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US home prices expected to rise 3% in next 12 months, says latest forecast report
US property prices are expected to rise 3% in the next 12 months but growth will depend on location, according to the latest real estate market report from Zillow. The Zillow Home Value Index rose to $169,200 in February, up 5.6% year on year and the number of homes listed for sale on Zillow was up 5.5% annually. However, the firm says that as the spring home buying season heats up, buyers and sellers nationwide can expect very different experiences when it comes to negotiating power. According to the latest Zillow analysis of national buyers' and sellers' markets, sellers in the West will likely have the upper hand in negotiations when selling their home, while buyers in Midwestern and East Coast metros will likely face less competition and have more room for bargaining on prices. The Bay Area, San Antonio and Los Angeles are the top prospects for sellers and Cleveland, Philadelphia and Tampa the top of the list for buyers, according to Zillow. 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. The real estate data in markets on both coasts are telling markedly different stories, the report says. ‘Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge. In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,’ said Zillow chief economist Stan Humphries. ‘In general, buyers in sellers' markets this spring can expect tight inventory, increased competition and a greater sense of urgency. Sellers in buyers' markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along,’ he explained. ‘As we put the housing recession further in the rear view mirror, the broad based dynamics that applied during those days, when all markets were reacting similarly to nationwide economic conditions, are fading. Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced,’ he added. He also pointed out that but both monthly and annual US home value appreciation slowed to their lowest paces in months. National home values were almost flat in February from January, and were up 5.6% from February 2013. The pace of home value growth has slowed in recent months as more inventory of for sale homes has helped meet demand. Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 5.5% annually… Continue reading
Lending for homes in UK up 43% compared to a year ago, latest figures show
Gross mortgage lending in the UK was £15.2 billion in February, down some 6% compared with January but still 43% higher than the £10.6 billion lent in February last year, the latest data from the Council of Mortgage Lenders shows. The CML also pointed out that it is the highest total for a February since 2008. CML chief economist Bob Pannell said that housing market indicators have continued to be strong over recent months, once seasonal factors have been taken into account. ‘First time buyers have benefitted most from the government’s Help to Buy initiatives, with the more recent mortgage guarantee scheme now starting to push typical loan to value levels higher,’ he explained. ‘The housing market got a further boost from this week’s Budget. This, together with benign developments in the economy more widely, should bolster short term sentiment and activity,’ he added. Experts believe that more new homes are needed to help the property market continue its recovery as lack of supply is holding it back. Duncan Kreeger, director of West One Loans, a privately funded short term lender, comments, believes that the market can only go so far without a sustainable supply of new homes. ‘While mortgages might be catching up with pre-recession levels, house building in the UK still falls considerably below these peaks,’ he said but added that building may have got a boost in yesterday’s Budget. ‘However, there are still many questions left unanswered. Some 200,000 new homes looks good on paper but we still don’t know where these will be placed. It’s all very well to build a garden city in Ebbsfleet, but if demand is greatest in urban areas, it’s unclear how this will help,’ he explained. ‘The hard truth is that to really increase the supply of homes where they are most needed requires complex property conversions and refurbishments and it’s still almost impossible to get mainstream funding for these types of projects,’ he added. According to Ian McGrail, managing director, FirstMortgage, the data supports the level of growth that his firm as seen at a company level year on year, as demand for mortgages from first time buyers and home movers remains consistently strong. ‘The results, showing the highest total for a February since 2008, pair well with our in house monthly figures, where similarly we have seen record levels of production. This growth looks set to continue steadily into the year, although we would expect activity to slow down temporarily at the end of April when the Mortgage Market Review comes into effect, as lenders get to grips with the reality of the reforms imposed,’ he added. However, Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), warned that growth could slow this year partly because regulatory changes on 26 April will act as a temporary buffer and also because the bar was significantly raised in the second half of last year. 'But the recovery is well underway and should continue to… Continue reading
Property prices and rents continue falling in Cyprus and sales are down considerably
Property prices and rental values are continuing to fall in Cyprus but there are much fewer sales than normal due to the banking crisis, according to the latest quarterly index report from the Royal Institution of Chartered Surveyors. The Property Price Index has recorded falls in almost all cities and asset classes, with significant falls being recorded in Nicosia. RICS says that Nicosia is clearly feeling the impact on the government and banking sector, which dominate the local employment market, whilst other cities are progressively bottoming out. Across Cyprus, residential prices for both houses and flats fell by 1.6% and 0.5% respectively in the fourth quarter of 2013. The biggest drop was in Larnaca where house prices were down1.4%, and Nicosia which saw a 6.8% fall in prices for flats. Values of retail properties fell by an average of 3.2%, whilst those of offices and warehouses fell by 1.4% and 0.7% respectively. Compared to the fourth quarter of 2012, prices dropped by 13.3% for apartments, 10.5% for houses, 19.8% for retail, 12.8% for office, and 15.4% for warehouses. Across Cyprus, on a quarterly basis rental values decreased by 1% for apartments, 1.3% for houses, 3.0% for retail units, 1.4% for warehouses, and 1.6% for offices. Compared to the fourth quarter of 2012, rents dropped by 13.3% for flats, 12.3% for houses, 29.4% for retail, 18.0% for warehouses, and 18.8% for offices. ‘The majority of asset classes and geographies continue to be affected, with areas that had dropped the most early on in the property cycle now nearing the trough. Only properties in Famagusta district showed a marginal increase in both capital values and rents, as the market there appears to be stabilising,’ the report says. At the end of 2013 average gross yields stood at 3.8% for apartments, 1.9% for houses, 5.3% for retail, 4.5% for warehouses, and 4.3% for offices. The report points out that the parallel reduction in capital values and rents is keeping investment yields relatively stable and at very low levels compared to yields overseas. ‘This suggests that there is still room for re-pricing of capital values to take place,’ it adds. The report also points out that during the fourth quarter of 2013 the Cyprus economy began stabilising from the impact of the decisions of the Eurogroup on 15 and 27 March to bail in the depositors of two of Cyprus’ largest banks, to close down Laiki Bank, and to impose capital restrictions. The secondary implications of these decisions, mainly the reduction of bank staff, the increase in unemployment, and further decreases in salaries, were unfolding throughout the quarter. ‘Given prevailing economic conditions and the turbulence in Cyprus’ banking system, there was a lack of transactions during the quarter. Local buyers in particular were the most discerning as the increase in unemployment and the worsening prospects of the local economy led to a sharp reduction in interest. Furthermore, those interested were unable to access bank finance or… Continue reading
