Month: May 2021

 Washington D.C. Edition | By WPJ Staff | May 19, 2021 8:05 AM ET
NAR Predicts Consumer Spending Will Propel Continued Economic Growth in 2021 – WORLD PROPERTY JOURNAL Global News Center

According to the National Association of Realtors, after recording the quickest recovery in the nation’s history in the wake of the COVID-19 pandemic, the U.S. economy is expected to kick into higher gear in 2021.

With the number of vaccinated Americans increasing and new coronavirus cases on the decline, NAR Chief Economist Lawrence Yun anticipates the economy will grow 4.5% in 2021.

“Consumers will begin to spend massive savings, and do more shopping, restaurant dining, traveling and in-person house hunting,” he said.

While home sales continue to be an economic bright spot, unemployment remains an issue. Eight million jobs that were lost during the pandemic have not yet been recaptured. Yun maintains that job recovery is taking longer due to some friction in the labor market, including workers being unable to return to their jobs, where work-from-home is not an option for many. As economic growth strengthens, 4 million jobs are projected to be gained this year.

Despite high unemployment, the economic recovery – propelled by favorable monetary and fiscal policies – has created the hottest housing market in nearly 50 years. The marketplace has surpassed pre-pandemic levels in terms of sales, but the fast-paced recovery has contributed to historic home price growth. In fact, an NAR report released this past week found that 89% of metros saw prices climb at double-digit rates on a year-over-year basis during the first quarter of 2021.

Thursday’s presentation noted that the economic recovery, both in the U.S. and globally, has raised inflationary pressures which will ultimately lead to an increase in the 30-year fixed mortgage to an average of 3.2% in 2021. Consumer price inflation is accelerating due to higher costs for a number of goods and commodities, including oil, gasoline, lumber, moving and storage fees, household appliances, rents, and houses, which have reached record-highs.

“As mortgage rates increase, the frenzied multiple-offer situation will become less prevalent by year’s end, as affordability challenges squeeze out some buyers and more inventory reaches the market,” Yun said.

Although the low supply of housing has played a significant role in home price surges, Yun expects more home construction, a growing willingness among homeowners to list properties due to an increase in vaccinations, and a gradual decline in mortgage forbearance.

In addition to homebuilders’ intentions to ramp-up construction, a recent NAR report – Case Studies on Repurposing Vacant Hotels/Motels into Multifamily Housing – details the idea of remodeling underutilized hotels and motels in order to help replenish the supply of affordable multifamily housing.

“With more inventory and some easing in demand, home prices are expected to shift to mid-single-digit appreciation by the fourth quarter and in 2022,” Yun said.

Yun predicts that the median existing-home sales price will increase at a slower pace of 7% in 2021.

As more homes reach the market, NAR anticipates existing-home sales to grow by 10% and forecasts new home sales to jump by 20%.

Mortgage Rates Settle In, Hovering Around 3% – Inman
BY MATT CARTER
May 20, 2021

So far, bond markets are taking the prospect of Fed tapering of monthly purchases of $40B in mortgage-backed securities and $80B in Treasuries in stride

Mortgage rates were up slightly during the week ending May 20, as borrowers with excellent credit putting 20 percent down were offered rates averaging 3.00 percent on 30-year fixed-rate purchase mortgages.

That’s according to the latest weekly rate survey from Freddie Mac, which showed rates registering their first weekly increase in May. The survey, which records rates going back to 1971, showed 30-year, fixed-rate mortgages hitting an all-time low of 2.65 percent during the week ending Jan. 7, before heading back up to 3.18 percent in March.

“After a run up over the first few months of the year, rates have paused and hovered around three percent since March,” said Freddie Mac Chief Economist Sam Khater, in a statement. “Despite this favorable rate climate, there remains a shortage of homes for sale. The lack of housing supply has been compounded by labor disruptions and expensive building materials that are driving up the cost of new housing, making it difficult for homebuyers to find homes to purchase.”

Freddie Mac reported average rates for the following mortgage types for the week ending May 20:

• Rates on 30-year fixed-rate mortgages averaged 3.00 percent with an average 0.6 point, up from 2.94 percent last week but down from 3.24 percent a year ago.
• For 15-year fixed-rate mortgages, rates averaged 2.29 percent with an average 0.7 point, up from 2.26 percent last week but down from 2.70 percent a year ago.
• Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.59 percent with an average 0.3 point, unchanged from last week and down from 3.17 percent a year ago.

In a new forecast this week, Fannie Mae economists said they expect a gradual rise in rates this year and next, with 30-year fixed-rate mortgages averaging 3.5 percent by the final quarter of 2022. But inflation worries could drive steeper rate increases, they warned.

Minutes from the April 27-28 meeting of the Federal Reserve’s Federal Open Market Committee published Wedensday revealed that some Fed officials are open to debating whether to taper the Fed’s monthly purchases of $40 billion in mortgage-backed securities and $80 billion in Treasuries.

Those purchases help keep long-term interest rates low, and word that the Fed might consider tapering in the months ahead initially sent yields on 10-year Treasurys, a benchmark for mortgage rates, to soar. But 10-year Treasury yields were down Thursday, as investors continued to weigh the likelihood of the Fed tapering its bond purchases.

Even small moves in mortgage rates can have a big impact on homebuying power. A recent analysis by First American concluded that higher mortgage rates in March contributed to a $13,000 decline in homebuying power nationally.

SOLD!

725 NW FLANDERS ST Portland, OR 97209
1bed/1bath
1037 sqft
$450,000
Have you seen this show-stopping loft in the Pearl w/ A+ designer finishes. Stunning reclaimed wood floors. 10 foot ceilings. Balcony & huge windows to tree canopy bring nature & light in. Kitchen w/ gas stove, custom counters/shelves. Designer lighting. Bedroom w/ transom windows, unique glass pocket door & cool steel window. Office w/ smoked poplar louvered slat wall. Bathroom: designer tile, reclaimed wood counter, carved natural stone sink. Easy access to Galleries, Whole Foods, Restaurants, Theater, Transport.  No rental cap. Minimum 7 day rental. Mixed-use building allows Residential & Many Studio/Professional/Office uses. W/D included. Walk/Transit/Bike scores 99/92/99. New high-efficiency mini-split heat pump & tankless hot water heater in 2017. New commercial building across park blocks.  MLS#: 21548144 CALL ME BEFORE IT’S GONE!

4625 SW 55TH PL Portland, OR 97221
$480,000
3bd/2ba
1348 sqft
Rare find on large lot in Bridlemile. Private back yard w/ awesome deck atop sloping natural greenery & small creek. Enjoy the low-maintenance nature setting while water ripples & birds chirp. Great floorplan w/ hardwoods & skylights in common areas. Vaulted ceilings with exposed wood beams & fireplace in living room. Large, versatile Office/Den/Bonus space facing greenery. 2-car garage. Newer roof & exterior paint. Double paned windows & sliders. Perfectly located between Downtown & Tech Park. Call me before it’s gone! MLS#: 21147670

Jordan Cohen, the top RE/MAX agent in the world, calls the luxury Ojai ranch – complete with 35 miles of hiking trails, an auto museum and private lake – a groundbreaking listing.

Hold on to your hats: This $100 million luxury ranch is unlike any other.

Black Mountain Ranch in Ojai, California, is a prestigious 3,600-acre working cattle and horse ranch that consists of 63 consecutive parcels of land. Called an “absolute epic one-of-a-kind property” by listing agent Jordan Cohen, Black Mountain Ranch features a 13,250-square-foot main residence in addition to a 6,203-square foot carriage house, 1,965-square-foot caretaker cottage and 1,800-square-foot guest cottage. For anyone keeping track, that’s already 23,218 square feet of living space on the mountain-view property.

Additional features include an automobile museum, multiple barns, private fishing lake, shooting range and 35 miles(!) of serene nature trails.

“This is truly the very best Southern California has to offer,” said Cohen, the No. 1 RE/MAX agent in the world, in an Instagram post highlighting the property. “This is my most groundbreaking listing and I could not be more excited!!”

Read more coverage of this listing in the Los Angeles Times.

Cohen of RE/MAX One in Westlake Village, California, is no stranger to exceptional luxury properties. Last year, one of his most notable listings was basketball star Anthony Davis’ Westlake Village house.

One of the biggest questions in real estate today is, “When will sellers return to the housing market?” An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers’ market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.

The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say it’s a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, indicates:

“Consumer positivity regarding home-selling conditions nearly matched its all-time high.” (See graph below):

Fannie Mae isn’t the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.com, shares:

“The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under $350,000, which would offer a tremendous boost to affordable housing for first-time buyers.”

Bottom Line

If you’re considering selling your house, don’t wait for more competition to pop up in your neighborhood. Let’s connect today to explore the benefits of selling your house now before more homes come to the market.

Some Highlights

• Selling a house is no small task. If you decide to try to do it on your own, keep in mind you’ll be responsible for all the expert-level work of a real estate professional.
• The vital tasks an agent manages for you include listing and marketing your house, handling legal documentation, negotiating with all parties, and navigating local laws and regulations.
• If you’re ready to sell while the market is in your favor, let’s connect to make sure you have the professional expertise you need every step of the way.

Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert.

According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:Due to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year.

Bottom Line

In such a hot market, it can feel as though the supply of homes has virtually dried up, leaving buyers to wander in an inventory desert. That’s why there’s never been a better time to sell. To a parched buyer needing to secure a home as soon as possible, your house could be a true oasis.