Housing starts up

Housing starts up

From what I see According to the Commerce Department, housing starts jumped 10.5% to a seasonally adjusted annual rate of 598,000 in August from a revised 541,000 in July.  Economists were expecting a rate of 550,000 housing starts, according to a consensus estimate from Briefing.com.  New construction was up 2.2% from a year ago.  Permits for future construction rose to a seasonally adjusted annual rate of 569,000 last month, up 1.8% from July and the highest level in two months. Economists were expecting 560,000 permits in August.  "This is a step in the right direction, but you have to remember that we're still hovering around all-time lows," said Kevin Smith, a senior vice president at Chapdelaine Credit Partners. "It's clear that we're far from being out of the woods." 

It's too early to look at this as a positive trend for the housing market until more jobs are created, he said.  "People who don't have jobs aren't buying homes.  You have to have job creation to see housing improve, and people need to actually have the confidence that they are going to keep that job for a year or two."  New construction of single-family homes, the key sector of the housing market, rose 4.3% over the month to an annual rate of 438,000.  The annual rate for new construction of multi-family homes - buildings with 5 or more units - was 147,000.  Permits for future construction rose to a seasonally adjusted annual rate of 569,000 last month, up 1.8% from July and the highest level in two months. Economists were expecting 560,000 permits in August.  Despite the monthly gain, permits were down 6.7% from the same time last year.

Real Estate sales nationwide slowed this summer.

As predicted, sales nationwide slowed this summer. This was due in part to the end of federal tax credits for homebuyers. But the important statistic to note is that, while sales volume slowed, in the Northeast and the West single-family home values actually went up. Despite the slower volume of sales, home values have been steady for the past 18 months.

Sales are beginning to pick up in FL right now.

 

The table below from the National Association of Realtors (NAR) shows the rate of change for home values per region.

Comparing home values from July 2009 to July 2010, NAR chief economist Lawrence Yun, reports that the price of homes increased .7%. Also, Yun reports that annual sales averaged 4.9 million in the past 20 years. But for 2010, annual sales are expected to reach 5 million because of the healthy activity from January to June.

 

Historically, July marks the peak in available inventory. High supply of inventory benefits buyers. But as inventory shrinks, prices will move up. Given that home values are stable and that new-home construction is low, sellers should experience a better selling market. Florida will follow the national trend very soon so selections and timing may be at an all-time best!

This may be the time to evaluate your real estate needs.

Will the homebuyer tax credit will boost apartment demand.

With the end of the homebuyer tax credit will suppress home sales in the second half, favorable housing affordability. Expiration of the homebuyer tax credit will boost apartment demand in the second half of the year as the number of individuals leaping into ownership subsides. Slower but continued job creation also will deepen the rental pool, largely driven by the “de-bundling” of households merged during the height of the recession. The national labor market is projected to increase by 1.3 million jobs this year, or 1 percent, and with apartment construction expected to hit a 15-year low, the apartment sector will post notable occupancy gains in the second half. Vacancy will finish the year at 7.4 percent, down 60 basis points from 2009 and the first annual improvement in two years.

Low mortgage rates have encouraged many households to refinance, helping strengthen their financial positions and supporting greater discretionary spending. Refinance applications have increased as mortgage rates have fallen and now account for 82 percent of mortgage applications. For some, these trends have raised household discretionary income and will likely positively impact retail sales. This more positive outlook will lead to greater stability through the remainder of the year, with the vacancy rate anticipated to rise just 40 basis points in the second half to 10.4 percent. Now is a great time to buy.

Are You Looking For Cash Flow Investments

What is the return you are getting right now on your cash? As prudent investors we must get the Highest Possible Return on Investment with the Lowest Possible Risk. I have found most people are scared to death of real estate right now simply because they have not thought it through. They are worried about prices dropping when they should be looking at Cash Flow. In fact if prices do continue to fall the cash flow and ROI still make real estate a more attractive investment than just about every other option. Below are some examples of properties we have right now. Look at the simple income & expense figures and let me know what you think. The only way to cash in on a buyers market is to be a buyer. call and I will help you get started.
Kissimmee FL $99,000 4 Bed 3 Bath 2,679 SF Asking Price                    $99,000 Down Payment 20%         $19,800 Loan Amount                   $79,200 Down Payment                $19,800 Closing Costs + Repairs   $10,000 Total Cash Investment     $29,800 $ 5,280/$29,800 = 17% ROI Loan Payment         $ 425 Property Taxes        $ 185 Insurance                 $  50 Property Mgmt.        $ 100 PITI+M                     $ 760 Rental Income        $1,200 Cash Flow              $  440                                   X12 Total Return        = $5,280 Need More Details admin@FlaopenHouse.com