Tag Archives: real estate
Existing home sales in the US bounced back in December, latest index shows
Existing home sales in the United States bounced back in December and climbed above an annual pace of five million sales for the sixth time in seven months, according to the latest index figures. Meanwhile, median home prices for 2014 rose to $208,500, their highest level since 2007 and 5.8% higher than 2013, the data from the National Association of Realtors shows. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, rose 2.4%. Compared to December 2013 sales were up 3.5% and are now above year-over-year levels for the third straight month. Lawrence Yun, NAR chief economist, says sales picked up in December to close a 2014 that got off to a sluggish start but showed encouraging signs of activity the second half of the year. ‘Home sales improved over the summer once inventory increased, prices moderated and economic growth accelerated. Sales were measurably better in the second half, up 8% compared to the first six months of the year,’ he added. Total housing inventory at the end of December dropped 11.1% to 1.85 million existing homes available for sale, which represents a 4.4 month supply at the current sales pace, down from 5.1 months in November. Unsold inventory is now 0.5% lower than a year ago when it was 1.86 million. ‘A drop in housing supply in December raises some affordability concerns in the months ahead as minimal selection and the potential for faster price appreciation could offset the demand from buyers encouraged by a stronger economy and sub 4% interest rates,’ explained Yun. ‘Housing costs, both rents and home prices, continue to outpace wages and are burdensome for potential buyers trying to save for a down payment while looking for available homes in their price range,’ he pointed out. The data also shows that the share of first time buyers was 29% percent in December, down from 31% in November but up from a year ago when it was 27%. First time buyers in 2014 represented an average of 29% for the second straight year. All cash sales were 26% of transactions in December, up from 25% in November and 32% in December 2013. Individual investors, who account for many cash sales, purchased 17% of homes in December, up 2% from the previous month but down 4% from December 2013. Some 63% of investors paid cash in December 2014. Distressed sales, foreclosures and short sales were up slightly in December at 11% compared with 9% in November but were down from 14% in December 2013. Some 8% were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 15% below market value in December compared with 17% in November, while short sales were discounted 12% compared to 13% in November. Properties typically stayed on the market the same amount of time in December at 66 days as November but for a slightly… Continue reading
European commercial property sales set to continue with growth in 2015
European commercial property transaction volumes for 2014 are likely to exceed the €160 billion mark, up 10% on 2013, new research shows. A significant amount of capital continues to target commercial real estate and forecasts from real estate firm Knight Frank suggest a similar rate of growth in 2015, with total volumes expected to be in the range of €175 to €180 billion. All the main commercial sectors are attracting strong interest, while specialist sectors such as hotels, healthcare and student accommodation are becoming increasingly part of the mainstream property market, the firm’s report shows. ‘The really good news for both occupiers and investors is that rents in most markets remain lower than their pre-recession peaks, in some cases significantly below,’ said Darren Yates, head of Global Capital Markets Research. ‘This should provide a further boost to activity in 2015, with more occupiers looking to take advantage of good deals, while investors will seek to cash in on better rental growth prospects as the economic outlook continues to improve,’ he added. According to Andrew Sim, head of European Capital Markets, the forecast 10% rise of commercial investment volumes is a positive start for the first quarter of 2015. ‘We have witnessed a strong recovery in cities such as Madrid and Dublin and we are expecting demand to generally broaden out to smaller cities,’ he said. ‘Investors are looking to move increasingly up the risk curve to target good quality secondary stock, in addition to development opportunities,’ he added. While there are some lingering doubts about the strength and uneven nature of Europe’s economic recovery, both the European Union and the Euro area are poised for positive growth in 2014 and 2015, the report points out. Occupier markets are likely to continue to move in line with wider economic trends, with the Nordic countries and the Baltics currently seeing a significant improvement in occupier sentiment, while the UK is finally seeing a pick up in its regional city markets. However, the firm says that perhaps the most encouraging trend is the rebound in some of the peripheral markets, notably Ireland and parts of Southern Europe, with Dublin and Madrid in particular recording solid rental increases in 2014 and further growth expected in 2015. Despite the recent dip in economic performance, major French and German cities are also expected to perform well on the back of limited availability, with development yet to accelerate significantly in either country. The Russia-Ukraine crisis meanwhile continues to weigh heavily on those countries and, while property markets in the wider Central and Eastern European region have remained relatively untouched by the conflict, plentiful supply has constrained rental growth in key cities such as Prague and Warsaw. Continue reading
Property prices in key UK cities up by 0.4% in December
House prices in key UK cities increased by 0.4% in December to an annual rate of 8.3% but the rate of growth plateaued and is set to slow further in 2015, according to the latest national index report. While the recovery in UK house prices is spreading, the gap between the best and worst performing cities has narrowed to its lowest level for 15 years, the index from Hometrack shows. There are now two distinct groups, cities that are accelerating off a low base after years of either static or falling prices and those that have enjoyed strong house price recovery over the last two years and where house prices are starting to slow on cooling demand and affordability constraints. Overall 11 cities registered growth in house price inflation over the second half of 2014, led by Edinburgh, Aberdeen and Glasgow where demand for housing has increased after the September independence vote. Newcastle, Leicester and Liverpool have also saw growth continue to rise off a low base in the second half of 2014 with house prices in these cities 9%, 2% and 15% below their 2007 levels. Oxford, London, Cambridge and Bristol have all registered a slowdown in the rate of growth over the second half of 2014 off a high, double digit base. Other cities registering a slowdown in the rate of growth include Bournemouth, Belfast and Leeds showing that slower house Slower growth in housing demand, tougher mortgage checks and affordability factors are behind the slowdown in these cities where house prices have bounced by as much as 55% from their 2009 lows in recent years, the report says. According to Richard Donnell, Hometrack director of research, house price growth at a city level looks set to converge further in the first half of 2015 as high growth markets continue to slow and lower growth markets start to see growth plateau. ‘Pent-up demand has fed back into the market in the last two years, supported by record low mortgage rates, but mortgage approvals have weakened in the last five months with a knock on impact on house price growth,’ he said. ‘Low mortgage rates are making housing look affordable but it is the willingness and ability of households to borrow, against the background of greater mortgage regulation, which will most influence the housing market in 2015,’ he added. Continue reading
