Most US cities saw home price gains in the second quarter, according to the latest report from the National Association of Realtors.
From April to June, 100 out of the 155 metropolitan statistical areas (MSAs) in the United States had higher median single-family home prices as compared to the second quarter of 2009.
And 14 saw double-digit increases. Hooray.
But wait, it’s not necessarily a sign that we’ve hit bottom, just more a reflection of the kind of stuff that’s actually selling these days.
“The median price is influenced by the mix of homes that were sold and do not reflect pure appreciation or depreciation,” said NAR chief economist Lawrence Yun, in a press release.
“The recorded home prices in many markets were significantly depressed last year because of a large percentage of distressed homes sold at discount. Now as more normal, non-distressed home sales are occurring, the median price in many areas is showing higher values.”
In other words, home prices haven’t really fallen as much as the media says they have, and haven’t really rebounded as much as they’ll eventually say they will.
The national median existing single-family price was $176,900 in the second quarter, a 1.5 percent from the $174,200 median seen a year earlier.
Distressed homes (foreclosures, short sales), which certainly weigh down the median, accounted for 32 percent of second quarter sales, down from 36 percent a year ago.
Existing-home sales, including single-family and condo, increased 9.1 percent to a seasonally adjusted annual rate of 5.61 million units in the second quarter, up from 5.14 million in the first quarter and 4.78 million a year ago.
Unfortunately that gain was probably mostly due to the homebuyer tax credit, which has since expired.
Read more: Is now a good time to buy a house?
This post was written on August 11, 2010
We’ve already covered the top 10 cities to rent vs. buy, so now let’s look at the top 10 cities to buy vs rent.
While there are plenty of advantages to renting an apartment or a home, there may be more upside to buying one, depending on where you live.
Currently, mortgage rates are at all-time record lows, meaning you can borrow on the cheap.
Home prices have also dropped considerably in certain parts of the country, though it’s important to note that they’ve come off grossly inflated highs.
You may also be wondering if real estate is still a good investment, given the ongoing turmoil.
Well, like I always say, real estate is all about location, and the index below from real estate listing service Trulia illustrates that point.
The company calculated the price-to-rent ratio using the average list price compared with the average cost of rent on two-bedroom apartments, condos, and townhouses listed on their website.
What they found is that hard-hit cities like Las Vegas, Miami, and Fresno are now good places to buy based on costly market rents and falling home prices.
As expected, a number of Texas cities made the list, along with Minneapolis, Minnesota, which took the number one spot.
Top 10 Cities to Buy vs. Rent
Read more: Is now a good time to buy a house?
This post was written on July 8, 2010
If you’re curious whether it’s the right time to buy that dream house, you may want to consider the local rents in the area.
There are plenty of advantages to renting, like no down payment, the flexibility to move, and lower monthly payments.
At the same time, buying a home means more space, tax deductions, and possible home price appreciation (is real estate still a good investment?).
But some cities just seem to be too overpriced, no matter how you slice it.
Even though home prices came down over the past few years, they only really dropped from inflated, unsustainable levels, so the discounts are dubious at best.
Last week, Trulia calculated the price-to-rent ratio using the average list price compared with the average monthly rent on two-bedroom apartments, condos and townhomes listed on their website.
They found that in many cities it’s still wise to rent rather than buy, because the associated costs are just too high.
Top 10 Cities to Rent vs. Buy
As you can see, renting in New York City is still the way go, as the cost of real estate is clearly astronomical. Surprisingly, the same is true in places like Omaha and Oklahoma City, meaning rents are still super cheap.
Remember, buying a home isn’t always the wisest move, but obviously your decision should go beyond price.
Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city.
Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city. The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation.
Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.
This post was written on June 9, 2010
Could this be the end of Zillow Zestimates as we know it?
First American CoreLogic Inc. has sued Zillow and seven other companies that provide automated house values.
The Santa Ana, CA-based company claims Zillow, Fiserv, IntelliReal, Interthinx, Lender Processing Services, Precision Appraisal Services, Real Data Inc, and Realec Technologies Inc. infringed upon a 1994 patent related to its automated valuation model, or AVM.
The AVM essentially estimates values for properties nationwide, and the aforementioned companies have been using it without paying out royalties to First American.
The lawsuit filed in the Eastern District of Texas names a mathematical model Patent No. 5,361,201, aka “Real Estate Appraisal Using Predictive Modeling.”
Zillow has been the only company to respond, though it only noted that it was aware of the lawsuit and has no plans to change its business model as a result.
The real estate juggernaut maintains that it provides estimates for a whopping 93 million homes in the United States, or nearly every residence in the country.
Zillow certainly came out of nowhere when it launched its Zestimates several years back – and they saw explosive growth in what seemed like days.
The big question is why First American waited so long to make the complaint, given the fact that Zillow and others have been providing these Internet house value estimates for years now.
And they’re not even close to accurate anyways. =)
This post was written on May 6, 2010
More than 80 percent of first-time home buyers believe now is a good time to buy a home, according to a new survey from Realogy and parent company Century 21 Real Estate.
Which begs the question: why do only 80 percent of those buying a home think it’s a good idea? Are 20 percent buying homes even though they’re uncertain about the decision?
Well, in reality, the survey takes responses from those who purchased a home in the past year, so perhaps 20 percent feel they made a bad decision.
First-time home buyers said the three most influential factors behind their decision to enter the market were current housing prices (66%), the homebuyer tax credit (63%), and low interest rates (60%).
Home Price within Budget in a Good Neighborhood
Most important to first-time home buyers is a home priced within their budget, followed by a neighborhood’s safety.
And roughly half of first-time buyers believe home prices will rise over the next year, which leaves me feeling not all that confident.
The top two factors motivating current homeowners to sell are personal/family reasons and current housing prices.
I’m assuming the personal reasons are personal problems, like negative equity and unemployment, to name but two.
Like I said last month, homes aren’t selling for a reason, and there’s no rush to buy a home.
It’s still very much a buyer’s market, so take your time to find something you like at the right price!
Keep in mind that this survey was conducted by real estate agents, whose sole motivation is to sell homes.
Tip: Is now a good time to buy a home?
This post was written on April 22, 2010
Home sales have been softer than analysts have predicted, and it’s really no surprise.
Prices aren’t really that attractive, even with all the home price declines; affordability is only historically high because mortgage rates are at record low levels.
That’s one reason I don’t see mortgage rates rising anytime soon; wouldn’t want to dampen affordability, especially if nobody is buying to begin with.
Then there’s the fact that prospective buyers don’t have any money, as evidenced by a poll of both current home owners and renters, conducted for the National Association of Home Builders (NAHB).
About one-third of renters who responded intend to buy a home in the “near future,” but 39 percent said they don’t have the money to buy right now. Uh oh.
Another 20 percent said they don’t think they can qualify for a mortgage, and 18 percent said job security is the greatest concern.
Oh, and 29 percent of current homeowners interested in buying a new home say their inability to sell their current home is the biggest obstacle.
There’s also the worry that the value of a new home might fall after the purchase is made, and many believe home prices are still just too high, even with that homebuyer tax credit set to expire in a couple months.
I for one, agree. That’s why I said there’s no rush to buy a home, still too much downside risk in my opinion.
This post was written on March 2, 2010
I follow the real estate market pretty intently, and I’ve actually considered purchasing some real estate myself, given the fact that bargains are beginning to emerge.
But at the same time, I don’t think there is any rush whatsoever to purchase a property. I don’t think you’ll miss anything if you wait.
Sure, home prices have fallen significantly throughout the nation, and mortgage rates are at record lows. That’s all good news, but that still doesn’t mean it’s the right time to buy.
There’s also that homebuyer tax credit floating around, along with the move-up buyer tax credit, both of which are good until April 30, 2010.
Of course, it can be argued that the tax credit is artificially propping up home prices, so that’s essentially awash, if you follow that logic.
And the threat of mortgage rates rising is also less of a concern in my eyes because one of the main reasons home prices are so affordable right now is due to the ultra low rates.
Do you think the government would risk messing that up, given how fragile things are right now?
If they did somehow rise, home prices would probably fall to compensate, so again, no rush.
At the same time, the mainstream media will make it seem as if you need to buy now, before it’s too late; that there are once in a lifetime opportunities standing before you.
Just don’t forget about all that shadow inventory, or the fact that roughly a quarter of all residential properties with mortgages were in a negative equity position as of year-end.
If you do decide to buy right now, you may wonder when home prices will rise? Some think they won’t hit recent peak levels until 2020…
In other words, don’t expect that instant profit we all grew accustom to in the 00’s, when it seemed anything you purchased appreciated within months.
If you are interested in buying a home, consider taking a look at the most overvalued cities and the most undervalued cities in the nation.
Or perhaps the top investment property markets in the United States, because regardless of all the turmoil, real estate is still a good investment. Just make sure you time it right…
This post was written on February 24, 2010
I already touched upon the most overvalued cities in the United States, so let’s talk about undervalued areas. Those are the ones we might want to invest in, right?
As one may have guessed, the hard-hit, foreclosure-riddled Las Vegas metro is the most undervalued area in the United States, with a median home price of $129,700.
According to statistics compiled by National City and IHS Global Insight, homes are selling at 41.40% below fair market value, compared to 38% below market value in 2006.
In Las Vegas, a number of homes and condos that were selling for $200,000 are now listed at around $40,000, presenting potential opportunity for those brave enough to take a gamble on Sin City.
Other undervalued spots include hard-hit spots in Florida, along with much of Central California, where foreclosures run rampant; Warren, Michigan also made the top ten, as the economy up there has ground to a halt.
The numbers are determined by comparing median home prices, income, mortgage rates, and population densities, along with historical premiums or discounts exhibited in areas over time.
The big question is determining which one of these undervalued spots can turn it around the fastest, an answer most likely based on employment conditions in the associated city.
This post was written on February 2, 2010
Plenty has changed over the past four years in the real estate world.
Home prices have plummeted, large banks and mortgage lenders have gone out of business, and millions have received foreclosure notices.
But as the dust begins to settle, opportunities will present themselves, and as I always say, real estate is local, so some areas will recover faster than others.
Back in 2006, 213 of 299 metro areas were considered overpriced, according to a survey conducted by National City Corp. and IHS Global Insight, and reported by CNN.
Today, just 87 markets are considered overvalued, thanks to massive price declines nationwide.
Some markets have become less overvalued, such as Atlantic City, which was 59% overvalued in 2006, and now only 30.2% over market price.
Conversely, Wenatchee, Washington was 13% overvalued in 2006, and now 28.9% above its fair market value.
Here are the top ten most overvalued cities in the United States at the moment:
Take a look at the complete list here to see where your area stands. This information could be helpful in making a decision to buy, sell, or invest (Is real estate still a good investment?).
This post was written on January 28, 2010
If you’re in the market for an investment property, you may be wondering where to buy in 2010.
Well, a company that specializes in analyzing the “best” investment properties could make your search a little bit easier.
FinestExpert.com gathers and analyzes data from over four million active properties nationwide, looking at things like employment, cash flow, rental markets, foreclosure impact, and growth level to find the top real estate investment markets.
The metropolitan areas that made the list tend to have the largest number of properties currently selling below their estimated value, with a good proportion of cash flow positive properties.
“For the first-time homebuyer, a good cash flow deal represents the ability to own for less than it would cost to rent,” the company said.
“These make excellent starter properties, especially for someone who may want to one day become a real estate investor.”
It’s important to note that the markets listed below were identified by the company as good “buy-and-hold” properties, not “quick-fix-and-flip” investments.
On to the list:
1.Dallas-Forth Worth-Arlington, TX
2.Houston, TX
3.Tulsa, OK
4.San Antonio, TX
5.Salt Lake City, UT
6.Phoenix, AZ
7.Indianapolis-Carmel, IN
8.Denver-Aurora, CO
9.Oklahoma City, OK
10.Charlotte-Gastonia-Concord, NC-SC
This post was written on January 13, 2010