NAR bans pocket listings; Mortgage applications rise; Bidding wars drop; and a Rosy outlook for 2020
New-home sales probably will jump 11% to 750,000, Yun says
Sales of new homes probably will rise to a 13-year high in 2020 as the U.S. dodges a recession, according to Lawrence Yun, chief economist of the National Association of Realtors.
New-home sales probably will jump 11% to 750,000, according to Yun’s new forecast, which would be the highest reading since 2007.
Sales of existing homes likely will increase 3.7% to 5.56 million in 2020, the highest tally since 2017, Yun said.
The median price of a single-family building lot rose 4.4% to $49,500
Part of the reason for the higher cost is an increase in “significant and rising regulatory costs that ultimately increase development costs and boost lot values,” NAHB said. “It is also possible that home building shifted towards more urban and dense areas where land values are typically higher, and land development faces more stringent regulation requirements.”
Refinance applications also climb to the highest level in five weeks. On an unadjusted basis, the index jumped 9.6% for the week ending on Nov. 8, 2019.
“Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates,” said Joel Kan, MBA’s vice president of economic and industry forecasting. “Positive data on consumer sentiment and growing optimism surrounding the U.S. and China trade dispute were behind last week’s rise in the 30-year fixed mortgage rate to 4.03%.”
Is it time to change what “healthy” supply looks like in Washington?
According to the most recent Northwest Multiple Listing Service, the active listings of homes (both single-family houses and condos) during the month of October totaled 14,379 — the lowest level since April.
And according to Dick Beeson, principal managing broker at RE/MAX Northwest in Gig Harbor and member of the NWMLS board of directors, this is part of what some refer to as the “new normal” for Washington real estate.
“People are moving here, home prices will continue to increase, inventory shortages will occur. That’s our future.”
The numbers back up this idea: across the 23 counties of the NWMLS there was just 1.73 months of supply overall. Four-to-six months of supply is generally seen to be a healthy market according to analysts. By NWMLS’s count, the last time supply of home and condos exceeded three months was February 2015, with a little more than 3.5 months of supply.
The National Association of Realtors board of directors voted 729-70 on Monday to ban the controversial practice of “pocket listings.”
“We know that the policy is a crucial protection for consumers,” said Kelman, who supported the NAR decision, “especially members of minority groups who, research shows, are often the last to find out about pocket listings.”
The new NAR rule requires properties to be listed on the MLS within one business day of being marketed to the public. Specifically, the policy states:
“Within one business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows yard signs, digital marketing on public-facing websites, brokerage website displays, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.”
Quarterly revenue up big, but so were the losses
According to Zillow, its Homes segment has lost approximately $204.2 million, slightly more than the company’s overall loss of $204.15 million. Zillow is losing $113 every time it buys and sells a house. In Q3, Zillow purchased 2,291 homes and sold 1,211 of them. The company ended the quarter owning 2,822 houses.
Zillow says the rise in awareness and demand for Zillow Offers is growing rapidly, with over 80,000 homeowners requesting offers from Zillow in Q3 alone. (so, Zillow bought just 3.5% of the homes offered to them; the rest presumably became leads to sell to premier agents.)
Meanwhile, the company’s Premier Agent business, where the company sells ads and other features to real estate agents is helping to blunt some of the financial damage from the company’s expansion.
“Our core Premier Agent business is strong, with record revenue that exceeded our outlook,” Barton said. “The profitability of our Premier Agent business is foundational to Zillow’s success and is the reason we are able to expand Zillow Offers with such confidence and speed. This quarter’s results illuminate how Zillow Group is in the most favorable position to lead Real Estate 2.0.”
But bidding wars in San Francisco and San Jose hit new highs for the year
According to the company, 10% of purchasing offers made on its site faced a bidding war during the month. Not only is this percentage down from last year’s rate of 39%, but it also marks a 10-year-low.
Despite October’s cooling, Redfin notes the rate of bidding wars in San Francisco and San Jose hit new highs for the year, coming in at 34.8% and 20.5%, respectively.
The nation’s most affordable smaller market is Monroe, Michigan, with 95.3% of homes sold in Q3 being affordable to families earning the median income of $79,000.
The least affordable major market is, again, San Francisco. Only 8.4% of homes sold in Q3 2019 were affordable to families earning the area’s median income of $133,800.
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