Affordability constraints hold back pending home sales

Pending home sales remained in a holding pattern in June, however they increased slightly, according to the Pending Home Sales Index from the National Association of Realtors.
Constricted supply and low affordability prevent a larger boost in home sales, even while mortgage rates linger near their all-time lows, according to the index.

National home prices increased by 5% annually in May, according to the S&P CoreLogic Case-Shiller Indices.
New home sales were up once again in June, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. In fact, they even reached an eight-year high.
“Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale,” NAR Chief Economist Lawrence Yun said.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched 0.2% to 111 in June, up from 110.8 in May and is now 1% higher than June 2015’s 109.9. With last month’s minor improvement, the index is now at its second-highest reading over the past 12 months, but is noticeably down from this year’s peak level in April 115.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales.
“With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cool down after a very active spring,” Yun said.
“Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6% from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth,” Yun said.
One noteworthy and positive development occurring in the housing market during the first half of the year is that sales to investors have subsided from a high of 18% in February to a low of 11% in June, which is the smallest share since July 2009, Yun said.
Yun attributes this retreat to the diminished number of distressed properties coming onto the market and the ascent in home prices, which have now risen annual for 52 consecutive months.
“Limited selection of homes at bargain prices is reducing the number of individual investors willing or able to buy,” Yun said. “This will hopefully open the door for first-time buyers, who made some progress last month but are still buying homes at a subpar level even as rents increase at rates not seen since before the downturn.”
Despite the slowdown from April’s peak high, existing-home sales are still expected to come in at 5.44 million this year, an increase of 3.6% from 2015, the highest annual pace since 2006.
By Kelsey Ramirez

Millennials Vie--Against Lopsided Odds--With Investors in Homeownership Bid

Young adults are sitting on the sidelines of the housing market for a number of reasons, but one of the biggest is investors who buy the homes they want and turn around and rent them out for increasing amounts. TIME staffer Martha C. White takes a look at this growing isssue, with one in four homes being brought by investors with cash.
While the number of investors buying homes fell their from their peak of almost one in three, they are still most likely to snatch up the starter homes young adults want.

Millennials are buying homes in droves - just not where you'd expect

While there has been plenty of media attention about the lack of home-buying activity among the millennial generation, a recent analysis of home sale data performed by Realtor.com® and reported by Bloomberg shows that in many U.S. cities, millennials make up half or more of home purchasers and a large number of them are first-time buyers. They are just buying homes in less glamorous places than where the media has asserted the younger generation wants to live. For example, millennials—those between the ages of 25 and 34—accounted for nearly 60 percent those who took out a mortgage to buy a home in the first half of 2015 in Des Moines, Iowa. They accounted for 45 percent or more in places like Provo, Utah; Madison, Wisc.; Grand Rapids, Mich.; and New Orleans.

Source:time

Setting new records in Santa Barbara real estate

Another record week here at Village Properties Santa Barbara Real Estate. 

With 60% of our sales having multiple offers this is the highest number we have experienced - in recent times :) 

Unfortunately along with a high number of sales we had very few new listings this week, meaning our inventory is being reduced further. 

Another busy week has already started. Until next week.

RECORD SALES FOR MARCH

Spring time is usually when we see an increased inventory but with double the number of sales compared to the number of new listings that doesn't seem to be the case this year. 

For the month of March we saw double the number of sales when compared to February, that would partially explain the low inventory. 

This last week once again did we have multiple offers on 50% of our sales at  Village Properties - Santa Barbara Real Estate. 

To another successful week.

IT'S A NEW YEAR

We are off to a great start in 2015 with 40% of our sales at Village Properties having multiple offers. The number of new listings are up which is typical for the beginning of the new year. 

SANTA BARBARA HOMES FOR SALE DIMINISHING

Still impressive number of sales in Santa Barbara Real Estate. In spite of the holidays the buyers are out there searching among the shrinking inventory of homes for sale. As an example one property listed at $2,5M had no less than 9 offers in this past week! 

30% of our real estate sales this last week had multiple offers. 

Hope you all had a nice Thanksgiving. Let's have another active week in Santa Barbara Real Estate.