Home values rise for first time in 5 years

NEW YORK (CNNMoney) -- Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday.

Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter, the first annual increase since 2007, real estate listing site Zillow reported. Prices were up 2.1% from the first quarter.

Even though June marked the fourth consecutive month of home value increases, overall home prices are still down almost 24% since April 2007, when Zillow began to track home values.
"[I]t seems clear that the country has hit a bottom in home values," said Zillow's chief economist Stan Humphries. "The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own."

Last winter, Zillow projected that the housing market turnaround would not arrive until the end of the year.
Other home price indexes have also recorded gains lately, including the S&P/Case-Shiller home price index. In it latest release, it reported that home prices in 20 major markets rose 1.3% in April, the first monthly increase in seven months.

Zillow uses a different methodology in calculating home values than other home price indexes like Case-Shiller and the Federal Housing Finance Agency. Sales of foreclosed, bank-owned properties, for example, are not factored into Zillow's data. Zillow does include short sales, however, which are more difficult to distinguish from conventional sales.
 
"Our index is geared to consumers, conventional sellers deciding whether they want to put their homes on the market," said Humphries.
 
The indexes that include foreclosures in their market data show larger price declines. The peak-to-trough drop for the S&P/Case-Shiller home price index, for example, is about 34% compared with Zillow's 24%.
Fewer than one third of the 167 metro areas Zillow surveyed recorded annual increases in home values, but the size of the price gains in these areas more than offset the losses posted by the remaining two-thirds of the markets.

In Phoenix, the biggest gainer, home values soared 12.1% year-over-year to a median of $136,200. Meanwhile, the biggest loss sustained by any of the 30 largest metro areas was in Chicago where median home values fell 5.8% to $158,600.

Foreclosures remain one of the biggest risks to the housing market recovery, Humphries said. In the wake of the national foreclosure settlement which clarified how banks can legally pursue foreclosures, Humphries expects the pace of foreclosures to pick up.

"That will translate to more homes on the market," he said. "But we think demand will rise to absorb that."
Zillow expects the housing market to continue to slowly recover, with median home values projected to climb 1.1% -- relatively flat -- over the next 12 months.

Beaten down markets like Phoenix, Las Vegas and many Florida cities, will likely record greater-than-average gains over the next 12 months, said Humphries.

The results in those places, however, will be bumpy. Home price increases will cause some homeowners who have been patiently waiting for values to rebound to put their homes on the market. And those additional listings could cool prices for a while, resulting in a staircase effect with "price spikes followed by plateaus," said Humphries.

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Meaninfgul Strides in the Construction Industry

Both nationally and locally the Construction Industry is making meaningful strides towards recovery to date in 2012. This positive pace has been without any governmental incentives that were in place last year. Nationally, housing starts rose 6.9% in June from May to a seasonally adjusted annual rate of 760,000, the highest since October 2008. In addition, the Home Builder Confidence continues. The July NAHB/Wells Fargo Housing Market Index jumped 6 points to a level of 35. This is the highest in more than five years and the largest one month increase since the recession recovery in 2002. (This is based on three components: current sales and sales expectation and builder traffic.)

     Locally, the building industry has picked up as well on a higher pace. On Hilton Head Island the number of new single family home permits increased 50% from May to June.  The dollar volume increased 48% from May June. 

      Historically, Hilton Head Island is an insulated market during recessionary times. Typically Hilton Head is one ot the last locations to be hit by a recession and one of the first locations to recover. With a sub-tropical climate, a variety of planned communities Hilton Head Island is very attractive to many baby boomers reaching their retirement age as well as younger families that are looking for their perfect vacation home or rental investment. Investing in Hilton Head Island has much potential!

Courtesy Bunting Construction Co.

Mortgage rates drop again, Freddie Mac says; 30-year at 3.53%

By E. Scott Reckard

LA Times 

July 19, 2012, 7:50 a.m.

The average rate on a 30-year fixed mortgage hit another new low this week, dropping to 3.53% from 3.56% last week, according to Freddie Mac's survey of what lenders are offering to well-qualified borrowers.

With the Federal Reserve aggressively pushing rates down and few signs of inflation on the horizon, it was 12th time in 13 weeks that a new record was set, Freddie Mac economist Frank Nothaft said in the report Thursday morning.

Freddie Mac said the 15-year fixed loan, which has been a popular part of the recent boom in refinancings, averaged 2.83%, down from 2.86% and also a new record.

The typical start rate on a five-year hybrid loan, which has a fixed rate until it turns adjustable in the sixth year, was at a record low level as well: 2.69%, down from 2.74%.

Borrowers would have paid 0.7% of the loan amount in upfront lender fees to obtain the 30-year fixed loan and 0.6% for the 15-year fixed and five-year hybrid, Freddie Mac said.

Freddie Mac asks lenders each week about the terms they are offering to solid borrowers for loans of up to $417,000. Industry pros say well-qualified borrowers can often do slightly better by shopping around, and it’s possible to "buy down" rates by paying additional discount points to lenders.

The survey excludes additional third-party closing costs such as appraisals and title insurance.

Home Values Rise for the First Time in 5 Years

NEW YORK (CNNMoney) -- Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday.

Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter, the first annual increase since 2007, real estate listing site Zillow reported. Prices were up 2.1% from the first quarter.

Even though June marked the fourth consecutive month of home value increases, overall home prices are still down almost 24% since April 2007, when Zillow began to track home values.

"[I]t seems clear that the country has hit a bottom in home values," said Zillow's chief economist Stan Humphries. "The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own."

Last winter, Zillow projected that the housing market turnaround would not arrive until the end of the year.
Other home price indexes have also recorded gains lately, including the S&P/Case-Shiller home price index. In it latest release, it reported that home prices in 20 major markets rose 1.3% in April, the first monthly increase in seven months.

Hilton Head's June Real Estate Sales Soar

The Hilton Head area real estate market is considerably healthier than it was one year ago, according to a report Tuesday by S.C. Realtors.

Sales of homes, condominiums and villas in June were up more than 60 percent over June 2011 and are up about 23 percent overall year to date.

June's surge -- the highest increase of any of the state's 16 regions for the month, according to the report -- was accompanied by a 21-percent decrease from June 2011 in the average number of days homes spent on the market.

That decline is indicative of an increasingly healthy market, said John Robinson, president of the Hilton Head Realtors Association.

"Over the past few years, that average wait hasn't decreased that much," he said. "This shows that the market's getting better and that buyers are making their moves."

Hilton Head Realtor Charles Sampson partly attributed the spike in sales to banks' placing distressed properties back on the market.

"Sellers are saying, 'I've waited long enough,' " he explained. "The inventory's starting to balance out."
The trend was not accompanied by the substantial drop in the median selling price that had tempered enthusiasm over strong sales rates in the past several months.

At $230,000, that median price marked only a slight decline from the June 2011 mark of $233,000.
Beaufort area sales remained consistent -- up 2 percent over June 2011 but down about 2 percent year to date.

Courtesy The Island Packet, by Grant Martin

Read more here: http://www.islandpacket.com/2012/07/17/2137595/hilton-head-home-sales-soar-in.html#storylink=misearch#storylink=cpy

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