Clear Capital provides home price data to Bloomberg

Clear Capital launched the availability of its home price data to more than 310,000 subscribers of the Bloomberg Professional service, a software platform delivering data, news and analytics to global business and financial professionals on Friday.

homeThe Clear Capital Home Data Index will eliminate the lag associated with monthly or quarterly reports.

The index also gives equal weight to real estate-owned sales and lower-priced homes, as a way to provide a more holistic view of the market.

“Our entire business is about measuring and understanding housing markets. Our data is the foundation of our collateral valuations. We’ve always been proud of the fact our data reports on price trends before other industry indices and that it evaluates price trends at a much deeper level,” said Alex Villacorta, director of research and analytics at Clear Capital.

He added, “The availability of our index on Bloomberg allows us to share our wealth of housing data with more colleagues in the mortgage and lending industries.”

The Bloomberg Professional service will stream Clear Capital’s Home Data Index for 30 select metropolitan statistical areas, four US regional series and U.S. national series.

“We believe the timeliness and depth of our data will have a positive impact on the industry,” said Villacorta.

He added, “For our customers, the ability to use the up-to-date information is crucial for smart investments.”

In addition to the 30 select MSAs, Clear Capital will offer premier annual subscriptions for access to data on more than 10,000 zip codes nationally.

“By offering a zip-code-level index set, we offer the granularity needed due to wide variation in home prices and characteristics within markets,” said Villacorta.

He added, “Providing Clear Capital data in conjunction with the robust data, news, and analytics offered via the Bloomberg Professional service will enable investors to make timely and better informed investment decisions.”

Source: HousingWire.com

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#RealEstate videos a growing trend

The Internet has changed the way real estate companies and residential and commercial developments promote the properties they have for sale or rent. The hottest trend regarding real estate marketing on the Web is the use of videos.

The cover story for the November/December issue of FloridaRealtors magazine was about using videos to market properties. The title of the article, “The Big Camera Conundrum,” concluded: “YouTube video with analytics is changing the way real estate professionals do business. It’s cheap, efficient and powerful.”

A recent article in BusinessWeek regarding real estate videos read, “Videos can convey more essential data in a shorter time. The viewer does not have to read long texts or jump between pages. Instead he or she gets fed exactly the data you want to deliver.”

And statistics released by Arbitron/Edison Media Research concluded, “7 of 10 Web visitors say websites would be more enjoyable if sound and video were included more often.”

All of this comes as no surprise to Duane Sulk, president of Sulk Mullin Global Media. Sulk, who spent 11 years in the television news industry and 20 years marketing real estate in Southwest Florida, has experienced the power the placing real estate videos on the Internet as the marketing director for The Chang Group, a real estate investment firm located in Fort Myers.

“For the past 16 months, the marketing department for The Chang Group has produced more than 120 videos which give prospective renters and buyers a room-by-room tour of the home, condominium or apartment,” said Sulk. “In that time frame the videos have garnered nearly 30,000 views with the majority of the properties being rented or sold within days of downloading the videos on YouTube, the company’s website and other real estate-based Internet sites.”

In early December Sulk, along with business partner Dan Mullin, launched Sulk Mullin Global Media, a company that focuses on producing Web videos for the real estate and business community.

“All signs point to the fact the real estate market is beginning to come back in Southwest Florida and we want to assist in accelerating that positive market movement,” said Mullin, a former Army soldier who was deployed to Egypt and Afghanistan.

According to Sulk, the main focus of the company will be real estate developments that have models and Realtors with For Sale homes.

“In most instances, if we can shoot the digital video and take the necessary photographs of the model or home in the morning, we can have the 4- to 6-minute completed video written, edited and ready to be placed on the Internet by the next day,” said Sulk, who not only writes the copy for the video but is the on-camera host and voice-over talent. “Think of the video tours as mini-documentaries with the home being the star.”

Sulk explained Realtors are encouraged to co-host since they represent the property. Kim Maloney of Florida Fidelity Realty Corp. of Bonita Springs was one of the first to take advantage of the marketing trend. Maloney was looking for a new way to promote a four-bedroom plus den/three-and-a-half-bath home priced at $1,099,000 in Bonita Bay.

“Within a month of placing the video link on our website, the MLS and other real estate-based sites we recorded more than 160 unique views,” said Maloney. “I’ve received phone inquiries regarding the property after prospective buyers viewed the video and have had several showings — once again, a direct result of the video. Buyers find them very informative.”

Producing hosted video tours of models and For Sale homes is only one of the offerings available at Sulk Mullin Global Media. The company is also pioneering the concept of community video newscasts.

“It’s the 60 Minutes format but done in 10 minutes,” said Mullin. “Incorporated within that 10 minutes would be 4 to 5 segments on a variety of topics including, for example, a model tour, a conversation with the golf professional regarding changes to the course, a profile of a Preferred Builder and end with a profile of a resident.”

According to Mullin, every month the lineup would change. And every month current residents and prospective buyers, who had visited the sales center, would be sent the link to the video via email so they can keep up with the community’s latest news and happenings.

“Consider it an entertaining, innovative and paperless way to communicate directly with those crucial to the overall success of the sales effort,” added Sulk.

The price of a hosted model video, which currently ranges from $500 to $1,500, is based on the size of the home under air. Monthly community newscasts are priced at $2,500 and include one model video with no size constraints.

Commercial properties are also prime material for a video. Sulk Mullin Global Media recently completed a 6-minute video for Paradise Center, a small plaza located on Bonita Beach Road.

“With so much commercial space available throughout Southwest Florida, a video about a shopping center, its location, current tenants and a quick tour of the retail or office space available — and then placed on the Internet — will garner more attention to prospective businesses and commercial ventures,” said Sulk.

All videos for Sulk Mullin Global Media are shot with the latest HD digital video cameras and produced and edited at KnowDibs Studio/Rental located at 4445 Bonita Beach Road in Bonita Springs.

 

Source: NaplesNews.com

By

JILL SCHLESINGER /

MONEYWATCH/ January 20, 2013, 5:52 PM

Fed missed the housing bust

CHIP SOMODEVILLA/GETTY IMAGES

(MoneyWatch) Who would want a detailed, public record of our business decisions? Unfortunately, if you are an esteemed Fed governor, you must confront your exact words from meetings that occurred 5 years ago. The central bank released 1,566 pages of transcripts from each of the Fed’s eight monetary policy meetings in 2007, which is customary. What is not customary, of course, is that 2007 was the year that one would have hoped that our most esteemed bankers would have gotten the drift that there was something rotten in the nation’s housing market.

Clearly Chairman Ben Bernanke would like to take back this January 2007 comment: “The housing market has looked a bit more solid, and the worst outcomes have been made less likely.” Or his June remarks, which may have been a “bit” of an understatement: “A bit of cooling in the financial markets might not be an entirely bad thing.” Bernanke is not alone in his misjudgment of the economic and financial industry landscape. Outgoing Treasury Secretary Tim Geithner, who in 2007 was the NY Fed president, said “Direct exposure of the counterparties to Bear Stearns is very, very small compared with other things.” Oops!

 

There was one Fed governor who nailed the situation. Janet Yellen, who at the time served as the San Francisco Fed president, expressed the danger that loomed in June 2007: “I still feel the presence of a 600-pound gorilla in the room, and that is the housing sector. The risk for further significant deterioration in the housing market, with house prices falling and mortgage delinquencies rising further, causes me appreciable angst.”

 

Yellen’s prescience is reminiscent of Brooksley Born, the late 1990s chairman of the Commodity Futures Trading Commission, who was the only regulator who saw the danger of over-the-counter derivatives, the vehicles that a decade later would contribute to the financial crisis. The big difference in 2007 was that Yellen was not the lone voice and she was not bullied by her colleagues.

 

Still, Yellen could not rally the other central bankers to her cause. In September 2007, she reiterated her concerns: “A big worry is that a significant drop in house prices might occur in the context of job losses, and this could lead to a vicious spiral of foreclosures, further weakness in housing markets, and further reductions in consumer spending. … at this point I am concerned that the potential effects of the developing credit crunch could be substantial.” Yellen is currently the Vice Chair of the Board of Governors of the Federal Reserve System and if she was seen as a potential successor to Ben Bernanke prior to this release, these comments beef up her chances in a big way.

 

Eventually, the Fed did recognize the magnitude of the problem, but as is often the case, the governors were late in their diagnosis and remedies. That’s why so many economists are worried about the central bank’s ability to withdraw its easy monetary policy when the U.S. economy improves. With the current low level of inflation (running below the Fed’s target of 2 percent on a year-over-year basis) and the high level of unemployment, the Fed will keep buying bonds and pushing money into the system until further notice. But will the Fed be able to predict when its time to stop?

 

Right now, economic growth is stuck in a low gear of about 2 percent annually, but when it reaccelerates, perhaps due to an uptick in global growth or a housing sector that perks up, the Fed could once again be behind the curve. When that happens, inflation will re-emerge; bonds will finally see the much-predicted sell-off; and the Fed will likely cringe when future transcripts are released.

 

This week, evidence of housing’s recovery will continue to trickle in. There’s little doubt that 2012 was the year that housing bottomed nationally. Prices were up about 6 percent; existing and new home sales rose by about 15 percent each; and housing starts increased 28.1 percent.

 

While this is good news, the housing crash created quite a hole. Prices are still down about 30 percent from the peak and even with the big jump in starts, 2012 ranks as the fourth lowest year since the Census Bureau started tracking starts in 1959 (the three lowest years were 2009 through 2011).

Remodeling market reports strong fourth quarter numbers

HousingRepair_2The Remodeling Market Index hit its highest reading since the first quarter 2004, hitting 55 in the fourth quarter of 2012, according to theNational Association of Home Builders. The fourth quarter report increased five points from the previous quarter.

Any RMI above 50 means most home improvement workers are reporting strong demand for their services.

“Remodelers are optimistic about the outlook for slow and steady market growth in the new year,” said 2013 NAHB Remodelers Chairman Bill Shaw. “Professional remodelers reported more work from large and small projects as well as overall home repair.”

Future remodeling activity indicators rose to 56, up from the previous quarter’s 49. Current conditions also revealed improvement, up from 52 in the previous quarter to 54.

“With existing home sales up, the increase in the RMI partially reflects the remodeling work new home owners undertake when they move in,” said NAHB Chief Economist David Crowe. “Consumers are gaining confidence in the economy and feeling more comfortable pulling the trigger on large and small renovations.”

The RMI in the Northeast saw the largest increase, jumping 24 points. This is due largely to the start of remodeling work related to Hurricane Sandy damage. All four regions of the country saw an RMI above 50.

FNC: Property values grow for ninth consecutive month

The rebound of property values in the U.S. barreled through November, which was the ninth consecutive month of price gains due largely to a classic case of supply-and-demand, according to the latest FNC report.

Signs of market recovery are continuing to drive up demand as potential homebuyers jump on low prices.

Nationally, home prices were up 0.3% in November, based on recorded sales of non-distressed properties in the 100 largest metropolitan areas throughout the country. As prices moved higher for the ninth consecutive month, the total appreciation rate hit 5.3% year to date.

Foreclosures dropped by 4.8% since November 2011 and made up 20% of total home sales in November.

FNC reported that two-thirds of the component markets tracked by the index show continued price improvement in November.

Las Vegas recorded the largest month-over-month increase, rising 3.4% since October. However, Chicago lagged behind other cities with home price declining 0.8% in the 12 months ending in November and a high level of distressed sales.

FNC Residential Price Index

8 ways the #housing market has changed for 2013

By Melinda Fulmer of MSN Real Estate

The real-estate recovery is now in full effect in most areas, and that means more of you are hopping off the fence to buy or list a home.  Do you know what you’re in for?

The housing market is a different place than it was just six months ago, with new issues, rules and opportunities — even for those who are planning on staying in their house for a while. In this slide show, MSN Real Estate will fill you in on eight ways the housing market has shifted since last spring’s peak selling season and what these changes mean for you: the buyer or seller.

1. Homes are more expensive — but not much more.

An improving economy and low interest rates have boosted buyer demand in most markets, decreasing supply and raising prices. Indeed, the national median home price increased 10.1% in November to $180,600 from the same period a year earlier, according to the National Association of Realtors. November marked the ninth consecutive month of home-price increases.

This year, the gains should be more restrained, says Alex Villacorta, director of research and analytics at Clear Capital. “2013 should be interesting for the housing market, where national gains should continue to see upward growth, but likely at a more modest growth,” he says.

Clear Capital expects prices to rise just 2.1% nationally this year. That’s good news for buyers in many Western markets, including Phoenix, where prices have surged in the past year, pricing some buyers out.

Some notable exceptions to this moderation are Seattle, where Clear Capital expects prices to rise 13.5% this year, and Birmingham, Ala., with a 10% increase.

2. Loans are getting pricier.

After bouncing along at record lows in 2012, interest rates are expected to rise slightly in 2013. Just how much is really anyone’s guess. However, Greg McBride, senior financial analyst with Bankrate.com,  says he wouldn’t be surprised if rates hovered between 3.5% and 4% for much of the year, barring any big changes in the overall economy.

Moreover, the costs associated with securing some loans are rising, as well. The Federal Housing Administration last spring once again increased its one-time upfront mortgage insurance premium for minimum down-payment loans (less than 5% down) to 1.75% of the loan, while raising its annual monthly premiums to 1.25%.

This year, those premiums could increase again. The Federal Housing Administration Fiscal Solvency Act of 2012 gave the FHA authority to raise premiums to as high as 2.05% annually to build and maintain its reserves, which are at record low levels. If that happens, the increase would tack an additional $133 onto the monthly payout for a $200,000 loan.

3. Inventory is bottoming out.

Rates are great, but not a lot of houses are for sale.

The inventory of existing homes for sale at the end of November was down 3.8% from the previous month to 2.03 million. That represents a 4.8-month supply at the current sales pace and is the lowest supply since the go-go market of fall 2005. Listed inventory is down 22.5% from a year ago, when there was a 7.1-month supply.

The problem is, prices haven’t gone up enough to enable many homeowners to sell and recoup enough to put down on a move-up home. Also, the banks are funneling more of their distressed sales to investors as rental properties. (More on this ahead.)

The dearth of listings should begin to change sometime this year, analysts say, as pent-up demand, historically low interest rates and slightly higher home prices prompt more move-up buyers to list their home.

4. A new mortgage rule will protect buyers from shady lenders.

To head off another financial crisis, the government’s consumer watchdog, theConsumer Financial Protection Bureau, recently announced a new rule to ensure that prospective buyers are actually able to repay their mortgage.

The Ability to Repay rule, which officially takes effect in January 2014 but will be put into place by most lenders sometime this year, protects consumers from risky practices such as “no doc” and “interest only” features that contributed to so many people losing their home in recent years.

“When consumers sit down at the closing table, they shouldn’t be set up to fail with mortgages they can’t afford,” CFPB Director Richard Cordraysaid.

The new rule, spurred by 2010’s Dodd-Frank financial-reform law, requires that borrowers’ financial information — employment status, income, assets and debt – be supplied and verified by lenders, thereby eliminating no- or low-doc loans.  That information, including debt-to-income ratio, must be used to prove that the borrower has the ability to pay back a loan.

5. Home-equity loans are back.

Low mortgage rates may have stolen all the headlines last year, but rates on home-equity loans have been falling, too, making those long-overdue home remodels more attractive to people who have been in their house for some time.

“With home prices stabilizing, you will see more lenders competing for home equity business,” McBride says.

The average rate on a fixed-rate home-equity loan fell to 6% in early January from 6.3% at the beginning of November, according to Bankrate.com. That average ran as high as 8.5% during the financial crisis in 2009.

Why did these loans get so pricey? Home-equity loans became much riskier for lenders in recent years, as home values declined and huge waves of people began defaulting on their mortgage. Equity lenders get paid only after the primary mortgage lender gets its money, so many lenders were taking losses on these loans as distressed-property sales failed to recoup enough to satisfy these second liens. Many got out of this business, McBride says.

Now, however, with home values rising, more lenders are willing to make these loans.

6. There are fewer distressed-home bargains to buy.

The mortgage crisis is starting to fade into memory, and so are those cheap foreclosure deals.  While the number of distressed homes is still fairly high at 2.3 million units, according to CoreLogic, fewer of these homes are getting a for-sale shingle.

One reason: Almost half of those 2.3 million homes are still seriously delinquent but haven’t been taken back by the bank because of a backlog in processing.

“I honestly thought the next wave would be short sales,” says Kim Drusch, an agent with Century 21 Award in San Diego. “But the banks are giving new opportunities to distressed homeowners to stay in their properties. They are even offering principal reductions to their loan balances as opposed to going the short-sale route.”

Moreover, a large number of the properties being repossessed by lenders are being sold off in portfolios to investors, rather than listed for individual buyers. When they make it back onto the market with a little face lift, they aren’t such a bargain anymore.

In addition, many portfolios of single-family bank-owned homes are being auctioned as rental properties. These big portfolios of homes are attracting the big guns, including national real-estate investment trusts (or REITs) that are expected to buy tens of thousands of properties over the next several years.

That’s great news for sellers, who have seen their neighborhood property values hammered by bargain-basement bank sales. But it’s meant rising prices for buyers as inventory has dwindled.

7. More new construction is coming.

Existing homes are in short supply, but there will soon be many more new homes to add to the mix.

While housing starts fell slightly in November on delays related to superstorm Sandy, the number of building permits for new single-family homes and condominiums rose 3.6% from the previous month alone and a whopping 27% from the same time last year.

Record-low interest rates and an uptick in hiring spurred the increased activity by builders. New-home sales are up 15.3% over the past year, hitting an annual rate of 377,000 in November, according to Census Bureau data.

After years of building inactivity and a dearth of turn-key homes on the market, many buyers are welcoming the chance to buy new and have it their way.

New-home prices, however are moving up faster than prices for existing homes. The median price of a new home in the U.S. rose to $246,200 in November, a 15% increase from the previous year. Greater supply in the months ahead, however, could ease the pace of future price increases.

8. The luxury market suffers a hangover.  

Sales of homes over $1 million surged 51% in November, as high-net-worth owners rushed to list their existing homes and buy new ones to avoid the capital-gains tax hikes in January that were part of the fiscal-cliff deal.

Under these changes, high-income earners would pay $88,000 less in taxes if they made a $1 million profit on their home in 2012 rather than in 2013. So, out went the for-sale signs, and down came the inventory of luxury homes in the last quarter of 2012.

Publicly traded Toll Brothers, which specializes in the luxury-home market, saw its sales contracts jump 60% in the fourth quarter from the same period last year — the highest level since the red-hot market of 2005. “We enjoyed resurgent activity across all of our product lines and in most of our geographic regions,” said Douglas C. Yearley Jr., Toll Brothers’ chief executive officer. “The momentum that began in our first quarter of FY 2012 built throughout the year.”

However, due to the dwindling supply of luxury homes in many markets and the huge number of buyers who took the plunge last year, experts predict a bit of a slowdown in luxury-home sales during the first part of this year.

For those shopping for a high-end custom home, it means less to choose from, but also a lot less competition.  Of course, the drop-off in demand probably won’t last long. More and more big-budget international buyers are continuing to invest in U.S. real estate, particularly along the coasts.

After so many years of decline, American real estate remains quite the bargain.

Source: MSNRealestate.com

#Housing Recovery Powers Lennar’s 4Q Beat; New Orders Soar 32%

home-construction-new

Lifted by the strengthening recovery in the housing market, home builder Lennar (LEN) beat the Street on Tuesday by revealing surging fourth-quarter profits and a 32% leap in orders.

Despite the stronger-than-expected results, Lennar’s stock, which has soared 86% over the past 12 months, dipped in premarket action.

The Miami-based home builder said it earned $124.3 million, or 56 cents a share, last quarter, compared with a profit of $30.3 million, or 16 cents a share, a year earlier.

Analysts had been calling for EPS of just 44 cents.

Revenue soared 42% to $1.35 billion, topping the Street’s view of $1.31 billion. Gross margins expanded to 23.5% from 19.4%.

“During our fourth quarter, the housing industry took further steps toward a sustained recovery,” Lennar CEO Stuart Miller said in a statement. “Low mortgage rates, affordable home prices, reduced foreclosures and an extremely favorable ‘rent vs. own’ comparison continue to drive the recovery.”

The home builder ended the quarter with a backlog of 4,053 homes, up 87% year-over-year. The value of the backlog stood at $1.2 billion, up 107% from the year before.

In another positive, Lennar said its new orders climbed 32% to 3,983 homes in the fourth quarter, representing a seventh straight increase.

“As we head into 2013, we are extremely well positioned to gain market share in a recovering market,” said Miller. “With a beginning sales backlog value up more than 100% from the prior year, fiscal 2013 promises to be another year of strong profitability.”

Given its impressive rally of the past 12 months, the bar had been set high on Wall Street for Lennar’s results. Shares of the home builder slipped 0.54% to $40.80 ahead of the opening bell on Tuesday.

Source: FoxBusiness.com

How to become a stronger listing agent

How balanced is your business? If you’re a buyer’s agent with few or no listings, the strength of your real estate practice may be suffering.

A healthy real estate strategy includes cultivating both buyers and sellers. After all, the two groups have a symbiotic relationship with each other. A robust pool of buyers to market to enables you to sell listings faster, while a set of solid listings helps you attract higher quality buyers. Growing both sides makes for a stronger, more well-rounded business.

With the housing market making a recovery, plenty of buyers are searching for homes while interest rates and prices are still low. This can be a double-edged sword, though. While there’s no better time to be a seller’s agent, competition for listings is fierce.

And it’s no wonder—listings take only one-third of the time and effort of working with buyers! Fortunately, Market Leader’s free Listing Agent Guide has outlined four strategic steps you can take to attract listing leads, convert them into clients, and sell their homes.

Source: RETechnology.com

#Housing a Sweet Spot for U.S. #Economy as Recovery Expands – #Realestate

At Lambert Ranch, an Irvine, California, housing development where prices start at $1 million, just two of 98 homes are unsold since the project opened in May.

The builder, New Home Co., is opening 14 neighborhoods in California this year for buyers who want to seize on low interest rates amid a scarce supply of homes for sale.

“Everywhere we are, we can see it,” Larry Webb, chief executive officer of Aliso Viejo, California-based New Home, said in a telephone interview. “Talk about pent-up demand.”

U.S. home sales and prices are poised to rise in 2013, solidifying a recovery that began last year after a half-decade slump that was the deepest since the Great Depression, according to analysts and economists surveyed by Bloomberg. Record-low mortgage rates and attractive prices, supported by declining unemployment, are luring buyers as the inventory of distressed homes shrinks. Homebuilders are responding by adding supply, bolstering economic growth.

“Increased new residential construction activity will lead to employment gains, which should translate into higher consumption and modest GDP growth,” Robert Wetenhall, a homebuilding analyst with RBC Capital Markets LLC in New York, said in a telephone interview. The U.S. budget deal reached this week removes a cloud to that outlook, he said.

Sales Gains

Sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, based on the median estimates of 15 economists and housing analysts surveyed by Bloomberg News for this story. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012, according to the forecasters, who used varying measures of values.

Building is set to jump after the inventory of new homes fell last year to the lowest level in half a century. Housing starts, including single- and multifamily units, are expected to increase 24 percent to 967,000 in 2013, the most since 2007, according to the median of 17 estimates. Starts will reach an annual pace of 1 million by the end of this year and 1.5 million by the end of 2016, according to a report today by Goldman Sachs Group Inc. analysts led by Hui Shan, who said housing will remain a “bright spot” in 2013.

Purchases of new single-family houses will climb 23 percent to 448,000 this year, extending last year’s rebound from a record low 306,000 in 2011, according to estimates of 17 analysts surveyed for this story.

“We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” Mark Kiesel, managing director at Pacific Investment Management Co. in Newport Beach, California, wrote in an e-mail.

Buying Home

Kiesel, who predicted the home-price bubble would burst in 2006, is betting on an extended housing recovery with his investors’ money and his own. In May, six years after selling his last house near the real estate peak, Kiesel bought a Newport Beach home in a sign of his conviction that prices had bottomed. The Pimco Investment Grade Corporate Bond fund outperformed (PIGIX) the broader Barclays US Credit index in 2012 because of its housing-related investments, he said.

“Residential investments potentially could grow between 20 percent and 30 percent” in 2013, adding as much as 0.75 percent to U.S. gross domestic product growth, he said.

The U.S. economy expanded at an annual pace of 3.1 percent in the third quarter, the Commerce Department said Dec. 20. Residential fixed investment climbed almost 14 percent from a year earlier to $370.9 billion, its highest level since the end of 2008. Gross domestic product will increase 2 percent this year, based on the median of 85 estimates in a Bloomberg survey.

Jobs Growth

U.S. payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today. The unemployment rate matched a four-year low, at 7.8 percent.

While new-home sales are at about a third of the level they were at the peak in 2005, builders are growing more bullish. The National Association of Home Builders/Wells Fargo Housing market index last month rose to its highest level since April 2006. The gauge, in which a number above 50 indicates more builders view sales conditions as good than poor, reached 47, compared with a low of 8 in January 2009.

The Standard & Poor’s Supercomposite Homebuilding Index (S15HOME) jumped 84 percent last year, the best performance since 2003. PulteGroup Inc. (PHM), the largest U.S. homebuilder by revenue, surged 188 percent for the biggest gain in the entire S&P 500. (SPX)

‘Virtuous Circle’

Increases in home prices, construction employment and consumer optimism can restart the “virtuous circle,” shifting housing from an economic drag to an economic engine, according to Michael Widner, an analyst with Stifel Nicolaus & Co.

“We see 2013 as the year the housing story progresses from ‘no way’ to consensus, and the GDP and job growth tailwinds being sustainable through 2015,” Widner, based in Baltimore, wrote in a Dec. 19 note.

Homebuilders have added another 2.8 percent in the last two days after the government’s budget deal. The agreement keeps homeownership tax benefits, such as the deductibility of mortgage insurance premiums and limits on capital gains taxes, which may help boost home sales, said Michael Rehaut, a homebuilding analyst with JPMorgan Chase & Co. in New York.

“Not only do we view it as a positive that these favorable provisions remain in place, but additionally, this result continues to support our view that the emerging housing recovery remains a top economic priority for the White House, Congress and the Fed,” Rehaut wrote in a Jan. 2 note.

Uncertain Outlook

Not everyone is convinced the worst is over. Robert Shiller, co-creator of the Case-Shiller index, said the outlook for home prices is “highly uncertain” because more people are becoming renters rather than buyers. The number of U.S. occupied residences increased by a net 1.15 million in the 12 months through Sept. 30, with a gain of 1.32 million rentals and a drop of 175,000 owner-occupied homes, according to the Commerce Department.

“We’ve seen a decline in general interest in home ownership,” Shiller, a professor of economics at Yale University in New Haven, Connecticut, said Dec. 27 on Bloomberg Television. “We’re seeing rentals rise. Our permit data show that new construction has tilted toward multifamily.”

Based on home sales, construction starts and mortgage delinquencies, the housing market is “halfway back to normal,” said Jed Kolko, chief economist of Trulia Inc., a San Francisco- based real estate website operator.

Houston, Chicago

“It’s likely that it will be another three years or so — maybe the end of 2015 or the start of 2016 — before we see that market nationally back to normal,” Kolko said in a Dec. 26 interview on Bloomberg Television. “Some local markets, like Houston and the San Francisco Bay area, are actually close to where the normal areas are. Whereas others, like Chicago and Atlanta, are a long, long way from normal.”

Home prices rose 4.3 percent in October from a year earlier, the biggest year-over-year price gain since May 2010, according to the S&P/Case-Shiller index of 20 cities. The gauge is up almost 9 percent since hitting a 10-year low in March. It fell as much as 35 percent from a July 2006 peak.

Competition among buyers seeking to take advantage of low prices and record-low interest rates propelled the price gains, Kolko said. The rate for a 30-year fixed loan tumbled to an all- time low of 3.31 percent in November, according to Freddie Mac. The number of homes listed for sale that month fell to the fewest since December 2001, data from the National Association of Realtors show.

Underwater Homeowners

“Price increases will spur more new construction, which will add to inventory,” Kolko said in an e-mail. “And price increases will lift some underwater borrowers back above water, encouraging some of them to sell,” he said, referring to homeowners who owe more than their property is worth.

More homeowners who awaited higher prices are preparing to list their houses this year by painting, laying carpets and sprucing up kitchens and bathrooms, said Alan Smith, a broker with Re/Max Professionals in Littleton, Colorado.

“There’s a lot of updating going on so they’re ready to go to market,” Smith said in a telephone interview from his office in the Denver (SPCSDEN) area, where prices climbed 6.9 percent in the 12 months through October. “A lot of folks’ homes are tired and they haven’t had the money or the time to update them.”

The estimated 11 million underwater homeowners have created a “paradox of negative equity,” according to Sam Khater, senior economist for CoreLogic Inc., an Irvine, California-based real estate data service. Because they can’t sell without taking a loss, these homeowners have helped drive up prices by limiting inventory listed for sale, he said.

Distressed Sales

Distressed home deals already account for a smaller share of transactions. In November, 22 percent of resales were foreclosures or short sales, when the lender agrees to sell for a loss. That was down from 29 percent a year earlier, according to the Realtors group.

The decrease is helping to boost home-price indexes and creating a false sense of a healthier market, said Michael Feder, CEO of Radar Logic Inc., a New York-based property price research company.

“We are not in a real housing recovery yet,” he said in an e-mail. “Current signs of improvement could evaporate quickly.”

Blackstone Buying

Distressed-home inventory has been drying up as investors purchase foreclosed properties and other low-cost homes. Blackstone Group LP, the world’s largest private-equity firm, has been buying as much as $100 million of homes a week to manage as rentals or sell when prices rise.

“We think there’s a lot more home price appreciation to go,” Blackstone President Tony James said at a Dec. 5 conference in New York sponsored by Goldman Sachs Group Inc.

Homes that were seriously delinquent, in the foreclosure process and not yet listed for sale, known as the shadow inventory, shrank 12 percent in the 12 months through October to 2.3 million units, CoreLogic reported Jan. 2.

“Given the long foreclosure timelines in many states, the current shadow inventory stock represents little immediate threat to a significant swing in housing market supply,” Mark Fleming, CoreLogic’s chief economist, said in a statement. “Investor demand will help to absorb the already foreclosed and REO properties in the shadow inventory in 2013.”

Buyer Traffic

Builders such as New Home’s Webb are seeing a lot of interest from prospective buyers. More than 6,500 people visited Lambert Ranch’s model homes on opening weekend in May, and high traffic continues from homeseekers with resources to buy, Webb said.

Shoppers will soon have more options. In Orange County, California, where New Home Co. is based, two dozen subdivisions are opening this year, the most since 2006, Webb said.

Webb, a homebuilder for 25 years, co-founded the New Home Co. in 2009 after his previous company, John Laing Homes, went through bankruptcy liquidation. Just three years earlier, as the housing prices were about to crash, John Laing was sold for $1.05 billion to Emaar Properties PJSC (EMAAR), a Dubai-based developer.

“We’re not looking for some crazy boom,” Webb said. “We’d just like to see consistent sales and modest price appreciation.”

Why green labels boost real estate values #realestate #housing

Walk into an office building in downtown San Francisco and you’re likely to see a familiar plaque at the entrance promoting the building’s green certification. At least 35 percent of San Francisco’s total commercial square-footage now bears a LEED and/or EnergyStar label, according to the U.S. Green Building Council.

Extensive research on the financial impact of green labels in the commercial real estate sector shows that tenants not only want to house their companies and employees in green buildings, they are willing to pay a price premium to do so. We have documented that buildings with a “green rating” (Energy Star and LEED) command rental rates that are roughly 3 percent higher per square foot than otherwise identical buildings — controlling for the quality and the specific location of the office building — and sales prices of green buildings are about 16 percent higher.

But does the price premium, and demand for green labels, exist in the residential real estate market as it does in the commercial sector? The short answer is yes.

The value of green hits home

In July 2012, my colleague Matthew Kahn and I released the “Value of Green Home Labels,” the largest study of its kind to document a significant price premium for green-labeled homes. Looking at sales transactions of 1.6 million homes in California from 2007 to 2012, we investigated the price implications of the three largest California green labels: LEED for HomesEnergy Star and GreenPoint Rated.

green homes