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Supply shortage pushing up property prices in the US
Shortage of supply is keeping house prices in the United States on the up across most of the nation but growth is slowing to a more healthy paces, according to the latest quarterly report. Overall prices increased during the third quarter of the year with the median existing home single family home price up in 87% of markets. Some 154 out of 178 metropolitan statistical areas (MSAs) showing gains based on closings in the third quarter compared with the third quarter of 2014, the data from the National Association of Realtors (NAR) shows. And 24 or 13% of areas recorded lower median prices from a year earlier. There were slightly fewer rising markets in the third quarter compared to the second quarter, when price gains were recorded in 93% of metro areas while 21 or 12% of metro areas in the third quarter saw double digit increases, a fall from the 34 metro areas in the second quarter. Some 16 or 9% of metro areas saw double digit increases in the third quarter of 2014. According to Lawrence Yun, NAR chief economist, there is no question the housing market had its best quarter in nearly a decade. ‘The demand for buying picked up speed in many metro areas during the summer as more households entered the market, encouraged by favourable mortgage rates and improving local economies,’ he said. ‘While price growth still teetered near or above unhealthy levels in some markets, the good news is that there was some moderation despite the stronger pace of sales,’ he added. The national median existing single family home price in the third quarter was $229,000, up 5.5% from the third quarter of 2014 when it was $217,100. The median price during the second quarter of this year increased 8.2% from a year earlier. Total existing home sales, including single family and condo, increased 3.4% to a seasonally adjusted annual rate of 5.48 million in the third quarter from 5.30 million in the second quarter, and are 8.3% higher than the 5.06 million pace during the third quarter of 2014. Yun explained that sales had the potential to be even higher last quarter given the decline in mortgage rates and favourable economic conditions. ‘Unfortunately, the lack of any meaningful gains in housing supply pushed prices in some areas above what some potential buyers, especially first time buyers, are able to afford,’ he added. The five most expensive housing markets in the third quarter were the San Jose, California metro area, where the median existing single family price was $965,000, San Francisco at $809,400, Anaheim–Santa Ana, California at $715,300, Honolulu at $714,000 and San Diego at $554,400. The five lowest cost metro areas in the third quarter were Cumberland, Maryland, where the median single family home price was $82,400, Youngstown–Warren–Boardman, Ohio, at $90,700, Decatur, Illinois at $101,400, Rockford, Illinois at $102,800 and Elmira, New York at $108,800. ‘Many of the metro areas with the fastest price appreciation over the past year… Continue reading
UK tenants want to be able to decorate their properties, new poll finds
New research reveals that residential landlords in the UK could benefit from the findings that tenants are willing to pay more if they are allowed to decorate their homes. Indeed, the survey by insurance provider Endsleigh found that they would be happy to pay an additional £149.52 a year, on average, if their landlords let them personalise the property. With two million private landlords, letting out five million homes in the UK, it calculates that there is potentially an extra £530 million in revenue out there for landlords who explicitly say they are happy for tenants to decorate. The poll found that 43% would be happy to pay more rent and only 29% of those surveyed said that they have the freedom to decorate their property as they wish. It also revealed that with 25% living in a rental property for more than three years, and one in five saying they would be ‘likely’ or ‘very likely’ to avoid inviting relatives round their home if they were embarrassed about the décor, it’s understandable that tenants want to decorate their homes. The top desire was to be able to paint the walls with a colour of their choice with 19% wishing to do this, 17% want to be able to hang pictures or mirrors with screws and 10% want to hand wallpaper of their choice. The research also found that 9% want to be able to use blu-tack to hang things on the wall and 9% want to hang a television on the wall. Many are reluctant to ask with just 28% of tenants seeking permission from their landlord for permission to decorate but of those that do, 76 % of those tenants’ landlords agree to the request, despite it being against the tenancy agreement. ‘With it being so difficult to get on to the property ladder, people are now renting for longer, so naturally they are going to want to decorate the property they are living in long term,’ said David Hadden, manager for landlords and lettings at Endsleigh. ‘Landlords who allow tenants to personalise their property could be favoured over those who don’t and may be able to command a higher rental price. If tenants feel at home in their property they may also have longer tenancies,’ he added. Continue reading
UK property prices set to rise by over 4% next year
Overall UK house prices are expected to tie by 4.1% in 2016 and by 20.3% cumulatively in the five years to the end of 2020, according to new research. However, as always national average performance disguises large regional variations that still characterise the UK market, the analysis report from international real estate firm Knight Frank shows. In the prime London and prime country markets higher transaction costs will continue to weigh on activity and price growth in 2016 as the market absorbs stamp duty, it points out and prime central London prices are forecast to rise by 2% in 2016 and by 20.5% cumulatively by 2020. Overall, values are growing more strongly in the South of England, particularly London and the South East, compared to slower growth in the North of England, Scotland and Wales. ‘These regional differences are unlikely to unwind significantly in 2016, although the improving economic and employment picture, especially in the regions, will underpin pricing,’ the report says. It also explains that interest rates continue to play a key role in the market. ‘While capital values will continue to be supported by ultra-low interest rates, the discussion has now turned to when, not if, the Bank of England will start to raise rates and markets are pricing in a rise in the second half of 2016,’ it adds. The report also points out that current ultra-low base rate, alongside an increased appetite for lending among banks, has led to record low mortgage rates, and mortgage lending has risen during 2015. The flip-side of this trend however, is that the best mortgage rates are generally only available to those who have access to sizeable deposits or equity. ‘While there are now more mortgage deals available to those with only a 5% deposit, a trend which will continue into 2016, the MMR mortgage rules mean that clinching a mortgage deal will continue to be challenging for some, especially for first time buyers,’ the report says. ‘Activity in the market has stabilised at around 100,000 transactions a month, although it is interesting to note that the cut in stamp duty for homes worth less than £1.1 million in December last year and the definitive general election result failed to produce an increase in activity. This was closely linked to a lack of stock on the market, particularly second hand stock,’ it adds. The analysis also looks at supply and demand and says that a lack of available homes to buy will likely continue to put a floor under pricing in 2016. ‘There is now even more emphasis on the delivery of new homes, and while levels of house building have picked up in recent years, the supply of new build dwellings is still far below Government targets,’ it points out. It also points out that the prime London property market faced a number of headwinds in 2015, led by the increase in stamp duty and higher transaction costs will continue to… Continue reading
