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Tag Archives: Housing Supply

Experts Project Growth in Commercial Real Estate, Housing Starts

A recent industry survey detects rising optimism in the commercial real estate sector and the single-family housing sector over the next few years. The survey, conducted in March by the Urban Land Institute and Ernst & Young, finds a consensus among economists and analysts that the real estate market will improve as transaction volumes rise and vacancies decline. Commercial real estate transactions totaled about $290 billion last year and are expected to rise to $310 billion this year. By 2015, analysts expect volumes of about $360 billion. The single-family market is anticipated to experience a rise in housing starts and a deceleration in price increases.

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Reports Burst Housing Bubble Concerns

While rapid price gains have recently prompted fears of another housing bubble on the horizon, recent reports from Capital Economics and Redfin asserted no such bubble is forming--at least not on a national level. Capital Economics addressed concerns that home price increases, which are rising twice as fast as gains in income and residential rent, are not sustainable in the long run. One argument the firm made is housing actually has more to gain than lose from rapid price gains since it would help more homeowners rise out of negative equity and help those with low equity.

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NAHB: List of Improving Markets Sees First Decline after 7 Months

After climbing for seven straight months, the improving markets index (IMI) from the National Association of Home Builders (NAHB) and First American fell by one market from the prior month. The index identified 273 markets as improving this month, down from 274 in March. Although the index welcomed five new markets in April, six dropped off the list. ""In some markets, the main thing that's holding back a recovery is a relatively thin inventory of homes for sale, which could be resolved if builders had easier access to credit for building homes and putting people back to work,"" said Rick Judson, NAHB chairman.

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NAR: Investment-Home Sales Decline in 2012; Median Price Rises 15%

Investment-home sales in 2012 were down slightly from the year before but remain elevated, while the median price increased, according to a survey from National Association of Realtors (NAR). Sales for investment homes fell 2.1 percent to 1.21 million, down from 1.23 million in 2011. Overall, investment sales accounted for 24 percent of sales in 2012, the second highest share since 2005, NAR data revealed. The median price paid for investment homes increased 15 percent to $115,000 in 2012 compared to $100,000 in 2011, NAR reported.

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Construction Spending Up in February

Construction spending rose 1.2 percent month-over-month in February, according to the Census Bureau. On an annual basis, construction spending was up 7.9 percent in February, reaching an annual rate of $885.1 billion. Residential construction spending increased 2.2 percent over the month, while nonresidential construction spending increased 0.4 percent. Within the residential sector, multifamily construction spending decreased in February while single-family construction spending rose.

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Commentary: No News Is…

The explanation from the National Association of Realtors (NAR) for the drop in the Pending Home Sales Index (PHSI) for February has to be viewed with a jaundiced eye. According to the NAR, the PHSI dropped because of the low inventory of homes for sale. Of course, that wasn't offered as an explanation one month earlier, when the inventory of homes for sale dropped to its lowest level since December 1999 and the PHSI increased. But when the PHSI fell in February, and the inventory of homes for sale increased, the still-low inventory became a convenient excuse.

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NAR: Inventory Shortage Brings Down Pending Home Sales in Janaury

The National Association of Realtors' (NAR) Pending Home Sales Index (PHSI) fell 0.4 percent to 104.8 in January, the third month-over-month decline in the last four months, the association reported. Economists had expected a 0.7 percent drop to 105.2 from January's originally reported 105.9 The January index reading was revised to 105.2. NAR chief economist Lawrence Yun attributed the drop in the PHSI to weak inventory of existing homes for sale.

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NAHB: List of Improving Markets Expands to 274

The National Association of Home Builders' (NAHB) Improving Markets Index (IMI) showed no signs of slowing down in March, rising for its seventh consecutive month. According to NAHB, 274 metros are now on the mend, a net gain of 15 since February. While 19 markets were dropped, 34 new areas were added, including Birmingham, Alabama; Santa Barbara, California; Colorado Springs, Colorado; and Bloomington, Indiana. For the second straight month, metros in all 50 states are represented on the list.

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Commentary: Headlines and Bottom Lines

One of the most interesting results of poring through economic data reports is that the details often tell a different story than the headline. The recent report on retail sales is a case in point. While the vast majority of commentators were impressed with a strong 1.1 percent month-over-month increase in overall sales, those who scratched the surface were rewarded for their efforts by learning more than half of the month-over-month increase came from an increase in gasoline station sales as prices. In addition, coverage of the recent report on housing permits and starts was dominated by the increase in both permits and starts. A closer look at the permit-starts data revealed another important phenomenon: a shift from single-family to multifamily construction.

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More than One-Third of Listed Homes Sold Within 2 Weeks: Redfin

More than one-third of homes were taken off the market in two weeks or less last month, Redfin revealed in its most recent monthly housing report. On average, 34 percent of homes were under contract within 14 days of their debut in February, an increase from 30.3 percent in January, the online real estate broker reported. Redfin also reported a continued year-over-year decrease in inventory, which has fallen 32 percent from February 2012.

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