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Inventory falls in US housing market, especially for first time buyers
There were fewer homes for sale in the United States in June than there were a year ago, increasing competition for potential buyers, the latest research shows. Most of these declines were among the lowest valued homes sought by first time homebuyers, according to the report from real estate firm Zillow. In the lowest priced third of homes for sale, the number of homes on the market fell year on year in 28 of the nation's 35 largest metro areas. By comparison, among the highest priced homes, inventory fell year on year in only 10 metro areas. The total number of homes listed for sale on Zillow in June was down 6.5% year on year but was up 2.1% on a monthly basis. Large metros where inventory has increased the most annually include Austin, up 30.3%, Atlanta up 22.4% and Washington DC up 18.9%. ‘Historically low mortgage rates continue to keep overall ownership affordability very good by historical standards, making it a great time to buy a home, especially with rent becoming increasingly unaffordable,’ said Zillow chief economist Stan Humphries. ‘Finding a house is the last hurdle for many buyers who have saved a down payment and gotten pre-approved for a mortgage. But low inventory levels like those we're seeing across the country can bring the home buying process to a screeching halt. In many markets, there just isn't a lot to choose from in terms of homes on the market,’ he added. Overall, home values in the United States rose 3.3% from June 2014, and 0.3% from May to a Zillow Home Value Index of $180,100. As home values continue to rise, buyers are faced with more challenges in a tighter market, especially in hot markets like Denver, which saw the highest home value appreciation from last year, surpassing even San Jose and San Francisco. Rents have also continued to rise in the second quarter, up 4.3% from this time last year to a Zillow Rent Index of $1,369 with annual growth led by San Francisco with a rise of 14.5% followed by Denver up 13% and San Jose up 12.5%. Metros that are seeing strong appreciation in rents, as well as home values, are experiencing healthy increases in demand with often thriving job markets and sometimes tight inventory supply, the report also says. Of the 863 metropolitan and micropolitan areas covered by the index, some 645 saw annual growth in rents in the second quarter and 527 metro areas saw rents increase from the first to second quarters. Over the next year, home value growth is expected to slow even further, to 2.4% through to the second quarter of 2016, according to the Zillow Home Value Forecast. The report explains that continued steady growth in the real estate market shows signs that the market is maintaining stability after going through the housing bubble and bust of 2007 through 2012. Continue reading
Private rental growth in UK centred in regional cities, new analysis suggests
The growth of the private rented sector in the UK continues and there is evidence that activity in this market is market is increasingly clustering in cities around the country. New data shows the proportion of those in the private rented sector living in urban areas has risen from 80% to 86% over the last decade, mostly accounted for by regional cities outside London. A new analysis of a range of data, including the most recent English Housing Survey, by real estate firm Knight Frank, suggests that this growth is set to continue. The firm has developed its PRS index, which reflected average yields, into a PRS Yield Guide, produced by Knight Frank consultancy agency and valuation teams which shows a slight tightening in yields for prime PRS deals in the second quarter across the Greater London market, as well as in many of the other key cities except Bristol and Glasgow. Meanwhile, it says that demand for rental property is being underpinned by affordability constraints in many parts of the sales market as well as increased hurdles in the mortgage market. There is also an increasing desire for property with flexible tenure, especially among young professionals, who want to live close to where they work. Tenants are also staying for longer with the English Housing Survey showing that the proportion of those living in rented accommodation reporting that they have lived in their current home for between two and four years rising to 24%, up from 20% a decade ago. Rents are rising across the country, reflecting an increase in wages as well as inflation. They rose by 2.5% in the year to the end of June but there are still wide regional variations in rental growth, just as there is a divergence in entry costs into these markets. The biggest increase in rents has been in Greater London with growth of 3.8% in the 12 months to the end of June, followed by the East of England up 2.6%, the South East up 2.5% and Scotland up 2.1%. In the same period rents have increased by 1.8% in the South West, by 1.7% in the Midlands and by 1.4% in Yorkshire and Humber. Meanwhile the growth over the same period in Wales was 0.8% and the North West and the North East both saw growth of 0.5%. The report also shows how institutional real estate investors are becoming increasingly active in the private rented sector in the regions over the last 12 months. It says they are attracted by the yields achievable and the strong occupier demand in regional centres. Of particular interest to institutions have been private rented sector schemes in Birmingham and Manchester, with a large amount of interest focussed on lot sizes ranging between £20million and £100 million. ‘The increasing entry of institutional investors into the market is a significant positive factor for the PRS, which should lead to an increase in the supply of good… Continue reading
Foreign buyers boosting Spanish property market, especially on Costa del Sol
An increased number of foreign buyers is set to boost the residential property market in the Costa del Sol in Spain, one of the country’s most popular areas with overseas purchasers. A new market forecast report from Instituto de Practica Empresarial (IPE) business school, in collaboration with property company Mar Real Estate, suggests the market could grow by 10% in the area. It also says that the market is set to grow by between 5% and 7% in major cities such as Madrid and Barcelona and 3% in other cities. The IPE says that home prices on the Costa del Sol are already up 10% this year, and now represent 5% of all sales nationwide and if sales continue growing at their present trend, the property market in Málaga province will increase to 20% of the overall Spanish market. The growth is buoyed by foreign demand for holiday homes on the Costa del Sol and the IPE report suggests that surging sales will help reduce the glut of new homes on the coast. Indeed, the excess inventory of new homes is expected to fall by 50% this year. Luxury home sales, in particular, are coming back strongly on the Costa del Sol, according to the IPE report, driven by a better exchange rate in Pounds and Dollars, and the security and stability of Spain. Meanwhile, the latest report from property valuation firm Tinsa says that the Spanish property market is undergoing a widespread recovery. Average property prices fell by 2% year on year in July, the lowest rate of decline since May 2008 but this masks growth areas along the Mediterranean coast in particular with some areas seeing price growth of 2.8% year on year. The data shows that on the Mediterranean coast, where prices have fallen by an average of 47.6% since the economic downturn, the average price of a home has increased by 3.8% since the end of 2014. This is more than large cities and the Balearic and Canary Islands where average prices have risen by 0.2% and 0.9%, respectively. Tinsa data also shows that five of the top 10 most expensive property hotspots are located in the Balearic Islands but Alejandra Vanoli, managing director of Mallorca Sotheby’s International Realty, said that there are prices per square metre in these locations that far exceed Tinsa’s estimations. ‘It’s not unheard of to reach as high as €30,000 per square metre for the most desirable Port Andratx home. Demand is strong from some of the wealthiest individuals and families in Europe, the US and beyond,’ she explained. Tinsa figures also suggest that the Balearics weathered the storm of the Spanish property market price ‘correction’ more positively than the rest of the country. While the average drop in prices across the whole country stands at 42%, in the Balearic Islands most regions registered less than a 35% decline. Palma was also highlighted by Tinsa as property transactions increased by more… Continue reading
