Case-Shiller Index : 85% Of Tracked Cities Showed Home Price Improvement In July

Standard  & Poor's released its monthly Case-Shiller Index this week. The Case-Shiller Index measures home price changes from month-to-month, and year-to-year, in 20 select U.S. cities. It also reports a "national" index; a composite of the values in said cities.

The most recent Case-Shiller Index shows a 0.9% rise in home values from June to July 2011. Home values were higher in 17 of the 20 tracked cities. Only Phoenix and Las Vegas fell. Denver was flat.

Also noteworthy is that, of all of the Case-Shiller cities, Detroit posted the strongest 1-year, home price improvement. As compared to July 2010, home values are higher by 1.2 percent in Detroit. This bests even Washington, D.C. -- long-believed to be the nation's healthiest housing market.

That said, we should be careful of the conclusions we draw from July's Case-Shiller Index -- both on a city-wide level, and on a national level. This is because, as with most "home price trackers", the Case-Shiller Index has flaws in its methodology.

The first Case-Shiller Index flaw is its limited scope. Although it's purported to be a "national housing index", the data that comprises the monthly Case-Schiller Index is sourced from just 20 U.S. cities. These 20 cities represent just 0.6% of the more than 3,100 municipalities nationwide.

The second Case Shiller Index flaw is that the sample sets include single-family, detached homes only. Condominiums, multi-unit homes, and new construction are specifically excluded from the Case-Shiller Index.

In some markets, "excluded" home types outnumber included ones.

And, lastly, the Case-Shiller Index is flawed in that it takes 2 months to gather data and report it. It's nearly October, yet we're still discussing the real estate market as it existing in July. For buyers and sellers in the New York City area, July in ancient history.

The Case-Shiller Index is useful for tracking long-term trends in housing, but does little to help individuals with their choices to buy or sell a home. For relevant, recent real estate data, talk to a real estate agent in your market. Real estate agents are often the best source for real-time, real estate data.

Location is the key. Know your real estate market. Call a Realtor.

Till next time

The New York Real Estate Nurse

New Home Sales Figures Better Than Reported

According to the Census Bureau, the number of new homes sold slid for the fourth straight month in August, easing 2 percent from July. On a seasonally-adjusted, annualized basis, home buyers bought 295,000 newly-built homes last month.

August marked the lowest new home sales tally since February. News outlets are jumping on the story, with at least one calling it a "blow" to the housing market.

That's an unfair assessment.

It's tough for the new home market to tally big sales numbers when the number of homes for sale is dwindling and, in August, that's exactly what we saw. The number of new homes for sale nationwide fell to 162,000 last month. This is the fewest number of new homes for sale since at least 1993, the first year the Census Bureau tracked such data.

In other words, using New Home Sales as a housing market gauge may be misleading. A better metric may be new home supply.

In August, new home supply edged 0.1 months higher to 6.6 months. This means that, at today's sales pace, the complete new home inventory would be sold out in 6.6 months.

It's the second-fastest reading in 2 years.

The new home market represents an interesting opportunity for home buyers in the New York City area. Builders are facing new competition from bank-owned homes and foreclosures, dragging builder confidence to all-time lows. Furthermore, builders have low expectations for the next 6 months.

As a buyer, you can use this to your advantage. Builders may be more willing to negotiate on price and finishes versus this time last year. You may find a good "deal" in new construction once you go in search of it.

Builders are eager to negotiate to move their inventory. Go make an offer.

Till next time

The New York Real Estate Nurse

Existing Home Sales Jump; Home Supplies Falling

Are home resales rebounding? Just trending?

According to the National Association of REALTORS®, Existing Home Sales rose 8 percent in August from the month prior, and 19 percent as compared to August of last year.

"Existing homes" are homes that are previously owned; ones that cannot be considered new construction.

A total of 5.0 million existing homes were sold last month on a seasonally-adjusted, annualized basis. This is slightly better than the 12-month home resale average, a statistic partially powered by "distressed sales". Distressed homes -- homes in various stages of foreclosures or sold via short sale -- accounted for 31 percent of all home resales in August.

At the current rate of sales, the national home resale inventory would be depleted in 8.5 months. This pace is a full month faster as compared to July, and the lowest home supply reading since March 2011.
Other noteworthy facts from the August Existing Home Sales report :

• There are currently 3.58 million existing homes for sale nationwide
• 29 percent of home buyers paid cash in August
• Real estate investors bought 22% of homes in August, up from 18% in July

Home prices throughout the New York City area are based on Supply and Demand and, at least right now, it appears the supply is dropping. Furthermore, with mortgage rates at all-time lows, it's reasonable to expect demand to pick up. These two conditions should lead home prices higher.

If you're shopping for a home right now, recognize the trends and work them to your advantage. It may be "cheapest" to buy now. Contact your local Realtor.

2009 was a great year to buy a home. 2011 is a great time to buy a home. Buy a home now and lock in a mortgage rate at 4% and you will never be disappointed. You will not say to yourself  " I should of waited".

This is the year, when you look back, you will say YES.

Till next time.

The New York real Estate Nurse

How To Clean Your Home Gutters

With the change of season, it's a good time to make sure your home's gutter system is clean and well-functioning.

Home gutters serve a specific purpose. By capturing and funneling rainwater away from a home "footprint" water damage to walls, windows and roofing can be minimized. A well-functioning gutter system can keep a home's basement from flooding, and a foundation safe from long-term structural damage.
Damaged or dirty gutters can lead to major home damage that may not be covered by insurance.

For homeowners in th New York City area, keeping clean gutters is essential. Luckily, with the right tools, gutter maintenance can be a do-it-yourself job.

First, gather the necessary tools. You'll need a ladder for climbing; a bucket for holding debris; a hose for flushing your gutters; and a small, scooping tool such as a trowel.
Next, carefully climb to your gutter. Using your hands, scoop large debris and place it in the bucket. Use the trowel to get to hard-to-reach places and for removing sticks and leaves. For safety, do not stretch to reach the next section of gutter.

After clearing the first gutter portion, step down from the ladder, move it to the next section of gutter, and repeat. Do this until all gutter sections are free from debris.

Next, find a garden hose with a spray attachment. Carry the hose up the ladder with you to the highest point of your gutter system -- usually opposite the downspout. With the water supply on, spray water into the gutter to flush the remaining debris.

If the water fails to drain, there's likely a clog in the downspout. Using a screwdriver, separate the downspout, find the clog, and remove it. Or, if you find standing water, adjust the slope of your gutter by removing the gutter hangers, fixing the slope, and re-attaching the hangers.

A gutter system should slope roughly one-quarter inch for every 10 feet of gutter.

Gutter maintenance is a twice a year task that you can do yourself. However, if you're uncomfortable on a ladder, or prefer to hire professionals, that's okay, too. As with everything in home maintenance, it's safety first.

Maintain your home and save money.

Till next time

The New York Real Estate Nurse

Building Permits Rising Nationwide; Housing Starts To Follow

Single-Family Housing Starts fell for the second consecutive month, dropping to a seasonally-adjusted, annualized 417,000 units in August 2011.

A "Housing Start" is defined as a home on which ground has broken.

We shouldn't put too much faith in the findings, however. Although housing starts were lower last month, as noted by the Census Bureau, the margin of error in the August Housing Starts report exceeded the actual result.

From the official report:

• August's Published Results : -1.4% from July 
• August's Margin of Error : ±10.3% from July

Therefore, August's Housing Starts may have actually increased by up to +8.9% from July, or it may have dropped as much as -11.7%. We won't know for sure until several months from now, after the Census Bureau has gathered more housing data.

One thing is certain, though -- the long-term trend in Housing Starts is "flat". There has been little change in new home construction since last summer.

The same can't be said for Building Permits.

Considered a pre-cursor to Housing Starts, Single Family Building Permits climbed 2.5 percent with a minuscule Margin of Error of ±0.9 percent.

As is common in real estate, results varied by region:

• Northeast : +3.3 percent from July
• Midwest : +6.3 percent from July
• South : -1.3 percent from July
• West : +11.3 percent from July

When permits are issued, 86 percent of them begin break ground within 60 days. Therefore, expect Housing Starts and new home inventory to rebound in the months ahead.

For now, housing remains steady. And, with mortgage rates at all-time lows, homebuyer purchasing power in an around the New York City area is higher than it's been in history. If you're in the process of shopping for a home, talk with your lender to plan your mortgage budget. Call your Realtor and plan your home purchase.

Till next time

The New York Real Estate Nurse

A Simple Explanation Of The Federal Reserve Statement (September 21, 2011 Edition)

Wednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 7-3 -- the second straight meeting at which the FOMC adjourned with as many 3 dissenters. Prior to that last meeting, there hadn't been 3 FOMC dissenters since 1992.

In its press release, the Federal Reserve presented a dour outlook for the U.S. economy, noting that since its last meeting in August:

1. Economic growth "remains slow"
2. Unemployment rates "remain elevated"
3. The housing sector "remains depressed"

The Fed also said that there are "significant downside risks" to the economic outlook, tied to strains in the global financial markets.
 
The news wasn't all bad, however.

The Fed noted that business investment in equipment and software continues to expand, and that inflationary pressures on the economy appear to have stabilized. The Fed then re-iterated its plan to leave the Fed Funds Rate in its current range near 0.000 percent "at least until mid-2013". This means that Prime Rate -- the rate to which credit card rates and lines of credits are often tied -- should remain unchanged at 3.250 for at least another 2 years.
Furthermore, as expected, the Federal Reserve launched a market stimulus plan aimed at lowering long-term interest rates. The Fed will sell $400 billion in Treasury securities with a maturity of 3 years or less, and use the proceeds to buy the same with maturity between 6 and 30 years.

Mortgage market reaction to the FOMC statement has been positive this afternoon. Mortgage rates in New York are improving, but note that Wall Street sentiment can shift quickly -- especially in a market that's as uncertain as this one.

If today's mortgage rates and payments fit your household budget, consider locking in a rate. Rates can change swiftly.

The FOMC's next meeting is a 2-day affair, scheduled for November 1-2, 2011.
They are out of bullets, what's a country to do.  More QE? Maybe its time to bite the bullet and tighten everybody's belt. Let the markets adjust to the new numbers and start over at par. Then maybe we will see some economic growth.

Till next time

The New York Real Estate Nurse

Homebuilder Confidence Stays Flat

Homebuilders are feeling worse about the market for new homes nationwide.

Myself, I am late with the news. I am OK with the trend.

With construction credit tight and competition from foreclosures increasing, the National Association of Homebuilder's Housing Market Index slipped 1 point in September, falling to levels just below the index's 12-month average.

The HMI measures homebuilder confidence nationwide. It's the result of 3 separate homebuilder surveys, each designed to measure a specific facet of the homebuilder's business.

1. How are market conditions for the sale of new homes today? 
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

Each component survey showed a drop-off from August. Responses fell 1 point, 2 points, and 2 points, respectively. Together, September's composite reading was 14 out of a possible 100 points. Readings over 50 are considered favorable.

The HMI not been above 50 since April 2006.

With homebuilder confidence low -- and stagnant -- buyers of new homes in the New York City area should remain alert for "deals". Builders are more likely to offer free upgrades and other concessions to incoming buyers. The availability of such deals may increase as the seasons change and as the year comes to a close.
Low mortgage rates are making new homes attractive, too. Last week, 30-year fixed rate mortgage rates fell to their lowest levels of all-time. As compared to just 8 weeks ago, 30-year fixed rate mortgage payments are lower by 5 percent at all loan sizes, down $27 per month per $100,000 borrowed.

Things are getting cheaper, America is headed for stagflation. Anybody remember the 70's. What a decade!
The world is mired in debt and defaults could happen. Nobody could pay out on all the Swaps. Financial disaster all over again.

Till next time

The New York Real Estate Nurse