Inventory Increases Across Middle Tennessee Housing Market

Inventory Increases Across Middle Tennessee Housing Market
Press Release by Greater Nashville REALTORS® | June 7, 2018

House 1048NASHVILLE, Tenn. (June 7, 2018) – There were 3,767 closings reported for the month of May, according to figures provided by Greater Nashville REALTORS®. This represents a 4.5 percent decrease from the 3,943 closings reported for May 2017.

Year-to-date closings total 15,396, a 1 percent decrease compared to the 15,606 closings reported through May 2017.

“Greater Nashville had a record setting month last year in May 2017 with the highest number of closings in one month in the history of the region. It is not surprising to see a normalization of the sales in May 2018,” said Greater Nashville REALTORS® President Sher Powers. “The higher number of homes under contract at the end of May 2018, compared to last year, sets the stage for what could be a very strong month of June.”

“Even with rising interest rates we see a healthy and vibrant market with continued strong sales numbers.”

There were 3,575 properties under contract at the end of the month, compared to the 3,540 properties under contract at this time last year. The average number of days on the market for a single-family home was 28 days.

“The increase in residential and condominium inventory is very healthy for the market. We saw a substantial inventory increase in both residential single-family homes and condominiums. This helps balance out a market that has seen a much lower inventory supply.”

The median residential price for a single-family home during May was $299,900 and for a condominium it was $226,000. This compares with last year’s median residential and condominium prices of $279,142 and $205,000, respectively.

Active inventory at the end of May was 9,511 which increased from 8,557 in 2017.

About Us: Greater Nashville REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners. REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics.

View the May 2018 Market Data Infographic

Source: Greater Nashville REALTORS® Press Release June 7, 2018

 

Amazon HQ2 Finalists Ranked on Housing

Amazon HQ2 Finalists Ranked on Housing
ATTOM Data Solutions   article by Daily Real Estate News | May 31, 2018

Amazon plans to announce its second headquarters location later this summer, and a handful of finalist cities are eagerly awaiting the decision. Amazon declared 20 finalists in the running for its HQ2 site. Cities are making their best offers to the online retail giant. Amazon promises to add up to 50,000 new high-paying jobs and invest $5 billion in the local economy to the chosen host city. Amazon will continue to maintain its headquarters in Seattle as well.

Ahead of the announcement, ATTOM Data Solutions, a real estate research firm, ranked 19 of the U.S. finalists (excluding Toronto). The finalists were ranked on the following seven factors: median home prices, five-year home price appreciation, affordability, average school test scores, crime rates, property tax rate, and environmental hazard risk.

The HQ2 finalist that emerged on top of ATTOM Data Solutions’ rankings: Raleigh, N.C. The area got a boost from its relatively affordable homes, above-average school scores, and below-average crime rates and property taxes.

“It’s striking that 16 out of the 19 markets have median home prices that are lower than the city of Seattle, which our data shows was $585,000 at the end of Q4 2017,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “The only exceptions are Boston, Los Angeles, and New York, indicating that Amazon is interested in markets that have relatively affordable housing for employees. At the end of the day, two of the most important factors for the decision will be finding a market with an ample supply of workers with the skills Amazon is looking for along with an ample supply of relatively affordable housing for those workers to live in. A market like Raleigh certainly has the affordable housing, and it also has an ample supply of skilled workers thanks to the several top-notch universities in the vicinity.”

attom-amazon

Source: “Amazon HQ2 Finalists Ranked by Housing Market Health,” ATTOM Data Solutions (May 30, 2018); REALTOR® Magazine Online, Daily Real Estate News 053118

Nationally: Sales Struggle to Overcome Housing Shortages

Nationally: Sales Struggle to Overcome Housing Shortages
National Association of REALTORS®
article by Daily Real Estate News | May 24, 2018

Blame it on the low inventory of available property: Total existing-home sales failed to gain traction in April, according to the National Association of REALTORS® latest housing report, released Thursday.

Total existing-home sales—which are completed transactions that include single-family homes, townhomes, condos, and co-ops—decreased 2.5 percent to a seasonally adjusted annual rate of 5.46 million in April. Sales are now 1.4 percent below a year ago. This also marks the second consecutive month sales have fallen on an annual basis.

Regional Breakdown  The following is a breakdown of existing-home sales across the country in April:

  • Northeast: existing-home sales dropped 4.4 percent to an annual rate of 650,000, and are now 11 percent below a year ago. Median price: $257,200—2.8 percent higher than a year ago.
  • Midwest: existing-home sales were unchanged month-over-month at an annual rate of 1.29 million in April, and are 3 percent below a year ago. Median price: $202,100—up 4.6 percent from a year ago.
  • South: existing-home sales dropped 2.9 percent to an annual rate of 2.33 million in April, but are still 2.2 percent above a year ago. Median price: $227,600—up 3.9 percent from a year ago.
  • West: existing-home sales dropped 3.3 percent to an annual rate of 1.19 million in April and are 0.8 percent below a year ago. Median price: $382,100—up 6.2 percent from a year ago.

“The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” says Lawrence Yun, NAR’s chief economist. “REALTORS® say the healthy economy and job market are keeping buyers in the market for now even as they face rising mortgage rates. However, inventory shortages are even worse than in recent years, and home prices keep climbing above what many home shoppers are able to afford.”

For the inventory that is out there, homes are selling fast. Strong buyer demand mixed with low inventory levels are prompting homes to sell at a record pace.

Here’s a closer look at some of the key indicators from NAR’s latest housing report:

Home prices: The median existing-home price for all housing types in April was $257,900, up 5.3 percent from a year ago.

Inventories: Total housing inventory at the end of April rose 9.8 percent to 1.80 million existing homes available for sale. Inventories are still 6.3 percent lower than a year ago. Unsold inventory is at a four-month supply at the current sales pace.

Days on the market: Properties stayed on the market an average of 26 days in April, down from 29 days a year ago. Fifty-seven percent of homes sold in April were on the market for less than a month.

“What is available for sale is going under contract at a rapid price,” Yun says. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”

All-cash sales: All-cash transactions comprised 21 percent of sales in April, unchanged from a year ago. Individual investors account for the biggest bulk of cash sales. Investors purchased 15 percent of homes in April, also unchanged from a year ago.

Distressed sales: Foreclosures and short sales made up just 3.5 percent of sales in April, the lowest since NAR began tracking such data in October 2008. That is also down from 5 percent a year ago. Broken out, 3 percent of April sales were foreclosures and 0.5 percent were short sales.

April-EHS

Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 052418

The Best Housing Markets for Home Flippers

The Best Housing Markets for Home Flippers
realtor.com   article by Daily Real Estate News | May 23, 2018

East Nashville 37206House flipping activity surged to an 11-year high this year, with more than 207,000 homes flipped, according to ATTOM Data Solutions, a real estate data firm. But the key is knowing where to be and when. “The sweet spot for successful home flipping is finding the neighborhoods just emerging as the next hot neighborhoods in a city,” says Daren Blomquist, a senior vice president at ATTOM Data Solutions. The firm says the average profit for a housing flip in 2017 was $68,100.

Realtor.com® ranked the 200 largest metros according to the share of all home sales categorized as a flip (defined as any type of home that is bought and resold within a three- to 12-month period). Researchers limited their rankings to two metros per state for geographic diversity and only included markets where the average profit was at least $30,000.

The following are the best housing markets for home flippers, according to realtor.com®:

  1. Nashville, Tennessee
    Ratio of flips to all home sales: 4.1%
    Average flip profit: $87,200
  2. Fresno, California
    Ratio of flips to all home sales: 3.5%
    Average flip profit: $53,200
  3. Palm Bay, Florida
    Ratio of flips to all home sales: 3.3%
    Average flip profit: $71,500
  4. North Port, Florida
    Ratio of flips to all home sales: 3.3%
    Average flip profit: $85,300
  5. Baton Rouge, Louisiana
    Ratio of flips to all home sales: 3.2%
    Average flip profit: $70,000
  6. Chattanooga, Tennessee
    Ratio of flips to all home sales: 3.1%
    Average flip profit: $65,800
  7. Los Angeles, California
    Ratio of flips to all home sales: 3%
    Average flip profit: $169,400
  8. Lubbock, Texas
    Ratio of flips to all home sales: 2.7%
    Average flip profit: $46,000

Source: “Flip It Good! Top 10 Home-Flipping Hotbeds Where Profits Are Through the Roof,” realtor.com® (May 23, 2018); REALTOR® Magazine Online, Daily Real Estate News 052318

Rates Hit Highest Level in 7 Years

Rates Hit Highest Level in 7 Years
Freddie Mac   article by Daily Real Estate News | May 18, 2018

Mortgage rates reversed course and soared to the highest averages in seven years, Freddie Mac reports. The 30-year fixed-rate mortgage averaged 4.61 percent this week, which matches the highest level since May 19, 2011.

rates051818

“Healthy consumer spending and higher commodity prices spooked the bond markets and led to higher mortgage rates over the past week,” says Sam Khater, Freddie Mac’s chief economist. “Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season. While this year’s higher mortgage rates have not caused much of a ripple in the strong demand levels of buying a home seen in most markets, inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

Freddie Mac reports the following national averages with mortgage rates for the week ending May 17:

  • 30-year fixed-rate mortgages: averaged 4.61 percent, with an average 0.4 point, rising from last week’s 4.55 percent average. Last year at this time, 30-year rates averaged 4.02 percent.
  • 15-year fixed-rate mortgages: averaged 4.08 percent, with an average 0.4 point, increasing from last week’s 4.01 percent average. A year ago, 15-year rates averaged 3.27 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.82 percent, with an average 0.3 point, rising from last week’s 3.77 percent average. A year ago, 5-year ARMs averaged 3.13 percent.

Source: Freddie Mac; REALTOR® Magazine Online, Daily Real Estate News 051818

States Where Owners Are Likely to Move

States Where Owners Are Likely to Move
ATTOM Data Solutions   article by Daily Real Estate News | May 17, 2018

Nevada has the highest share of homeowners who are likely to move, according to a new report released by ATTOM Data Solutions. Homeowners in Delaware, Florida, Colorado, and Virginia rounded out the top five places where homeowners are showing the greatest likelihood of moving.

ATTOM Data Solutions, a real estate research firm, culled data from purchase loan applications on residential real estate transactions for its first quarter Pre-Mover Housing Index. The index is based on the ratio of homes with a “pre-mover” flag during a quarter to total single-family homes and condos in a geographic area. An index reading above 100 indicates a home will likely be sold in the next 90 days in a given market.

By metro area, the top 10 highest pre-mover locales are in: Colorado Springs, Colo. (280 reading); Manchester-Nashua, N.H. (213); El Paso, Texas (213); Washington, D.C. (208); Orlando, Fla. (201); Tampa-St. Petersburg, Fla. (200); Las Vegas (199); Charleston, S.C. (198); Nashville, Tenn. (185); and Jacksonville, Fla. (184).

“The pre-mover index provides insight into which markets are poised to see a high percentage of homeowners moving this spring and which markets are likely to see a high percentage of homeowners staying put,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Markets with a high pre-mover index tend to be in areas where homes are still somewhat reasonably priced and have a growing job market, allowing for greater upward mobility. Markets with a low pre-mover index tend to be in areas with a struggling job market or with home prices that are out of reach for the average wage earner.”

The metros with the lowest pre-mover index were Cleveland (46 reading); Rochester, N.Y. (48); Boston (49); Pittsburgh (51); and Providence, R.I. (53).

Where Homeowners Are Moving in Q2 2018

 

Source: ATTOM Data Solutions; REALTOR® Magazine Online, Daily Real Estate News 051718

What Makes Homeowners Tackle a Remodel

What Makes Homeowners Tackle a Remodel
National Association of Home Builders
article by Daily Real Estate News | May 16, 2018

The chief reasons homeowners undergo a remodel are because they desire better and newer amenities or they feel compelled to repair or replace old components in their home, according to the National Association of Home Builders’ Remodeling Market Index. These two reasons have tended to drive most remodels in recent years, but other reasons are growing in popularity among homeowners.

Notably, three reasons to remodel are on the upswing: a “desire and need for more space,” “wanting to avoid moving/buying another home,” and “desire to be able to age in place.”

“An increased desire to avoid moving to another residence could in part be a reason to higher construction costs for new homes and a low inventory of existing homes available on the market,” the NAHB notes on its blog, Eye on Housing, in reporting the survey’s findings. “The uptick in aging in place is not entirely surprising, given the ongoing growth in the nation’s older population.”

The chart below reveals homeowners’ top reasons for remodeling:

NAHB_remodeling

Source: “Aging in Place on the Rise as a Reason to Remodel,” National Association of Home Builders’ Eye on Housing blog (May 15, 2018); REALTOR® Magazine Online, Daily Real Estate News 051618