All the Real Estate News That’s Fit to RE-Print™
Welcome to our weekly edition of Real Estate Investing News This Week. Highlights this week include:
- The Housing Recovery Is Faltering
- Existing-Home Sales Cool in January
- Housing Starts Down 2%
- 13% of Total Sales Are “Distressed” Sales
“The housing recovery is faltering. While prices and sales of existing homes are close to normal, construction and new home sales remain weak. Before the current business cycle, any time housing starts were at their current level of about one million at annual rates, the economy was in a recession” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.”
Existing-home sales declined in January to their lowest rate in nine months, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 4.9 percent in January (lowest since last April). Despite January’s decline, sales are higher by 3.2 percent than a year ago.
Lawrence Yun, NAR chief economist, says the housing market got off to a somewhat disappointing start to begin the year with January closings down throughout the country.
“January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” he said.
Nationwide housing starts fell 2 percent to a seasonally adjusted annual rate of 1.065 million units in January, according to newly released data from the U.S. Commerce Department. This drop was mainly due to a 22.2 percent decrease in the Midwest.
Single-family housing production fell 6.7 percent to a seasonally adjusted annual rate of 678,000 in January while multifamily starts rose 7.5 percent to 387,000 units.
Distressed sales (REO and short sales) accounted for 12.8 percent of total home sales nationally in December 2014, a 2.8 percentage point drop from December 2013, and a 1.2 percentage point drop from November 2014.
The December 2014 distressed sales share was the lowest for any December since 2007.
Within the distressed category, REO sales made up 8.8 percent of total home sales in December, and short sales made up 4 percent.
At its peak, the distressed sales share totaled 32.4 percent of all sales in January 2009, with REO sales making up 28 percent of that share.