May 2, 2014
We’ve exited a miserable winter and entered a not-so-stellar spring. The economy grew at 1/10th of 1% in the first quarter and home ownership has fallen to 65%, the lowest level in 19 years. What do we see in the marketplace?
- MIXED DATA:
From RIS Media, the National Association of Home Builder’s Housing Market Index has missed expectations for 7 of the last 8 months and comes in at a lower than expected rate of growth. The index weakness centered in traffic – a lack of participation in first time buyers and the fact that all-cash buyers who had been holding up the housing market are now disappearing.
On the bright side, NAR shows that the number over properties for sale in March rose 9.5% over last year. NAR shows that pending sales rose nationally by 3.4% in March compared with February, but fell 7.9% below March of 3013. The Northeast rose 1.4% over February, but fell 5.9% year over year.
Nationally, home sales are expected to trend up over the year and into 2015 (4.9 million), but are unlikely to meet 2013’s level (5.1 million).
- 2ND HOME MARKET POISED FOR REVIVAL:
Colleen Sullivan writes in Banker & Tradesman that the high end in Falmouth draws from metro Boston and has been very active while the Lower Cape draws from New York, New Jersey and Connecticut and has been very slow. Nationwide, NAR shows vacation home sales up 29.7% in 2013 over 2012, but that is still one third below peak activity in 2006. Vacation home sales were 13% of all transactions in 2013.
- SALES OF LUXURY HOMES “EXPLODE”:
From an article in opp Connect: Limited inventory, low interest rates and pent up demand encouraged overseas investors, local buyers at the lower end of the luxury market and younger millennial investors born after 1980 to buy in the top 10 cities according to Christies International Real Estate. Compared with the previous year, San Francisco volume increased 62%, Los Angeles 40%, Sydney, Australia 29%, Miami and the Cote d/Azure, France each 27%, New York 22% and London 20%. The three worst performers were Paris with an increase of 12%, Toronto, Canada 4% and Hong Kong decreased 15%.