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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
Average prime property prices in London up £260 a day in 2014
Average prime London property values rose by £260 a day over last year, and Balham saw the biggest leap as prices jump by 21% over the 12 months period, new data shows. Overall the majority of property market gains in London were made in first half of 2014, and prices dropped 1.6% during the final three months of the year, the first quarterly fall since the second quarter of 2011. The data from the latest London Property Monitor report from Marsh & Parson, also shows that supply of Prime London property for sale increased by 26% in last three months of 2014 and the New Year has seen an uplift in demand, with 13 buyers to every available property in January. The average Prime London home has risen in value by £95,000 in the past year but in Balham they have jumped £152,000 over the same period. With property prices in outer prime areas of the capital typically 25% lower than the wider prime London average, stronger demand for more affordable homes has pushed the rate of house price inflation up in these kind of suburban areas. Indeed, house prices in outer prime London climbed 9% during 2014, compared to a 4.3% annual increase in prime central areas. Balham is favoured by first time buyers and young families and the growth in this area was followed by Brook Green where property values are now 19% higher than a year ago. In contrast, average prices in exclusive prime central enclaves of Kensington and Holland Park have grown 8% in the past 12 months. ‘The prestigious prime property bastions of Kensington, Chelsea and Holland Park will always command worldwide appeal from buyers, however, everyday demand for more affordable homes has catapulted Balham and other outer prime corners of the capital onto the map,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘Londoners are increasingly willing to compromise on a central location in return for more living space and manageable price tags, and as a result the price growth seen in these green village suburbs has overtaken the Goliaths of London property this year,’ he added. So, a breakdown of the figures show that throughout prime London prices now average £1,572,342, up 6.4% year on year but down 1.6% month on month. In prime central London they are £2,199,531, up 4.3% annually but down 2.1% month on month. And in outer prime London average prices are £1,180,348, up 9% year on year but down 1.1% month on month. However, the majority of this house price growth occurred in the first half of 2014, and in the last three months, prime London property values declined 1.6%. This is the first quarterly price drop witnessed for three and a half years, as the market corrects after remarkable growth seen throughout the first half of 2014 . A 26% uplift in the supply of prime London properties… Continue reading
UK buyers less concerned about interest rates, survey suggests
The drop in inflation in the UK to 0.5% in December 2014 has corresponded with a steep drop in the proportion of consumers viewing interest rates as one of the main barriers to buying a property, it is claimed. According to the latest Halifax Housing Market Confidence Tracker index over the last 12 months, the proportion of consumers citing concern about rises in interest rates as a barrier to buying property rise steadily from 14% in the fourth quarter of 2013 to 19% in the third quarter of 2014, the highest since the Tracker began at 22%. However, this fell back to 13% in the fourth quarter of 2014, the lowest level in over a year, at the same time as inflation began to fall sharply in the last few months of the year. ‘Speculation over a potential rate rise was high on the news agenda at certain times in 2014 and the Housing Market Confidence Tracker showed consumers becoming increasingly anxious about interest rate rises,’ said Martin Ellis, housing economist at the Halifax. ‘But with inflation falling sharply in the last few months it’s taken away some of risk of an imminent rise and worries have fallen accordingly. While a rate rise will happen eventually, lenders take this into account as part of our affordability checks in the mortgage application process. Going forward the key factor in how they adjust to any changes in rates will be the way in which borrowers manage their disposable income,’ he explained. It is not only interest rates that consumers perceive as being a barrier to buying a property. The largest single barrier is perceived to be the ability to raise a deposit, cited by 61% in the fourth quarter of 2014. However, in the last few years there have been a number of schemes launched specifically aimed at supporting borrowers with smaller deposits such as the Help to Buy scheme, which has loaned buyers deposits and guaranteed loans. ‘Mortgage affordability has improved significantly in recent years with record low mortgage rates a major contributor behind this improvement. Figures from the 2014 Halifax First Time Buyer annual review show that the number of first time buyers is at its highest level since 2007 and last year the number of first-time buyers increased by 22%. This was the third successive annual increase with a 50% rise in the past two years,’ Ellis pointed out. Continue reading
