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New-Home Sales Gain Momentum

by Associated Press

 New-Home Sales Gain Momentum

After three straight months of declines, sales of new homes got a boost last month, jumping 11 percent, according to the Commerce Department’s latest new-home sales report released Monday.

New-home sales rose in March to a seasonally adjusted rate of 300,000 homes, up from February’s 250,000. However, the number is still far from what economists view as a healthy 700,000-a-year pace for the sector.

The median price of a new home increased 3 percent from February to $213,800. New-home prices are about 34 percent higher than the median price of existing homes, according to economists.

Regionally, new-home sales saw the biggest boost in the Northeast, jumping nearly 67 percent in March. The West saw an increase in new-home sales last month by nearly 26 percent; the Midwest posted a 13 percent increase; and in the South, new-home sales dipped 0.6 percent.

The new-home market continues to be battered by a high number of foreclosures that continue to dampen home prices across the country. With 1.2 million foreclosures forecast this year, the new-home sales market may not see a major turnaround for years, according to RealtyTrac Inc.

However, while residential construction has decreased considerably in recent years, reports have recently shown building permits have increased 28 percent for apartment and condo buildings.

Source: “The number of people who bought new homes jumped 11 pct., but pace is far below healthy level,” Associated Press (April 25, 2011)

Analysts say housing in on way up!

by Jon Prior - Monday Morning Cup of Coffee - Housing

Daily Real Estate News  |  April 25, 2011  |  Housing on the Way Up 


Analysts at both Standard & Poor's and Barclays Capital agree that the uptick in home resales last month is a favorable sign of things to come. Because pending home sales — an indicator of future activity — were up in February, S&P believes transaction volume will rise for April.

Barclays, meanwhile, says March's 3.7 percent gain in existing-home sales merely reinforces its position that the housing market actually hit bottom in late 2010.

Source: “Monday Morning Cup of Coffee,” Housing Wire, Jon Prior (04/25/11)
 

Vacation Home Sales on the Rebound

by Tim Hart

Some of the hardest-hit cities in the housing downturn were from vacation home areas, but now these areas are seeing a surge in sales.

Condo sales in Hawaii and Florida are inching upward, Housing Predictor reports. For example, in the first two months of 2011, existing condo sales in Oahu, Hawaii, increased nearly 21 percent and the median prices on these units jumped 7 percent higher than more than a year ago.

“We’re definitely seeing continual strengthening of the market as more buyers are taking advantage of low prices and low rates to buy second homes and vacation homes,” says Jeff Proster, president of Brookfield Homes in Hawaii.

Meanwhile, closed transactions of existing condos in Miami jumped 58 percent higher in February compared to a year ago.

“We are even seeing instances in certain neighborhoods with multiple offers above asking price,” says Jack Levine, the Miami REALTORS® chairman.

Florida has seen improvement in its sales across the state with sales jumping 29 percent on condos and 13 percent for single family homes. However, seven out of 10 sales in the state were either foreclosures or short sales. Half of all sales also were from cash buyers.

Source: “Vacation Home Sales Surge Higher,” Housing Predictor (March 23, 2011)

Yes, Virginia, there is a recovery!

by Tim Hart

This article is all about the good things happening in the Gallatin Valley and positive economic trends - I follow Alex - great and passionate writer

Yes, Virginia, there is a recovery

by Alex Tenenbaum - printed in B2B - a special section by the Bozeman Daily Chronicle http://www.bozemandailychronicle.com/app/special_sections/b2b_011111/ 

Things look good for the Gallatin Valley in 2011. Really good. Stupendous, in fact.

Nationally, I’m predicting the arrival of a fiery, rampaging bull market that will gore unemployment into bloody oblivion. Also, you should look for congress to get carried away and slash taxes to zero. Uncle Sam doesn’t want your money anymore, and not to worry, that pesky deficit will vaporize like morning dew.

Locally, I’d be on the watch for isolated dollar storms, with quarter-size hail in the form of quarters. And if the holidays rendered you a tad plump, this will be your year. I suggest wearing 3-D glasses to get the full effect as you watch your paunch melt away like vanilla ice cream under a summer sun -- though hopefully without the sticky mess. 

OK, so 2011 won’t defy the laws of finance, meteorology or biology. But this is the year we’ll loosen up, forge ahead and make reins from our bootstraps to drive this valley into healthy and sustainable growth.

Does that sound overly optimistic? Just look at the numbers.

Over the last two years we’ve watched the DOW rise 36 percent. At the time this goes to print, the index has yet to climb just 20 percent to reach its all-time high of 14,093. Perhaps 20 percent won’t happen in the next twelve months, but even conservative economists seem to expect DOW 14,093 by the end of 2012. And considering that a number of market wizards, like Montana’s own Brian Wesbury, say a fair market valuation of the index would put the DOW somewhere in the 15,000’s, that record high doesn’t seem too far off.

That’s all well and good if we’re talking about national recovery, but the Gallatin Valley seems to be faring far better.

Forbes named Bozeman the third fastest growing small town in the nation citing our 10.5 percent population growth from 2006 to 2009, which means blessedly few houses left empty, unlike many other parts of the country. Construction is still sluggish, but our growth rate should make the industry at least viable, and with the Yellowstone Club back on track with a new business model of selling homes, instead of just land, the building slump may not be around for long.

Outside the construction industry, optimism comes with fewer reservations. Local car salesmen say that their Black Friday week between Christmas and New Year’s went better than expected, recounting that a few families even returned to pre-recession behavior with what seemed like $30,000 impulse buys.

As B2B readers already know, quite a few companies in the technology and manufacturing industries are expanding, and that means hiring. RightNow Technologies, Bozeman’s largest private employer, continues to hire after reporting an astounding 25 percent growth in year over year revenue for the third quarter, while Mystery Ranch Backpacks is taking on about 30 staff to handle its snowballing military buys. West Paw Design continues to grow sales overseas and has placed a number of job postings in the Chronicle.

Other tech and manufacturing firms aren’t necessarily hiring, but perhaps they should. TowHaul, for example, has orders on backlog for the next year and a half, and apparently a patient clientele.

Beyond B2B’s recent features, local publicly traded companies are certainly more valuable to investors today than they were a year ago.

In keeping with its sales performance, RightNow’s stock rose 36 percent in 2010, while Bacterin, the Belgrade-based bone graft manufacturer went public in July, offering shares for as little as $1.60 according to company reports. Their stock closed on New Year’s Eve at $8.50 -- an increase of 530 percent.

While private companies continue to haul buckets of bullion into the valley, the Federal Government has seen fit to lavish the area with dollars, and while Gallatin County’s Recovery and Reinvestment Act payout of $127 million may not be well allocated, it certainly isn’t hurting us.

Even better, MSU has played an enormous role in dampening the bust’s blow to our local economy by providing steady employment through the Great Recession. We’ve got a leg up on most other Montana communities, and the university’s impact on the community continues to grow as annual research funding has nearly doubled over the last decade, rising from $61 million in 2000 to $109 million in 2010. That number is expected to increase again this year.

Now if all of that isn’t enough to convince you that the world isn’t over, that the sky isn’t falling, that maybe it’s OK to live a little, you probably thought the economy was in shambles at the height of the boom. But for those of us with a shred of sense, it’s time to set about our work, to embrace the Gallatin Valley’s Great Recovery and to celebrate the passing of the storm.

Happy 2011.

Real Estate is as affordable as it gets! WSJ

by Tim Hart

Real Estate Is 'as Affordable as it Gets'

 
Now is a good time to buy real estate, according to data from Moody’s Analytics. Home affordability has returned to pre-housing bubble levels or even fallen below the average in many U.S. markets.

In fact, housing affordability by the end of September had returned to or fallen below the average reached between 1989-2003 in 47 of the 74 housing markets that Moody Analytics tracked.

In September 2010, the ratio of home prices to annual household income had fallen to 1.6--below the historical average of 1.9 between 1989 and 2003. The ratio peaked in 2005 at 2.3.

"Based on incomes, this is as affordable as it gets," says Mark Zandi, chief economist at Moody's Analytics. "If you can get a loan, these are pretty good times to buy."

Some of the most undervalued markets include Cleveland, Detroit, Las Vegas, Atlanta, and Phoenix.

But those cities also are facing high rates of foreclosures and more borrowers defaulting on their mortgages that could decrease values further in those cities before they start to improve, Zandi says.

In Phoenix, for example, "it's become cheaper to buy than to rent,” Jon Mirmelli, a real estate investor in Scottsdale, Ariz., who rents out foreclosed homes, told The Wall Street Journal. "But the question is: can you qualify for a loan?"

Source: “Home Affordability Returns to Pre-Bubble Levels,” The Wall Street Journal Online (Feb. 8, 2011)

Read More:
"Affordability Motivated Buyers in 2010"

Should I Buy a Home Now?

by Tim Hart

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 621-626 of 626

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