By Julie Schmit, USA TODAY
The housing industry is poised to gain strength this year after coming off one of its worst years ever in 2010, economic forecasts and new data released Wednesday show.
One cause for optimism: Building permits for new single-family homes rose 5.5% last month, the third consecutive monthly increase and the strongest showing since March, the Commerce Department said.
That sets the stage for more home construction later this year as the economy improves, says Celia Chen, economist at Moody's Analytics.
"The trend is up," Chen says.
But it'll be a slow slog. The previous two years have been the worst on record for home builders in at least 50 years. Nationwide, home prices are down almost 30% from their 2006 peak. A new USA TODAY survey of 44 top economists finds that 48% say average home prices won't hit bottom until sometime this year, and 27% say it'll take longer.
The housing market recovery "will be two baby steps forward and one backward," says Joel Naroff, chief economist at Naroff Economic Advisors.
The theme of slow improvement is likely to be repeated in December's existing home sales data, to be reported today. A small gain is expected over November, says IHS Global Insight economist Patrick Newport.
He also says that December's permit numbers indicate that housing construction "may be set to grow again." But some of December's jump may have been driven by builders trying to get permits ahead of 2011 building code changes in California, New York and Pennsylvania, the Commerce Department said.
Newport also cautions that home-building numbers "are still really awful." Housing starts, for example, fell 4.3% in December as cold weather and snow delayed construction. But Newport says other factors will continue to depress housing starts.
Those include low prices on foreclosed homes, which makes it hard for builders to turn profits on new homes, and tight financing for home builders and buyers. What's more, the recession sharply reduced the rate of household formation, which means that more families are doubling up in homes vs. each getting their own, Newport says.
Moody's doesn't see home construction getting back to more historically normal levels until at least 2012, Chen says. USA TODAY's economist survey indicates that 669,000 new home starts are likely this year, up 15% from 2010.
The key is job creation, says Lawrence Yun, chief economist with the National Association of Realtors. When more people are working, and earning higher incomes, home buying increases. IHS expects the economy to add 2.5 million jobs this year and 2.7 million next year.
"The (housing) market appears to have hit bottom, and now we're trying to get back to normal," Yun says.
Tuesday, January 25, 2011
Friday, January 21, 2011
Back to the Blog!
Hey Everyone!
I have returned to my blog. Tell you the truth, I actually forgot I even had it; I couldn't even remember what blog site I used. Now that I've found it, I intend to use it and hopefully share information that will be helpful, interesting and fun to read.
As you may have noticed, my last post was in 2007 (seems like a very long time ago, especially if you are counting in real estate years). The market has been through some changes since then (most people are trying to forget them) but it's important to stay ahead of the market and I feel like we were able to do that; I had my most productive years since 2007 and I'm happy to say I've helped many new clients as well as repeat clients with all their real estate needs. 2010 was a great year, but I am really looking forward to 2011. Our office has already seen a boost in activity since the first of the year, there's more people out looking to buy and sellers are feeling a little more confident. We're excited about the future! I'll be updating you on the Richmond, VA housing market over the next few weeks, so keep checking back in so you stay ahead of the game!
Best,
Graham
I have returned to my blog. Tell you the truth, I actually forgot I even had it; I couldn't even remember what blog site I used. Now that I've found it, I intend to use it and hopefully share information that will be helpful, interesting and fun to read.
As you may have noticed, my last post was in 2007 (seems like a very long time ago, especially if you are counting in real estate years). The market has been through some changes since then (most people are trying to forget them) but it's important to stay ahead of the market and I feel like we were able to do that; I had my most productive years since 2007 and I'm happy to say I've helped many new clients as well as repeat clients with all their real estate needs. 2010 was a great year, but I am really looking forward to 2011. Our office has already seen a boost in activity since the first of the year, there's more people out looking to buy and sellers are feeling a little more confident. We're excited about the future! I'll be updating you on the Richmond, VA housing market over the next few weeks, so keep checking back in so you stay ahead of the game!
Best,
Graham
Tuesday, October 16, 2007
Health of Richmond Housing Market
By CHRISTINE CHMURA
TIMES-DISPATCH COLUMNIST
The downturn in the housing industry is yielding some sobering numbers in most parts of the country.
Sales of existing homes are on a six-month slide, says the National Association of Realtors, with the purchase of new homes falling to the lowest level in seven years, reports the U.S. Commerce Department.
According to the Case Shiller home price index of 20 major metropolitan areas, home prices fell 3.9 percent over the year ending with July -- the largest drop since the index was created in 1987. New construction starts in August fell to their lowest level in 12 years, and foreclosures are way up, double what they were a year ago.
And yet, the real estate climate in Richmond has remained strong.
While the area has not been immune to the effects of the sub-prime mortgage implosion, the Richmond region has felt only a modest impact.
The Richmond Association of Realtors recently reported that the sale prices of homes in Richmond have increased year over year, despite a dip in sales volume. Also notable is Richmond's foreclosure rate for the first half of 2007, which was the lowest in the country's top 100 metro areas -- down 1 percent compared with the first six months of 2006, according to RealtyTrac.
With so many areas of the country feeling the full brunt of the market downturn, why has the real estate climate in Richmond remained relatively bright? At least three factors contribute to the health of our local housing market.
Affordability. Home prices in the Richmond region are generally affordable. The median home price in the area is just under $240,000, which means most homeowners in Richmond do not have to borrow heavily against their annual household income to afford their homes. In fact, the mortgage-to-income ratio in the metropolitan area is at a more-than-manageable 4-to-1, which most banks consider ideal.
Homeowners from other metropolitan areas have not fared as well.
Compare Richmond's housing prices to the likes of San Diego, New York, Boston and other major cities. Homeowners in these large markets have had to borrow heavily against their incomes, putting their mortgage-to-income ratios in a tenuous 7-to-1 range.
Affording these hefty mortgages led to some creative financing, including many of the subprime loans at the heart of the mortgage hardships. The first few years of the loan may start at an attractive 4 percent interest rate, but rising rates have meant increases in variable mortgages, which are now topping 7 percent. Suddenly, the homes that over-leveraged families have been living in have become unaffordable.
That has not happened on a significant scale in Richmond because of the broad affordability of homes in the local market.
Supply. The balance between supply and demand also contributes to the health of the local market. Again, unlike many other large urban centers -- most notably Washington and Miami, where condominium development, in particular, left a colossal glut of units -- the Richmond region has had a more moderate rate of new construction over the past five years.
On the condominium front, while there have been some high-profile developments, including Rocketts Landing, the Vistas on the James, and Riverside on the James, most of the building has focused on in-fill and restoration projects, which has kept the pace of development in line with consumer demand.
Stability of housing prices. Finally, the price of housing in the Richmond region will likely continue to be stable in the near term and remain on an upward trend.
According to the Office of Federal Housing and Enterprise Oversight, quality-adjusted home prices rose 6.9 percent in the Richmond region for the year ending with the second quarter of 2007.
That's a consequence of not only the supply-demand balance, but also the strength and diversity of our local economy. The unemployment rate in the region is much lower than that of the nation and employment is growing at a slightly faster pace than the nation.
The fact that Richmond is an attractive place to live and work will continue to create housing demand throughout the region.
Our highway network, expanded airport, historic character and other factors all will continue to make central Virginia a location where people will want to put down long-term roots.
And because Richmond will continue to be a great place to call home, it also will continue to be a wonderful place to buy one, irrespective of what is happening elsewhere.
TIMES-DISPATCH COLUMNIST
The downturn in the housing industry is yielding some sobering numbers in most parts of the country.
Sales of existing homes are on a six-month slide, says the National Association of Realtors, with the purchase of new homes falling to the lowest level in seven years, reports the U.S. Commerce Department.
According to the Case Shiller home price index of 20 major metropolitan areas, home prices fell 3.9 percent over the year ending with July -- the largest drop since the index was created in 1987. New construction starts in August fell to their lowest level in 12 years, and foreclosures are way up, double what they were a year ago.
And yet, the real estate climate in Richmond has remained strong.
While the area has not been immune to the effects of the sub-prime mortgage implosion, the Richmond region has felt only a modest impact.
The Richmond Association of Realtors recently reported that the sale prices of homes in Richmond have increased year over year, despite a dip in sales volume. Also notable is Richmond's foreclosure rate for the first half of 2007, which was the lowest in the country's top 100 metro areas -- down 1 percent compared with the first six months of 2006, according to RealtyTrac.
With so many areas of the country feeling the full brunt of the market downturn, why has the real estate climate in Richmond remained relatively bright? At least three factors contribute to the health of our local housing market.
Affordability. Home prices in the Richmond region are generally affordable. The median home price in the area is just under $240,000, which means most homeowners in Richmond do not have to borrow heavily against their annual household income to afford their homes. In fact, the mortgage-to-income ratio in the metropolitan area is at a more-than-manageable 4-to-1, which most banks consider ideal.
Homeowners from other metropolitan areas have not fared as well.
Compare Richmond's housing prices to the likes of San Diego, New York, Boston and other major cities. Homeowners in these large markets have had to borrow heavily against their incomes, putting their mortgage-to-income ratios in a tenuous 7-to-1 range.
Affording these hefty mortgages led to some creative financing, including many of the subprime loans at the heart of the mortgage hardships. The first few years of the loan may start at an attractive 4 percent interest rate, but rising rates have meant increases in variable mortgages, which are now topping 7 percent. Suddenly, the homes that over-leveraged families have been living in have become unaffordable.
That has not happened on a significant scale in Richmond because of the broad affordability of homes in the local market.
Supply. The balance between supply and demand also contributes to the health of the local market. Again, unlike many other large urban centers -- most notably Washington and Miami, where condominium development, in particular, left a colossal glut of units -- the Richmond region has had a more moderate rate of new construction over the past five years.
On the condominium front, while there have been some high-profile developments, including Rocketts Landing, the Vistas on the James, and Riverside on the James, most of the building has focused on in-fill and restoration projects, which has kept the pace of development in line with consumer demand.
Stability of housing prices. Finally, the price of housing in the Richmond region will likely continue to be stable in the near term and remain on an upward trend.
According to the Office of Federal Housing and Enterprise Oversight, quality-adjusted home prices rose 6.9 percent in the Richmond region for the year ending with the second quarter of 2007.
That's a consequence of not only the supply-demand balance, but also the strength and diversity of our local economy. The unemployment rate in the region is much lower than that of the nation and employment is growing at a slightly faster pace than the nation.
The fact that Richmond is an attractive place to live and work will continue to create housing demand throughout the region.
Our highway network, expanded airport, historic character and other factors all will continue to make central Virginia a location where people will want to put down long-term roots.
And because Richmond will continue to be a great place to call home, it also will continue to be a wonderful place to buy one, irrespective of what is happening elsewhere.
Tuesday, September 25, 2007
As national home values fall, the Richmond real estate market remains stready. Our firm, at Coldwell Banker Johnson & Thomas, has had the same number of closed transactions this year as we did at this time last year. There's more inventory available now, but pricing remains a constant. It continues to be a good time to buy and or sell in Richmond, VA.
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