Tuesday
California Real Estate - Record year seen
California Real Estate
California's real estate market is positioned for a record year after the median home price in the state in September jumped 17.3 percent and the month's home sales rose 3.9 percent from a year earlier, according to the real estate report released today.
The median price of an existing, single-family detached real estate home in California, which has had one of the hottest housing markets in the nation in recent years, rose 17.3 percent to $543,980 in September from a year earlier, and fell 4.4 percent from August in a typical seasonal pattern, according to the report by the California Association of Realtors.
Closed escrow sales of existing, single-family detached homes in California totaled 650,780 in September at a seasonally adjusted annualized rate, up 3.9 percent from a year earlier and 2.9 from August.
The price and sales data point to a record year for California's housing market, according to the chief economist for the realtors group.
Year-to-date sales are on track with our expectation that the market in 2005 will set new records for both statewide sales and median price.
However, California's overheated real estate is expected to cool as households stretch to buy homes, a trend that will be reflected in home price appreciation.
Entry level and mid-range homes are showing more strength in year-over-year price gains compared with the high end of the market. But all tiers of the market are appreciating more slowly than they did a year ago.
First-time home buyers are being pushed out from the coast, high home prices in coastal markets are forcing many home buyers inland, where homes are less expensive. The San Diego median home price is $612,030, compared with the High Desert's median of $312,410, which is a pretty significant difference.
The realtors group has forecast California's median home price will rise by 10 percent next year, compared with a projected increase of 16 percent this year, and that home-price appreciation next year in the state will be stronger in inland areas than in coastal areas.
California's real estate market is positioned for a record year after the median home price in the state in September jumped 17.3 percent and the month's home sales rose 3.9 percent from a year earlier, according to the real estate report released today.
The median price of an existing, single-family detached real estate home in California, which has had one of the hottest housing markets in the nation in recent years, rose 17.3 percent to $543,980 in September from a year earlier, and fell 4.4 percent from August in a typical seasonal pattern, according to the report by the California Association of Realtors.
Closed escrow sales of existing, single-family detached homes in California totaled 650,780 in September at a seasonally adjusted annualized rate, up 3.9 percent from a year earlier and 2.9 from August.
The price and sales data point to a record year for California's housing market, according to the chief economist for the realtors group.
Year-to-date sales are on track with our expectation that the market in 2005 will set new records for both statewide sales and median price.
However, California's overheated real estate is expected to cool as households stretch to buy homes, a trend that will be reflected in home price appreciation.
Entry level and mid-range homes are showing more strength in year-over-year price gains compared with the high end of the market. But all tiers of the market are appreciating more slowly than they did a year ago.
First-time home buyers are being pushed out from the coast, high home prices in coastal markets are forcing many home buyers inland, where homes are less expensive. The San Diego median home price is $612,030, compared with the High Desert's median of $312,410, which is a pretty significant difference.
The realtors group has forecast California's median home price will rise by 10 percent next year, compared with a projected increase of 16 percent this year, and that home-price appreciation next year in the state will be stronger in inland areas than in coastal areas.
Wednesday
Risky Mortgages
Increasingly popular high-risk mortgages could imperil both borrowers and banks if the hot housing market cools off, the head of the Federal Deposit Insurance Corp.
With home prices breaking records, FDIC Chairman Donald Powell became the latest reguator to voice concern over people who took out interest-only or option adjustable-rate mortgages to buy homes they otherwise could not afford. Some borrowers and mortgage lenders holding such loans could be at risk if housing prices drop or interest rates rise.
"Credit losses are very low now, but mortgage lenders need to be prepared for higher losses," Powell said in a speech to a gathering of community bankers in Orlando, Fla. "Homeowners taking on these types of mortgage product need to understand how their obligation may grow when their low introductory interest rates expire."
The FDIC and other federal agencies that regulate banks are evaluating the risks to lenders and examining banks' lending policies and will issue guidelines for banks where needed, Powell said.
The regulators do not seek to stanch innovation by banks, but to encourage sound banking principles.
Federal Reserve Chairman Alan Greenspan recently turned up the volume on his warnings about the potential dangers of risky home mortgages — and there are signs that some lenders have been getting the message. A few have begun scaling back some types of those mortgages or making them less appealing by raising costs.
Another bank regulator, U.S. Comptroller of the Currency John Dugan, has said that home lenders' more lenient credit standards and the popularity of risky mortgages "have raised questions about how these loans will fare in the event of a rise in interest rates or a softening in house prices."
Though there are signs of cooling, home sales still are on pace for a record fifth straight yearly increase, powered by low interest rates. In the meantime, prices have skyrocketed.
Interest-only mortgages require that the homeowner initially pay only the interest on the loan for a set period. Option ARMs give the homeowner flexibility to decide how much to pay each month. One of the options is a minimum payment that covers only a portion of the monthly interest. These mortgages are appealing to people who need cash for other expenses. But it also exposes them to far greater risk — if housing prices drop, their loan could be worth more than their property. If interest rates rise, their loan will become expensive to pay off.
With home prices breaking records, FDIC Chairman Donald Powell became the latest reguator to voice concern over people who took out interest-only or option adjustable-rate mortgages to buy homes they otherwise could not afford. Some borrowers and mortgage lenders holding such loans could be at risk if housing prices drop or interest rates rise.
"Credit losses are very low now, but mortgage lenders need to be prepared for higher losses," Powell said in a speech to a gathering of community bankers in Orlando, Fla. "Homeowners taking on these types of mortgage product need to understand how their obligation may grow when their low introductory interest rates expire."
The FDIC and other federal agencies that regulate banks are evaluating the risks to lenders and examining banks' lending policies and will issue guidelines for banks where needed, Powell said.
The regulators do not seek to stanch innovation by banks, but to encourage sound banking principles.
Federal Reserve Chairman Alan Greenspan recently turned up the volume on his warnings about the potential dangers of risky home mortgages — and there are signs that some lenders have been getting the message. A few have begun scaling back some types of those mortgages or making them less appealing by raising costs.
Another bank regulator, U.S. Comptroller of the Currency John Dugan, has said that home lenders' more lenient credit standards and the popularity of risky mortgages "have raised questions about how these loans will fare in the event of a rise in interest rates or a softening in house prices."
Though there are signs of cooling, home sales still are on pace for a record fifth straight yearly increase, powered by low interest rates. In the meantime, prices have skyrocketed.
Interest-only mortgages require that the homeowner initially pay only the interest on the loan for a set period. Option ARMs give the homeowner flexibility to decide how much to pay each month. One of the options is a minimum payment that covers only a portion of the monthly interest. These mortgages are appealing to people who need cash for other expenses. But it also exposes them to far greater risk — if housing prices drop, their loan could be worth more than their property. If interest rates rise, their loan will become expensive to pay off.
Tuesday
Real Estate Greater Nashville jumps
Greater Nashville Real Estate
Home sales in the Greater Nashville, Tenn., area jumped 10.9 percent in September from their year-ago level, according to figures provided by the Greater Nashville Association of Realtors.
Realtors reported 3,457 home closings last month, up from 3,117 closings in September 2004.
Year-to-date closings for the Greater Nashville area totaled 29,311, up 5.7 percent from the 27,721 closings reported through third-quarter 2004, the best year on record for area home sales in the region.
The residential real estate market in Greater Nashville continues to be healthy and vibrant. It is on track to set another record for home sales this year according to the president of GNAR. "We are especially pleased to see the strong number of closings for September. They are higher than expected, as we usually see a seasonal adjustment in activity at this point in the year."
The average number of days on the market for a single-family home was 58 days, down from 67 days for September 2004.
The median residential price for a single-family home during September was $162,610, up 8.8 percent from $149,500 reported a year ago. The median price for a condo last month was $135,000, up 7.1 percent from $126,000 in September 2004.
Inventory at the end of September was 13,888, down from 14,741 in September 2004.
Inventory continues to be lower than it was at the same time last year, but is holding steady at just under 14,000 available properties. That provides a good selection of homes based on current sales activity. Median prices have increased this year, and the September increase is consistent with what we have seen for the past several months.
Home sales in the Greater Nashville, Tenn., area jumped 10.9 percent in September from their year-ago level, according to figures provided by the Greater Nashville Association of Realtors.
Realtors reported 3,457 home closings last month, up from 3,117 closings in September 2004.
Year-to-date closings for the Greater Nashville area totaled 29,311, up 5.7 percent from the 27,721 closings reported through third-quarter 2004, the best year on record for area home sales in the region.
The residential real estate market in Greater Nashville continues to be healthy and vibrant. It is on track to set another record for home sales this year according to the president of GNAR. "We are especially pleased to see the strong number of closings for September. They are higher than expected, as we usually see a seasonal adjustment in activity at this point in the year."
The average number of days on the market for a single-family home was 58 days, down from 67 days for September 2004.
The median residential price for a single-family home during September was $162,610, up 8.8 percent from $149,500 reported a year ago. The median price for a condo last month was $135,000, up 7.1 percent from $126,000 in September 2004.
Inventory at the end of September was 13,888, down from 14,741 in September 2004.
Inventory continues to be lower than it was at the same time last year, but is holding steady at just under 14,000 available properties. That provides a good selection of homes based on current sales activity. Median prices have increased this year, and the September increase is consistent with what we have seen for the past several months.
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