Report: Here Comes a Buyer’s Market –According to a new report by CoreLogic, a power shift is occurring in the housing market with more negotiating power landing on the buyer’s side. Home values moved 5.1 percent higher this past November compared to November 2017. CoreLogic is predicting a 4.8 percent gain in home values by November 2019. The National Association of REALTORS® also recently reported an uptick in inventory entering more markets as more homeowners put their homes up for sale. Buyers are having more choice, prompting some sellers to lower their asking prices due to the added competition, according to CoreLogic researchers. NAR has predicted home sales to top about 5.3 million for 2018, which would fall in line with sales performance from 2000. The strong economy may get more buyers purchasing in the new year. “Given the 17 million more jobs now compared to the turn of the century, home sales are clearly underperforming today,” says Lawrence Yun, NAR’s chief economist. “That also means there is a steady longer-term growth potential.”
Sales Slump Forces Builders to Offer Incentives Again –According to the Los Angeles Times, more builders reportedly are offering incentives to attract home shoppers, including paying closing costs, buying down mortgage rates, and even cutting prices, a move builders are usually reluctant to make. “We are really working a little bit harder to get people in the door and to get people excited,” Mark Mullin, a real estate professional who sells new homes in the L.A. area, told the Times. “These are things builders were not having to do a year ago.” Still, concessions are small compared to a decade ago, but they are growing. Twenty-three percent of builders in December lowered their net prices (their list price) as well as offered money toward upgrades, according to a survey by John Burns Real Estate Consulting. For comparison, only 4 percent of builders reported doing the same a year earlier. Still, that is way down from 2010, when 43 percent of builders were cutting their prices in the aftermath of the housing crisis. In general, builders prefer to offer money toward upgrades or amenities before resorting to cutting prices. They don’t want home buyers who already signed contracts at a higher price to then back out as their home is being built, says Rick Palacios, research director with John Burns Real Estate Consulting.
Mortgage Rates Fall to 9-Month Lows –Based on Freddie Mac reports, mortgage rates posted more reductions recently, lowering the borrowing costs of potential home shoppers and refinancers. Rates are now at a nine-month low, which helped boost mortgage applications more than 20 percent recently. “Lower mortgage rates combined with continued income growth and lower energy prices are all positive indicators for consumers that should lead to a firming of home sales,” says Sam Khater, Freddie Mac’s chief economist.
The Clients Shaping 2019 Housing: Women, Millennials, and Hispanics – Based on a new analysis by Realtor.com, shows that women, millennials, and Hispanics are shaping up as dominating forces in the housing market. Ten of the top 20 and seven of the 10 fastest-growing buyer first names are mostly millennial female names, researchers found. Home deeds that contained predominantly millennial first names rose 5.3 percent year over year. Home sales associated with traditionally Hispanic first names increased 4.1 percent year over year. Hannah, Austin, Alexis, Logan, and Taylor, three of which are predominantly female names were the five fastest-growing first names on home sales deeds in 2018. Their frequency saw an average increase of 22 percent from 2017. However, the first names of Michael, John, David, James, and Robert remained the top five first names on sale deeds by sheer volume, but those names have decreased 3 to 5 percent since 2017, according to the study. “First names associated with women, especially millennial women saw a significantly faster level of home sales growth in 2018, giving us a sneak peek of homeownership trends in 2019,” says Javier Vivas, director of economics research at realtor.com®. “Hispanic and millennial names overall also saw a surge in home purchases last year. If these buyers can continue to break through the affordability barrier, they are likely to make up a larger share of owners than ever before and dominate the market for years to come.”