Kiplinger Letter May 13, 2011
Soon, the cost of money will rise as well, as the Federal Reserve moves from a policy of easing to neutral then to tightening the money supply. Odds are, it will raise short-term interest rates in early 2012, triggering a hike in banks lending rates
Economy, affordability to drive home sales growth
WASHINGTON – May 16, 2011 – Home sales are on track to outperform last year, even though the market doesn’t have the benefit of the homebuyer tax credit, NAR Chief Economist Lawrence Yun told a packed room on Thursday during the Residential Economic Update at the 2011 Realtors® Midyear Legislative Meetings.
Florida foreclosures down in April
TALLAHASSEE, Fla. – May 13, 2011 – Foreclosures in April were a whopping 59 percent lower in Florida than a year ago.
Pending Sanibel 2011 Residential total #’s
5/18 5/11 4/27 4/20 4/13 4/6 3/23 3/16 3/8 2/24 2/17
48 48 43 42 34 34 34 34 40 30 31
Pending Sanibel 2011 Condominiums total #’s
5/18 5/11 4/27 4/20 4/13 4/6 3/23 3/16 3/8 2/24
35 36 35 32 40 33 31 30 24 16
GM to Boost Plant Investments
BY SHARON TERLEP
General Motors Co. will invest $2 billion and add 4,000 workers through recalls of idle workers and new hiring by 2014, the company said Tuesday.
Kiplinger…Growth will pick up this quarter and increase and increase by about 3% for the year.
Florida’s existing home, condo sales rise in 1Q 2011 Related:
NAR: Existing-home sales rise in most states in 1Q
ORLANDO, Fla. – May 10, 2011 – Florida’s existing home and existing condo sales rose in first quarter 2011 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. Existing home sales increased 13 percent in 1Q 2011 with a total of 44,531 homes sold statewide; during the same period the year before, a total of 39,406 homes changed hands according to Florida Realtors. Statewide sales of existing condos in the first quarter rose 29 percent compared to the year-ago sales figure.
Florida population: Census summary 2010
Census Bureau Florida reports
The 52-page "Florida Population: Census Summary 2010" is posted on floridarealtors.org in PDF format.
WASHINGTON – May 10, 2011 – Florida continues to grow. According to the 2010 Census, Florida’s population was 18,801,310 on April 1, 2010, an increase of 2,818,486 since April 1, 2000.
The 2000-2010 period was the fourth consecutive decade to see the Florida population grow by more than 2.8 million residents. Florida’s numeric population increase during the past decade was the third largest of any state, trailing only Texas and California. Its percent increase (17.6 percent) was the eighth largest in the nation.
County trends
Only Monroe and Pinellas counties saw a population decline over the decade, while 65 of Florida’s 67 counties logged an increase. Monroe lost 6,499 residents while Pinellas declined by 4,953.
Twenty-four of Florida’s 67 counties grew by more than 20 percent, and 52 beat the national growth rate of 9.7 percent.
Four counties grew by more than 50 percent – Flagler, Sumter, Osceola and St. Johns – while another eight – St. Lucie, Lake, Lee, Walton, Clay, Pasco, Wakulla and Hernando – grew by 30-50 percent. Growth has no clear geographic border, and Florida’s rapidly expanding counties can be found throughout the state, on both coasts and in the interior.
As vacation rentals gain popularity, online sites increase listings
ORLANDO, Fla. – May 9, 2011 – Vacation rentals, once an ugly duckling of the travel industry, are getting their turn at the spotlight. With more vacationers considering rental homes, investors are pouring money into online portals that match homeowners with travelers struck with hotel fatigue. Aimed largely at families, vacation rentals which include privately owned homes and condos, and unoccupied timeshares has been a fragmented market that’s been growing even as it’s been slow to turn to the Internet for sales.
Sales of vacation rentals grew about 9 percent to $26.4 billion in the three years from 2007 to 2010, according to a 2009 report by travel research firm PhoCusWright. Only about 17 percent of sales likely came from Internet channels.
Companies such as HomeAway hope to accelerate the pace. The Austin-based company has attracted about $400 million in venture capital since its founding in 2005 and has used the funds to buy vacation rental sites VRBO.com and VacationRentals.com. In March, it filed to raise up to $230 million in an initial public stock offering.
Airbnb, which started in 2008 by linking budget-conscious couch surfers and backpackers with homeowners with a spare room, has expanded in recent years by adding more listings that rent an entire condo or home. Such landlords now make up about 65 percent of its 80,000 listings. Unlike many other sites, Airbnb doesn’t charge homeowners to post listings. It takes a small percentage from actual purchases.
Online travel stalwarts also are keen on the segment. In 2008, TripAdvisor bought a controlling stake in FlipKey.com. Orbitz and Travelocity have launched vacation rental sites in recent years. Meanwhile, customer demand continues to rise. Customers’ queries on the vacation rental booking systems run by LeisureLink rose 10 percent in March 2011 from a year ago, says Steve Reich of LeisureLink, a Pasadena, Calif.-based firm that helps small property managers and owners get their inventory shown on large vacation rental websites.
Available inventory has been growing, as well. There are about 6 million vacation homes for rent in the U.S. and Europe, according to HomeAway.
5 markets ripe for appreciation
CHICAGO – May 6, 2011 – Realtor.com recently unveiled a list of markets where property values are stabilizing, buyer traffic is picking up, and prices will likely appreciate soon.
Top five "turnaround towns"
1. Buffalo-Niagara Falls, N.Y.: List prices are increasing, and days on the market for inventory is shrinking (87 days, which is nearly half the national average).
2. Los Angeles-Long Beach, Calif.: While housing values here have fallen 378 percent compared to the its 2006 housing peak, a turnaround is underway with list prices showing signs of stabilizing month-over-month and homes spending fewer days on the market. This area is also the third most-searched at Realtor.com, so buyer interest appears high.
3. Fort Myers-Cape Coral, Fla.: Vacation homes here are getting more pricey here: The median list price has risen 24.12 percent in March – the highest median price increase nationwide. However, distressed sales have weighed heavily on this market so prices are still 60 percent lower than the 2006 housing peak.
4. Dallas, Texas: Median list prices are down only slightly by 1 percent year-over-year, and the median age of Dallas’ inventory stands at 100 days. While home values here have dropped about 10 percent from their peak (national median drop was 31 percent), Dallas has not faced as steep of property value declines as other bigger cities.
5. Boston, Mass.: Demand for homes here is starting to pick up. The median age of inventory is 130 days, which is 30 days below the national average. Median list prices are down just slightly – 0.26 percent – year over year.
Source: "Top 10 Early Turnaround Towns From REALTOR.com, Part II," Realtor.com (April 28, 2011)
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NAR forecast: Rise in housing activity
WASHINGTON – May 13, 2011 – Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to experts at a residential real estate forum today at the Realtors® Midyear Legislative Meetings & Trade Expo here.
"If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better," says Lawrence Yun, NAR chief economist. "We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million – that’s a sustainable level given the size of our population."
Mortgage interest rates should rise gradually to 5.5 percent by the end of the year and average 6.0 percent in 2012 – still relatively affordable by historic standards. "A huge volume of cash sales, supported by the recovery in the stock market, show that smart money is chasing real estate. This implies that there could be a sizeable pent-up demand if mortgages become more readily accessible for qualified buyers," Yun said. "The problem isn’t with interest rates, but with the continuation of unnecessarily tight credit standards that are keeping many creditworthy buyers from getting a loan despite extraordinarily low default rates over the past two years."
Yun said that if credit requirements returned to normal, safe standards, home sales would be 15 to 20 percent higher. He added that some parents are buying homes with cash for their children, and offering them loans, which provide better returns than bank accounts or CDs.
Yun projects the Gross Domestic Product to grow 2.5 percent this year and 2.7 percent in 2012, adding 1.5 million to 2 million jobs yearly over the next two years. The unemployment rate should decline to 8.8 percent by the end of 2011 and average 8.6 percent next year, returning to a normal level of 6 percent around 2015.
Citizens board approves $1.4B in insurance
TALLAHASSEE, Fla. – May 12, 2011 – Citizens Property Insurance Corp will return to the private re-insurance market to help pay for hurricane claims during the upcoming season in an attempt to begin weaning the state-backed insurer off taxpayer assessments in the event of a catastrophic storm.
Meeting via conference call, Citizen’s governing board Wednesday approved the purchase of $900 million in pre-event insurance coverage and another $400 million in private reinsurance as it prepares for the 2011 hurricane season now only a few weeks away.
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