Rising Rates Prompt Cash Buyers to Act 08/29/2013 By: Esther Cho

While higher mortgage rates have been blamed for the slowdown in pending home sales, they may be contributing to an increase in cash purchases, RealtyTrac suggested in a recent report. In July, about 40 percent of residential property sales were all-cash transactions. The share presents an increase from 35 percent in June and 31 percent compared to July 2012. Dallas experienced the biggest monthly increase in cash sales, at 82 percent, followed by St. Louis (+66 percent), Los Angeles (+32 percent), Riverside-San Bernardino in Southern California (+26 percent), Seattle (+21 percent), and Phoenix (+21 percent). Daren Blomquist, VP at RealtyTrac, explained rising rates could be leading to a higher percentage of cash purchases, while “some non-cash buyers can no longer afford to buy, particularly in high-priced markets.” Short sales also accounted for a bigger share of sales in July, increasing to 14 percent, up from 13 percent in the prior month and 9 percent from a year ago. Meanwhile, institutional investor purchases and sales for bank-owned properties fell flat, at 9 percent for each type of sale, unchanged from June and July 2012. Overall, RealtyTrac reported an increase in July sales, with sales volume rising 4 percent from June and 11 percent compared to a year ago. Despite the national gain, sales were still down year-over-year in eight states—California (-17 percent), Alabama (-14 percent), Arizona (-11 percent), Nevada (-7 percent), Georgia (-2 percent), New York (-2 percent), Hawaii (-1 percent), and Oregon (-1 percent). Of those states, four still managed to post the biggest annual price gains. California led with a 31 percent annual increase in media home values. Price increases in Nevada, Arizona, and Georgia ranged from 20 to 27 percent over the last year. Among the largest metro areas, the biggest annual declines in sales were concentrated in California, starting with San Francisco (-20 percent), Los Angeles (-20 percent), San Diego (-19 percent), and Riverside-San Bernardino (-14 percent). Other large metro areas with significant decreases were Phoenix (-13 percent) and Atlanta (-8 percent). On the other hand, sales were strongest in Chicago (+27 percent), Minneapolis (+23 percent), Baltimore (+21 percent), Boston (+20 percent), and Philadelphia (+ 20 percent). http://www.dsnews.com/articles/rising-rates-prompting-action-from-cash-buyers-2013-08-29

Existing Home Sales Up, New Home Sales Down

Existing home sales rose 6.5% in July to a seasonally adjusted annual rate of 5.39 million units from 5.06 million units in June. Compared to a year ago, existing home sales were up 17.2% in July. The inventory of unsold existing homes on the market rose 5.6% to 2.28 million in July, a 5.1-month supply at the current sales pace. New home sales fell 13.4% in July to a seasonally adjusted annual rate of 394,000 units. On a year-over-year basis, new home sales were 6.8% higher than July 2012. At the current sales pace, there is a 5.2-month supply of new homes on the market. The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 16 fell 4.6%. Purchase volume rose 1%. Refinancing applications decreased 8%. The index of leading economic indicators — designed to forecast economic activity in the next three to six months — rose 0.6% in July, following a flat reading in June. Retail sales fell 1.9% for the week ending August 17, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.2%. Initial claims for unemployment benefits for the week ending August 17 rose by 13,000 to 336,000. Continuing claims for the week ending August 10 rose by 29,000 to 2.999 million. The less volatile four-week average of claims for unemployment benefits was 330,500. Upcoming on the economic calendar are reports on durable goods orders on August 26, the housing price index on August 27 and pending home sales on August 28.

New Homes are Under Construction!

Friday saw Housing Starts up 5.9% in July, hitting an 896,000 unit annual rate. All the gain was due to multi-family starts, which rebounded after their steep drop in June, while single-family starts slipped 2.2% for the month. However the underlying home building trends remain upward. Single-family starts are up 15.4% over a year ago and the total number of homes under construction is up 30% versus a year ago. Experts say the upward trend in home building should continue for at least a couple of years. They believe population growth and tear downs will require starts to ultimately rise to about 1.5 million units per year, most likely by 2015. This level of building puts the number of homes increasing at the same rate as the population. Building Permits headed up 2.7% in July, with permits for single-unit homes up 17.9% over a year ago. The National Association of Home Builders reported their Builders Confidence Index at its highest level since November 2005.

Open House Sunday August 18th from 2 - 4 - 251 Steffy, Ramona, CA