From National Association of Realtors
The housing market recovery should continue through the coming years, assuming there are no further limitations on the availability of mortgage credit or a "fiscal cliff,"according to forecast presentations at a residential forum at the 2012 Realtors Conference and Expo.
Lawrence Yun, chief economist of the National Association of realtors, said the housing market clearly turned around in 2012. "Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases," he said.
Yun sees no threatening signs for inflation in 2013, but projects it to be in the range of 4 to 6 percent by 2015. "The huge federal budget deficit is likely to push up borrowing costs and raise inflation well above 2 percent," he said.
Rising rents, quantitative easing (the printing of money), federal spending outpacing revenue, and a national debt equal to roughly 10 percent of Gross Domestic Product are all raising inflationary pressures.
Mortgage interest rates are forecast to gradually rise and to average 4.0 percent next year, and 4.6 percent in 2014 from the inflationary pressure.
With rising demand and an ongoing decline in housing inventory, Yun expects meaningfully higher home prices. The national median existing-home price should rise 6.0 percent to $176,100 for all of 2012, and increase another 5.1 percent next year to $185,200; comparable gains are seen in 2014.
"Real estate will be a hedge against inflation, with values rising 15 percent cumulatively over the net three years, also meaning there will be fewer upside-down home owners," Yun said. "Today is a perfect opportunity for moderate-income renters to become successful home owners, but stringent mortgage credit conditions are holding them back."
Existing-home sales this year are forecast to rise 9.0 percent to 4.64 million, followed by an 8.7 percent increase to 5.05 million in 2013. Housing starts are forecast to rise to 776,000 in 2012 from 612,000 last year, and reach 1.13 million next year.
The growth in new construction sounds very impressive, and it does mark a genuine recovery, but it must be kept in mind that the anticipated volume remains below long-term underlying demand," Yun said. "Unless building activity returns to normal levels in the next couple years, housing shortages could cause home prices to accelerate, and the movement of home prices will be closely tied to the level of housing starts."
"Home sales and construction activity depend on steady job growth, which we are seeing, but thus far we've only regained half of the jobs lost during the recession," Yun said.
Yun projects growth in Gross Domestic Product to be 2.1 percent this year and 2.5 percent in 2013. The unemployment rate is showing slow, steady progress and is expected to decline to about 7.6 percent around the end of 2013. "Of course these projections assume Congress will largely avoid the "fiscal cliff" scenario," Yun said. "While we're hopeful that something can be accomplished, the alternative would be a likely recession, so automatic spending cuts and tax increases need to be addressed quickly."
Regardless, Yun said that four years from now there will be an even greater disparity in wealth distribution. "People who purchased homes at low prices in the past couple years, including many investors, can expect healthy growth in home equity over the next four years, while renters who were unable to get into the market will be in a weaker position because they are unable to accumulate wealth." he said. "Not only will renters miss out on the price gains, but they'll also face rents rising at faster rates."
Real Estate Market is Rebounding
Taken from LA Times 10/18/2012
Foreclosures started in California have dropped to the lowest level since early 2007, the latest sign that the housing market is rebounding faster than analysts expected.
Notices of default fell 10.2% from the previous quarter and were down 31.2% from the same period last year, San Diego-based DataQuick reported Wednesday. A total of 49,026 notices of default – the first stage of foreclosure in California -- were filed on homes here last quarter.
That was the lowest number since the first quarter of 2007, and a 63% decline from the first quarter of 2009, when notice of default filings peaked in the state.
The number of Californians entering foreclosure dropped in the third quarter to its lowest level since early 2007.
Foreclosure filings have fallen as banks work toward completing more loan modifications and short sales. An improving economy and rising prices have also helped.
“Prices in most areas today are up significantly from their low point in early 2009,” John Walsh, president of San Diego real estate firm DataQuick, said in a news release. “Additionally, during the past year, we’ve seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress.”
Notices of default fell 10.2% from the prior quarter and were down 31.2% from the same period last year, DataQuick reported. A total of 49,026 notices of default – the first stage of foreclosure in California -- were filed on homes in the Golden State last quarter.
That was the lowest number since the first quarter of 2007, and a 63% decline from the first quarter of 2009, when notice of default filings peaked in the state.
The number of homes lost to foreclosure was up 5% from the prior quarter and down 41% from the same period a year ago. A total of 22,949 homes were lost to foreclosure last quarter.
Foreclosures started in California have dropped to the lowest level since early 2007, the latest sign that the housing market is rebounding faster than analysts expected.
Notices of default fell 10.2% from the previous quarter and were down 31.2% from the same period last year, San Diego-based DataQuick reported Wednesday. A total of 49,026 notices of default – the first stage of foreclosure in California -- were filed on homes here last quarter.
That was the lowest number since the first quarter of 2007, and a 63% decline from the first quarter of 2009, when notice of default filings peaked in the state.
California foreclosure starts fall to 2007 level
The number of Californians entering foreclosure dropped in the third quarter to its lowest level since early 2007.
Foreclosure filings have fallen as banks work toward completing more loan modifications and short sales. An improving economy and rising prices have also helped.
“Prices in most areas today are up significantly from their low point in early 2009,” John Walsh, president of San Diego real estate firm DataQuick, said in a news release. “Additionally, during the past year, we’ve seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress.”
Notices of default fell 10.2% from the prior quarter and were down 31.2% from the same period last year, DataQuick reported. A total of 49,026 notices of default – the first stage of foreclosure in California -- were filed on homes in the Golden State last quarter.
That was the lowest number since the first quarter of 2007, and a 63% decline from the first quarter of 2009, when notice of default filings peaked in the state.
The number of homes lost to foreclosure was up 5% from the prior quarter and down 41% from the same period a year ago. A total of 22,949 homes were lost to foreclosure last quarter.
For Renters, buying a home pays off in 3 years on average
The company, which lists for-sale and for-rent information on its site, has released a new analysis of what it calls the "break-even horizon," comparing what it would cost to buy or rent the same home in a number of U.S. markets over time.
The rent-or-buy calculus varies widely depending on where you live.
In the combined Los Angeles and Orange counties, the magic number is 4.3 years, assuming the buyer has made a 20% down payment. Buying wins out after only 1.6 year in the desert community of Banning. But Newport Beach residents must wait 14 years for buying to make more financial sense than renting.
The analysis takes into account a host of factors potential buyers should think about when considering the leap, including the down payment, mortgage and rental payments, buying and selling costs, property taxes, utilities, maintenance costs and tax deductions. The analysis adjusts for inflation and forecasts home value and rental price appreciation.
Zillow senior economist Svenja Gudell said the data should help homeowners get a rough and immediate sense of whether buying makes sense in a particular area in relation to their financial situation.
"For a home buyer out there, it is really tough to get a good grip on the buy-versus-rent decision," Gudell said. Although buying a home is a deeply personal decision, she said, the analysis gives consumers "a sense for 'Am I ready to make this decision?'"
The new take on the classic rent-versus-buy debate comes at a tenuous moment for the housing market. Many analysts believe that a housing bottom has been reached but don't expect a return to the heady days of the real estate bubble. There is already some concern about the strength of the recovery, with home sales slowing in June as inventory remained tight and buyers paid higher prices.
At the same time, rents are rising, housing affordability is at record levels, and mortgage interest rates remain very low. These factors are prompting many renters to consider homeownership.
Stuart Gabriel, director of UCLA's Ziman Center for Real Estate, noted that the main lesson from the subprime mortgage debacle and the housing bust was that homeownership shouldn't be pushed at all costs. Federal policy has been adjusted to support this new point of view.
"One of the things we have learned in recent years is, obviously, house prices don't always go up, and even over the very long term in certain markets homeownership may only offer a minimal return," Gabriel said.
"What we have all learned is to treat homeownership as a bit of a dangerous animal. You know it's not always good, and it's not good for everyone."
Things to consider when buying, particularly in an slowly appreciating market, include how mobile will you be, your financial situation, marital status, career goals and personality, Gabriel said.
Richard Green, director of the USC Lusk Center for Real Estate, added that in many regions buying has become increasingly attractive compared with renting. There are also non-financial reasons for buying.
"I can enjoy living in this house for the rest of my life, and nobody can throw me out of it," he said. "You are consuming something, and you have control over it, and control has some value."
Zillow's analysis, which covered more than 200 metropolitan areas and 7,500 U.S. cities, found that buying is a better financial decision than renting in the Riverside-San Bernardino area if you live in the home for at least two years. That rises to 3.2 years in the area including Oxnard, Thousand Oaks and Ventura.
The San Francisco metropolitan area's break-even score of 5.9 years encompasses a range from two years to 24.3 years.
Realtor Specializes in West Los Angeles
Looking to buy or sell in West Los Angeles?
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West Los Angeles History
The district is bordered by Santa Monica on the west, Brentwood on the northwest, the unincorporated Sawtelle Veterans Administration grounds on the north, Westwood on the northeast, Rancho Park on the east and southeast, and Mar Vista on the south and southeast. Its generally accepted boundaries are the San Diego Freeway on the east, the Santa Monica Freeway on the south, the city limits of Santa Monica on the west, and Wilshire Boulevard on the north.
Its major thoroughfares are Olympic, Santa Monica, Pico, Wilshire, and Sawtelle Boulevards, Barrington and Bundy Drive.
After the area's colonization by the Spanish, most of what is now West Los Angeles became part of the Rancho San Vicente y Santa Monica. With the arrival of Anglo settlers after the Mexican-American War, the original Californio landowners sold out, or were forced from their holdings, and by the beginning of the 20th century the area was mostly bean and wheat fields. Many Japanese immigrants settled in the district, establishing orchards and nurseries in the process. Some of these nurseries are still in business today, along the stretch of Sawtelle Boulevard between Olympic and Santa Monica Boulevards.
The core of what is now West Los Angeles, including the West Los Angeles government center at Santa Monica and Purdue, was incorporated as the City of Sawtelle. In the 1920s, West L.A. was annexed by the City of Los Angeles.
As with most parts of the Westside, West Los Angeles is an affluent neighborhood. Its central location has made it a locus of commercial development, with several high-rise office buildings along Olympic, Santa Monica, and Wilshire Boulevards. It also contains a large number of Japanese-owned businesses. A satellite congregation of the Wilshire Boulevard Temple, one of the most prominent Reform Jewish congregations in Southern California, occupies the northeast corner of Olympic and Barrington.
Housing in West Los Angeles is a mixture of low-rise apartment buildings, mostly inhabited by young professionals and working-class families, and single-story tract house developments built between late 1920 and 1960. Two of Los Angeles's tallest residential towers are at the neighborhood's northern edge, at the intersection of Wilshire and Barrington. There is a trend toward greater density, as single-family houses get replaced by apartment buildings, or apartment buildings by taller ones, as building sites become available through demolition.
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