TSI
Cash sales of homes in the United States falling, latest figures show
Cash sales made up 34.6% of total home sales in the United States in March 2015, down from 39% in the same month in 2014, according to the latest data available. The year on year share has fallen each month since January 2013, making March 2015 the 27th consecutive month of declines, the report from real estate form CoreLogic shows. Month on month the cash sales share fell by 2.8% compared with February but the firm pointed out that due to seasonality in the housing market, cash sales share comparisons should be made on a year on year basis. The cash sales share peak occurred in January 2011 when cash transactions made up 46.5% of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%t. The report predicts that if the cash sales share continues falling at the same rate it did in March 2015, the share should decrease to 25% by the middle of 2016. A breakdown of the figures shows that real estate owned (REO) sales had the largest cash sales share in March 2015 at 56.2% followed by resales at 34.5%, while short sales accounted for 31.6% and newly constructed homes 14.9. While the percentage of REO sales that were all-cash transactions remained high, REO transactions made up only 8.4% of all sales in March. In January 2011, when the cash sales share was at its peak, REO sales made up 23.9% of total home sales. Resales make up the majority of home sales at about 80% and therefore have the biggest impact on the total cash sales share. Florida had the largest share of all cash sales at 51.8 followed by Alabama at 50%, New York at 46.5%, New Mexico at 42.2% and Michigan at 41.3%. Of the nation’s largest 100 Core Based Statistical Areas (CBSAs) measured by population, Philadelphia had the highest share of cash sales at 60.7% followed by West Palm Beach-Boca Raton-Delray Beach, Florida at 59.9%, North Port-Sarasota-Bradenton, Florida at 59.5%, Cape Coral-Fort Myers, Florida at 59.3% and Miami-Miami Beach-Kendall, Florida at 58.3%. The data also shows that Colorado Springs had the lowest cash sales share at 16.1%. Continue reading
New homes in UK seen as cramped and of poor quality, new research has found
The UK government has pledged to build hundreds of thousands of much needed new homes but it seems that this is not what home owners want with the majority preferring older properties. People think new homes are too small, characterless and of poor quality with new research finding that just 21% would actually buy a new build and 47% want a home that is 10 years old or older. The survey carried out for the HomeOwners Alliance found that 38% think that a low standard of build quality is the main disadvantage of a new home. A third were put off by the size of rooms and other dislike included the lack of character and smaller gardens. ‘We need more new homes, but they have to be homes that people want to live in, not homes that are quick, easy and cheap for house builders to throw up,’ said Paula Higgins, of the HomeOwners Alliance. ‘What we need to solve the housing crisis are quality homes of character and space, and challenge the housing industry to deliver. After the war, they built homes fit for heroes. All we want is homes fit for home owners. Homes shouldn’t be built just for a quick profit, but to last for generations to come,’ she added. There are however, positive aspects to new homes, the research also found. For example no old pipes on show and no hidden problems. And half of people believe the biggest benefits of a new build were the low maintenance costs and better energy efficiency. Kim Vernau, of BLP insurance, which funded the research, said that there is reasoning behind the perception over quality. ‘With activity in the construction industry on the increase as local authorities and developers attempt to meet the housing shortfall, there is a real risk that building standards will slip,’ said Vernau. ‘Consumers want peace of mind and reassurance that the home they are purchasing is fit for purpose and built to last rather than simply chasing a house-building statistic,’ added Vernau. Official figures show about 120,000 homes were completed last year, an increase on 2013 but still only half the 240,000 experts say are needed to deal with the UK’s chronic housing shortage. The Government has pledged to ease the supply shortage by building 200,000 cut-price starter homes. Prime Minister David Cameron said first time buyers under 40 would be able to buy these houses at a 20% discount to ensure everyone who works hard can have a home of their own. Continue reading
Three tier recovery in UK commercial property markets, led by offices
The UK commercial property market is experiencing a three tier recovery with offices and retail living in different worlds, according to the latest analysis report. All property capital growth increased by 0.8% in May month on month, up from the 0.5% reported for April, says the Knight Frank June market outlook report. Offices saw the highest capital growth at 1.5%, and retail the lowest at 0.2% while the 12 month total return fell again to 17.6% and investment volume from January to May was £23.6 billion, up from £17.8 billion for the same period of 2014. ‘The winter and early spring were a time of deceleration for commercial property, following the heady capital growth seen in 2014. While in May IPD’s capital growth index gained momentum, the improvement was not evenly spread across the sectors,’ said James Roberts, Knight Frank chief economist. The report analysis points out that offices surged ahead, industrial achieved a less dramatic increase, and retail barely saw any improvement. Roberts explains the disparity is probably due to the fact that in recent years industrial has enjoyed a fillip in the occupier and investment market from the rise of e-commerce but that is not ‘news’ any more. ‘Possibly investors now view the internet effect as priced in, taking some of the heat out of the market. This is perhaps a healthy downwards gear change, especially as the internet is no longer expanding its market share in retail as aggressively as a few years ago,’ he explained. He also pointed out that in 2000 the office market became overheated in London and the South East, as property investors and developers overestimated the growth prospects of tech firms. ‘Hopefully what we are seeing is a soft landing for industrial following its e-commerce boom of recent years,’ he added. But he also said that explaining retail property’s under performance is, however, getting harder. ‘After all, the UK retail sales figures have been robust for some time, and the consumer has done much to support GDP growth by compensating for sluggish export demand and a retrenching government. Plus, there are the new occupier groups and shopping formats that have emerged to meet changing consumer trends, such as cafés, mini supermarkets, and click and collect. These should be compensating for problems elsewhere in the sector. Perhaps the explanation is to be found in leasing market fundamentals,’ he explained. So far this year the UK shop vacancy rate has hovered around the 13% mark according to Local Data Company. This is in marked contrast to the steady decline in vacancy rates in many UK office markets, particularly in London and the South East where levels are in most cases lower than in 2007. ‘These dynamics are shaping rental growth, which is reasserting itself significantly in the office market, and barely in existence for retail. Admittedly, the rental growth for London and the South East is the driving force behind the IPD office figures, but there are… Continue reading
