Monthly Archives: November 2016

Housing predictions of forecasts

Housing will pick up to its fastest pace ever in 2017. No wait, it will see a slowdown due to affordability constraints. No, that’s not right, affordability is at its best point in years.

Are you having trouble keeping up with all the forecasts for 2017, or wondering which forecast is the most accurate? It’s easy to get lost this time of year, when economist everywhere begin pouring out their forecasts for the next year.

While I won’t tell you who to believe, I can show you the difference between the experts, and where their forecasts are coming from. From there, you’re on your own.

Redfin came out on Tuesday with its prediction that homes would begin flying off the market. It had a positive outlook of the economy and said the technology in 2017 would help sell homes at the fastest pace ever. Well of course Redfin would say that. It’s an online brokerage.

But, that’s not to say their predictions aren’t without merit. This year did break the record as the fastest market on record, and many technological improvements are taking place that could improve that for next year.

And not only that, but economists are predicting a coming surge in Millennial homebuyers, who will expect a quicker online experience.

Redfin still recognized the affordability constraints, but put existing home sales at a growth of 2.8% for 2017.

On the other hand, the National Association of Realtors was much more somber in their report. Could it be because companies such as Redfin are causing real estate agents to have to lower their commission, Redfin’s sixth prediction, in order to compete with the growing only brokerages?

Whatever the cause, NAR predicted an increase of just 2% in existing home sales due to affordability constraints. But these predictions are based on a consumer survey, which showed more consumers saying that now isn’t a good time to buy a home.

Less consumers said now is a good time to buy in the fourth quarter, after interest rates shot up.

Forecasts minimal gain in home sales

Existing home sales will show only a small gain in 2017 due to increasing mortgage rates and shrinking consumer confidence, according to the National Association of Realtors.

This prediction is a huge departure from the 2017 home sales projection release by real estate agent provider, Redfin.

NAR conducted its fourth quarter Housing Opportunities and Market Experience survey, which asked consumers about their confidence in the economy and their housing expectations in 2017.

While the majority still said now is a good time to buy a home, confidence retreated significantly among renters, 57% of whom said now is a good time to buy a home. This is down from 60% in in the third quarter and 68% last year.

Among homeowners, on the other hand, 78% say now is a good time to buy. This is unchanged from the third quarter but down from last year’s 82%.

“Rents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year,” NAR Chief Economist Lawrence Yun said.

“Making matters worse, the unwelcoming reality of higher mortgage rates since the election is likely further holding back confidence,” Yun said. “Younger households, renters and those living in the costlier West region – where prices have soared in recent months – are the least optimistic about buying.”

NAR predicts existing home sales will close out 2016 with an annual increase of 3.3% and reach about 5.42 million, the best year since 2006.

Headed into 2017, existing home sales will still increase, but slightly less at 2% to around 5.52 million. Home prices will continue to rise, increasing 5% this year and 4% in 2017, according to NAR’s predictions.

NAR predicts the end of next year will bring interest rates of 4.6% and the Federal Reserve will raise rates several times to reach 1.25%.

“Although the economy is expected to continue to expand with around 2 million net new job creations, existing home sales are expected to see little expansion next year because of affordability tensions from rising mortgage rates and prices continuing to outpace income growth,” Yun said.

Murdered under mysterious circumstances

Early Monday morning a real estate agent was shot and killed in his own home in Abilene, Texas, according to an article by Joe Fry and Scott Martin for KTXS News.

The agent, 54-year-old Tom Niblo, was shot in his home, an act which police believe wasn’t random.

Abilene Police Chief Stan Standridge said the shooting wasn’t a random act. He also said Niblo wasn’t killed during a burglary or robbery.

“There is nothing new (that) APD is releasing tonight,” the Abilene Police Department said in a social media message late Monday afternoon. “No arrests. Investigation ongoing.”

Was Niblo targeted? If so, by who, and why? Police are still investigating.

Click here to see photos of the crime scene.

Niblo’s wife and dog were in the house at the time, but both managed to escape unharmed, according to the article.

From the article:

Earlier in the day, Niblo’s spouse told police she heard gunshots and was able to exit the house and escape. Her husband, she said, was unable to escape and was shot and killed.

According to Abilene police spokesman Rick Tomlin, Niblo’s spouse said someone had broken into the house.

Niblo’s wife was in protective custody and was to be among those questioned, he said.

The dog, while at first believed to have been shot, turned out to be unharmed. A vet exam showed the blood on the dog was from contact at the crime scene, and it had a preexisting limp.

Highest level Real Estate for November

“It’s difficult to explain why home sales were down in October but were so buoyant in November,” said Jack Kreider, executive vice president and regional director of RE/MAX Northern Illinois.

“It could be that many sales transactions which normally would have been completed in October were pushed back into November,” Kreider said. “Perhaps, it was related to the election, but whatever the reason, we’re delighted to see the housing market deliver such a strong November performance.”

The median home price increased 9% annually to $215,000 in November, and the number of days homes spent on the market decreased from 92 days last year to 88 days, the lowest market time since November 2005.

However, inventory continues to be a problem in the Chicago market. Inventory of homes for sale held steady at 10% below 2015 levels.

The home sales data used for RE/MAX’s analysis was collected by MRED, the regional multiple listing service. It covers detached and attached homes in the Illinois counties of Cook, DuPage, Kane, Kendall, Lake, McHenry and Will. Detached homes are typically stand-alone single-family dwellings. Attached homes include condominium and cooperative apartments along with townhouses.