Tag Archives: crisis
US house price growth cooling but likely to still rise over 3% in next year
Some housing markets in the United States are starting to cool but overall home values are expected to rise another 3.1% between now and August 2015. The latest Home Value Index from real estate firm Zillow rose 6.6% to $175,600 in August, the slowest annual pace in the last 12 months. The cooling market offers a clear view of local markets that favour either buyers or sellers and the hottest markets are on the West Coast with quick sales and high asking prices. Top are San Jose, San Francisco and Seattle. But some still recovering markets remain a bargain for buyers as more homes went up for sale. These include Cleveland, Philadelphia and Providence. Overall the index shows that home values increased by 0.1% in August compared with the previous month and are up 6.6% from August 2013. According to the latest Zillow analysis of buyers' and sellers' markets, sellers in the Bay Area, Seattle and Dallas have the most negotiating power, with final sale prices largely at or above asking. For those looking to buy a home, the Northeast and Midwest offer the most favourable conditions, as buyers are less likely to be faced with the fierce bidding wars seen across the West Coast and in larger cities across the country. In this analysis, a sellers' market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to, or greater than their last listing price. In buyers' markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price. ‘Real estate has always been local, but as we continue to put the housing recession further in the rear view mirror, the largely uniform performance of local markets is also fading,’ said Zillow chief economist Stan Humphries. ‘We now have several different types of markets emerging, including markets that are still muddling along the bottom. Markets that shot up immediately after the recession ended and are now cooling quickly,’ he explained. ‘And markets that are still very hot. Each of these environments presents unique challenges and opportunities for buyers and sellers, and what works in one area won't necessarily work in another,’ he added. National home values have risen month on month for more than two years, though the pace of monthly home value appreciation has slowed as a result of increased numbers of properties for sale entering the market. The number of homes listed for sale on Zillow in August was up 20.6% year on year and 2.1% month on month. Meanwhile, the Zillow Rent Index shows that national rents rose in August by 0.7% compared with July to a Zillow Rent Index (ZRI) of $1,328. Year on year, national rents were up 3.3% in August. Continue reading
Survey reveals opposition to big housing developments in UK
With general agreement that a major uplift in new home building is crucial to resolution of the UK's housing crisis, half of the population would oppose a major house building programme if it was in their immediate neighbourhood, a survey has found. Some 49% of Britons would be opposed to building more than 300 properties in their neighbourhood and 53% are anti-developments of 100 and 299 properties, according to the Property Tracker survey from the Building Societies Association (BSA). But when asked how much of the UK they believe should be ‘urban’, which is defined as housing, gardens, train lines and parks, nine out of 10 said more than 10% of the country should be developed when currently just 7% of the country is. The majority of Britons are only willing to support developments of one to 10 properties being built in their local area. Against that, the research also shows that Britons are increasingly open to the types of properties they want to live in and want greater diversity in the types of properties and tenures available to them. One in five people say they would be open to buying a shared ownership property, living in an off the shelf kit home, living in a converted retail or office space and even renting long term. And despite the fact that less than 10% of properties built in the UK are custom build, more than a third of Britons are open to building their own home. The research also shows that access to mortgage finance is now the single biggest barrier to owning a home among first time buyers, rising above raising a deposit for the first time since 2012. Now 57% of these buyers say that getting a mortgage is the most difficult hurdle to overcome, compared to 41% in June 2014 and 33% in September last year. Difficulty in accessing finance for home movers has been marginally less striking, rising from 42% in September 2013 to 51% in September 2014. Substantial press coverage around the changes to mortgage regulation implemented in April may be one of the reasons why first-time buyers are especially concerned about getting a mortgage. Recommendations from the Financial Policy Committee (FPC) to bring in a cap of 15% on the total number of mortgages available at or above 4.5 times a borrowers' income may also have affected confidence, especially to those buying for the first time in London and the South East. ‘These consumer views results illustrate the major barrier that governments has to overcome when it comes to boosting housing supply in the UK. People are open to new developments and even different types of housing and tenure, but the message is clear: not in my backyard,’ said Paul Broadhead, head of Mortgage Policy at the BSA. ‘Local opposition is a major barrier to any government building its way out of the current housing crisis and is why we need the position of Housing Minister to be a full Cabinet position… Continue reading
Property industry says Scotland No vote will bring renewed enthusiasm
Scotland’s property market is likely to see renewed enthusiasm and a rise in prices in sales after the historic referendum vote which saw independence rejected. The residential real estate industry welcomed the No vote and said that the market, which has been stalled to a certain extent, can now not only return to normality but is also likely to see growth as those who put buying or selling on hold are now reassured. ‘With the outcome now certain and Scotland voting to remain part of the United Kingdom, we can expect to see some positive movement in the Scottish housing market. It is good news for Scottish estate agents and their customers who can now look forward to a less frenetic housing discussion and market,’ said Mark Hayward, managing director of the National a Association of Estate Agents (NAEA). ‘Although the outcome does not necessarily guarantee clarity for the market, the mist of ambiguity will clear much earlier than if the outcome to Scottish independence was Yes. Therefore, there is likely to be a substantial increase in market activity in the coming months, with an increase seen in the volume of sales and investments,’ he explained. But he warned that this could disrupt house prices in the short term, although not significantly. ‘The existing concerns around increases in interest rates and a significant hike in stamp duty will undoubtedly have a bigger impact over the next 12 months,’ added Hayward. According to Ran Morgan, head of Knight Frank Scotland, the certainty provided by the No vote will allow the property market to return to more normal trading conditions. ‘The fundamentals are in place to ensure a full recovery, led by the key cities of Edinburgh, Aberdeen, Glasgow and rural counties within commuting distance of large employment hubs. Improving economic activity levels in the UK, better consumer sentiment and higher bank lending will all help to kick-start the market,’ he said. ‘We expect we will be very busy in the coming months as vendors and buyers, many of whom have put off making a decision to buy or sell a property in Scotland due to the referendum, return to the market. This will lead to an increase in the number of transactions at all levels of the market,’ he pointed out. ‘We believe that the outlook for the prime property market in Scotland is positive. Our forecast is that prime values will rise by 3% by the end of this year and by a further 3% to 6% in 2015,’ he added. Andrew Rettie, head of agency for Strutt & Parker in Scotland, also believes that the No vote will inject confidence, optimism and stability into the market which will experience a renewed vigour in the latter months of 2014. ‘We all hope this will be a shot in the arm for the Scottish housing market and that the momentum seen earlier in the year returns to the sector. Buyers and sellers who have stalled in… Continue reading
