Elena Zimina's Real Estate

HOME SALES EXPECTED TO EXPAND MODESTLY IN 2017  Existing-home sales are forecast to muster only a small gain in 2017 because of increasing mortgage rates and shrinking consumer confidence that now is a good time to buy a home, according to new consumer survey findings and a 2017 housing forecast update from NAR. In NAR's fourth quarter Housing Opportunities and Market Experience (HOME) survey, respondents were asked about their confidence in the U.S. economy and their housing expectations in 2017. With the calendar turning to a new year in a couple weeks, the survey found that a majority of households believes now is a good time to buy a home. However, confidence has retreated by a considerable amount amongst renters. Fifty-seven percent of renters said now is a good time to buy, which is down from 60 percent in September and 68 percent a year ago. Seventy-eight percent of homeowners (unchanged from September; 82 percent in December 2015) think now is a good time to make a home

Calif. median home price: November 2016: California: $501,710 Calif. highest median home price by region/county: San Francisco, $1,360,500 Calif. lowest median home price by region/county: Siskiyou, $183,000 Calif. Pending Home Sales Index : The Pending Home Sales Index rose 1.5 percent from 117.3 in October 2015 to 119.1 in October 2016 – the seventh consecutive year-to-year increase. Calif. Traditional Housing Affordability Index : Third Quarter 2016: 31 percent Mortgage rates : Week ending 12/15/2016 (Source: Freddie Mac) 30 year fixed: 4.16% fees/points: 0.5% 15-year fixed: 3.37% fees/points: 0.5%

FREDDIE MAC ANNOUNCES NEW FORECLOSURE PREVENTION PROGRAM  Freddie Mac recently announced the Freddie Mac Flex Modification foreclosure prevention program, which is designed to help America's families by offering significant reductions in their monthly mortgage payments. It replaces Freddie Mac's version of the Home Affordable Modification Program (HAMP), which is set to expire at the end of this year. The new program was developed in alignment with Fannie Mae at the direction of the Federal Housing Finance Agency (FHFA). The Flex Modification is expected to provide a 20 percent payment reduction for eligible borrowers. A high percentage of those who are at least 60 days delinquent would be eligible; the modification could also be an option for those who are current or less than 60 days delinquent in certain situations. Servicers must implement the new program by Oct.1, 2017. In the interim, while HAMP expires on Dec.30, 2016, Freddie Mac's Standard and Streamlined Modifica

FIRST-TIME HOMEBUYERS FACE WORSENING STARTER-HOME SHORTAGE Trulia released its findings from the Trulia Inventory and Price Watch, which showed that the number of homes for the average first-time homebuyer saw its steepest year-over-year drop in three years, falling 12.1 percent since 2015. Moreover, these buyers will need to pay 1.9 percent more of their income on average to buy a starter home in their local market. Nationally, housing inventory fell for the sixth consecutive quarter, dropping 9.1 percent from a year ago. Across different housing segments, home buyers saw the biggest decreases in a starter and trade-up home inventory. The number of starter homes and trade-up homes on the market dropped 12.1 percent and 12.9 percent from this time last year, respectively. Meanwhile, premium home inventory fell a more moderate 5.6 percent. Declines in the affordability of starter homes continues to plague first-time home buyers. Currently, the average starter-home buyer will need to s

STUDY FINDS RENTERS NOT MATERIALLY CONSTRAINED BY RENTAL PRICES Despite steep increases in rental prices, renters are less financially constrained today than they were just after the last recession, according to a new TransUnion study. The study confirmed that, on average, renters at the mid-point of 2016 were lower risk and more credit active than renters were in 2010. TransUnion analyzed the credit behavior of 775,000 renters who moved in Q2 2009 and 631,000 renters who moved in Q2 2015, over the 12-month period post-move. TransUnion found that 38.6 percent of the 2015 renters had a prime or better credit score in 2015, compared to 26.2 percent of the 2009 cohort of renters. To determine how renters are impacted by a move, TransUnion used its CreditVision aggregate excess payment (AEP) algorithm, which incorporates monthly payments from mortgages, credit cards, and other debt obligations. A consumer with a positive AEP could take on new payments and has money available after their m

GENERATION Z: THE FUTURE OF HOMEOWNERSHIP Source: DS News Homeownership has been declining, particularly among millennials. While this has taken place, rental household formation has been increasing, with millennials making up a large share of this growing population. But what about the generation that follows behind millennials? What are those from Generation Z, or those born after 1996, planning when it comes to becoming future homeowners? Ninety-seven percent of Generation Z believe that they will own a home in the future, according to Better Homes and Gardens Real Estate, and 82 percent indicate that homeownership is the most important factor in achieving the American Dream.

HOMEOWNERS TWICE AS RICH AS FIVE YEARS AGO  Source: CNBC   After hitting bottom in 2012, home prices took off dramatically before leveling off a bit in mid-2014. In the last two months, though, they turned higher again. The amount of equity homeowners now have — the value outside their mortgage debt — has doubled in the last five years, according to CoreLogic. September home prices showed a 6.3 percent annual gain, slightly more than in August and a clear sign that prices are heating up again after cooling through much of spring and summer. CoreLogic’s chief economist said that home equity wealth has doubled during the last five years to $13 trillion, large because of the recovery in home prices. While homeowners today show more wealth on paper, they are not extracting it at nearly the rate they did during the last housing boom. Near-record-low mortgage rates have certainly prompted thousands of borrowers to refinance and lower their monthly payments, but a very small share have

HOMEBUYERS GETTING MORE ANXIOUS ABOUT AFFORDABILITY Source: Investors Business Daily Homebuyers in the U.S. are growing more anxious about their ability to afford a dwelling of their own, and that's especially true of millennials, says a new survey from Redfin. Another concern they have is high rent, with nearly half of first-time homebuyers surveyed saying that it pushed them into the housing market. And while low inventory was blamed as a major factor in July's drop in sales of existing homes, that was third on the list of homebuyers' worries, after affordability and competition from other shoppers. Making sense of the story In previous surveys, the second- and third-most cited concerns made up a far higher percentage of total responses. Last year it was 31.4 percent, while in May it was 33.5 percent. In other words, affordability is gaining prominence as the number one concern among buyers.  Among the 1,887 homebuyers participating in the Redfin survey, those who sa

Calif. median home price: June 2016: California: $519,440 Calif. highest median home price by region/county: San Francisco, $1,350,000 Calif. lowest median home price by region/county: Glenn, $205,560 Calif. Pending Home Sales Index : The Pending Home Sales Index (PHSI) increasied 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016 Calif. Traditional Housing Affordability Index : First Quarter 2016: 34 percent Mortgage rates : Week ending 7/21/2016 (Source: Freddie Mac) 30-yr. fixed: 3.45% fees/points: 0.5%  15-yr. fixed: 2.75% fees/points: 0.5%

HOUSING REMAINS A PRIORITY FOR MOST AMERICANS An overwhelming four-out-of-five Americans believe that owning a home is a good investment, according to a recent poll commissioned by the National Association of Home Builders (NAHB) to gauge public sentiment on the value of homeownership and government programs that encourage homeownership and housing production Among the key findings: 82 percent rate “a home for you to live in” a good or excellent investment (the highest of six choices), far ahead of the second option, retirement accounts, at 67 percent. 81 percent of 18-29-year-olds want to buy a home. 72 percent support the government providing tax incentives to encourage homeownership. 46 percent say now is a good time to buy a home, twice the 23 percent who say it is not. 36 percent would like to buy a home in the next three years.

FOREIGN INTEREST IN U.S. HOMES COOLS Source: Wall St. Journal Purchases of U.S. residential real estate by foreigners who aren’t residents of the United States fell by $10 billion in the year ending March to $44 billion, the lowest level since 2013, according to a survey by the National Association of REALTORS®. Rising U.S. home prices and a strong U.S. dollar have hurt the purchasing power of foreign buyers. The survey looks at two categories of foreign buyers: Recent immigrants and non-residents. Purchases by immigrant foreigners actually rose to $59 billion from $49 billion, and the share of non-resident buyers decreased to 41 percent from about 50 percent in previous years. The average price of homes purchased by foreign buyers fell to about $480,000 from nearly $500,000 in 2015.

FOREIGN INTEREST IN U.S. HOMES COOLS Source: Wall St. Journal Purchases of U.S. residential real estate by foreigners who aren’t residents of the United States fell by $10 billion in the year ending March to $44 billion, the lowest level since 2013, according to a survey by the National Association of REALTORS®. Rising U.S. home prices and a strong U.S. dollar have hurt the purchasing power of foreign buyers. The survey looks at two categories of foreign buyers: Recent immigrants and non-residents. Purchases by immigrant foreigners actually rose to $59 billion from $49 billion, and the share of non-resident buyers decreased to 41 percent from about 50 percent in previous years. The average price of homes purchased by foreign buyers fell to about $480,000 from nearly $500,000 in 2015.

MORTGAGE REFINANCES JUMP 21 PERCENT ON NEAR RECORD LOW RATES Source: CNBC Applications to refinance home loans jumped 21 percent for the week, and they are now 113.5 percent higher compared to one year ago, when rates were about three quarters of a percentage point higher, according to the Mortgage Bankers Association (MBA). Clearly, the Brexit bonus to U.S. homeowners is well underway, as the drop in mortgage interest rates is putting more money in the pockets of owners. Application volume is now 66 percent higher than one year ago. Mike Fratantoni, Chief Economist for the MBA, commented, “Mortgage rates have been low for years, but the impact of Brexit has brought us close to record lows once again, with jumbo rates already at their lowest levels, giving more borrowers a larger incentive to refinance.”

MILLIONS OF BOOMERS PREFER TO RENT Source:  DSNews.com   Are aging baby boomers looking for a change of pace with their living arrangements? According to a new Freddie Mac 55+survey (polling 6,000 homeowners and renters born in 1961 or earlier), approximately six million homeowners stated they would prefer to move at some point and rent instead of owning. The supply of affordable rental housing will be greatly impacted by this trend, as nearly as many renters age 55 and over said they would prefer to move out and continue renting, and more than five million of those said they are likely to move and rent by the year 2020. Affordable rental housing will likely play a key role in determining who moves and when among the baby boomer crowd.

Home prices nationwide, including distressed sales, increased 5.9 percent in May compared with a year ago, according to the latest price index from CoreLogic. Prices increased at a 1.3 percent pace in May from April. Frank Nothaft, Chief Economist for CoreLogic, commented, “Housing remained an oasis of stability in May with home prices rising year over year between 5 percent and 6 percent for 22 consecutive months. The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.” CoreLogic's forecast shows that home prices will increase by 5.3 percent on a year-over-year basis from May to May 2017. Prices are expected to increase at a slightly slower 0.8 percent pace in June from May.

HOME PRICE GROWTH EXPECTATIONS DECLINE, BUT CONSUMERS’ OUTLOOK ON HOUSING REMAINS POSITIVE Source: Federal Reserve The results from the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations Housing Survey reveal that there was a modest decline in home price growth expectations. However, the majority of households still view housing as a good financial investment. Mortgage rate expectations have declined since last year’s survey, and renters’ perceived access to mortgages has become easier. Making sense of the story Average home price change expectations at both the one- and five-year horizons declined from the 2015 survey. For example, the mean one-year ahead expected change in home prices in the 2016 survey was 3.3 percent, nearly a full percentage point below the mean forecast in the 2015 and 2014 surveys. Attitudes toward housing continued to remain positive: 59.2 percent of respondents think that buying property in their zip code is a (very or somewhat) g

Calif. median home price: May 2016: California: $518,760 Calif. highest median home price by region/county: San Francisco, $1,409,370 Calif. lowest median home price by region/county: Siskiyou, $174,000 Calif. Pending Home Sales Index : Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index increasing 3.8 percent from 131.4 in May 2015 to 136.5 in May 2016 Calif. Traditional Housing Affordability Index : First Quarter 2016: 34 percent Mortgage rates : Week ending 6/30/2016 (Source: Freddie Mac) 30-yr. fixed: 3.48% fees/points: 0.5%  15-yr. fixed: 2.78% fees/points: 0.4%

In May, more people than ever say it is a good time to sell your home, according to Fannie Mae’s Home Purchase Sentiment Index, an index which polls 1,000 Americans to assess their attitudes towards various aspects about owning and renting a home. The index increased to an all-time high. The new share of consumers who expect home prices to go up over the next 12 months increased 5 percent to 42 percent. This was followed by 3 percent increase in the net share of consumers who expect mortgage interest rates to go down over the next 12 months. Of the six HPSI components, six of them increased in May. The largest increase was 7 percent to 18 percent in the share of consumers reporting that their income was significantly higher than it was 12 months ago.

RENTERS VALUE HOMEOWNERSHIP BUT FACE AFFORDABILITY CHALLENGES WHEN IT COMES TO BUYING A HOME, C.A.R. SURVEY FINDS Source: C.A.R. Current renters value homeownership and want to buy a home but many are encountering affordability and financial obstacles that prevent them from buying, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 Renter Survey. Making sense of the story Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a down payment would motivate them to buy now. Of the 28 percent of renters who don’t plan to buy in the future, 50 percent said they can’t afford to buy, 20 percent will not buy because they prefer to rent, 19 percent said they can’t qualify for a mortgage, and 15 percent lack a down payment. Job uncertainty (9 percent), economic uncertainty (12 percent),

WASHINGTON (AP) -- The global luxury housing market lost some of its sheen last year as financial markets became unsettled and many wealthy buyers began to look for less expensive homes. "The return of realism," is how Dan Conn, chief executive of Christie's International Real Estate, described the high-end market that stretches from San Francisco to Singapore. Sales in a sector whose average home prices start at $2.2 million slowed in 2015, increasing by 8 percent, half its 2014 pace. The decline most likely reflects stability rather than weakness, according to a report released Thursday by Christie's. Properties in London and Hong Kong are sitting on the market longer. On average, homes sold for prices 19 percent below the original asking price, compared with 14 percent below the asking price in 2014. The number of luxury-home sales in the often sizzling Manhattan market dipped 5 percent last year. Falling oil prices led sales in Dubai to tumble 25 percent.

Calif. median home price: March 2015: California: $483,280 Calif. highest median home price by region/county: San Francisco, $1,360,580 Calif. lowest median home price by region/county: Merced, $189,500

STRONG WAGE GROWTH, LEVEL HOME PRICES BUOY HOUSING AFFORDABILITY Higher wages and lower seasonal home prices combined to push California housing affordability higher in the first quarter of 2016, compared to the previous quarter, according to a recent report by C.A.R. Affordability was flat when compared to the previous year as rising home price offset income gains. The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in first-quarter 2016 rose to 34 percent from the 30 percent recorded in the fourth quarter of 2015 and was unchanged from first-quarter 2015, according to C.A.R.’s Traditional Housing Affordability Index (HAI).  This is the 12th consecutive quarter that the index has been below 40 percent and is near the mid-2008 low level of 29 percent.  California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012. Home buyers needed to earn a minimum annual income of $92,571 to qualify f

Which way are rates headed?  That’s the big question.  Understanding what is holding rates at these levels with little to no volatility is probably a smarter question.  Let’s start with the easier part of the question, the lack of volatility.  Lack of volatility means lack of changing opinions, lack of game changing or thought altering headlines, a lack of major position realignments and a lack of intuition.  Essentially it means no one knows and nothing has come to the forefront to change anyone’s opinion.  It’s the Great Not Knowing.   The 10yr is bouncing between 1.70 and 1.80 with the occasional lift above 1.90 before returning right back to the 1.70-1.80 range.     Today it trades at 1.76%.  It’s becoming Ground Hog Day again, over and over.  The Fed says they plan to raise rates soon, depends upon data, play it by ear, watch inflation, jobs, yada yada and the market doesn’t move.   Half the market thinks the day of Fed liftoff is coming soon and the other half of the marke

California suburbs growing fast as many are priced out of cities, data show Source:  LA Times According to state officials, suburban areas just outside of Los Angeles and San Francisco grew especially fast last year due to red-hot housing markets. As people attempt to remain within commuting distance while fleeing astronomical prices, many suburbs have increased in popularity.  For example, San Joaquin County, home to Stockton, grew faster than any other, up 1.3 percent to 733,000 people. San Joaquin was followed by Yolo, Riverside, and Santa Clara counties. Among cities with at least 30,000 people, the fastest-growing were concentrated primarily in the Inland Empire and Orange County: Porterville, Eastvale, Lake Forest, Beaumont, and Lake Elsinore. Supply needs have only grown for the state’s population, but the number of new housing units in California declined last year for the first time since the start of the economic recovery.

WEST LEADS NATION IN HOME-PRICE APPRECIATION Source:  HousingWire   Home prices are up both year-over-year and month-over-month and since home-price appreciation has stayed strong for roughly a year now, this trend doesn’t look like it’s going to change anytime soon. Home prices nationwide, including distressed sales, moved higher year-over-year by 6.7 percent in March 2016 compared with March 2015 and increased month-over-month by 2.1 percent in March 2016 compared with February 2016, according to the CoreLogic Home Price Index.

KITCHEN AND BATH REMODELING MORE COMMON THAN EVER IN 2015 Source:  NAHB In 2015, the top two most common remodeling jobs were bathroom remodeling (81 percent) and kitchen remodeling (79 percent). A larger share of remodelers reported these as their most common jobs in 2015 in comparison to prior years. In fact, the share of remodelers reporting bathroom and kitchen remodels as their most common jobs in 2015 is the highest it has been since the inception of the National Association of Home Builder’s Remodeling Market Index (RMI) survey in 2001. The percentage of remodelers reporting room additions as one of their most common remodeling jobs jumped in 2015 (from 40 percent in 2014 to 47 percent in 2015).

U.S. HOMEOWNERSHIP RATE FALLS AGAIN, NEARING A 48-YEAR LOW Source: C.A.R. The nation’s homeownership rate hit a 48-year low in the second quarter of 2015, and results from the first quarter of 2016 have dashed hopes that the homeownership rate had finally hit a bottom in 2015, as it slid back almost to that level in the first quarter of this year, according to the U.S. Commerce Department. Making sense of the story In the first three months of this year, the rate was at 63.5 percent, not seasonally adjusted. That is down from 63.8 percent in the fourth quarter of 2015. When adjusting for seasonality, the homeownership rate in the first quarter also fell slightly to 63.6 percent from 63.7 percent in the fourth quarter of last year. Jonathan Smoke,  realtor.com ®‘s chief economist, commented, “The decline in the homeownership rate is definitely showing signs of bottoming out. Most likely the homeownership rate is going to be stabilizing or even could be rising again in anothe

HIGH DEMAND AND THIN HOUSING SUPPLY CRIMP MARCH CALIFORNIA PENDING HOME SALES Source: C.A.R. Statewide pending home sales in California decreased in March on an annual basis for the third straight month, reflecting high demand for a dearth of homes available for sale on the market, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Making sense of the story Statewide pending home sales fell in March on an annual basis, with the Pending Home Sales Index (PHSI) decreasing 1.7 percent from 138.0 in March 2015 to 135.6 in March 2016, based on signed contracts. On a monthly basis, California pending home sales rose from February, primarily due to seasonal factors. The PHSI increased 12.7 percent from an index of 120.3 in February to 135.6 in March. When adjusting pending sales for typical seasonal patterns, pending sales actually declined 1 percent from February. Tight inventories are expected to continue to impede home sales growth this year. At the regional level,

CALIFORNIA HOME SALES GAIN STEAM IN FEBRUARY AS SHIFT TOWARD MORE AFFORDABLE AREAS TEMPERS HOME PRICES Moderating home price appreciation and improving housing inventory combined to spur California’s housing market in February as existing home sales increased from both the previous month and year. Existing, single-family home sales totaled 393,360 in February on a seasonally adjusted annualized rate, up 2.6 percent from January and 6.4 percent above February 2015

AVERAGE US RATE ON 30-YEAR MORTGAGE EDGES UP TO 3.68 PERCENT Source:  Associated Press   It was the second straight weekly increase for long-term loan rates, which had declined since the start of the year amid global economic anxiety and market turbulence. It was only the second time this year that rates rose. Mortgage buyer Freddie Mac said the average rate on a 30-year, fixed-rate mortgage edged up to 3.68 percent from 3.64 percent last week. The average rate on 15-year fixed-rate mortgages increased to 2.96 percent from 2.94 percent last week. That being said, rates still remain at historically low levels at the start of the spring home buying season.

HOW HOUSING PRICES ARE DRIVING LOW, MIDDLE-INCOME FAMILIES OUT OF CALIFORNIA Source:  Pasadena Star-News High housing costs are pushing many people out of the state of California, despite higher wages and job growth, according to a new report from Beacon Economics. The report notes that 625,000 more U.S. residents left California between 2007 and 2014 than moved into the state. The vast majority ended up in Texas, Oregon, Nevada, Arizona, and Washington. Higher-wage workers continue to move in, which argues against the theory that high taxes are driving people away. Christopher Thornberg, a founding partner with Beacon, commented, “California has an employment boom with a housing problem. The state continues to offer great employment opportunities for all kinds of workers, but housing affordability and supply represent a significant problem.” In 2014, California ranked 49th in homeownership, with only 53.8 percent of homes being owner-occupied.

TALKING POINTS … According to CoreLogic’s latest Negative Equity Report, the number of residential homes with negative equity, also referred to as being “underwater,” has been steadily declining in the last few years while the number of homes with equity has been on the rise. The report found that 256,000 residential properties regained equity in the third quarter, bringing the nationwide total to about 46.3 million, which calculates to approximately 92 percent of all homes with an outstanding mortgage. The number of residential properties with a mortgage that had negative equity as of the end of Q3 was at 4.1 million, or about 8 percent of all homes nationwide. This represented a decline of nearly 5 percent from Q2 2015 and nearly 21 percent from Q3 of 2014.