NAR – home prices jump 6.2% in second quarter; eclipse
2016 high
The headstrong supply and demand imbalances in much of
the country slightly tempered the pace of sales and
caused home prices to maintain their robust growth in
the second quarter, according to the latest quarterly
report by the National Association of Realtors (NAR).
The national median existing single-family home price
in the second quarter was $255,600, which is up 6.2%
from the second quarter of 2016 ($240,700) and
surpasses the third quarter of last year ($241,300) as
the new peak quarterly median sales price. The median
price during the first quarter increased 6.9% from the
first quarter of 2016. Single-family home prices last
quarter increased in 87% of measured markets, with 154
out of 178 metropolitan statistical areas (MSAs)
showing sales price gains in the second quarter
compared with the second quarter of 2016. Twenty-three
areas (13%) recorded lower median prices from a year
earlier. Twenty-three metro areas in the second quarter
(13%) experienced double-digit increases, down from 30
areas in the first quarter (17%). Overall, there were
slightly more rising markets in the second quarter
compared to the first quarter, when price gains were
recorded in 85% of metro areas. Total existing-home
sales, including single family and condos, slipped 0.9%
to a seasonally adjusted annual rate of 5.57 million in
the second quarter from 5.62 million in the first
quarter, but are still 1.6% higher than the 5.48
million pace during the second quarter of 2016. At the
end of the second quarter, there were 1.96 million
existing homes available for sale4, which was 7.1%
below the 2.11 million homes for sale at the end of the
second quarter in 2016. The average supply during the
second quarter was 4.2 months — do wn from 4.6 months in
the second quarter of last year.
Last quarter, a rise in the national family median
income ($71,529)5 was not enough to offset weaker
affordability from the combination of higher mortgage
rates compared to a year ago and rising home prices. To
purchase a single-family home at the national median
price, a buyer making a 5% down payment would need an
income of $56,169, a 10% down payment would require an
income of $53,213, and $47,300 would be needed for a
20% down payment. The five most expensive housing
markets in the second quarter were the San Jose,
California, metro area, where the median existing
single-family price was $1,183,400; San Francisco,
$950,000; Anaheim-Santa Ana, California, $788,000;
urban Honolulu, $760,600; and San Diego, $605,000. The
five lowest-cost metro areas in the second quarter were
Youngstown-Warren-Boardman, Ohio, $87,000; Cumberland,
Maryland, $98,200; Decatur, Illinois, $107,400;
Binghamton, New York, $109,000; and Elmira, New York,
$111,600. Metro area condominium and cooperative prices
— covering changes in 61 metro areas — showed the
national median existing-condo price was $239,500 in
the second quarter, up 5.4% from the second quarter of
2016 ($227,200). Eighty-seven% of metro areas showed
gains in their median condo price from a year ago.
Total existing-home sales in the Northeast rose 1.3% in
the second quarter and are 0.4% above the second
quarter of 2016. The median existing single-family home
price in the Northeast was $282,300 in the second
quarter, up 3.2% from a year ago. In the Midwest,
existing-home sales increased 4.2% in the second
quarter but are 0.5% below a year ago. The median
existing single-family home price in the Midwest
increased 6.6% to $204,000 in the second quarter from
the same quarter a year ago.Existing-home sales in the
South dipped 3.0% in the second quarter but are 2.5%
higher than the second quarter of 2016. The median
existing single-family home price in the South was
$229,400 in the second quarter, 6.7% above a year
earlier. In the West, existing-home sales decreased
3.7% in the second quarter but are 3.1% above a year
ago. The median existing single-family home price in
the West increased 7. 5% to $372,400 in the second
quarter from the second quarter of 2016.
Chinese takeovers of US companies plummet this year
amid tough Trump talk
– As of early August, Chinese dealmaking in the US has
dropped by 65% this year, according to Dealogic.
– The sharp decline comes amid greater uncertainty
around whether the Trump administration will allow the
deal to be completed.
– The Dealogic report estimated a further drop in
Chinese deals in the US, putting $75 million in advisor
fees at risk.
As the Trump administration looks to take a tougher
stance against Beijing, Chinese investments into the US
have more than halved this year, according to Dealogic.
“Amid growing regulatory scrutiny of China outbound M&A
targeting the US, volume has seen a 65% year-on-year
decline in 2017 year-to-date,” Nicholas Farfan and Karl
But of Dealogic Research said in an Aug. 8 note. “In
comparison, such deals peaked at $65.2 billion last
year, with high-profile deals inc luding HNA’s
acquisition of 25% of Hilton Worldwide.” “With
tightening restrictions, Chinese buyers may look to
stop pursuing or shelve potential acquisitions in the
US,” the note said. The pressure and uncertainty is
coming from both countries. On Beijing’s side,
authorities are reportedly targeting some of the
largest Chinese dealmakers to try to keep capital from
fleeing the country and contributing to yuan weakness.
On the American side, reports indicate the Committee on
Foreign Investment in the United States is looking to
use national security concerns to prevent more Chinese
purchases of US firms, especially in technology.
Anecdotally, Gregory Husisian, chair, export controls
and national security group at law firm Foley &
Lardner, noted that an increasing number of clients are
concerned about working with Chinese buyers due to the
potential for regulatory intervention. The dealma king
industry could also suffer some significant business
setbacks. The Dealogic analysts estimate about $9.7
billion in pending Chinese deals to buy US firms could
fall under regulatory scrutiny, potentially putting $75
million in advisor fees at risk.
NAHB – single-family starts hold steady in July after
upward June revision
Nationwide housing starts fell 4.8% in July to a
seasonally adjusted annual rate of 1.16 million units,
according to newly released data from the US Department
of Housing and Urban Development and the Commerce
Department. Single-family production slipped 0.5% in
July to a seasonally adjusted annual rate of 856,000
after a strong, upwardly revised June reading.
Year-to-date, single-family starts are 8.6% above their
level over the same period last year. Multifamily
starts dropped 15.3% to 299,000 units. “The overall
strengthening of the single-family sector is consistent
with solid builder confidence in the market,” said
Granger MacDonald, chairman of the National Association
of Home Builders (NAHB) and a home builder and
developer from Kerrville, Texas. “The sector should
continue to firm as the jo b market and economy grow and
more consumers enter the housing market.” “New-home
production numbers this month are in line with our
forecast for a slow and steady recovery of the housing
market,” said NAHB Chief Economist Robert Dietz. “We
saw multifamily production peak in 2015, and this
sector should continue to level off as demand remains
solid.” Regionally in July, combined single- and
multifamily housing production rose 0.6% in the South,
and fell 1.6% in the West, 15.2% in the Midwest and
15.7% in the Northeast. Overall permit issuance in July
was down 4.1% to a seasonally adjusted annual rate of
1.22 million units. Single-family permits held steady
at 811,000 units while multifamily permits fell 11.2%
to 412,000. Regionally, overall permits rose 19.2% in
the Northeast. Permits fell 1.4% in the South, 7.9% in
the West, and 17.4% in the Midwest.
Fiat Chrysler joins BMW, Intel in developing
self-driving cars
Fiat Chrysler (FCAU) said Tuesday it will partner with
BMW and Intel (INTC) to develop a platform for
self-driving cars. The Italian-American automaker will
contribute engineering and other technical resources to
the existing BMW-Intel alliance, which launched in July
2016 to create an automated driving system for global
manufacturers. Fiat Chrysler also said its involvement
in the group will accelerate product development.
Earlier this year, the alliance announced its plan to
test 40 autonomous cars on public roads by the end of
2017. The companies, including Intel-owned Mobileye,
expect to offer solutions for fully automated driving
by 2021. The alliance’s goal is to create the “most
relevant” self-driving platform that automakers can
adopt while maintaining their brand identities. “In
order to advance autonomous driving technology, it is
vital to form partnerships among automakers, technology
providers and suppliers,” said FCA CEO Sergio
Marchionne. “Joining this cooperation will enable FCA
to directly benefit from the synergies and economies of
scale that are possible when companies come together
with a common vision and objective.” In a joint
announcement, the companies said they invite other
automakers and technology firms to adopt their
platform. Financial terms of the Fiat Chrysler deal
weren’t disclosed.
CoreLogic – US single-family rents up 2.8% year over
year in June
– National rent growth decelerated in June 2017
compared with June 2016
– Low-end rent growth more than doubled high-end rent
growth
– Orlando had the highest year-over-year rent growth
in Q2
Single-family rents, as measured by the CoreLogic
Single-Family Rental Index (SFRI), climbed steadily
between 2010 and 2016. However, the index shows
year-over-year rent growth has decelerated slowly since
February 2016, when it peaked at a 4.4%. As of June
2017, single-family rents increased 2.8% year over
year, a 1.6 percentagepoint decline since the February
2016 peak. The index measures rent changes among
single-family rental homes, including condominiums,
using a repeat-rent analysis to measure the same rental
properties over time. Using the index to analyze
specific price tiers reveals important differences. The
ind ex’s overall growth was pulled down by the high-end
rental market, defined as properties with rents 125% or
more of a region’s median rent. Rents on higher-priced
rental homes increased 1.9% year over year in June
2017, down from a gain of 3% in June 2016. Growth in
the low-end market, defined as properties with rents
less than 75% of the regional median rent, increased
4.4% in June 2017, down from a gain of 5.5% in June
2016.
Rent growth varies significantly across metro areas.
Rental vacancy rates are available quarterly from the
US Census Bureau Housing Vacancy Survey. Figure 3 shows
the relationship between the rent growth and rental
vacancy rates for 37 metro areas that are available for
both CoreLogic’s rental index and the Census’s vacancy
survey in Q2 2017. Cities with limited new construction
and strong local economies that attract new employees
tend to have low rental vacancy rates and stronger rent
growth. Orlando experienced 4.5% year-over-year rent
growth in Q2 2017, driven by employment growth of more
than 3% year over year and a rental vacancy rate of
7.1%, slightly lower than the 7.3% national
single-family rental home vacancy rate in Q2 2017. In
contrast, Oklahoma City, which has been hit with
energy-related job losses since early 2015 and a rental
vacancy rate of 11.5% in Q2 2017, experi enced a 3%
year-over-year decrease in rents, according to
CoreLogic data.
DSNews – further simplifying foreclosures
Foreclosures can be a messy process for all
involved—from the homeowner that loses their home, to
the servicers that eventually take care of the
property—it is anything but a pleasant experience. In
addition, the entire process can be complicated by a
slew of paperwork, payments, and transfers with many
moving parts that are easy to miss. But, according to
The Journal Times, one county in Wisconsin is making a
small change to its foreclosure procedure that could go
a long way in ensuring smooth transitions of title, one
that the rest of the country could possibly benefit
from if it goes as planned. The proposed change is as
simple as removing a middle-man, the article notes. In
Racine County, as of now, when a foreclosure is sold
through the sheriff’s office the buyer receives a copy
of the deed and is required to take that deed down t o
the Register of the Deed’s office to get it filed.
However, this little step is often overlooked,
according to the Racine County Register of Deeds, which
can cause big problems for borrowers and the state,
since the tax bill will continue to be sent to the old
owner to never be paid. This can lead to further
complications, like tax interception. The proposed
bill, Senate Bill 175, would allow the Clerk of Courts
Office to simply take the deed directly to the Register
of Deeds Office, and eliminate the middle man, who has
little incentive to make sure the task gets
accomplished.
Currently, this practice has been implemented in
Milwaukee County, but if passed would become state-wide
practice. Critical and constant examination of
foreclosure requirements and best practices are vital
to streamlining and simplifying the industry, and
taking a look at what certain states and municipalities
are doing is just one of the many ways for the industry
to stay ahead of the curve.