Low US housing inventory dampens market

The latest nationwide housing market reports are indicating that the housing recovery is being hit by low inventory, which is resulting in a drop in sales.

Low supply is blamed for a decrease of 1% in existing home sales in December, although sales were still at the second highest level since November, 2009, according to the National Association of Realtors (NAR).

NAR also reported that pending homes sales fell 4.34% in December, although it was 6.9% higher than December 2011.

New home sales in December fell 7.3%, but was 8.8% higher than December 2011, according to the Census Bureau and the Department of Housing and Urban Development.

Despite these numbers, total new home sales in 2012 were at the highest level seen in three years.

These results are being blamed on the inventory of homes for sale which dropped 8.5% from November and is at the lowest level since January, 2001. With inventories down 21.6% from December 2011, rise in home prices is occurring as home sellers are receiving multiple bids for their homes.

Less inventory and higher home prices may be turning the housing market around to a sellers market, which may also make it difficult for some home buyers to qualify for a mortgage. 

For the week ending January 18th, loan applications rose 7.0% on a seasonally adjusted basis and 8% on an unadjusted basis, according to the Mortgage Bankers Association. The Refinance Index was up 8% with refinances accounting for 82% of all applications. The seasonally adjusted Purchase Index increased 3% and reached the highest level since May, 2010.

According to the most recent survey of wholesale and direct lenders done by FreeRateUpdate.com, conforming mortgage rates have remained steady over the past week.

Current 30 year fixed mortgage rates are as low as 3.125%, 15 year fixed interest rates are as low as 2.375% and 5/1 adjustable mortgage rates are as low as 2.375%. These rates require that borrowers have good credit, and qualifications are necessary for approval.

The FHA Streamline Refinance with no Cash Out is one of the best refinance deals available to homeowners. The streamline does not require an appraisal, credit history or any other documentation as long as there is no cash taken out and the current mortgage has been paid on time.

The high priced property market has been on the increase which is creating more competition in the jumbo loan market.

Increasing by .125%, jumbo 30 year fixed mortgage rates are now as low as 3.500%. Jumbo 15 year fixed rates are as low as 2.700% and jumbo 5/1 adjustable interest rates are as low as 2.125%. But borrowers must have a history of excellent credit, and substantial assets must be available for the higher down payment and additional months of reserves.

The next post on this blog will examine the housing market conditions in Southeast Florida.

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Published by Realty Times, 30 January 2013, graph by Housing Tracker.

The Dutch Approach

Shortly after Christmas I had the pleasure to visit Roermond (...again; I love the Netherlands and the Dutch), a lovely small town on the Maas river in the southeastern Dutch province of Limburg.

Destroyed in 1213 by Otto IV of Brunswick, by 1232 the town was rebuilt and was granted its own seal, reign, mint, court and city rights.

On the outskirts is a thoroughly modern (and very good) outlet mall designed to resemble a cozy village (hmm), but the town centre is the really interesting part, from the Minster Church ("Munsterkerk") to the market place, from the Rattentoren to City Hall and the small pleasure boat harbour on the Maas.

Though modernism is obviously absent from the landmarked town centre, I love the uncomplicated Dutch approach to architecture:

Market place

Town Hall, detail

Designer Outlet Mall

Roer river

Condominiums on the Maas river. Note the street under the building

Market place

Pastoorswal, heading towards town centre

Other bank of the Roer river

Wait – we can fit another house in here

(Sorry for the muddy pix; wrong choice of equipment for the day).

Wright House in Phoenix saved; Hadid to design Miami condo building

The Frank Lloyd Wright Building Conservancy emailed Christmas cheer to their supporters yesterday: it has facilitated the purchase of the David and Gladys Wright House in Phoenix, Arizona, through an LLC owned by an anonymous benefactor.

The transaction closed on December 20 for an undisclosed price. The property will be transferred to an Arizona not-for-profit organization responsible for the restoration, maintenance and operation of the David Wright House.

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After renowned architect (“starchitect”?) Zaha Hadid joined other notables and made her imprint on Miami Beach with a municipal parking garage in the Collin’s Park area, she has been commissioned to design a residential tower in Miami, her first in the western hemisphere.

The project – no details available yet – will be located on 1000 Biscayne Boulevard in downtown Miami, west of Bicentennial Park and the Bay and just south of MacArthur Causeway which connects Miami with Miami Beach.

Google street-view  shows currently a BP station at the site, right next to Miami Pawn. But surely the Hadid name will guarantee the developers of 1000 Biscayne Tower adequate pricing of the units.

Hadid, mentioned in this blog in the two-part post “Modern Architecture in the Alps”, is an Iraki living in London. Only recently she had lost an intense competition to design an office on 425 Park Avenue in New York City to Sir Norman Foster. An overview of her work is at arcspace.

South Florida Housing Market in October

Sorry for being a bit later than usual with the October data; I had to revise the numbers not once but twice.

As you see below, like in previous months the economic oddity of low inventory paired with flat prices continued in October. 

Palm Beach asking prices for single family homes went through the roof, but caused nothing but frustrations – like in previous months, buyers were not impressed and sat on their hands.  

The PB county gap between sellers' expectations and buyers' willingness reached an astonishing 208%, the second highest score since 2008. In Jan-Mar '12 it was even higher at 213% – and then it didn't work either. As a result, absolute selling prices and SP per square feet dropped.

Broward county sellers were much more modest – the gap is at 155%, practically the same as in September, and promptly selling prices saw a slight increase. In the meantime, Miami-Dade county wobbled along, sort of a mix between Broward and Palm Beach. 

The table and the chart for single family home sales in Southeast Florida for the month of September:

South Florida home sales October 2011-2012, Source: SEF-MLS, ©tckaiser/modernsouthflorida.com

Slowly I am running out of ways to describe a flat market. And as the Holiday season is here, if past years are an indicator November and December are going to be even flatter (and more difficult to describe?).

Leaves me only to wish you a nice weekend – enjoy the Holiday Season, hopefully not in a mall.

Oscar Niemeyer, Brazilian Modernist, 1907-2012

"The last Giant of the Architectural Modern Movement", Brazilian architect Oscar Niemeyer, died Wednesday.

Niemeyer – with German ancestry – was not only the last living modernist master, like Le Corbusier and other of his contemporaries he was convinced that the world can be improved through architecture. (A bit similar to Prince Charles' architectural amibitions, but on a different level and without historic aping). 

Jörg Häntzschel in the German daily Süddeutsche Zeitung admiringly states that Niemayer seemed to be able to negate gravity. He constructed huge apartment buildings on columns as slender as a woman's legs. Curvy paths lead from one floor to the other like connecting clouds. Railings were superfluous. 

Niemeyers buildings, over 600 commissions in total, were famous for their sensousness and their utopian abundance. He once commented the curves typical for his buildings were inspired by those of his wife. 

 

Now architect Architekt Oscar Ribeiro de Almeida Niemeyer Soares Filho passed away 10 days shy of his 105th birthday on Wednesday in Rio de Janeiro.

A slideshow of his best-known works can be seen at Architectural Record.

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Fotos: Reuters

Thanksgiving Wishes

Let's be grateful for what we have.

A very happy Thanksgiving to you and your loved ones,

Tobias

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Photo: Ilkahöhe near Tutzing/Bavaria, © tckaiser

Challenges in Marketing Modern Architecture

Florida's lovely Tropic magazine, the legitimate successor to Homes magazine, also a brainchild of capable publisher John O'Connor, focuses on all aspects of contemporary and mid-century modern design and living in Southeast Florida.

In its November issue, Tropic has a riveting piece – I must state that, I'm mentioned in it – on the challenges of marketing modernism, specifically modern architecture.

It's not the life of the Fast and Furious, or the Rich and the Famous. Not really; more the opposite.

As my dear colleague Martie always says: if you want to become rich in real estate, don't specialise in modernism. But we have super-interesting clients and even fun, don't we?

To read more on the ins and outs of marketing modern homes, pick up an issue of Tropic anywhere around the TriCounty area, read the article online here (jump to pages 22-24) or download it here as a PDF, for yours to keep and cherish.

Oh, and let me know what you think of it.