Latest home sales numbers
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construction

When you look at home sales the important thing to look for is not just sales but inventory.  It is mostly inventory that impacts prices. When we look at sales for existing homes you should look at the ratio  between conventional and distressed, not total sales. So, for those who follow housing closely, the existing home sales report on Monday was solid even though sales were down.However, for the new home sales report, the key number IS sales! An increase in sales adds to both GDP and employment The housing recovery is healthy and not in a bubble.

The Census Bureau reported that there were 244 new homes sold in the first half of 2013, up 28.4% from the 190 thousand sold during the same period in 2012. This was the highest sales for the first half of the year since 2008.

We are still low. This suggests significant upside over the next few years. As the economy improves, more people are leaving parents and doubling up situations to form new households Based on that , sales should increase to 750 to 800 thousand over the next several years – substantially higher than the current sales rate.

And an important point worth repeating : Housing is historically the best leading indicator for the economy

Another way to look at this is a ratio of existing to new home sales.

This ratio was fairly stable from 1994 through 2006, and then the flood of distressed sales kept the number of existing home sales elevated and depressed new home sales.

In general the ratio has been trending down – and is currently at the lowest level since November 2008. This ratio should continue to trend down over the next several years as the number of distressed sales declines and new home sales increase.

 We are slowly working our way through to a normal situation. As i reported before, hedge funds are slowing down so we have less competition. Any time demands eases and supply gains, prices will cool or maybe even drop a little.

SO STOP LISTENING TO THE BUBBLE NONSENSE. The market for investing is improving all the tme.


Hedge funds leaving
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Thank god that trend is going away . It’s been impossible to find deals when those big boys are in there buying without regard to comps. They don’t have to worry about appraisals  since they are paying cash. We as investors have to be concerned about what the house will appraise for when we sell it. So, it’s been a problem.

Current homeowners are playing a bigger role as housing market participants amid a sharp slowdown in investor activity, according to data from theCampbell/Inside Mortgage Finance HousingPulse Trackingsurvey.

Among three buyer types-current homeowner, first-time homebuyer, and investor-the survey showed current homeowners were the only group to see activity rise in June.

Last month, current homeowners represented 44.6 percent of the purchase market, up from 43.8  p eent in May based on a three-month moving average.

At the same time, the share for first-time homebuyers fell to 35.7 percent from 36 percent month-over-month.

Even more notable was the decrease in investor purchases. As rising home prices discourage investors,  home purchases from investors slipped to 19.7 percent, down significantly from 23.1 percent from February. The percentage also represents the lowest level since September 2012.

Falling in line with the decrease in investor activity was a drop in the supply of distressed properties.

According to HousingPulse, the share of foreclosure or short sales transactions plummeted year-over-year, falling to 28.2 percent from 40.3 percent in June 2012. The percentage represents the lowest level in at least three and half years.

The HousingPulse survey also revealed investor traffic decreased for the fourth straight month in June.

Agents across the United States also offered insight into investor activity, with one Arizona agent stating, “Investors have left our market with rising house prices,”

In California, one agent reported, “Values have increased by 20% since January and investors are backing away.”

The survey includes about 2,000 real estate agents nationwide.

Current homeowners are playing a bigger role as housing market participants amid a sharp slowdown in investor activity, according to data from theCampbell/Inside Mortgage Finance HousingPulse Trackingsurvey.

The survey includes about 2,000 real estate agents nationwide.


Need money to buy your dream house?
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There is a new program called REX Home buyer and its a kind of shared appreciation of real estate, Hedge funds, pension funds and the like are getting into this.

They will provide up to half of the down payment when you buy and you give up 40% of the equity when you sell. This is not a new concept. Everything goes away and comes back again when the timing is right. Look into it if you think it might help you.


Hooray- hedge funds are stepping down from buying real estate
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Hedge fund real estate

For the past three years they have been swarming over the hardest-hit housing markets, buying distressed properties in bulk and pushing prices higher by double digits. The idea for these investors was not to buy and flip, but to hold and rent. Now some investors say that they have priced themselves out of the market.

“Higher prices are reducing returns on investment, and investors are responding by cutting back on their purchasing plans until conditions sort out,” said Chris Clothier, a partner in MemphisInvest.com and
Premier Property Management Group, which commissioned a national survey of investors conducted by ORC International. “Fewer foreclosures, rising property values and competition from hedge funds are making it tough to find good deals on distress sales.”

Nearly half the investors surveyed said that they planned to cut back on purchases of homes in the coming year; in a survey last August, just 30 percent said they planned to cut back. Only 20 percent of investors said they plan to increase purchases, compared with 39 percent who said they would last August. All this could have a significant impact on the housing recovery.

Bargains are drying up when it comes to buying foreclosed properties. The number of foreclosure sales in the first quarter of this year fell 22 percent from a year ago, according to RealtyTrac, a real estate website. The number of
short sales, when the home is sold for less than the value of the mortgage, also fell, as rising prices provided less incentive for banks to agree to such deals. Some claim banks are actually holding onto repossessed homes, waiting for prices to rise higher.

Investors accounted for 19 percent of home sales in April, according to the National Association of Realtors, down from 24 percent in all of 2012. Investors include individual buyers as well as large hedge funds, but the hedge funds have been getting much of the attention, credited with juicing prices in the hardest hit housing markets like Phoenix and Las Vegas. Their so-called REO-to-Rent strategy (Real Estate Owned-to-Rent) has evolved into a new asset class, with two of the companies that engage in the practice going public this year as real estate investment trusts (REITs).

Read more on Hooray- hedge funds are stepping down from buying real estate…