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Monthly Archives: August 2012
American Dream: Hispanic Home Buyers On The Rise
Buying a home has long been a way for immigrant groups to signal that they have “made it.” For Hispanic Americans, a mega-boom in homeownership is revving up.
With U.S. Census data reporting that more than half of all infants born in the United States last year were minorities or multiracial, with whites having 1.1 births for every death and Hispanics counting 8.9 births for every death, it stands to reason that the profile of home buyers is also undergoing a change that may accelerate in years to come. The folks at Movoto.com, a full service real estate brokerage based in San Mateo, CA, decided to figure out just how much.
Using data on the race/ethnicity of first time and repeat home buyers from the National Association of Realtor’s annual “Profile of Buyers and Sellers,” on its blog Movoto.com noted that whites accounted for about 85 percent of home purchases.
Last year, the other 15 percent of buyers included six percent Black/African-Americans, six percent Hispanic/Latino home buyers and four percent Asians or Pacific Islanders, with other ethnicities/races comprising up to two percent.
But among first time buyers, Movoto.com reported, Hispanics are enthusiastically angling for the American dream of a home to call their own. Predictions indicated that between now and 2020, Hispanics – the second largest ethnic group in America — will account for 50 percent of new buyers . Currently, 75 percent of first time buyers are white while Hispanic home buyers constitute 11 percent, a 38 percent increase over 2010 figures. And as their purchasing power increases, a “mega rise” may be on the way.
Over the last three decades, two of every five newcomers were Hispanic, according to the National Association of Hispanic Real Estate Professionals, a 20,000 member group. The Hispanic population in the U.S. multiplied 3.5 times between 1980 and 2010. And with Hispanics expected to account for 40 percent of the estimated 12 million new households, they will become “an increasingly key market for homeownership,” according to the association’s “2011 State of Hispanic Homeownership” report. Minorities are expected to account for 70 percent of total growth.
In general, Hispanics hold fast to the American dream. According to national housing surveys, despite worries over jobs and the economy, they are more eager to become homeowners for both emotional and financial reasons.Though only 32 percent of all Americans consider owning a home a symbol of success, 56 percent of Hispanics believe that it is. Additionally, 68 percent of Hispanics versus 57 percent of all Americans are more likely to think purchasing a home is a sound economic decision. And 73 percent of Hispanics compared to 57 percent of all Americans feel that home ownership is a good path to building family wealth for future generations.
They may soon be blazing the way.
The 5 Things You Must Do To Work This Demographic.
Sources: Marcelle Sussman Fischler, Forbes; KCM Blog
Sales of existing homes are strengthening and prices continue to rise, stoking confidence in the housing market’s recovery.
According to the National Association of REALTORS®, resales of single-family homes, townhouses, condominiums and co-ops grew 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million. The measure took an unexpected fall in June.
Resales jumped 10.4 percent compared with the same month last year. Economists at the association believe sales could reach 5 million next year.
Nationwide, prices were on a tear, with the median rising 9.4 percent from a year ago to $187,300 last month. The increase is the largest since a 10.2 percent boost in January 2006.
Demand is stronger due to low mortgage interest rates and rising rents, according to Lawrence Yun, the group’s chief economist.
But “the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions,” Yun said in a statement.
Though first-time buyers made up more than a third of resale clients, in normal housing conditions they’d constitute 40 percent. Many are still being pushed out by investors making all-cash offers, even though the ranks of such buyers are shrinking .
Distressed homes, which include foreclosures and short sales, made up 24 percent of sales in July, down from a quarter the previous month and nearly 30 percent a year earlier.
The median price of a single-family home was $188,100, up 9.6 percent from the same period in 2011. Sales of such properties rose 9.9 percent over the same period to an annual rate of 3.98 million.
By Tiffany Hsu, Los Angeles Times
admin in Hillsborough Title,Real Estate Headline News | August 23, 2012
A recent analysis from John Burns Real Estate Consulting suggests that investors may be the biggest driving force in the housing recovery.
In a report from the company, senior research analyst Erik Franks noted that investors are buying homes at an increased pace and at prices that allow for a reasonable rental return.
“Investors are buying homes at a more rapid pace than ever before, and this time their investments actually make sense,” Franks wrote.
Across the 167 metro areas analyzed by the company, investor activity as a share of all transactions rose to 29.6 percent in the first quarter of 2012, up from a low of 23.6 percent in the last quarter of 2009. Furthermore, the company’s “on the ground” research leads analysts to believe this year’s second-quarter activity exceeded the first quarter’s, with investor activity spiking 2 percent.
Investor activity has returned to Stockton, Miami, Las Vegas, Riverside-San Bernardino, Sacramento, and Phoenix, all areas investors were previously reluctant to enter after their old investments crashed. According to the report, some markets are now “completely dominated” by investors, such as Las Vegas (where investor activity makes up 50 percent of total activity) and Phoenix (46 percent).
Investors also seem to be attracted to small markets-particularly those in inland California, the report notes. Second home buyers are also making their way into smaller markets, leading to large activity increases in Naples, The Villages, Tucson, and Panama City.
While Franks conceded that these signs of increased investor interest may point to a false recovery, he said John Burns Real Estate Consulting is not concerned and welcomes the return of private capital.
“Most of these investors are paying all cash and buying homes below replacement cost,” Franks wrote. “They are helping the market recover by removing supply at the low end of the market and driving real buyers to higher price points, including new homes.”
Franks also wrote that the company doesn’t foresee a scenario in which investors dump their stock on the market unless it’s clear prices are dropping again. For now, Franks said he and his colleagues feel comfortable for the near future.
“We are hyper-focused on the potential positive result, which is that rising prices get fence-sitting consumers off the fence. We are seeing this occur in some pockets around the country.”
By Tory Barringer, DSNews
admin in Hillsborough Title,Real Estate Headline News | August 20, 2012
Builder confidence improved two points in August to 37, its highest level since February 2007, the National Association of Home Builders (NAHB) reported Wednesday. Economists had expected the index to remain flat at 35.
The improvement in the index in August marked the fourth straight month-month gain. The overall index has gained 22 points in the last year, the largest one-year gain since February 1992. The August reading also marked the third straight month the index was more than double what it had been one year earlier.
The Housing Market Index (HMI), considered a measure of builder confidence, could be reflected in permits and starts data reported for August. That report from the Census Bureau will be issued in September. Meanwhile, Census will report on July permits Thursday.
All three components of the index – the assessment of current sales, of sales six months out, and traffic at showrooms and model homes – improved.
The current sales measure rose three points to 39, its highest level since February 2007. The August gain followed a jump of five points in July. The current sales gauge is up 24 points in the last year, the last year, the strongest year-year surge since February 1992.
Buyer traffic also rose three points to 31, its highest reading since May 2006. Year-year the buyer traffic index is up 20 points, the largest 12-month improvement since March 1996.
The index of the outlook for sales in sales months rose one point to 44, the highest level since April 2007. The six month sales outlook index has increased 25 points in the last year, the largest annual gain since January 1992.
“This fourth consecutive increase in builder confidence provides further evidence of the gradual strengthening that’s occurring in many housing markets and providing a needed boost to local economies,” said NAHB Chief Economist David Crowe. “However, we are still at a very fragile stage of this process and builders continue to express frustration regarding the inventory of distressed properties, inaccurate appraisal values, and the difficulty of accessing credit for both building and buying homes.”
Gains in the index – or its components – do not always translate into new home sales. New home sales, for example, fell 32,000 in June to 350,000 although the HMI rose that month. The current sales measure rose in June as well but the buyer traffic index was flat. Six months earlier in December, the outlook for sales six months ahead had improved.
The index, built based on surveys conducted jointly by the NAHB and Wells Fargo, gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”
Regionally, the index improved in two of the four census regions: up nine points to 42 in the Midwest and two points to 35 in the South but down nine points to 25 in the Northeast and down three points to 40 in the West. The regional confidence measures are consistent with the most recent report (for June) on new home sales, which showed new home sales plunged in the Northeast.
The HMI survey followed a surprisingly strong payroll report for July which showed the nation added 163,000 jobs, far more that what the market had been expecting but the unemployment rate rose to 8.3 percent in the same month. However recent housing specific survey such as the Case Shiller Home Price Index show improvements in home prices.
By Mark Lieberman, Five Star Institute Economist