REALTOR® Magazine-Daily News-Housing Expert: 'The Suburban Century Is Over'

REALTOR® Magazine-Daily News-Housing Expert: 'The Suburban Century Is Over'

Real Estate Outlook: After the Credits

Real Estate Outlook: After the Credits
by Kenneth R. Harney

The Federal Reserve's latest region-by-region analysis of the national economy, the so-called "Beige Book" released last week, has an important message for anyone interested in real estate: It's a gradual recovery out there, but it's for real and it should prove durable. The Fed's report, which is based on detailed assessments from 12 member banks spread around the country, noted that the home purchase tax credits have stimulated sales as they were intended to do. But what happens when they're gone? Most economists in the Federal Reserve System "think that low interest rates and fairly low prices will continue to make the (housing) market attractive for prospective buyers," says the report. Some dramatic pickups in local sales this spring were highlighted by the Fed -- the state of Maine, for instance, saw a 63 percent year over year jump in the latest month, Rhode Island sales were up by 26 percent and New York 20 percent. The Fed didn't mention them by name, but there are dozens of other metropolitan markets that have racked up hefty gains as well: hard-hit Miami saw house and condo sales jump 31 percent in April over the same month the year before. Baltimore sales jumped by 26 percent, Washington DC by 36 percent. Metropolitan Nashville, Tennessee, saw sales increase by 27 percent. Though most of these areas are still reporting either flat or slightly negative prices, a handful are beginning to see positive appreciation. San Francisco and San Diego both are looking at 5 percent appreciation, according to the IAS 360 housing price index released last week. Palm Beach, Florida prices are up 3 percent. And Orange County, California, prices up by 1.4 percent, according to the IAS index. Now, no one is predicting a break-out of big-time home price appreciation across the country anytime soon. But the IAS numbers suggest that home buyers and owners can at least be confident that we've reached or passed the bottom in most areas. Nationwide, the index found prices in April were up by almost one percent. Of course there are still some major roadblocks in the way of any full economic and housing market recovery. Tops on the list: the naggingly high and persistent unemployment numbers. Although the latest federal jobs report looked good at first glance -- a net 431,000 gain and a decline in the unemployment rate to 9.7 percent from 9.9 -- most of those came from temporary Census-taker hirings. So, as usual, the picture is complicated. But overall, we think the Federal Reserve probably has the outlook pegged about right.

Expiration of Home Buyer Tax Credit Won't Dissuade Most from House Hunting

Expiration of Home Buyer Tax Credit Won't Dissuade Most from House Hunting

The 2010 Home Buyer Tax Credit incentive program was credited with stimulating the real estate market. But the 2010 Prudential Real Estate Outlook Survey released April 28 by Prudential Real Estate and Relocation Services shows that most buyers will not be deterred from purchasing a home without the tax credits on the table. That's a good thing, considering the credits expired April 30. “The federal home buyer tax credits played a key role in increasing market activity," says James Mallozzi, chairman and CEO of Prudential Real Estate and Relocation Services. "However, it is part of a larger fundamental shift that most importantly includes low mortgage rates and falling home prices.” Consumers are certainly noticing that shift. Seventy percent of survey respondents said now is a "great" or "good" time to buy a home. And when asked whether the expiration of the home buyer tax credit would affect their decision to purchase a home, just 8 percent said it would make them much less interested in the prospect. The majority of respondents—65 percent—said it would have little or no effect on their interest in buying a house. The Prudential Real Estate Outlook Survey was administered from April 15-20, 2010, to 1,000 U.S. consumers with at least $35,000 in annual household income. Want more information? Read the full 2010 Prudential Real Estate Outlook Survey or view the supporting charts and graphs. Additionally, we've developed a news release template about the survey that you can customize and share with your local media (attached below). While PRERS' media outreach focuses on the national level, please use the template to connect with your local reporters and to further raise your company's profile through this important and timely topic.

Fast Facts

Fast Facts
Calif. median home price: March 2010: $301,790 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region March 2010: Santa Barbara So. Coast $890,000(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region March 2010: High Desert $122,970 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 2009: 64 percent (Source: C.A.R.)
Mortgage rates - week ending 4/22/10 30-yr. fixed: 5.07 Fees/points: 0.7% 15-yr. fixed: 4.39% Fees/points: 0.6% 1-yr. adjustable: 4.22% Fees/points: 0.5% (Source: Freddie Mac)

C.A.R. Green Tip of the Week: Confused about plastics?
Experts have reached a consensus and recommend consumers avoid these varieties of plastics--identified by a triangle and number on the bottom of most containers--for the following reasons:

• #3 Polyvinyl Chloride (PVC) commonly contains di-2-ehtylhexyl phthalate (DEHP), an endocrine disruptor and probable human carcinogen, as a softener.
• #6 Polystyrene (PS) may leach styrene, a possible endocrine disruptor and human carcinogen, into water and food.
• #7 Polycarbonate contains the hormone disruptor bisphenol-A, which can leach out as bottles age, are heated, or exposed to acidic solutions. Unfortunately, #7 is used in most baby bottles and five-gallon water jugs and in many reusable sports bottles.

The Consumer Confidence Index rose to 57.9 in April (1985=100) compared with 52.3 in March, the Conference Board reported yesterday. The Present Situation Index increased to 28.6 in April from 25.2 in March, and the Expectations Index improved to 77.4 from 70.4 last month, according to the report.

“Consumer confidence, which had rebounded in March, gained further ground in April. The Index now is at its highest reading in about a year and a half,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers’ concerns about current business and labor market conditions eased again. And, their outlook regarding business conditions and the labor market was also more positive than last month. Looking ahead, continued job growth will be key in sustaining positive momentum."

Consumers' assessment of current conditions was more positive in April than in March, with those claiming business conditions are "good" increasing to 9.1 percent in April compared with 8.5 percent in March, while those claiming conditions are "bad" decreasing to 40.2 percent in April compared with 42.1 percent in March. Consumers' appraisal of the job market also improved, according to the report.

Case Shiller: Home prices mixed in February
The 10-City and 20-City Composites tracked as part of the S&P/Case-Shiller Home Price Indices showed improvements in February. For the first time since December 2006, the annual rates of changes for the two Composites were positive, although 11 of the 20 metro areas experienced year-over-year declines. The 10-City Composite rose 1.4 percent in February compared with a year ago, and the 20-City Composite increased 0.6 percent compared with February 2009. Eighteen of the 20 metro areas and both Composites showed an improvement in February compared with January.