Real estate sales rise 19.2% in May

NAR credits tax credits for propelling market

By Inman News, Tuesday, June 22, 2010.

Inman News

Closings for existing-home sales were up 19.2 percent year-over-year in May — a robust rate of activity the National Association of Realtors attributed to the federal homebuyer tax credit program.

“We are witnessing the ongoing effects of the homebuyer tax credit, which we’ll also see in June real estate closings,” said Lawrence Yun, the association’s chief economist, in a statement.

Closed sales transactions of existing single-family homes, townhouses, condominiums and co-ops were at a seasonally adjusted annual rate of 5.66 million units last month, down 2.2 percent from April’s upwardly revised 5.79 million units, the report said.

The association expects sales to decline after the homebuyer tax credits’ scheduled closing deadline at the end of June — though legislation is in the works that seeks to extend the closing deadline through September.

“Job growth and a manageable level of foreclosures are keys to sales and price performance during the second half of the year,” the report said.

A NAR survey showed first-time homebuyers accounted for 46 percent of all home purchases in May, down from 49 percent in April, while investors accounted for 14 percent of home sales that month. Repeat buyers made up the remaining share of sales.

Raw unsold inventory was up 1.1 percent year-over-year in May, though it fell 3.4 percent month-to-month to 3.89 million existing homes. That volume of homes represents an 8.3-month supply of homes at the current sales pace, down slightly from April’s 8.4-month supply.

That year-over-year rise in inventory “is especially concerning because the reported inventory is already historically very high, and the 8.3 months of supply in May is well above normal,” observed the financial and housing blog Calculated Risk.

“The months of supply will probably stay near this level in June, because of more tax-credit-related sales (reported at closing), but the months of supply could be close to double digits later this year.”

According to NAR’s report, distressed homes made up a slightly smaller share of sales in May — 31 percent — compared with 33 percent the month before and in May 2009. At the same time, the national median price for all existing homes was $179,600 in May, a 2.7 percent increase from May 2009, the report said.

Existing-home sales in all regions jumped by double digits in May compared to the same time last year. The South saw the biggest jump, at 22.9 percent. The Northeast saw the smallest increase, at 12.7 percent. That region was also the only one to see a year-over-year drop in median price: up 2.2 percent to $240,200.

Meanwhile, the median price in the Midwest was up 2.2 percent year-over-year, to $150,700. In the South, the median price edged up 1 percent compared to a year ago, to $159,000. The West’s median price saw the biggest rise, up 7.4 percent to $221,300.

A separate report released today by the California Association of Realtors found that sales of existing single-family detached homes in the state rose 1.2 percent year-over-year in May, while the median price rose a whopping 23.2 percent to $324,430. Sales rose 14.1 percent compared to April.

“Home sales posted their third-largest increase on record for May, due in part to first-time homebuyers who timed the open and close of escrow in order to capitalize on both the federal and state tax credits,” said Steve Goddard, C.A.R.’s president, in a statement.

“May also marked the fifth month of double-digit gains in the median price, indicative of strong buyer demand relative to the supply of homes for sale. With a 4.6-month supply of homes for sale, unsold inventory continues to be well below the long-run average of seven months, and will continue to drive price appreciation over the next several months.”

A six-month supply of inventory is considered a rough equilibrium between a buyer’s market and a seller’s market, with an inventory above six months sometimes indicating a buyer’s market. All homes under $1 million in California now have a less-than-six-month inventory.

Another report by the Federal Housing Finance Agency, also released today, showed that U.S. house prices fell 1.5 percent year-over-year in April — a smaller decline than the 6.9 percent drop observed between April 2008 and April 2009.

Prices rose 0.8 percent month-to-month in April, which the FHFA partially attributed to the homebuyer tax credit program. The agency based its numbers on the purchase prices of houses with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.

See related article:  NAR: Tax credit boosts pending real estate sales

Cheryl Ashurst, Realtor
334-323-1124 or Toll Free 800-475-2243 ext 124
Certified Residential Specialist (CRS) & Broker Associate
Helping You Move Team with RE/MAX of Montgomery

5 ways to right-size your home

Optimize living space by making it fit your lifestyle

In the 1980s, as editor of Home magazine, Gale Steves said she started being aware of newer homes that looked “amazingly big on the outside but had poorly designed living spaces inside — with double-height family rooms or foyers that would never function as anything more than an ego trip.”

Then, she started taking note of all the older homes that, regardless of size, had names that were no longer relevant to our lifestyles — no one “lived” in the living room, very little food consumption occurred in the dining room, etc.

To get the functions they desired in their homes, people typically added on or moved up to larger spaces, yet never got past the original problem — some parts of the house went unused while other rooms were asked to perform too many functions, she said.

Steves became a big believer in what she calls “right-sizing,” her concept of making better use of space.

“It’s admitting how you live and making the house fit that,” said Steves, who is now a consultant to the housing and home-furnishings industries.

She recently wrote “Right-Sizing Your Home: How to Make Your House Fit Your Lifestyle” (Northwest Arm Press, $21.95), which is a guide to figuring out what you really need before remodeling or making other major household changes.

But Steves agreed that the book, which is filled with room-by-room checklists to help determine how you really want your home to function, could be an excellent source in a real estate search, for homebuyers determined to find a place that doesn’t waste a single inch of space.

Five things you need to know about right-sizing:

1. Steves’ strategy involves making step-by-step plans for getting a room to “right,” which requires a lot of soul-searching — or, at least, room-searching.

In the book, she sets a framework for “audits” of every use you or your family make of a given room. A second inventory would count all the uses you’d like to get out of that room.

Slowly, a game plan will evolve from side-by-side comparisons of the two lists, she wrote. Sometimes, the only obvious way to gain a right-sized room will be to remodel, and the book offers a wealth of suggestions and photographs.

But Steves also said just re-arranging furniture may make all the difference in a room’s functionality, and her book also has suggestions for making that task more efficient, such as making paper-bag cut-out “models” of the furniture before dragging the heavy stuff around the house.

2. But where to start? Even though we may have dining rooms and living rooms that we seldom use, surprising as it might sound, the one room that vexes homeowners the most, she said, is the family room.

That’s because we use it so much, she said. In interviews with homeowners, she said, their frustration with that room came up again and again.

“It’s become that multipurpose, everything room, where everyone gathers,” she said. “That’s mostly because in many homes, it’s too big to be functional.

“I’ve been in some ‘great rooms’ that look like hotel lobbies,” she said. “Most people don’t know how to arrange furniture to make it cozy and comfortable. It seems to be the hardest to arrange — sometimes you’re fighting the fireplace vs. the television. It may be an office by day and a family playroom by night.”

Steves said a family-room audit will help prioritize the room’s uses in order to make decisions for organizing books, media and workspace needs.

3. Then there are the rooms that we think we must have when we buy a place, then ignore.

“No one wants to give up these rooms because of the dreaded ‘resale’ word” that Steves said drives too many of our homebuying decisions.

“In talking to 300 couples in the course of researching my book, I asked them: ‘If (you) had to give up three spaces, what would they be?’ ” she said. “Everyone said No. 1 would be the living room — you use it once a year for the Christmas tree.

“The second would be the foyer because nobody ever uses it except the FedEx guy, and third would be the dining room because they’re just a waste.”

Steves doesn’t have a lot of advice for rehabilitating foyers, but urges homeowners to find other uses for their living and dining rooms.

She suggested adding doors to a living room to turn it into a home office or a dining room into a game room.

“I have talked to people who have used the living room for a downstairs bedroom,” she said. “There are many things these rooms can be used for and converted back if they ever sell it.”

4. “The pressure on the home is now for office space,” Steves said. “Everyone seems to feel entitled to their own office space.”

Her book explains how to conduct a “working style” audit in order to differentiate the needs of the telecommuter from the self-employed person from someone who just needs a place to organize bill-paying and family schedules.

And she asks homeowners to consider the trade-offs of such decisions as sharing a printer or of creating built-in file cabinets. She offers, with ample photographs, suggestions for offices that range from a cubby in a laundry room to elegant executive spaces.

Detailed floor plans of various types of home offices spell out minimum square-footage needs compared to a suggested amount for true comfort and utility.

5. Then there’s the kitchen.

“I broke down the kitchen by function — are you a re-heater or someone who does gourmet meals, or maybe once a week you’re a leisurely diner?” she said. Each of the various eating styles has its own needs.

And be honest about where you eat that food once it’s out of the oven or microwave, Steves said.

“Of course, no one eats in front of the TV,” Steves protested. Not.

“If you eat in front of the TV, you ought to get a table that works for you,” she said. “People should recognize how they live and not pretend they’re someone or something else.

“Why, in one (furniture) showroom I was in just today, I looked at this coffee table that rises (to a higher level) and was beautiful and sculptural,” she said. “I said, ‘That’s a four-pizza-box table.’ “

Her husband, she said, dreams of having a bedside table that’s doubles as a small refrigerator — so he can snack better in bed. Steves has only one little problem with that.

“I said, ‘You can have that if you can find a self-cleaning mattress.’ “

By Mary Umberger, Wednesday, May 19, 2010. Inman News
Mary Umberger is a freelance writer in Chicago.

Cheryl Ashurst, Realtor
334-323-1124 or Toll Free 800-475-2243 ext 124
Certified Residential Specialist (CRS) & Broker Associate
Helping You Move Team with RE/MAX of Montgomery

REALTOR� Magazine-Daily News-Surge in Pending Home Sales Continues

REALTOR� Magazine-Daily News-Surge in Pending Home Sales Continues.