Home Prices Near 10-Year Peak in U.S.

Yet Not a Housing Bubble Market Says Nationwide...

According to a forward-looking housing barometer report released this week by Nationwide, U.S. home prices nationally have risen significantly since the 2008 mortgage crisis, but "healthy fundamentals" in the majority of local housing markets signify that another housing bubble isn't imminent.

Today's housing market remains positive and in stark contrast to the conditions during the housing bubble when more than three-fourths of metro areas flashed warning signs at least two years before the bubble popped, according to Nationwide's Health of Housing Markets Report (HoHM Report).

The latest HoHM Report finds that continued job growth, increasing incomes and record low mortgage rates across the U.S. are keeping housing affordable. Additionally, modestly tight mortgage underwriting criteria and a decided lack of overbuilding should support housing markets in the year ahead. The report also shows that there are a handful of regional markets where house prices are more than 20 percent above their pre-crash peaks.

"Home prices reaching or even passing their pre-crash highs of a decade ago does not signal a bubble in the near future," said David Berson, Nationwide senior vice president and chief economist. "Even with record-high prices in some markets, housing remains relatively affordable, and we are not concerned about a national bubble."

Berson noted that only 7.1 percent of homeowners remain underwater on their mortgages and housing market metrics across the board remain healthy. "We're optimistic that the housing market will continue to boost the U.S. economy," he said.

The quarterly report evaluates the housing health for the U.S. and 400 metropolitan statistical areas. Overall, it indicates that the vast majority of local housing markets will experience sustainable housing activity during the next year with little chance of substantial downturns.

Incomes in six markets across the country, however, are not keeping pace with sharply rising home prices. They are Dallas, Houston and Austin, Texas; Denver, Colo.; and San Francisco and San Jose, Calif. Meanwhile, home prices in several metro areas that experienced the biggest increases in the housing boom remain more than 20 percent below their peak. They include Bakersfield and Fresno, Calif.; Las Vegas, Nev.; Orlando, Fla.; and Tucson and Phoenix, Ariz.

The report also found that:

• While more than half of metro areas are still below their peak home prices of a decade ago, about 150 areas set all-time price peaks already in 2016. Housing trends driving the overall market suggest that national home prices should surpass their previous peak in coming years. 
• The energy sector slowdown weighs heavily on job growth and housing sustainability in Louisiana, North Dakota, Texas and Wyoming, placing metro areas in those states among the bottom 10 states on the index for the second consecutive quarter. Many of them have been at the bottom for the past year. 
• Major MSAs among the top 50 include Baltimore, Cincinnati, Detroit and Jacksonville; meanwhile, three of the 40 largest MSAs remain concerning, just outside of the bottom 10: Houston, Seattle, and New Orleans. The 10 top metro areas in the index, which reflects the health of housing, are, in order, Fayetteville-Springdale, Ark.-Mo.; Saginaw, Mich.; Valdosta, Ga.; Cumberland, Md.-W.Va.; Jackson, Tenn.; New Bern, N.C.; Buffalo-Niagara Falls, N.Y.; Niles-Benton Harbor, Mich.; Durham-Chapel Hill, N.C.; and Manhattan, Kan.

Residential News » Irvine Edition | By Michael Gerrity

Which political party is better for home ownership?

If you want to know which political party is better for home ownership, the answer is: It depends on where you live.

Nationwide, homeowners living in Democrat-controlled congressional districts have gained more than twice as much in housing wealth as homeowners living in Republican-controlled districts over the past eight years, according to ATTOM Data Solutions. However, those in Republican districts in Florida fared better than their counterparts in Democrat-controlled districts, while the opposite is true in Orange County.

Nationwide, homeowners living in Democrat-controlled congressional districts have gained more than twice as much in housing wealth as homeowners living in Republican-controlled districts over the past eight years. Nationwide, homeowners living in Democrat-controlled congressional districts have gained… more

Key U.S. highlights include:
Among 2.4 million single family homes bought eight years ago, those in Democrat-controlled districts have gained an average $59,467 in value since purchase — a 21 percent return — compared to a $22,086 return representing a 10 percent ROI for homes in Republican-controlled districts.

Homeowners in Republican-controlled districts are paying lower property taxes — $2,514 on average representing a 1.02 effective tax rate compared to $3,659 representing a 1.07 percent tax rate for homeowners in Democrat-controlled districts. Counter to the national trend, seven of the 11 battleground states in the 2016 presidential election have produced better ROI for homeowners in
Republican-controlled districts.

Here are Florida’s stats:
About 42,190 single-family homes bought eight years ago in congressional districts with a Democratic representative have gained an average of $21,990 in value since purchase, an 8 percent return. In comparison, about 95,813 single-family homes bought eight years ago in congressional districts with a Republican representative saw an average $26,790 return, representing an 11 percent return on investment.

Homeowners in Republican-controlled districts are paying lower property taxes —$2,895 on average for a 1.09 percent effective tax rate compared to $3,937 representing a 1.37 percent tax rate for homeowners in Democrat-controlled districts.

Here are Orange County stats:
Home buyers saw an average $12,682 gain in value, or a 6 percent return, in congressional districts with a Democratic representative, while those who bought a home eight years ago in congressional districts with a Republican representative saw an average $13,317 gain, or a 4 percent return. Homeowners in Democrat-controlled districts are paying lower property taxes — $2,277 on average for a 1.03 percent effective tax rate, compared to $4,691 or a 1.37 percent effective tax rate in Republican-controlled districts. - Susan Lundine, Managing Editor Orlando Business Journal

Central Florida’s housing market: Median sales prices up in August 2016

Central Florida’s housing market reported more closed sales and higher median prices in August, according to the latest data released by Florida Realtors.

Local closed sales of existing single-family homes totaled 3,150 last month, up 5.5 percent from August 2015. Statewide, closed sales of single-family homes statewide totaled 25,070 last month, up 8.2 percent from August 2015.

“A continued lack of inventory – particularly in the mid-$200,000 and under range – is creating obstacles for many buyers who are trying to enter Florida’s housing market,” said 2016 Florida Realtors President Matey H. Veissi in a prepared statement.

Statewide inventory was at a 4.2-months’ supply in August for single-family homes and at a 5.8-months’ supply for townhouse-condo properties.

“Rising median prices also may be an inhibiting factor for these would-be homeowners; however, the uptick in prices could persuade sellers that now is the time to list their properties for sale, which in turn may help ease the tight supply in many areas,” said Veissi.

The median sales price for a single-family home in Central Florida was $229,000 in August, up 13.4 percent from the year-ago period, and higher than the statewide median price of $225,000.

For townhomes and condos, the local median sales price was $130,000 in August, up 13.3 percent from the same month last year, lower than the statewide median of $160,000. There were 854 condos and townhomes sold last month in the region, up 4.9 percent for the year-ago period; and 9,484 townhouse-condo sales closed statewide last month, up 3.3 percent compared to August 2015.
In August, statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year for the 57th month in a row.

The national median sales price for existing single-family homes in July 2016 was $246,000, up 5 percent from the previous year; the national median existing condo price was $228,400, according to the National Association of Realtors.

“Closed sales of single-family homes in Florida were up by 8.2 percent year-over-year in August, effectively erasing all of the losses from July,” said Florida Realtors Chief Economist Brad O’Connor in a prepared statement. “August’s gains were broad-based, with 20 of Florida’s 22 metro areas experiencing a year-over-year increase in sales. - Susan Lundine, Managing Editor, Orlando Business Journal

Orlando houses sell at fastest clip since 2006

Indecisive home buyers in the Orlando area were left behind last month as houses sold faster than in a decade, a new report shows.

Orlando-area houses that sold during August landed a contract within an average 56 days of hitting the market — the shortest sales period since May 2006, when the real estate bubble was about to burst.

"There are less homes on the market, and people are still looking. The demand is still high," said Caroline Moffitt, an agent with Keller Williams Heritage, based in Altamonte Springs. "It makes for a good market for sellers."

A year ago, houses took an average of two weeks longer to sell than in August, according to reports from Orlando Regional Realtor Association, which looks at sales mostly in Orange and Seminole counties. During the depths of the recession in 2008, Orlando houses took more than twice as long to sell as they did last month.

The late summer buying season in Orlando brought increased activity with 3,429 houses selling in August — up 2 percent from a month earlier and up 7.3 percent from a year earlier. Housing supply shrank too, dwindling to three months worth of inventory from 3.2 months in July and from 3.6 months a year before, the association's monthly sales report shows.

"There were 21 percent fewer single-family homes listed below $300,000 available for purchase than this month last year," said Lazenby, president of the association. "The lack of available options is pushing buyers to take advantage of the current low interest rates and choose more expensive properties they might not otherwise be able to afford with higher rates."

Lazenby underscored the market's bifurcation by pointing to a supply of just 1.98 months for houses priced under $300,000. Buyers don't begin to realize the benefits of a more balanced market — with closer to a six-month supply of listings — until they look at houses priced higher than $400,000, he added.

Buyers had to jump faster for contracts in August, but, unlike the heated market a decade ago, they benefited from relatively flat prices.

Typically the summer buying season peaks in July, with families positioning themselves for the new school year, but this year, median prices topped in June at $207,000 for the core Orlando market. In August, median prices held at $205,990, which was flat from a month earlier. Compared with a year ago, prices rose 13.8 percent.

Mary Shanklin, Reporter - Orlando Sentinel

Uptick in Home Refinancing Driven by Lower U.S. Mortgage Rates

Freddie Mac's latest Primary Mortgage Market Survey is reporting this week that the average fixed mortgage rate in the U.S. is moving slightly lower for the week helping to spur ongoing refinance activity.

Sean Becketti, chief economist of Freddie Mac, "The 30-year fixed-rate mortgage fell 2 basis points to 3.44 percent this week. As mortgage rates continue to range between 3.41 and 3.48 percent, many are taking advantage of the historically low rates by refinancing. Since the Brexit vote, the refinance share of mortgage activity has remained above 60 percent."

Freddie Mac News Facts:

• 30-year fixed-rate mortgage (FRM) averaged 3.44 percent with an average 0.6 point for the week ending September 8, 2016, down from last week when it averaged 3.46 percent. A year ago at this time, the 30-year FRM averaged 3.90 percent. 
• 15-year FRM this week averaged 2.76 percent with an average 0.5 point, down from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 3.10 percent. 
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.81 percent this week with an average 0.4 point, down from last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 2.91 percent. 

WPJ Staff - World Property Journal

Orlando's "Milk District" to receive multi-year makeover

Real estate investor Adam Wonus has raised millions of dollars to buy and demolish about 60 old houses mostly in east Orlando's Milk District with the hope of transforming it into the next Thornton Park.

As he drives past a 1940s house he recently purchased in east Orlando's Milk District he spots a vagrant slipping into an open window. The trespasser won't be able to squat there for long. The old, whitish house will be razed soon.

Wonus, 33, has demolished about 25 1940s-era homes near the old T.G. Lee Dairy property and replaced them with new rental townhomes. In little over a year, he has put together a portfolio of about 50 properties in the area about two miles east of downtown Orlando.

"What I want to do is help change Orlando," said the Ohio native, who would like to transform the Milk District into Orlando's next Thornton Park — an older neighborhood saved from urban blight by house makeovers with trendy shops and restaurants.

Unlike most real estate investors buying houses in Central Florida, Wonus draws from a banking background that has helped him raise millions of dollars. In addition, he owns Atrium Management Company, which has about 500 rentals. He said he would rather rent out his townhomes than sell to better control how the neighborhood evolves.

The Milk District area he wants to remake draws mostly 20-something tenants searching for backyard fire pits and cheaper rents than they can find in downtown Orlando. They are slowly edging out older residents, many on fixed incomes, who long ago sought the affordability of homes with fewer than 2,000 square feet.

Longtime homeowner Danielle Knight weeds the butterfly garden she has created in her front yard. She stops and sighs when asked about the redevelopment just a few houses away. "It's sad," said Knight, a nurse who bought her house when both she and her husband worked at the former Orlando Naval Base more than 30 years ago.

Investment firms have purchased rental homes in mainstream neighborhoods throughout Central Florida. "This is an older Orlando neighborhood and instead of taking a house and remodeling it, they're building this thing here and that thing there."

Prices there have spiked and sales have slowed, reflective of the region's sparse listings. Average sales prices for houses in the 32803 ZIP code jumped by about $30,000 during the last year to $300,000 in June. Sales dropped from 111 in June 2015 to 41 in June 2016, according to Orlando Regional Realtor Association reports.

Wonus said he likes to stay below $135,000 on his purchases. To keep costs down, he said he scouted construction sites to find a contractor who could build his townhomes affordably.Eyeing a dilapidated blue house as he drove around his properties, Wonus said: "This one I want so badly." Renters at the house pay about $500 a month. Next door to it is one of Wonus'signature two-story townhome duplexes. Renters there pay more than $2,000.

The houses sport quality materials and finishes and get pressured washed every year, Wonus said. Cars are prohibited from parking on the front-lawn sod he has planted.

Nearby, Rod Vermilio of Distinguished Development and Contracting Inc. is at work on a townhome and duplex project he expects will have rentals and sales from the $300,000s. "We identified the Milk District as an ideal place to create some quality housing," he said."It's a fringe area that we feel has great potential."

Orlando has seen other developers remake partially blighted areas. Dan Bellows assembled low-income pockets of west Winter Park and developed the Hannibal Square shopping area.
In the 1990s and early 2000s, Craig Ustler and Phil Rampy combed through Thornton Park, rehabbing old houses and ultimately developing midrise residential towers. Ustler, who is trying to ignite Creative Village in the Parramore area, said he has met with Wonus and appreciates his vision and financial background.

"I think he sees the Milk District and other in-town neighborhoods as underdeveloped, but also understands that land assemblage and controlling development costs are potential roadblocks," Ustler said.

But holding the weeder and working in her garden, Knight lamented the new two-story townhomes that overshadow the first generation of Colonial Town houses. Seeing prices rise won't help her because she doesn't want to sell. "I'm not going anywhere," she said. "This is my home."

- Mary Shanklin, Contact Reporter - Orlando Sentinel

New town center plans for Lake Nona

A new “marriage” is brewing in Lake Nona, this time to create the southeast Orlando community’s 3.8 million-square-foot central commercial district.

Tavistock Development Co. LLC has partnered with Columbus, Ohio-based Steiner + Associates to master plan the next phases of the Lake Nona Town Center. Steiner + Associates will work with Tavistock Development on retail planning, leasing and development services.

The next phase of Lake Nona's 100-acre, open-air town center will include a mix of shops, eateries, entertainment venues, office and hotels. Early plans being discussed include a possible upscale movie theater and bowling alley. The Lake Nona Town Center will serve as the “defining anchor and amenity” for the 8,000-acre community, which already boasts 10,000-plus residents, 7,000 students and 5,000 employees in the Medical City life sciences hub.

Tavistock already introduced a downtown-like atmosphere in the first $70 million phase of the Lake Nona Town Center. It now includes an 85,000-square-foot, four-story office building with ground-level restaurants; a 200-room, dual-branded Courtyard by Marriott and Residence Inn building and structured parking. Urban-style apartments also are being built across the street from the new complex.

But by bringing in Steiner + Associates, Tavistock Development will gain expertise from a company known as a pioneer in creating the modern live/work/play environment now being used throughout the country. Steiner in 1999 debuted Easton Town Center in its hometown of Columbus, paving the way for retail destinations in the next several years. That project continues to draw new concepts. Read more about that development from sister paper Columbus Business First.  Then, Steiner + Associates last year opened Liberty Center, a $350 million mixed-use development in the Cincinnati region.

“Steiner + Associates is among the most creative and innovative mixed-use planners in the country with groundbreaking projects like the Easton Town Center and Liberty Center,” Tavistock Development President Jim Zboril said in a prepared statement. “We are attracted to their energy and passion for place making as well as their strong track record for inspiring, engaging and creating mixed-use communities.”

“Lake Nona Town Center will be unlike any other mixed-use project in the country,” Steiner + Associates founder and CEO Yaromir Steiner said in a prepared statement. “From thoughtful design and community integration to curating the very best mix of retail, restaurants, entertainment and other uses, we are going to deliver something very special to Central Florida.” - Anjali Fluker, Associate Managing Editor @ the Orlando Business Journal

Summer home sales soften for Orlando

Orlando's housing market did not get its typical bump in prices from June to July, a new report shows.  The midpoint price for the core Orlando market in July was $205,382, which was down from $207,000 the month before during a time of year when prices usually surge as families relocate prior to the school year starting. Even with the slight month-over-month softening, prices were still 12 percent higher than a year earlier, according to a report released this week by the Orlando Regional Realtor Association.

Sales declined to 3,342 in July, which was down about 6 percent from both a month earlier and a year earlier.  "Competition for homes in the entry-level and mid-price range (under $300,000) continues to remain high, especially among first-time home buyers and investors," said Colony Realty Group Inc. agent John Lazenby, president of the real estate industry association.

Another sign of a less-than-robust summer was the amount of houses on the market. The inventory of listings edged up slightly to 3.19 months of supply from 2.99 months in June. Even though supply ticked up, it remained about half what is considered a normal for a market.

"Additionally, would-be sellers are staying put and hesitant to put their homes on the market because they will face high prices and few choices as they look for a new home," Lazenby said.
Despite declines in prices and sales, July home buyers were still hit with such a competitive landscape that houses came under contract in an average of 60 days — the smallest amount of time in more than a decade.

The month-over-month declines in sales and price came as interest rates on a 30-year mortgage remained relatively low at 3.45 percent. - Mary Shanklin, Contact Reporter @ the Orlando Sentinel.

Now's the time to sell: Orlando home prices continue to increase!

Orlando-area home prices increased by 6.9 percent in June compared with June 2015, according to a new report by CoreLogic. Orlando's home price surge was better than the nationwide year-over-year average, which saw an increase of 5.7 percent.

Orlando-area home prices also saw a month-over-month growth, increasing by 0.8 percent compared with May. Statewide, Florida ranked No. 6 in year-over-year home price increase at 7 percent. Oregon and Washington came in at No. 1 and 2 at 10.9 percent and 10.3 percent, respectively. Other Realtor associations also have reported an upward trend in home prices.

Further, experts expect the increase to continue: The CoreLogic Home Price Index Forecast predicts that home prices will increase nationally by 5.3 percent on a year-over-year basis from June 2016 to June 2017.

Other positive trends, such as the region's low home inventory, are signs that Central Florida's real estate market is steadily making its way back to pre-recession levels.  - Emma Skeels, Reporter @ the Orlando Business Journal.

Election Pessimism Could Hurt The Housing Market, Survey Suggests

Whether you prefer Hillary Clinton, Donald Trump or [a third party candidate], there’s no question that the next president’s economic and employment policies will be a key influence on the health of real estate for the next four years, including, perhaps, the price of a mortgage.

“While homeowner anxiety over the election is clearly mounting, the likelihood of an immediate shock to the market is slim,” Redfin chief economist Nela Richardson said. “It will take considerable time for our next commander-in-chief to implement policies that have any impact on housing.”

No matter who wins this fall, they’re likely to inherit a stronger real estate market than four years ago. Read full article by Troy McMullen, Contributor at Forbes.