over June 2014.
"June marked the 43rd month in a row – more than 3½ years – that median sales prices rose year-over-year for both single-family homes and townhouse-condo properties," says 2015 Florida Realtors President Andrew Barbar, a broker with Keller Williams Realty Services in Boca Raton.
"Florida's housing market shows positive momentum with a rising influx of people moving to the Sunshine State and a steadily improving jobs outlook – in June, the state's unemployment rate was 5.5 percent. Statewide, new listings for single-family homes in June rose 10 percent year-over-year, while new townhouse-condo listings rose 5.2 percent.

"Meanwhile, June's new pending sales for single-family homes increased 10.4 percent from a year ago; new pending sales for townhouse-condo properties rose 2.7 percent."

The statewide median sales price for single-family existing homes last month was $203,500, up 10 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in June was $152,076, up 7.9 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in May 2015 was $230,300, up 8.6 percent from the previous year; the national median existing condo price was $216,400. In California, the statewide median sales price for single-family existing homes in May was $485,830; in Massachusetts, it was $341,000; in Maryland, it was $275,292; and in New York, it was $226,500.

Looking at Florida's townhouse-condo market, statewide closed sales rose last month with a total of 10,991, up 14.6 percent compared to June 2014. The closed sales data reflected fewer short sales in June: Short sales for townhouse-condo properties declined 36.1 percent while short sales for single-family homes dropped 30.4 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.

"With the continued growth in both sales and prices in Florida, it raises the question of whether the market is starting to overheat," says Florida Realtors Chief Economist Dr. John Tuccillo. "The decline in inventories to seller-market levels, and the decline in days on market, tend to suggest that possibility as well. But there are mitigating factors here. First of all, the real inventory pressure is in the lowest price tiers, which has been the case for several months. Secondly, going forward, the rise in condo sales and prices will be mitigated by increased supply in the form of condo towers now under construction.

"And finally, the Federal Reserve will soon be raising interest rates, which will have a dampening effect on demand."

Inventory continues to tighten, with a 4.6-months' supply in June for single-family homes and a 5.5-months' supply for townhouse-condo properties, according to Florida Realtors. Most analysts consider a 6-month supply of inventory as the benchmark for a balanced market between buyers and sellers.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.98 percent in June 2015, down from the 4.16 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors' website under "Research." Association members (login required) also have access to local data specific to their market.

Reprinted courtesy of Florida Realtors. © 2015 Florida Realtors® Original post here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=325909

US home sales surged in June to fastest pace in 8-plus years

US home sales surged in June to fastest pace in 8-plus years

By JOSH BOAK, AP Economics Writer

WASHINGTON (AP) -- Americans bought homes in June at the fastest rate in over eight years, pushing prices to record highs as buyer demand has eclipsed the availability of houses on the market.

The National Association of Realtors said Wednesday that sales of existing homes climbed 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million, the highest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has risen just 0.4 percent.

The median home price has climbed 6.5 percent over the past 12 months to $236,400, the highest level - unadjusted for inflation - reported by the Realtors.

Home-buying has recently surged as more buyers have flooded into the real estate market. Robust hiring over the past 21 months and an economic recovery now in its sixth year have enabled more Americans to set aside money for a down payment. But the rising demand has failed to draw more sellers into the market, limiting the availability of homes and sparking higher prices that could cap sales growth in the coming months.

"The recent pace can't be sustained, but it points clearly to upside potential," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Nationally, a mere five months' supply of homes was on the market in June, compared with 5.5 months a year ago and an average of six months in a healthy market.

Some markets are barely adding any listings. The condominium market in Massachusetts contains just 1.8 months' supply, according to a Federal Reserve report this month. The majority of real estate agents in the Atlanta Fed region - which ranges from Alabama to Florida - said that inventories were flat or falling over the past year.

Some of the recent sales burst appears to come from the prospect of low mortgage rates beginning to rise as Fed officials consider raising a key interest rate from its near-zero level later this year. Past efforts by the Fed officials to reduce their stimulus efforts have led to higher mortgage rates, creating expectations that homebuyers will face increased borrowing costs later this year.

That possibility is prompting some buyers to finalize sales before higher rates make borrowing costs prohibitively expensive, noted Daren Blomquist, a vice president at RealtyTrac, a housing analytics firm.

The premiums that the Federal Housing Administration charges borrowers to insure mortgages are also lower this year, further fueling buying activity, Blomquist said.

It's also possible that more homebuyers are aggressively checking the market for listings, enabling them to act fast with offers despite the lack of new inventory.

"Buyers can more quickly be alerted of new listings and also more conveniently access real estate data to help them pre-search a potential purchase before they even step foot in the property," said Blomquist, adding that this could help to explain why sales growth have dramatically outpaced new listings so far this year.

Properties typically sold last month in 34 days, the shortest time since the Realtors began tracking the figure in May 2011. There were fewer all-cash, individual investor and distressed home sales in the market, as more traditional buyers have returned.

Sales improved last month in all four regions: Northeast, Midwest, South and West.

Still, the limited supplies could prove to be a drag on sales growth in the coming months.

Ever rising home values are stretching the budgets of first-time buyers and owners looking to upgrade. As homes become less affordable, demand will likely taper off.

Home prices have increased at more than three times the pace of wages. The average hourly wage has risen just 2 percent over the past 12 months to $24.95 an hour, according to the Labor Department.

Some would-be buyers are also spurning their limited options on the market. Tony Smith, a real estate broker in Charlotte, North Carolina, said some renters shopping for homes are now choosing instead to re-sign their leases and wait until a broader and better selection of properties comes onto the market.

Construction has yet to satisfy rising demand, as builders are increasingly focused on the growing rental market.

Approved building permits rose increased 7.4 percent to an annual rate of 1.34 million in June, the highest level since July 2007, the Commerce Department said last week. Almost all the gains came for apartment complexes, while permits for houses last month rose only 0.9 percent.

The share of Americans owning homes has fallen this year to a seasonally adjusted 63.8 percent, the lowest level since 1989.

Real estate had until recently lagged behind much of the six-year rebound from the recession, hobbled by the wave of foreclosures that came after the housing bubble began to burst roughly eight years ago.

But the job market found new traction in early 2014. Employers added 3.1 million jobs last year and are on pace to add 2.5 million jobs this year. As millions more Americans have found work, their new paychecks are increasingly going to housing, both in terms of renting and owning.

Low mortgage rates have also helped, although rates are now starting to climb to levels that could slow buying activity.

The average 30-year fixed rate was 4.09 percent last week, according to the mortgage giant Freddie Mac. The average has risen from a 52-week low of 3.59 percent.

Reposted courtesy of Josh Boak and The Associated Press. © 2015 The Associated Press. All rights reserved. Original article published here: http://hosted.ap.org/dynamic/stories/U/US_HOME_SALES?SITE=AP

Renting and flipping new Miami condos is all the rage

The majority of new condo buyers in Miami have been looking to capitalize on their investments by flipping the units or renting them out, according to research by CraneSpotters.

Looking at the four largest condo towers completed in greater downtown Miami since construction resumed in 2011, anywhere from 45 percent to 96 percent of the units sold by the developers in each building were placed back on the market or put up for rent. That indicates a high level of investor ownership in those buildings, and also raises some questions.

With more than 18,100 condo units either under construction, planned with approvals or proposed in greater downtown Miami, according to CraneSpotters.com, is there enough rental demand at higher price points to support that many new units? And how will they be impacted by the nearly 7,800 apartments in the development pipeline?

The recently completed condo towers in Miami sold in the mid-$400s per square foot, but the average price per square foot for new projects is more than double that now, CraneSpotters principal Peter Zalewski said. When the sales prices climb, so must rents. Are there enough high-earning renters in Miami to fill those units?

"We strongly believe that when Brickell CityCentre opens and people will be able to walk to a shopping mall with a Saks Fifth Avenue, 11 cinemas and 500,000 square feet of retail, Brickell condos will raise in value and so will rents," said Carlos Rosso, head of the Related Group's condominium division. "Twenty-four-hour urban living close to the workplaces is and will continue to be in high demand."

Here’s a look at how the four largest recently completed condo projects in Miami have performed:

Nine at Mary Brickell Village

• Units: 390
• Units sold/price per square foot: 300 for $501
• Active MLS listings/price per square foot: 17 for $469
• Units resold: 0
• Asking rentals/price per square foot: 95 for $2.78
• Closed rentals/price per square foot: 23 for $2.47

1100 Millecento Residences

• Units: 382
• Units sold/price per square foot: 376 for $435
• Active MLS listings/price per square foot: 99 for $403
• Units resold: 1
• Asking rentals/price per square foot: 67 for $2.59
• Closed rentals/price per square foot: 120 for $2.25

BrickellHouse

• Units: 374
• Units sold/price per square foot: 374 for $504
• Active MLS listings/price per square foot: 91 for $627
• Units resold: 7
• Asking rentals/price per square foot: 64 for $3.63
• Closed rentals/price per square foot: 77 for $3.24

MyBrickell

• Units: 192
• Units sold/price per square foot: 192 for $360
• Active MLS listings/price per square foot: 31 for $379
• Units resold: 8
• Asking rentals/price per square foot: 19 for $2.67
• Closed rentals/price per square foot: 126 for $2.01

It looks like some of these condo towers are more like apartment buildings. Projects in other South Florida cities have behaved quite differently. For instance, in Broward County’s largest newly completed condo tower:

Beachwalk – Hallandale Beach

• Units: 300
• Units sold/price per square foot: 289 for $448
• Active MLS listing/price per square foot: 49 for $532
• Units resold: 1
• Asking rentals/price per square foot: 6 for $2.97
• Closed rentals: 0

There's a fair amount of resale activity, but not many rentals. However, Beachwalk has a rental pool system managed by the hotel management that doesn't show up on MLS, so many unit owner participate in that. CraneSpotters.com also looked at the largest recently completed condominium in Palm Beach County, Bay Colony Juno Beach, and found only two of its 121 units on the rental market, although it had 23 resales.

Reposted courtesy of Brian Bandell and South Florida Business Journal

Original post appeared here: http://www.bizjournals.com/southflorida/news/2015/07/10/renting-and-flipping-new-miami-condos-all-the-rage.html?ana=e_sflo_bn_newsalert&u=kjqD4NmNTYzv1JVDYuD+8WZzhLb&t=1436798791

Q&A: FICO executive on credit scoring changes

 

NEW YORK (AP) – July 13, 2015 – Your credit score is an important bit of information that determines a lot about your financial life. But if you wanted to be in the loop, it came with a price tag.

That never seemed fair, but now consumers can increasingly see their FICO score for free – the three-digit number that determines if you'll be approved for a credit card or loan.

Fair Isaac Corp., the company that developed the FICO score, has been working with credit card issuers and lenders to allow them to show customers their FICO score online or on monthly statements. Seeing the score frequently pushes consumers to improve their finances, says Jim Wehmann, a vice president of FICO's scores business.

People with higher FICO scores, which generally range from 300 to 850, are offered lower interest rates on mortgages or have an easier time getting approved for credit cards or loans.

FICO scores are calculated using information from your credit report, a detailed list of your past and current debts. But roughly 45 million Americans have no credit history or credit score, according to the Consumer Financial Protection Bureau. FICO is developing a scoring system for these so-called "credit invisibles."

Wehmann offered insight on what you should know about your credit score. Excerpts have been edited for clarity and length.

Q: What's the fastest way to improve your FICO score?
A: Always make your payments on time. Roughly 35 percent of your score is based on payments. That's going to be the most important factor.

Q: What hurts your score the most?
A: Not making your payments on time. Delinquencies and other negative events – collection items, bankruptcy, foreclosures – will have a significant negative impact on your score.

Q: What's the biggest mistake people make when it comes to their FICO score?
A: Not fully understanding that the behavior that they take today could impact their score and their ability to get credit later.

Q: It has become easier to get a free FICO score. Big credit card issuers, such as Discover, Chase, offer the score to their customers for free. How did that happen?
A: We launched something called FICO Score Open Access, which allows lenders to freely share with consumers the score that the lender is using. We launched the program two years ago and it's grown significantly. About 65 million people right now are eligible to get their FICO score for free through their lender, and we expect that number to grow over the coming months. There's a lot of attention given to the largest financial institutions, but we're working with credit unions, community banks and smaller organizations.

Q: Is it true that each person has several different FICO scores?
A: Yes. We have a few different versions. Some lenders use older versions of the scoring methodology, and some are for specific types of lenders.

Q: Who are the credit invisibles?
A: They're called invisibles for a couple of reasons. One is they don't have credit scores. Some don't have credit files, so they have no credit history; no credit card or mortgage or auto loan or personal loan. No data has been captured by the credit bureaus. They're young people who are just starting out, who don't have any credit, or they may be immigrants to the country where they don't have a U.S.-based credit history.

Q: What information does FICO need to create a score?
A: From a FICO perspective, they are unscorable because we don't yet have six months of history on them, or we haven't had an update in six months.

Q: If there's no credit history, what information will you use to build their score?
A: Wireless or landline or cable bills.

Q: When will that FICO score be used?
A: We're in a pilot phase. We've built the score and we are right now working with lenders for them to validate the score based on their actual applications.

Q: When will it be ready?
A: We have 12 lenders in the initial pilot, so we're going to wait until they do their validations before we make it widely available to all lenders, probably by the end of the year or first quarter of next year.

Copyright © 2015 The Associated Press, Joseph Pisani. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reposted Courtesy of Associated Press. Original Post Appeared Here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=3&id=325542