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US home sales fall to lowest annual pace for six months, latest data shows
Home sales in the United States have fallen to their lowest annual pace for six months, down 6.1% in November, according to the latest data from the National Association of Realtors. Total sales, excluding new build, reached a seasonally adjusted annual rate of 4.93 million in November from a downwardly revised 5.25 million in October but they are still up 2.1% compared to a year ago. Lawrence Yun, NAR chief economist, says sales activity was choppy throughout the country in November and housing inventory began its seasonal decline. ‘Fewer people bought homes last month despite interest rates being at their lowest levels of the year,’ he pointed out. ‘The stock market swings in October may have impacted some consumers’ psyches and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market,’ he added. But prices are still strong. The median existing home price for all housing types in November was $205,300, 5% above November 2013 and the 33rd consecutive month of year on year price gains. The NAR data also shows that total housing inventory at the end of November fell 6.7% to 2.09 million existing homes available for sale, which represents a 5.1 month supply at the current sales pace, unchanged from last month. Despite the tightening in supply, unsold inventory remains 2% higher than a year ago, when there were 2.05 million existing homes available for sale. ‘Lagging home building activity continues to hamstring overall housing supply and is still too low in relation to this year’s promising job growth. Much faster price and rent appreciation, easily exceeding wage growth, will occur next year unless new construction picks up measurably,’ said Yun. All cash sales were 25% of transactions in November, down from 27% in October and below the 32% recorded in November of last year. Individual investors, who account for many cash sales, purchased 15% of homes in November, unchanged from last month and below November 2013 when it was 19% while 61% of investors paid cash in November. The percent share of first time buyers in November climbed to 31% from 29% in October, the highest share since October 2012 when it was also 31%. First time buyers have represented an average of 29% this year. Distressed sales, that is foreclosures and short sales, were unchanged in November from 9% in October and remained in the single digits for the fourth month this year, well below the 14% of a year ago. Overall 6% of November sales were foreclosures and 3% were short sales. The data shows that foreclosures sold for an average discount of 17% below market value in November compared with 15% in October, while short sales were discounted 13% compared to 10% in October. Properties typically stayed on the market in November for 65 days, slightly longer than the 63 days recorded in October and above the 56 days of… Continue reading
Third of UK properties have seen prices drop since going on sale
A third of properties on the market in the UK currently for sale have been discounted, up from 27% in February and the highest since August 2012 the latest data shows. The highest proportion of asking price reductions are to be found in Yorkshire and Lancashire in Preston, Barnsley, Wakefield, Rotherham, according to the latest research from property firm Zoopla. London is among cities with the fewest price reductions but discounts have doubled since start of year and overall some £3.8 billion has been knocked off UK asking prices, equivalent to £24,429 per property The average price reduction has also grown since the start of the year, with asking price reductions now at 6.7% on average off the initial asking price, equivalent to £24,429, up from 6.3% or £20,781 in February 2014. Preston has the highest proportion of price reductions in the country at 44% of properties having had their asking price lowered since first coming to the market. This is closely followed by the Yorkshire towns of Barnsley, Wakefield and Rotherham all at 43%. However it is not just in the north of England where sellers are resetting their expectations. The largest discounts currently are to be found in affluent Mitcham in south west London where sellers have dropped prices by 9.2% on average, equal to £55,606. The research also shows that sellers in Edinburgh are the most confident of achieving their original asking prices, with only 22% of properties for sale having their prices reduced, the lowest proportion across the country. This is followed by London where only 29% of homes have seen their asking prices lowered from the original price. However, this is almost double the proportion recorded in February 2014 when only 15% saw their asking prices reduced. ‘The property market typically slows in December as buyers postpone their plans until the New Year and become pre-occupied with the festive season, but these figures suggest that sellers may be being forced to rest their expectations and become more realistic in order to secure a buyer. People are well attuned to a bargain at this time of year, so homebuyers may want to capitalise on the latest raft of reductions,’ said Lawrence Hall of Zoopla. ‘The recent Stamp Duty reforms have injected a real feel-good factor into the property market that is likely to last into January when there will be a renewed surge in buyers looking for property. There would usually be an air of uncertainty in the lead up to an election, but the positivity created by the tax overhaul should ensure this isn’t as keenly felt as usual,’ he added. Continue reading
Rents in England and Wales down for first time in eight months
Residential rents across England and Wales fell to a new average of £768 per month in November, down 0.2% month on month, the latest index shows. It is the first time in eight months that rents have fallen on a monthly basis, according to the buy to let index from the UK’s largest lettings agent networks, Your Move and Reeds Rains. However, despite the month on month fall rents are 2% higher than a year ago, or £15 higher than November 2013. Also, the East of England, the East Midlands and London have actually posted new all-time record rents. The firm says that the fall follows the usual seasonal trend as landlords keen not to have vacant property over the colder months reduce rents to attract tenants. A breakdown of the figures show that five out of 10 regions have seen lower rents in November than in October with the South East seeing rents fall by 2.1% drop, the North West down 1.2% and the North East down 0.6%. By contrast, the East Midlands has defied the overall trend, seeing rents increase by 1.7% between October and November. This monthly change is four times faster than experienced in both London and the neighbouring East of England, both of which saw rents rise 0.4% on a monthly basis. Despite monthly dips, rents in eight out of 10 regions remain higher than in November 2013, with one other region seeing no significant change. Far above the overall average, three neighbouring regions stand out on an annual basis. Rents in the East of England have grown by 6.7% since November 2013. This is followed by 5.5% in the East Midlands and 3.9% in the West Midlands. At the other end of the spectrum, rents in the South West are now 0.2% lower than in November 2013, the only region to see a fall while the North West has seen zero rental inflation over the last twelve months. The index also shows that the gross rental yield on a typical rental property in England and Wales now stands at 5.1% as of November, the same as in October 2014, but a 0.3% drop from last year, when yields in November 2013 stood at 5.4%. However, alongside this stability, total returns improved in November. Taking into account price growth and void periods between tenants, but before costs such as mortgage repayments or maintenance, total annual returns on an average rental property are 12.8% over the 12 months to November. This compares to 12.7% over the 12 months ending October 2014. In absolute terms this means the average landlord in England and Wales has seen a return, before deductions such as mortgage payments and maintenance, of £21,512 over the last twelve months. Within this figure rental income makes up £8,305 while the average capital gain amounts to £13,207. ‘Property prices have shifted to a more… Continue reading
