Tag Archives: real-estate
US home sales reach eight year peak and prices all time high
Existing home sales in the United States increased in June to their highest pace in over eight years, according to the latest monthly data report from the National Association of Realtors. It also shows that the cumulative effect of rising demand and limited supply has helped push the national median sales price to an all-time high of $236,400. Sales increased by 3.2% and all regions experienced sales gains in June and have now risen above year on year levels for six consecutive months. Sales are now at their highest pace since February 2007 and have increased year on year for nine consecutive months and are 9.6% above a year ago. ‘Buyers have come back in force, leading to the strongest past two months in sales since early 2007. This wave of demand is being fuelled by a year plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy,’ said Lawrence Yun, NAR chief economist. ‘June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,’ he added. The median existing home price for all housing types in June was $236,400, which is 6.5% above June 2014 and surpasses the peak median sales price set in July 2006 of $230,400. June's price increase also marks the 40th consecutive month of year on year gains. The data also shows that total housing inventory at the end of June inched 0.9% to 2.3 million existing homes available for sale, and is 0.4% higher than a year ago when it was 2.29 million. Unsold inventory is at a five month supply at the current sales pace, down from 5.1 months in May. ‘Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers. Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single family homes,’ Yun explained. The percent share of first time buyers fell to 30% in June from 32% in May, but remained at or above 30% for the fourth consecutive month. A year ago, first time buyers represented 28% of all buyers. Properties typically stayed on the market for 34 days in June, down from 40 days in May and the shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 129 days in June, while foreclosures sold in 39 days and non-distressed homes took 33 days. Some 47% of homes sold in June were on the market for less than a month, the highest percentage since June 2013. According to NAR president Chris Polychron, real estate agents are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West. ‘The demand for buying has really… Continue reading
Average UK home values up almost 3% in first half of 2015
The average value of homes across Britain rose by 2.75% during the first six months of 2015, with all regions seeing price growth, according to new figures. At the start of July the average price stood at £270,674, up £6,974 on January’s figure of £263,699, the data from property website Zoopla shows. A breakdown of the data show that although there is general growth the rate of growth varies from region to region. Scotland experienced the highest rate of growth, with an average increase in property values of 6.6% or £11,382, taking the average home value in Scotland to £183,230. The next best performing regions were the North East and North West registering a 3.1% and 3% increase respectively. Wales was the worst performing region for property price increases over the first half of 2015 with an average rise of only 1% or £1,584. Among the 50 largest cities in Britain Edinburgh registered the largest growth in house prices since January 2015 of 8.2%, representing a £20,465 increase in the average home value in the city. Next was Colchester in Essex which saw property prices rise by 7.6% or £19,088, during the six month period, followed by Aberdeen with a 6.4% or £15,416 rise in values. London saw prices rise by only 2.5%, below the national average, but this amounted to a rise of £14,385 because of the higher price of property in the capital city. Yorkshire had three of the 10 worst performing cities for house price growth in the first half with Rotherham seeing a fall of 2.1% or £2,752. Wolverhampton, Newcastle upon Tyne and Middlesbrough also saw a modest drop in average houses over the period. ‘While national property price growth saw a slow start to the first half of the year, it recovered strongly towards the end of the period. The strong regional figures across the board indicate an economy which is returning to health, with a series of Government incentives designed to encourage home buying helping to boost demand for property in all parts of Britain,’ said Lawrence Hall of Zoopla. He explained that the surge in property values in Scotland can, in part, be explained as a post referendum bounce, as businesses and capital flood back to Scotland, after withholding investment during the volatile September referendum period in 2014. ‘A post general election feel good factor must not be discounted as more devolution promised has given property prices a bounce as Scots anticipate more jobs and investment coming their way,’ he added. Continue reading
European Bank measures risk house price bubbles in UK, Germany and Norway
Quantitative easing by the European Central Bank could drive prices even higher in overvalued property markets in Germany, Norway and the UK, a new analysis suggests. House prices in these countries have risen quickly over the last year and a half and as a result the risk of house prices bubbles have re-emerged, according to a report from Moody’s Analytics. It explains that while the International Monetary Fund’s Global Housing Watch shows prices rising, it is case of a two speed market. Some have rebounded quickly after just moderate price declines during the financial crisis, the other group is still recovering from much steeper price drops. The first group includes Germany, the UK and Norway where house prices have shot up over the last few quarters and where the formation of a housing bubble is a real possibility and QE feeds asset bubbles, the report points out. Since March every month the EWCB has been buying €60 billion worth of euro-denominated assets issued by euro one governments, agencies, and European institutions and the programme will last at least until September 2016. This has seen yields on the government debt of countries viewed by investors as safe fall and this in turn has encouraged investment in property markets which yield higher returns. In Germany, house prices have been steadily rising since the middle of 2009 as its property market is viewed as a safe haven investment in an environment of increased uncertainty. Indeed, Germany was one of the few European countries to avoid a housing market slump during the 2008/2009 downturn, thanks to prudent bank lending regulation. However, the report says that growing demand for German properties is leading to overvaluation, especially given the insufficient supply. Only recently has construction finally picked up. In the first half of this year, German building authorities granted 10% more building permits than in the same period a year earlier. But it will take a few years before supply catches up to demand. German house prices have therefore been rising more quickly than rents and incomes. Although the price-to-income and price to rent ratios are still relatively low compared with Germany’s long term average, the report says that if this trend persists the housing market could overheat. While the outright risk of a housing bubble forming in Germany is relatively low, the Bundesbank is monitoring the situation. So far, it has not intervened. However, in the UK the authorities are doing so. Last year the Bank of England in 2014 warned of a possible housing bubble which could derail the country’s recovery and introduced tighter mortgage loan standards designed to reduce the supply of credit, taking some heat out of the housing market. The UK’s Financial Conduct Authority also introduced stricter underwriting rules for mortgages to ensure that banks assess borrowers’ ability to repay loans after interest rates start to rise. Yet loan standards are still relatively loose, largely the result of the UK government’s Help… Continue reading
