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REALTORS® Expect Home Prices to Increase by 4% in the Next 12 Months

In a monthly survey of REALTORS®, respondents are asked “In the neighborhood(s) or area(s) where you make the most sales, what are your expectations for residential property prices over the next year?

Among the respondents, the median expected price change is four percent. The chart below shows median expected price change by state based on survey responses collected during February–April 2018[1], according to the  April 2018 REALTORS® Confidence Index Survey

Respondents from the states of Washington, Oregon, Idaho, Nevada, California, Utah, Wyoming, Colorado, and Wisconsin expect the highest price growth in the next 12 months, with the expected median price growth at more than five to nearly eight percent.

Owing to tight lack of construction, house prices have increased steeply since 2012 compared to the growth in income. Nationally, the median price of U.S. existing homes sold was 68 percent higher than the level in January 2012, the year the housing market started to recover solidly.  Meanwhile, wages have increased only 15 percent since then.

Based on the FHFA House Price Index at the state level, the strongest price growths from 2012 through 2017 were in the West region such as Nevada (102 percent), California (85 percent), Arizona (76 percent), Oregon (74 percent), Idaho (70 percent), Washington (68 percent), Colorado (68 percent), Utah (65 percent). Home prices have also increased steeply in Florida (73 percent), Michigan (71 percent), and Texas (47 percent).

Use the data visualization below to view median listing prices in April 2018. Red areas are areas where prices are higher than the U.S. median home price growth. Hover on the map to view the historical median listing prices of properties listed on Realtor.com from June 2012 through April 2018.[2]

MedianPrice_DB3

[1] Because each month’s survey asks about the outlook in the next months, the responses collected from January-March 2018 covers the outlook for January 2018-March 2019.

[2] Realtor.com data is freely available and can be download from https://www.realtor.com/research

Older Boomers: Most Satisfied Buyers Purchasing Forever Homes

Older Boomers, buyers aged 63 to 71 years, made up 14 percent of all home buyers in 2017. The median age for this group was 66 years old and they were born between 1946 and 1954. Within this group, they had the second largest share of single female buyers at 22 percent. Their primary reasons for purchasing a home, more than other generations, were the desire to live closer to friends and family (25 percent), followed by retirement (15 percent).

Combined, Older Boomers owned the highest share of investment (nine percent) and vacation (seven percent) properties. Equal to the Silent Generation, Older Boomers were the most likely to purchase homes in a small town (27 percent) and in a rural area (11 percent).

Compared to other buyers, they moved the greatest distances at a median of 30 miles. Older Boomers were the least likely to purchase homes for the quality of school districts or convenience to schools. Rather, they purchased homes for the quality of the neighborhood and for convenience to friends and family. This age group found commuting costs as well as windows, doors, and siding installation equally important. Overall, Older Boomers were very likely not to make compromises on the home when they purchased (47 percent), citing that they were never moving and it was their forever home (27 percent).

In their home search process, Older Boomers were very likely to drive by homes and neighborhoods and they were the least likely to find the paperwork a difficult step. Older Boomers were the most satisfied with the home buying process at 93 percent.

Older Boomers’ income was below the median income of all buyers ($88,800) at just $80,700 and they purchased homes at a median price of $239,200. Older Boomers were the most likely to use the proceeds from the sale of a primary residence as the source of their downpayment (56 percent) and from an IRA account (five percent). They were the largest group of home buyers to save for a downpayment for more than two years (30 percent).

Older Boomers were the third largest share of home sellers at 22 percent in 2017. The median age for an Older Boomer seller was 67 years. They had the second lowest median income at $80,700. They were the most likely to sell to be closer to friends and family (28 percent) and for retirement (19 percent), and at a median distance of 39 miles from the home they recently purchased. They were also very likely to sell when they wanted to (94 percent). They receive the highest equity at 46 percent and second highest dollar value at $86,000.

April 2018 Housing Affordability Index

At the national level, housing affordability is down from last month and down from a year ago. Mortgage rates rose to 4.66 percent this April, up 13.4 percent compared to 4.11 percent a year ago.

  • Housing affordability declined from a year ago in April moving the index down 8.8 percent from 159.8 to 145.8. The median sales price for a single family home sold in April in the US was $259,900 up 5.5 percent from a year ago.
  • Nationally, mortgage rates were up 55 basis point from one year ago (one percentage point equals 100 basis points), while median family incomes rose 2.8 percent.

  • Regionally, the West recorded the biggest increase in home prices at 6.4 percent. The South had an increase of 5.0 percent while the Midwest had a gain of 4.1 percent. The Northeast had the smallest incline in price of 2.5 percent.
  • Regionally, all four regions saw a decline in affordability from a year ago. The West had the biggest drop in affordability of 9.4 percent. The South and the Midwest both had a decline of 8.0 percent. The Northeast had the smallest drop of 5.4 percent.
  • On a monthly basis, affordability is down from last month in all four regions. The West had a decline of 0.8 percent followed by the Northeast with a dip of 2.0 percent. The South had a drop of 2.6 percent followed by the Midwest, which had the biggest; dip in affordability of 6.0 percent.
  • Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 183.6. The least affordable region remained the West where the index was 104.6. For comparison, the index was 147.9 in the South, and 160.2 in the Northeast.

  • Mortgage applications are currently up 4.1 percent. Consumer confidence remains strong. Home prices are up 5.5 percent while median family incomes are only growing 2.8 percent. New home construction is being held back by increased material cost and labor shortage.
  • What does housing affordability look like in your market? View the full data release here.
  • The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.


Marilia Cathcart, GRI, E-PRO, CHS, HPS

City and Coast Properties
Broker/Mortgage Broker
CA BRE License #00496226
717 Union St. Ste K
San Diego, CA 92101
NMLS Licenses #385315 & 244536
Notary Public -  CA - Comm. # 1916637
Phone: 619-300-5008
marilia@cityandcoastproperties.com

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Marilia Cathcart’s professionalism, knowledge of the real estate market, the loan process and her continuous vital support in all aspects of buying and selling a home were invaluable and very much appreciated. She is easy to work with, personable and made the whole loan process, as well as buying and selling our home very smooth and uncomplicated. It is wonderful to find someone like Marilia who will go the extra mile to assure peace of mind every step along the way. Her availability, and most of all her professionalism, generosity and kindness make her an outstanding representative of her profession. She took us under her wing and guided us through every detail to completion. My husband and I will not hesitate to recommend Marila Cathcart to anyone who is thinking of securing a loan or who is looking to buy or sell their home – she is the BEST. Oscar and Rita Carlson
Endorsement for Marilia Cathcart: In my career as a physician-scientist, I have lived in the northeast, southeast, northwest, and southwest USA, as well as in the middle of the country. As was my custom when moving to a new city, as soon as I knew I would be joining the faculty at UCSD, I flew to town, rented a car, and drove around until I found an attractive neighborhood near my future workplace. I then went to the nearest shopping area for that community, and walked into the realtor offices, tucked to the side of the grocery store. There she was, standing inside the door with a big smile to greet this weary traveler, the lady who would change my life for the better, Marilia Cathcart. She not only showed me houses while I was in town, but continued to send me pictures and information on prospects after I had returned to Seattle where I was finishing training. She paid close attention to what I said I was looking for, the health problems I needed to accomodate, and found many wonderful possibilities. When we found my dream house, she helped me see how I would be able to afford it by calculating how much the mortgage interest deduction would save me in taxes. She found me a banker that gave me the loans I needed, she found me wall-to-wall carpeting at wholesale prices, and she even fixed me up with a very attractive and nice young man I still think about. I ended up so crazy about that house that I wish I still lived there. When I had to move back east, she helped manage that California property for me, and when I finally needed to sell it, she handled that, too, in the middle of a real estate slump, no less. I had bought the house in 1977, and sold it in 1991, so this all may seem like ancient history, but is not the end of the story. When I retired in 2000 and decided to move back to San Diego County, she reprised her role as lifesaver. After looking at loads of houses both physically and now with computer assistance, on line, she found me another perfect house for my needs. She later helped me find a reliable outfit to refinance my loan when the interest rates dropped sufficiently. I have been in this home ten years now, and they will need dynamite to dislodge me. Marilia Cathcart is, quite frankly, the best real estate manager/seller/broker I have ever dealt with, and from coast to coast, there have been quite a few. She has a wonderful business sense, and is frugal with both the buyer's and the seller's money--I know because she has handled both for me. She is also a terrific "people person", with good instincts about what people want, and what will work for them. She was "networking" before the word was invented-- she would call it making friends, and putting people together who can help each other. Since she knows everybody, and never forgets a good guy, when you know Marilia, you potentially know a whole phonebook-full of good guys who can do anything from give you a mortgage loan to fix your sprinkler. As an added bonus, she is just a lovely human being, and a pleasure to know, even after nearly 34 years. Marilia Cathcart has my highest recommendation, without reservation. Charlotte B. McCutchen, M.D. Dr Charlotte B. McCutchen
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