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When Prices of Homes With Pools Take a Dip

Studies show homes with swimming pools can sell at a higher price during the summer and a lower price in the winter.  These findings are important to know when looking to buy or sell La Jolla homes featuring pools.   In a recent article by Tanette Tanaka, she explains the recent pool study and illustrates how a home being sold in August can see a 2 percent price increase but a home being sold in January can see a 1.5 decreases in sale price.  As we enter into the early stages of summer, expect San Diego and La Jolla homes with pools to start dressing up the pool area since pools will start to look much more inviting as the temperature starts to rise.  Read the full article below as it also provides a few more helpful tips for buyers and La Jolla homes featuring pools.

 

When Prices of Homes With Pools Take a Dip

In the winter, the water doesn’t look so appealing, so potential buyers are less likely to shell out extra bucks for a swimming pool 

By Sanette Tanaka

[image]Caroline TestoneSEASONAL SALE: This Alpharetta, Ga., home, listed for $5.35 million, has seven bedrooms, nine baths—and a pool that may look its most inviting in August.

Another mystery of human behavior: Home buyers will pay a premium for a house with a swimming pool in August—even though soon it may be too chilly to sit poolside. “When it is sweltering outside, a swimming pool just looks attractive. There’s an emotional connection because it reminds us of fun times we have in the summer,” says Jaren Pope, assistant professor of economics at Brigham Young University. When swimming-pool homes go into contract in the summer, they sell for an average 0.22 percentage points more than the base-line price determined by researchers. For a $1 million house, summer adds roughly a $4,000 premium. In just a couple of months, however, “the home buyer is left scratching his head and wondering why he paid extra for a pool,” he says. Conversely, a swimming-pool home that goes into contract in January sells for 0.15 percentage points below the researchers’ base line.

Prof. Pope and co-authors Meghan Busse, Devin Pope and Jorge Silva-Risso set out to discover what role weather plays in buying decisions. They looked at more than four million housing transactions from 1998 to 2008 in 27 states. They limited the study to homes that sold at least twice over the 10-year period and compared sale prices with base-line prices controlled for housing characteristics. Their findings, “Projection Bias in the Car and Housing Markets,” were published in June by the National Bureau of Economic Research. Their research falls into the broader category of behavioral economics, giving insights into the psychology of spending, such as why some people spend more money at the grocery store when they’re hungry. In the home-sale study, the best month to list depends on how hot or cold your local market is, Prof. Pope says. But generally speaking, early spring is best in order to snag those late summer buyers. Jim Getzinger, a real-estate agent with Atlanta Fine Homes Sotheby’s International Realty, says he sees an uptick in interest in homes with pools in the summer. During winter months, sellers need to pay extra attention to make the pool look appealing, he says. He advises sellers to keep pools as clean as possible and set up cushions and décor “even if it’s 20 degrees.” He also recommends dressing up a pool area with Christmas lights and heaters to draw attention. “A pool can look just as attractive in the winter on a clear, cold day if you put the right elements out there to enhance it,” he says.

Posted in La Jolla Homes, La Jolla Homes Sales | Comments closed

Asking Home Prices Up 5.1% in 2012

More support to document the increases in rental and sale prices for our La Jolla rentals and La Jolla homes for sale.  Jed Kolko provided an article “Asking Prices Rise Up in 2012, Huge Turnaround after falling 4.3%”, showing 2012 statistics for the real estate industry across the US.  Kolko uses Trulia price monitors to go over the 2012 changes in home and rental prices and these statistics will be key indicators for our La Jolla rentals and La Jolla homes for sale for the year 2013.  The article also shows the top 10 turnaround cities of 2012 and provides a chart of the largest metropolitan cities and how each city’s prices have changed in the year 2012.  San Diego is number 22 on the metropolitan chart and San Diego posted a rise of 2.3% in rent price and a rise of 7.2% in asking price.  These statistics show positive sings for the real estate market and we are excited about the consistent market improvements of La Jolla rentals and La Jolla homes for sale.  For more details on the rest of the country’s markets, please read the article below.

 

Asking Home Prices Up 5.1% in 2012, Huge Turnaround After Falling 4.3% in 2011

Phoenix, Las Vegas, and San Jose post largest year-over-year price gains in December. Las Vegas and Seattle are 2012’s biggest turnaround markets.

The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.

Asking Prices Rise 5.1% Nationally Year-Over-Year, Up in 82 of the 100 Largest Metros
In December, asking prices rose 0.7% month-over-month, the tenth gain in twelve months, for a 5.1% year-over-year increase. Quarter-over-quarter prices rose 2.3%, seasonally adjusted. Price increases have accelerated in 2012: quarter-over-quarter price changes were 0.8% in Q1 (March 2012), 0.4% in Q2 (June 2012), 1.4% in Q3 (September 2012), and 2.3% in Q4 (December 2012), seasonally adjusted.

December 2012 Trulia Price Monitor Summary

% change in asking prices

# of 100 largest
metros with asking-price increases

% change in asking prices,excluding foreclosures

Month-over-month,
seasonally adjusted

0.7%

Not reported

0.8%

Quarter-over-quarter,
seasonally adjusted

2.3%

74

2.1%

Year-over-year

5.1%

82

5.5%

Trulia Price Monitor Line Chart  Dec 2012

 

Las Vegas and Seattle are Top “Turnaround” Markets in 2012
In December 2012, Phoenix had the nation’s largest year-over-year price increase at 26.0%. But Las Vegas and Seattle had double-digit price gains in 2012 after double-digit declines in 2011, making them the top turnaround housing markets of the year. Phoenix had the third-largest improvement in 2012 relative to 2011. All but one of the top 10 turnaround metros were in the West and Southwest, including four in California: OaklandSan JoseSacramento, andFresnoAtlanta was the only market east of the Rockies to make the list.

2012’s Top Turnaround Housing Markets
for Asking Price Recovery

# U.S. Metro

Y-o-Y % change in asking prices, Dec 2012

Y-o-Y % change in asking prices, Dec 2011

Difference between Dec 2012 and Dec 2011 changes

1 Las Vegas, NV

16.3%

-11.2%

27.5%

2 Seattle, WA

10.2%

-13.8%

24.0%

3 Phoenix, AZ

26.0%

4.2%

21.8%

4 Oakland, CA

12.7%

-8.4%

21.0%

5 San Jose, CA

16.1%

-4.7%

20.8%

6 Salt Lake City, UT

14.0%

-6.5%

20.5%

7 Atlanta, GA

9.0%

-9.9%

18.9%

8 Sacramento, CA

9.5%

-8.5%

17.9%

9 Fresno, CA

9.0%

-8.7%

17.7%

10 Tacoma, WA

4.0%

-13.7%

17.7%

NOTE: Among 100 largest U.S. metros. The third column of figures equals the first column minus the second column. Click here to download a PDF of price and rent trends for all 100 metros.

2012 was a huge turnaround year for most local markets, not just the 10 on our list. Whereas 82 of 100 metros had price increases in 2012, only 12 did in 2011. Furthermore: in 2012, 16 metros had price increases of more than 10%, compared with just two in 2011. And only five of the 100 largest metros had smaller price increases (or bigger declines) in 2012 than in 2011: MiamiFort Lauderdale, andCape Coral-Fort Myers, FL, plus Greenville, SC and Albany, NY.

2012

2011

National price change,
year-over-year, December

+5.1%

-4.3%

# of 100 largest metros
with price increases

82

12

# of 100 largest metros with
price increases more than 10%

16

2

# of 100 largest metros with
price declines more than 10%

0

6

Rents Up 5.2%, But Prices Rising Faster than Rents in 17 of 25 Largest Rental Markets
Nationally, rents rose 5.2% year-over-year, still slightly ahead of the national price gain of 5.1%. In Houston, Chicago, Philadelphia, and Baltimore, rents are rising much faster than home prices. But in most large rental markets, prices are rising faster than rents. The gap is largest in “rebound” markets–those which are bouncing back from steep price declines after the bubble burst–specifically in PhoenixLas VegasRiverside-San Bernardino, CA, andSacramento, where home prices rose more than rents by at least 7 percentage points.

Rent and Price Changes in the 25 Largest Rental Markets

# U.S. Metro

% change in rents,
Y-o-Y ,
Dec 2012

% change in asking prices,
Y-o-Y,
Dec 2012

1 Houston, TX

16.2%

3.1%

2 Oakland, CA

12.6%

12.7%

3 Miami, FL

10.3%

8.9%

4 Denver, CO

8.1%

12.7%

5 Seattle, WA

8.0%

10.2%

6 New York, NY-NJ

6.9%

3.5%

7 Philadelphia, PA

6.5%

-0.8%

8 Chicago, IL

6.5%

-1.1%

9 Boston, MA

6.4%

4.0%

10 Portland, OR-WA

6.1%

8.6%

11 Minneapolis-St. Paul, MN-WI

5.5%

10.8%

12 San Francisco, CA

5.2%

11.9%

13 Atlanta, GA

5.1%

9.0%

14 Baltimore, MD

5.1%

-0.1%

15 Los Angeles, CA

4.9%

5.8%

16 Dallas, TX

4.4%

1.5%

17 Riverside-San Bernardino, CA

4.3%

11.9%

18 Orange County, CA

3.8%

10.5%

19 Tampa-St. Petersburg, FL

3.7%

8.0%

20 Washington, DC-VA-MD-WV

3.2%

6.4%

21 Phoenix, AZ

2.7%

26.0%

22 San Diego, CA

2.3%

7.2%

23 Sacramento, CA

2.0%

9.5%

24 St. Louis, MO-IL

1.7%

3.5%

25 Las Vegas, NV

-0.9%

16.3%

NOTE: Largest 25 rental markets, ranked by change in rents. Click here to download a PDF of price and rent trends for all 100 metros.

 

The next Trulia Price Monitor and Trulia Rent Monitor will be released on Tuesday, February 5, at 10 AM ET.

How did we put this report together? To recap the methodology, the Trulia Price Monitor and the Trulia Rent Monitor track asking home prices and rents on a monthly basis, adjusting for the changing composition of listed homes, including foreclosures provided byRealtyTrac. The Trulia Price Monitor also accounts for the regular seasonal fluctuations in asking prices in order to reveal the underlying trend in prices. The Monitors can detect price movements at least three months before the major sales-price indexes do. Our FAQs provide all the technical details.

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Home Prices at a High

We continue to find support in the press for the recovery we are experiencing in the San Diego and La Jolla real estate markets.  Lily Leung with Union Tribune goes over a few monthly and year-end statistics from 2012 in her blog “Home Prices at a High, Suggesting a Recovery.” Leung believes the market will continue to recover this year and the 2012 San Diego and La Jolla real estate statistics appear to support her suggestion as the real estate market made large gains near the end of last year.  The article explains how the home prices continue to rise and transactions continue to increase making the future promising for our San Diego and La Jolla real estate markets.  For more details and statistics, view the article below.

 

HOME PRICES AT A HIGH, SUGGESTING A RECOVERY 

Union Tribune Lily Leung | Business | 1/16/13

More evidence poured in Tuesday to support the notion that the county’s housing market is recovering and will likely continue doing so throughout 2013.

At year’s end, local home prices hit their highest point in 4½ years, based on the latest report from San Diego-based real estate tracker DataQuick. The median price paid for a home sold in the county in December was $366,000, which was 2.2 percent higher than the previous month and 16.2 percent higher than the same time a year ago. The county’s most recent price peak was $370,000 in June 2008. Total home sales also increased. There were 3,757 transactions last month, up by 11.5 percent from November and 13.5 percent from a year ago. A higher-than-normal share of cash buyers and investors, as well as record-low interest rates, pushed the market toward levels of housing activity not normally seen in the fall and winter. Buyers and sellers tend to take a break for the holidays and resume in the spring. ”In 2011, the question was, ‘When should I buy?’ ” said Linda Lee, president of the San Diego Association of Realtors. “In 2012, it was: ‘What can I buy now? What should I buy?’ They’re no longer, ‘Should I buy?’ They’re now worried about how quickly they will be priced out.”Prices have stayed flat or increased during the past 11 months, DataQuick numbers show. From start to finish in 2012, the median home sales price rose by 20 percent. Another milestone: The December median price for sales of single-family homes, which make up the bulk of monthly transactions, almost cracked the $400,000 mark. The last time that happened was 4½ years ago.

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Housing a Sweet Spot for US

In a recent article by John Gittelsohn, he explains how the real estate market has potential to help in the recovery of the US economy.  Similar to our La Jolla homes, home prices have been consistently rising throughout the US. Gittelsohn explains how this should lead to new housing developments being built which would create more jobs and improve consumer optimism.  Though there are not many new La Jolla homes being built at this time, the low inventory and increasing prices should created an urge for nearby homebuilders to resume building homes for the interested buyers until inventory rises. The article also uses many professional opinions and though not everyone believes the real estate recovery has truly begun, most believe to see improvements in year 2013.  If this is the case, expect increases in price and inventory for La Jolla homes this year. For the full story on the possible “sweet spot for US economy,” view Gittelsohn’s full article below.

 

Housing a Sweet Spot for U.S. Economy as Recovery Expands

By John Gittelsohn - Jan 4, 2013 10:20 AM 

David Paul Morris/Bloomberg
Housing starts, including single- and multifamily units, are expected to increase 24 percent to 967,000 in 2013 and sales of new single-family homes are expected to rise 22 percent to 450,000.

At Lambert Ranch, an Irvine, California, housing development where prices start at $1 million, just two of 98 homes are unsold since the project opened in May.

Housing Long-Term Outlook Is `Fuzzy,' Shiller Says

2:48

Dec. 27 (Bloomberg) — Robert Shiller, a professor at Yale University and co-creator of the S&P/Case-Shiller index of property values, talks about the outlook for the U.S. housing market. He speaks with Sara Eisen on Bloomberg Television’s “Surveillance.” (Source: Bloomberg)

U.S. Job Market `Gradually Healing,' Krueger Says

4:46

Jan. 4 (Bloomberg) — Alan Krueger, chairman of the White House Council of Economic Advisers, talks about the December U.S. employment report released today and outlook for federal debt negotiations. He speaks with Deirdre Bolton on Bloomberg Television’s “In the Loop.” Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co., also speaks. (Source: Bloomberg)

Housing a Sweet Spot for U.S. Economy as Rebound Extends to 2013

While new-home sales are at about a third of the level they were at the peak in 2005, builders are growing more bullish. Photographer: Patrick T. Fallon/Bloomberg

The builder, New Home Co., is opening 14 neighborhoods in California this year for buyers who want to seize on low interest rates amid a scarce supply of homes for sale.

“Everywhere we are, we can see it,” Larry Webb, chief executive officer of Aliso Viejo, California-based New Home, said in a telephone interview. “Talk about pent-up demand.”

U.S. home sales and prices are poised to rise in 2013, solidifying a recovery that began last year after a half-decade slump that was the deepest since the Great Depression, according to analysts and economists surveyed by Bloomberg. Record-low mortgage rates and attractive prices, supported by declining unemployment, are luring buyers as the inventory of distressed homes shrinks. Homebuilders are responding by adding supply, bolstering economic growth.

“Increased new residential construction activity will lead to employment gains, which should translate into higher consumption and modest GDP growth,” Robert Wetenhall, a homebuilding analyst with RBC Capital Markets LLC in New York, said in a telephone interview. The U.S. budget deal reached this week removes a cloud to that outlook, he said.

Sales Gains

Sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, based on the median estimates of 15 economists and housing analysts surveyed by Bloomberg News for this story. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012, according to the forecasters, who used varying measures of values.

Building is set to jump after the inventory of new homes fell last year to the lowest level in half a century. Housing starts, including single- and multifamily units, are expected to increase 24 percent to 967,000 in 2013, the most since 2007, according to the median of 17 estimates. Starts will reach an annual pace of 1 million by the end of this year and 1.5 million by the end of 2016, according to a report today by Goldman Sachs Group Inc. analysts led by Hui Shan, who said housing will remain a “bright spot” in 2013.

Purchases of new single-family houses will climb 23 percent to 448,000 this year, extending last year’s rebound from a record low 306,000 in 2011, according to estimates of 17 analysts surveyed for this story.

“We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand,” Mark Kiesel, managing director at Pacific Investment Management Co. in Newport Beach, California, wrote in an e-mail.

Buying Home

Kiesel, who predicted the home-price bubble would burst in 2006, is betting on an extended housing recovery with his investors’ money and his own. In May, six years after selling his last house near the real estate peak, Kiesel bought a Newport Beach home in a sign of his conviction that prices had bottomed. The Pimco Investment Grade Corporate Bond fundoutperformed the broader Barclays US Credit index in 2012 because of its housing-related investments, he said.

“Residential investments potentially could grow between 20 percent and 30 percent” in 2013, adding as much as 0.75 percent to U.S. gross domestic product growth, he said.

The U.S. economy expanded at an annual pace of 3.1 percent in the third quarter, the Commerce Department said Dec. 20. Residential fixed investment climbed almost 14 percent from a year earlier to $370.9 billion, its highest level since the end of 2008. Gross domestic product will increase 2 percent this year, based on the median of 85 estimates in a Bloomberg survey.

Jobs Growth

U.S. payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today. The unemployment rate matched a four-year low, at 7.8 percent.

While new-home sales are at about a third of the level they were at the peak in 2005, builders are growing more bullish. The National Association of Home Builders/Wells Fargo Housing market index last month rose to its highest level since April 2006. The gauge, in which a number above 50 indicates more builders view sales conditions as good than poor, reached 47, compared with a low of 8 in January 2009.

The Standard & Poor’s Supercomposite Homebuilding Index (S15HOME) jumped 84 percent last year, the best performance since 2003. PulteGroup Inc. (PHM), the largest U.S. homebuilder by revenue, surged 188 percent for the biggest gain in the entire S&P 500. (SPX)

‘Virtuous Circle’

Increases in home prices, construction employment and consumer optimism can restart the “virtuous circle,” shifting housing from an economic drag to an economic engine, according to Michael Widner, an analyst with Stifel Nicolaus & Co.

“We see 2013 as the year the housing story progresses from ‘no way’ to consensus, and the GDP and job growth tailwinds being sustainable through 2015,” Widner, based in Baltimore, wrote in a Dec. 19 note.

Homebuilders have added another 2.8 percent in the last two days after the government’s budget deal. The agreement keeps homeownership tax benefits, such as the deductibility of mortgage insurance premiums and limits on capital gains taxes, which may help boost home sales, said Michael Rehaut, a homebuilding analyst with JPMorgan Chase & Co. in New York.

“Not only do we view it as a positive that these favorable provisions remain in place, but additionally, this result continues to support our view that the emerging housing recovery remains a top economic priority for the White House, Congress and the Fed,” Rehaut wrote in a Jan. 2 note.

Uncertain Outlook

Not everyone is convinced the worst is over. Robert Shiller, co-creator of the Case-Shiller index, said the outlook for home prices is “highly uncertain” because more people are becoming renters rather than buyers. The number of U.S. occupied residences increased by a net 1.15 million in the 12 months through Sept. 30, with a gain of 1.32 million rentals and a drop of 175,000 owner-occupied homes, according to the Commerce Department.

“We’ve seen a decline in general interest in home ownership,” Shiller, a professor of economics at Yale University in New Haven, Connecticut, said Dec. 27 on Bloomberg Television. “We’re seeing rentals rise. Our permit data show that new construction has tilted toward multifamily.”

Based on home sales, construction starts and mortgage delinquencies, the housing market is “halfway back to normal,” said Jed Kolko, chief economist of Trulia Inc., a San Francisco- based real estate website operator.

Houston, Chicago

“It’s likely that it will be another three years or so — maybe the end of 2015 or the start of 2016 — before we see that market nationally back to normal,” Kolko said in a Dec. 26 interview on Bloomberg Television. “Some local markets, like Houston and the San Francisco Bay area, are actually close to where the normal areas are. Whereas others, like Chicago and Atlanta, are a long, long way from normal.”

Home prices rose 4.3 percent in October from a year earlier, the biggest year-over-year price gain since May 2010, according to the S&P/Case-Shiller index of 20 cities. The gauge is up almost 9 percent since hitting a 10-year low in March. It fell as much as 35 percent from a July 2006 peak.

Competition among buyers seeking to take advantage of low prices and record-low interest rates propelled the price gains, Kolko said. The rate for a 30-year fixed loan tumbled to an all- time low of 3.31 percent in November, according to Freddie Mac. The number of homes listedfor sale that month fell to the fewest since December 2001, data from the National Association of Realtors show.

Underwater Homeowners

“Price increases will spur more new construction, which will add to inventory,” Kolko said in an e-mail. “And price increases will lift some underwater borrowers back above water, encouraging some of them to sell,” he said, referring to homeowners who owe more than their property is worth.

More homeowners who awaited higher prices are preparing to list their houses this year by painting, laying carpets and sprucing up kitchens and bathrooms, said Alan Smith, a broker with Re/Max Professionals in Littleton, Colorado.

“There’s a lot of updating going on so they’re ready to go to market,” Smith said in a telephone interview from his office in the Denver (SPCSDEN) area, where prices climbed 6.9 percent in the 12 months through October. “A lot of folks’ homes are tired and they haven’t had the money or the time to update them.”

The estimated 11 million underwater homeowners have created a “paradox of negative equity,” according to Sam Khater, senior economist for CoreLogic Inc., an Irvine, California-based real estate data service. Because they can’t sell without taking a loss, these homeowners have helped drive up prices by limiting inventory listed for sale, he said.

Distressed Sales

Distressed home deals already account for a smaller share of transactions. In November, 22 percent of resales were foreclosures or short sales, when the lender agrees to sell for a loss. That was down from 29 percent a year earlier, according to the Realtors group.

The decrease is helping to boost home-price indexes and creating a false sense of a healthier market, said Michael Feder, CEO of Radar Logic Inc., a New York-based property price research company.

“We are not in a real housing recovery yet,” he said in an e-mail. “Current signs of improvement could evaporate quickly.”

Blackstone Buying

Distressed-home inventory has been drying up as investors purchase foreclosed properties and other low-cost homes. Blackstone Group LP, the world’s largest private-equity firm, has been buying as much as $100 million of homes a week to manage as rentals or sell when prices rise.

“We think there’s a lot more home price appreciation to go,” Blackstone President Tony James said at a Dec. 5 conference in New York sponsored by Goldman Sachs Group Inc.

Homes that were seriously delinquent, in the foreclosure process and not yet listed for sale, known as the shadow inventory, shrank 12 percent in the 12 months through October to 2.3 million units, CoreLogic reported Jan. 2.

“Given the long foreclosure timelines in many states, the current shadow inventory stock represents little immediate threat to a significant swing in housing market supply,” Mark Fleming, CoreLogic’s chief economist, said in a statement. “Investor demand will help to absorb the already foreclosed and REO properties in the shadow inventory in 2013.”

Buyer Traffic

Builders such as New Home’s Webb are seeing a lot of interest from prospective buyers. More than 6,500 people visited Lambert Ranch’s model homes on opening weekend in May, and high traffic continues from homeseekers with resources to buy, Webb said.

Shoppers will soon have more options. In Orange County, California, where New Home Co. is based, two dozen subdivisions are opening this year, the most since 2006, Webb said.

Webb, a homebuilder for 25 years, co-founded the New Home Co. in 2009 after his previous company, John Laing Homes, went through bankruptcy liquidation. Just three years earlier, as the housing prices were about to crash, John Laing was sold for $1.05 billion to Emaar Properties PJSC (EMAAR), a Dubai-based developer.

“We’re not looking for some crazy boom,” Webb said. “We’d just like to see consistent sales and modest price appreciation.”

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Mortgage Rates Remain Low

With recent economic news and data, mortgage rates have remained stagnant due to the minor changes in the economy these past couple weeks.  Sam Baugh from Guaranteed Rate released an report showing a few of the important economic indicators that directly affect the mortgage rates and La Jolla homes sales.  These changes in the economy and mortgage rates play a significant role in La Jolla homes sales and as mortgage rates have stayed at a relatively low rate, it continues to help improve the La Jolla real estate market. The article also describes how retail sales and industrial production will be the most important economic indicators in the next few weeks and if expectations are met, we should see mortgage rates drop even lower.  In this case, the demand to find homes is growing and the future appears to be positive for La Jolla homes sales. Please read the article below for more detail and statistics.

Sam Baugh | Guaranteed Rate

Feb 11, 2013

Mortgage rates remained in a fairly confined range last week, with limited economic data or news to push rates significantly either way. Recent, positive economic news has moved mortgage rates up, off of record low levels, but rates remain extremely low, in historical terms. While we do have the Federal Reserve actively working to keep rates low, ongoing improvements in the economy, even small ones, may drive rates up, as overall optimism for the global economy has improved over the last few weeks. If we continue to create a series of fiscal cliffs, rates will be held low, as the economy waits on the government.

Retail Sales and Industrial Production will be the most important economic indicators of this week. With expectations that sales will pull back, an increase in sales would likely push mortgage rates upward. If both Retail Sales and Industrial Production come in near expectations, mortgage rates may slip back down slightly, waiting for more positive economic news.

 

 

 

 

 

 

 

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Top 10 American Housing Turnarounds

In a recent Business Insider article Mamta Badkar describes how the U.S. housing market “has turned the corner in 2012.”  Consistant with the majority of the United States, La Jolla real estate has also shown improvements with home prices rising this past year.  Badkar states the home prices in the United States were up 5.1 percent from last year with the largest increases taking place in the 4th quarter.  The report also gives details on the top ten cities that experienced the highest increases in home prices from 2011 to 2012.  Though La Jolla real estate was not in the top ten this past year, home prices have continued to consistently rise for La Jolla real estate.  Read the article below for more details on the top ten “housing turnarounds.”

 

 

 

 

 

 

 

The 10 American Housing Markets That Made Tremendous Turnarounds In 2012

Mamta Badkar | Jan. 4, 2013, 6:00 AM | 128,001 | http://www.businessinsider.com/top-10-turnaround-housing-markets-of-12-2013-1 – comments15

 

 

Dave Gates via Flickr

The U.S. housing market turned the corner in 2012. The latest home price report from Trulia says home prices were up 5.1 percent year-over-year nationally.

And the pace of increases has also picked up in the year. With home prices up 0.8 percent quarter-over-quarter in Q1, and up 2.3 percent in Q4.

We drew on Trulia’s latest report to highlight the top “turnaround markets” of 2012, i.e. markets with the biggest increase in home prices between December 2011 and December 2012.

Note: The report looks at the 100 largest metros in the U.S. All price and rent changes are on a year-over-year basis.

 

Tacoma, Washington

Wikimedia Commons

Difference between 2011-2012:
+17.7 percent

Change in price December 2012:
+4.0 percent

Change in price December 2011:
-13.7 percent

Median price for Q4 2012:
$209,950

Source: Trulia

 

 

Fresno, California

AP

Difference between 2011-2012:
+17.7 percent

Change in price December 2012:
+9.0 percent

Change in price December 2011:
-8.7 percent

Median price for Q4 2012:
$184,000

Source: Trulia

 

 

Sacramento, California

AP Images

Difference between 2011-2012:
+17.9 percent

Change in price December 2012:
+9.5 percent

Change in price December 2011:
-8.5 percent

Median price for Q4 2012:
$249,900

Source: Trulia

 

 

Atlanta, Georgia

Brett Weinstein via Flickr

Difference between 2011-2012:
+18.9 percent

Change in price December 2012:
+9.0 percent

Change in price December 2011:
-9.9 percent

Median price for Q4 2012:
$159,000

Source: Trulia

 

Salt Lake City, Utah

Dave Gates via Flickr

Difference between 2011-2012:
+20.5 percent

Change in price December 2012:
+14.0 percent

Change in price December 2011:
-6.5 percent

Median price for Q4 2012:
$234,900

Source: Trulia

 

San Jose, California 

wiki commons

Difference between 2011-2012:
+20.8 percent

Change in price December 2012:
+16.1 percent

Change in price December 2011:
-4.7 percent

Median price for Q4 2012:
$589,950

Source: Trulia

 

Oakland, California 

Wikimedia Commons

Difference between 2011-2012:
+21.0 percent

Change in price December 2012:
+12.7 percent

Change in price December 2011:
-8.4 percent

Median price for Q4 2012:
$384,750

Source: Trulia

 

Phoenix, Arizona 

Wikimedia Commons

Difference between 2011-2012:
+21.8 percent

Change in price December 2012:
+26.0 percent

Change in price December 2011:
+4.2 percent

Median price for Q4 2012:
$189,000

Source: Trulia

 

Seattle, Washington 

Flickr/dherrera_96

Difference between 2011-2012:
+24.0 percent

Change in price December 2012:
+10.2 percent

Change in price December 2011:
-13.8 percent

Median price for Q4 2012:
$299,950

Source: Trulia

 

Las Vegas, Nevada 

Ethan Miller/Getty Images

Difference between 2011-2012:
+27.5 percent

Change in price December 2012:
+16.3 percent

Change in price December 2011:
-11.2 percent

Median price for Q4 2012:
$147,000

Source: Trulia

 

 

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Home Prices Hit a Milestone

Nick Timiraos explains in a recent article how home prices have hit a “milestone” in the year 2012.  Similar to our La Jolla homes for sale, the article describes how there is a shortage of homes and with some help from competitive buyers, home prices have continued to increase making 2012 the first year to post an increase in home prices since 2006.  Timiriraos also explains how foreclosures have continued to slow down similar to the La Jolla homes for sale.  The article also explains how some believe the home increases will slow down this year due to many borrowers still owing more money than their home is worth and strict mortgage lending standards does not help the case. However for the meantime, our La Jolla homes for sale have continued to increase in price along with the majority of the United States. Read the article below for details on the “Milestone.”

Home Prices Hit a Milestone

Updated December 26, 2012, 6:41 p.m. ET

Growing Demand, Shrinking Supply Buoy Housing Market; ‘Tide Has Changed’

By NICK TIMIRAOS

Home prices are on track to notch their first yearly gain since 2006, the strongest performance since the housing bust and a development that could accelerate the real-estate rebound even as the broader economy stutters. The housing market’s revival has had several false dawns in recent years, but a recovery that began in the spring has strengthened throughout the summer and fall. The latest confirmation came on Wednesday, when the Standard & Poor’s/Case-Shiller 20-city index showed that prices rose by 4.3% from a year ago in October. Since January, prices are up 6.9% so far this year, the largest year-to-date gain since 2005. A separate index released Wednesday by Lender Processing Services Inc.LPS +7.23% showed that national home prices were up by 5.2% this year through October.

U.S. home prices slipped in October from a month earlier amid expected seasonal weakness but were up from a year earlier, according to Standard & Poor’s Case-Shiller home-price indexes. WSJ’s Nick Timiraos analyzes the data and looks ahead to 2013.

“The tide has changed,” said Ivy Zelman, chief executive of research firm Zelman & Associates. “People feel it’s OK to go back into residential real estate—it’s no longer taboo—and that change in sentiment could have a very powerful effect.” Prices have risen this year amid stronger demand and sharp declines in the number of homes for sale. Banks slowed down foreclosures after abuses in processing paperwork surfaced two years ago. Since then, banks have become more aggressive at modifying loans or approving short sales, where the home is sold for less than the amount owed. The decline in new foreclosures has reduced the number of homes on the market that sell for large discounts. Homeowners who normally would sell their properties have been holding them off the market rather than sell at what they perceive to be a lowball prices, leaving inventories of previously owned homes at an 11-year low. Weak home construction in past years also is a factor and has left inventories of new homes for sale near the lowest levels in at least 50 years. Demand, meanwhile, has picked up, first as investors scooped up perceived discounts on properties that can be rented out or resold quickly for a profit. Traditional buyers—those planning to live in the property and not flip it—also returned to the market, drawn by record-low mortgage rates, rising rents and steady job gains that are increasing household formation. “People got tired of living in mom and dad’s basement, and rents have gotten much higher than your mortgage payment,” said Glenn Kelman, chief executive of Redfin, a real-estate brokerage.

[image]

To be sure, housing markets are still fragile and face stiff headwinds. Mortgage lending standards are still strict, as lenders scrutinize appraisals and borrowers’ income history to make bulletproof mortgages. Millions of borrowers owe more than their homes are worth or don’t have enough equity to sell their home and make a down payment on a comparable property. Median sales prices of previously owned homes stood at $180,600 in November, according to the National Association of Realtors, and have posted year-over-year gains for nine months, the longest such streak since May 2006, when home prices peaked. Still, sales of existing homes in November were up 14.5% from a year earlier, putting them on pace to reach their highest level since 2007. On Thursday, the Census Bureau is set to report new-home sales for November. The upshot is that more buyers have been chasing fewer homes for sale, putting upward pressure on prices. “We’ve been seeing just crazy competition. Supply and demand has tipped in the seller’s favor,” said Nani Luculescu, a real-estate agent in Anaheim, Calif.

Last month, she represented a buyer who made the winning bid—among 52 offers—for a $320,000 four-bedroom home in Garden Grove, Calif., that sold for 10% more than the asking price. Although the home drew better offers, the owner sold to her clients, a newlywed couple buying their first home, after they included pictures of themselves and their pet dogs—two Pugs—in a cover letter. Some buyers aren’t only bidding above the list price, but also are making all-cash offers and forgoing home inspections in an effort to make the sale as easy as possible for the seller. Frustrated by a lack of inventory, others are instead purchasing new homes. Sonal Basu, a real-estate agent in San Francisco’s East Bay, said in August she noticed that prospective buyers began camping out in tents at the new-home development where she lives in San Ramon, Calif. Some of the “campers,” she says, are being paid $250 a day by buyers to wait in line for them. Since August, every area new-home development has also had campers waiting in line to buy homes, she said. “A year and a half ago, nobody wanted to move out here because they felt it was the boonies,” Ms. Basu said. “Now, they’re not hesitating with this commute.”

Prices are rising in part because the share of “distressed” homes—those selling out of foreclosure or in short sales—has dropped. While 18 of 20 cities posted year-over-year price gains in October, the largest increases have taken hold in some cities hit hard by the housing bust. In Phoenix, for example, prices have jumped by 21.7% over the past year. Prices gained by 10% in Detroit and 8.5% in Miami. Economists say many such gains aren’t sustainable and instead reflect prices rebounding from very low levels. “They’re not going to continue at that pace,” said Thomas Lawler, an independent housing economist in Leesburg, Va. He said he expected prices to go up next year, but at a slower pace than this year. Also, some states where banks have struggled to follow court-administered foreclosure processes have large overhangs of mortgages where borrowers haven’t made any payments in at least a year. Those homes could eventually hit the market, putting pressure on prices if demand isn’t strong. Prices in New York and Chicago, which both have large overhangs, saw prices decline by 1.2% and 1.3% in October from one year ago. A more immediate concern is how consumer confidence might fare if lawmakers don’t reach a solution to avoid the “fiscal cliff,” a raft of automatic tax increases and spending cuts set to take place in early 2013. For now, low inventories of distressed properties are finally boosting the fortunes of the nation’s home builders that have long been sidelined by competition from cheap bank-owned properties. The stock prices of U.S. home builders, as measured by the Dow Jones home construction index, were up more than 75% year-to-date as investors are betting that the housing recovery could be sustainable. Others are plowing money into startups that invest in single-family homes as rentals. That, in turn, is ramping up construction hiring and spending on everything from lumber to cement to air-conditioning units. “It hasn’t gotten to any big level yet, but our carpet businesses and brick businesses and all of that will come on with residential construction, and that has turned,” said Warren Buffett, chief executive of Berkshire Hathaway, in an interview last month with CNBC. Real-estate executives say their biggest worry right now is that more homes aren’t available to meet demand. Mr. Kelman says he is looking to increase Redfin’s workforce of 400 agents nationally by 50% by the end of January. “I’m going across the country meeting with managers, and the only topic we’re talking about is hiring,” he said. Earlier this year, the company ended up referring about half of its potential customers to other companies because “demand outstripped the supply of agents,” he said. Redfin is unusual among real-estate companies because it pays a salary and benefits to its agents instead of commissions. “Our model means we have to go long on real estate,” Mr. Kelman said, “and we did not go long enough.”

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Foreclosures in California Reach A Five Year Low

In a recent article, DQ News explains a few possible reasons behind the five year low in California Foreclosures which includes our La Jolla homes.  Throughout the second quarter (April-June), DQ News states there were 54,615 Notices of Default (NODs) recorded in California.  These numbers would help to indicate a 2.9 percent drop in foreclosures from the first-quarter of 2012 and a 3.6 percent drop from the 2011 second-quarter.  DQ News goes into detail on how the improving housing market, the burn off of mortgages from 2005 through 2007 and the growing use of short sales have helped to get the foreclosure rate down in California. These stats also coincide with La Jolla homes as foreclosures have continued to drop.  Check below for the full article and more details about the foreclosures for California and La Jolla homes.

California Q2 Foreclosure Activity Lowest in Five Years

July 23, 2012

La Jolla, CA.–The number of California homes entering the formal foreclosure process dropped in the second quarter to its lowest level since early 2007. The decline stems from a combination of factors, including an improving housing market, the gradual burning off of the most egregious mortgages originated from 2005 through 2007, and the growing use of short sales, a real estate information service reported.

A total of 54,615 Notices of Default (NODs) were recorded on houses and condos during the April-though-June period. That was down 2.9 percent from 56,258 for the prior three months, and down 3.6 percent from 56,633 in second-quarter 2011, according to San Diego-based DataQuick.

Last quarter’s 54,615 was the lowest since 53,943 NODs were recorded in second-quarter 2007. NODs peaked in first-quarter 2009 at 135,431. DataQuick’s NOD statistics go back to 1992. The year-over-year drop was most noticeable in the Bay Area, where the 8,572 NOD filings marked a 13.4 percent drop from 9,893 a year ago.

“The foreclosure process has always been the sanitation department of the housing sector. It’s where financial distress is processed. The question is whether these lower NOD numbers mean that there’s less distress to process, or if we’re just seeing distress get processed at a slower pace,” said John Walsh, DataQuick president.

“Obviously the economy has been on the mend – however slowly. But because housing is widely seen by economists as the biggest drag on growth, some interesting alternatives to the foreclosure process are being discussed, such as the use of eminent domain to buy and restructure mortgages. Needless to say, we’re all watching closely,” he said.

The most active “beneficiaries” in the formal foreclosure process last quarter were Bank of America (8,299), JP Morgan (7,497), Wells Fargo (7,131), Aurora Bank (1,984) and Bank of New York (1,838).

The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), Cal-Western Reconveyance Corp (Wells Fargo) and NDEx West (Wells Fargo).

Most of the loans going into default are still from the 2005-2007 period. The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.

NOD filings continued to fall last quarter in communities across the home price spectrum. However, mortgage defaults remained far more concentrated in California’s most affordable neighborhoods. Zip codes with second-quarter 2012 median sale prices below $200,000 collectively saw nearly 9 NODs filed for every 1,000 homes in those zip codes, while the ratio was 5.6 NODs filed per 1,000 homes for zip codes with $200,000 to $800,000 medians. For the group of zip codes with median sale prices above $800,000, there were 2.2 NODs filed per 1,000 homes.

On primary mortgages, California homeowners were a median eight months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $17,864 on a median $317,019 mortgage.

On home equity loans and lines of credit in default, borrowers owed a median $5,227 on a median $75,369 second mortgage. The amount of the credit line that was actually in use cannot be determined from public records.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

Although 54,615 default notices were filed last quarter, they involved 53,664 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

Of the state’s larger counties, mortgages were least likely to go into default in San Francisco, Marin and San Mateo counties. The probability was highest in Tulare, San Joaquin and Sacramento counties.

Trustees Deeds recorded (TDs), or the finalized loss of a home to the formal foreclosure process, totaled 21,851 during the second quarter. That was down 27.8 percent from 30,261 for the prior quarter, and down 48.5 percent from 42,465 for second-quarter 2011.

Last quarter’s Trustees Deeds total was the lowest for any quarter since the second quarter of 2007, when 17,458 were filed.

The all-time peak for Trustees Deeds was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.

Just as with NOD filings, Trustees Deeds, or foreclosures, remained far more concentrated in the state’s most affordable neighborhoods. Zip codes with second-quarter 2012 median sale prices below $200,000 collectively saw 4.3 homes foreclosed on for every 1,000 homes in existence. That compares with 1.9 foreclosures per 1,000 homes for zip codes with medians between $200,000 and $800,000, and less than one – 0.5 – foreclosure per 1,000 homes in the group of zip codes with $800,000-plus medians.

While 1.45 million of California’s roughly 8.7 million houses and condos have been involved in a foreclosure proceeding the past five years, 835,000 went through the whole foreclosure process. The other 615,000 were either sold, or the payments were brought current.

Foreclosure resales accounted for 27.9 percent of all California resale activity last quarter, down from a revised 33.6 percent the prior quarter and 35.6 percent a year ago. It peaked at 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 7.3 percent in San Francisco County to 47.4 percent in Madera County.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 18.0 percent of statewide resale activity last quarter. That was down from an estimated 20.1 percent the prior quarter and up from 17.4 percent a year earlier. In terms of the number of short sales, last quarter’s estimated 20,141 was up 13.0 percent from the prior quarter and up 10.2 percent from a year earlier.

On average, homes foreclosed on last quarter took 7.7 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s down from an average of 8.5 months the prior quarter and down from 10.0 months a year earlier.

At formal foreclosure auctions held statewide last quarter, an estimated 40.1 percent of the foreclosed properties were bought by investors or others who don’t appear to be lender or government entities. That was up from an estimated 33.4 percent the previous quarter and up from 28.3 percent a year earlier, DataQuick reported.

 

Notices of Default (Trustees Deeds further down)
houses and condos

County/Region 2011Q2       2012Q2       Yr/Yr%
Los Angeles 11,250       10,568        -6.1%
Orange   3,705        3,599        -2.9%
San Diego   4,158        4,099        -1.4%
Riverside   5,534        5,677         2.6%
San Bernardino   4,334        4,487         3.5%
Ventura   1,133        1,152         1.7%
Imperial     270          250        -7.4%
Socal 30,384       29,832        -1.8%
San Francisco     402          295       -26.6%
Alameda   2,030        1,789       -11.9%
Contra Costa   2,552        2,214       -13.2%
Santa Clara   1,793        1,474       -17.8%
San Mateo     732          613       -16.3%
Marin     279          220       -21.1%
Solano   1,185        1,137        -4.1%
Sonoma     738          680        -7.9%
Napa     182          150       -17.6%
Bay Area   9,893        8,572       -13.4%
Santa Cruz     245          258         5.3%
Santa Barbara     487          442        -9.2%
San Luis Obispo     345          313        -9.3%
Monterey     489          443        -9.4%
Coast  1,566        1,456        -7.0%
Sacramento   3,397        3,202        -5.7%
San Joaquin   1,675        1,580        -5.7%
Placer     849          788        -7.2%
Kern   1,485        1,508         1.5%
Fresno   1,612        1,637         1.6%
Madera     284          279        -1.8%
Merced     510          483        -5.3%
Tulare     714          831        16.4%
Yolo     201          222        10.4%
El Dorado     377          289       -23.3%
Stanislaus   1,094        1,133         3.6%
Kings     184          230        25.0%
San Benito      85          105        23.5%
Yuba     195          157       -19.5%
Colusa      35           44        25.7%
Sutter     217          175       -19.4%
Central Valley 12,914       12,663        -1.9%
Mountains*     635          648         2.0%
North Calif*   1,241        1,444        16.4%
Statewide* 56,633       54,615        -3.6%

 includes additional counties

Trustees Deeds Recorded (number of homes foreclosed on)
houses and condos

County/Region   2011Q2     2012Q2    Yr/Yr%
Los Angeles    6,733       3,553       -47.2%
Orange    1,887       1,052       -44.3%
San Diego    2,763       1,391       -49.7%
Riverside    4,810       2,395       -50.2%
San Bernardino    4,083       2,012       -50.7%
Ventura      697         360       -48.4%
Imperial       274         147       -46.4%
Socal   21,247      10,910       -48.7%
San Francisco      156         103       -34.0%
Alameda    1,317         638       -51.6%
Contra Costa    1,799         900       -50.0%
Santa Clara      991         392       -60.4%
San Mateo      328         182       -44.5%
Marin      130          74       -43.1%
Solano      916         475       -48.1%
Sonoma      495         258       -47.9%
Napa      129          61       -52.7%
Bay Area    6,261       3,083       -50.8%
Santa Cruz      191          84       -56.0%
Santa Barbara      319         185       -42.0%
San Luis Obispo      270         107       -60.4%
Monterey      425         167       -60.7%
Coast    1,205         543       -54.9%
Sacramento     3,160       1,562       -50.6%
San Joaquin    1,399         729       -47.9%
Placer      641         320       -50.1%
Kern    1,555         802       -48.4%
Fresno    1,392         780       -44.0%
Madera      298         151       -49.3%
Merced      585         230       -60.7%
Tulare      607         408       -32.8%
Yolo      231         110       -52.4%
El Dorado      393         149       -62.1%
Stanislaus    1,199         533       -55.5%
Kings      157         118       -24.8%
San Benito       73          47       -35.6%
Yuba      184          91       -50.5%
Colusa       40          17       -57.5%
Sutter      160         113       -29.4%
Central Valley   12,074       6,160       -49.0%
Mountains*       525         358       -31.8%
North Calif*    1,153         797       -30.9%
Statewide*   42,465      21,851       -48.5%

* includes additional counties

Source: DataQuick; DQNews.com

Media calls: Andrew LePage (916) 456-7157

Copyright 2012 DataQuick. All rights reserved.

 

http://dqnews.com/Articles/2012/News/California/CA-Foreclosures/RRFor120723.aspx

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Rental Rates on the Rise

In a recent short article by Morgan Scott, he states the rental rates for San Diego and La Jolla Rentals have been on the rise since 2010.  The article shows how the average rent for San Diego and La Jolla rentals has been increasing for 1 and 2 bedroom units on a consistent basis for the past few years.   Though rental rates are just one indicator on how to measure the rental market, this is a positive sign for San Diego and La Jolla rentals.  For more information and details on the 2012 rental rates and vacancy rates, check out the article below.

2012  San Diego Rental Market
Did you know that San Diego rents on average in 2012 for 1 bedroom and 2 bedroom units have been on the increase since 2010. $1,063 – Average rent for a 1 Bedroom Apartments in 2012*
$1,460 – Average rent for a 2 Bedroom Apartments in 2012*

Average rent growth is consistent month-to-month, quarter-to-quarter, and year-to-year for the past two years in San Diego County.

.5% increase month on month**
.8% increase quarter on quarter**
.3% increase year on year**

Rental rates are just one metric to measure the rental market. Vacancy rates are a good indicator for demand of rental units. Here are the spring 2012 vacancy rates for San Diego County.

Vacany Rates by Region
5.6% – East County***
4.9% – North County***
4.8% – South Bay***
3.4% – City of San Diego***

* – ApartmentRatings.com
** –
Zillow.com
*** – San Diego County Apartment Association

 

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Real Estate Rebound in the Near Future

Articles continue to rise in regards to the real estate rebound.  As the country and La Jolla real estate markets continue to show positive signs, many continue to vision the real estate rebound is well on its way.  In a recent article by Vanguard, they go into detail on how the past year has shown numerous positive signs for the real estate world.  Not only are the existing home sales continuing to rise but sales for new construction have also been on the rise.  Vanguard states the national median existing-home price has now rose 6 months in a row which has not occurred since 2006.  They also describe how the construction of new homes in the US has risen 29% from last year.  Though the La Jolla real estate market has not contributed to the new construction of homes, the La Jolla real estate market has also shown an increase of home prices within the past year.  View the full article below and visit the link below for the full article by Vanguard.

Economic Week in Review: Real estate rebound may be for real

September 21, 2012

In a light week for economic news, positive developments on the real estate front dominated the headlines. Numbers were up for existing-home sales and new-home construction. In the only other report issued this week, The Conference Board’s index of leading indicators fell slightly. For the week ended September 21, the S&P 500 Index decreased 0.4% to 1,460 (for a year-to-date total return—including price change plus dividends—of about 18%). The yield on the 10-year U.S. Treasury note fell 11 basis points to 1.77% (for a year-to-date decline of 12 basis points).

Existing-home sales show improvement

Sales of previously owned homes jumped 7.8% to an annual rate of 4.82 million, an indication the housing market’s long-awaited rebound may be under way. Lawrence Yun, National Association of Realtors chief economist, said buyers are reacting to better conditions. The national median existing-home price rose to $187,400 in August, the first time prices climbed six straight months since December 2005 to May 2006. Sales were up in all four of the nation’s regions. Single-family home sales advanced 8%, while condominium and co-op sales increased 6.1%. Housing inventory grew 2.9% in August, but the number of months it would take to sell the entire inventory of homes at the current sales pace fell to 6.1 months from 6.4 months.

Economic chart

Housing starts resume rise

Construction of new residential homes climbed 2.3% to an annual rate of 750,000 in August, although the dip in July’s numbers was revised downward by almost 2% more. Housing starts are 29% higher compared with a year ago, but they are still well below levels seen before the downturn.

“Housing starts reflect both the deep adjustments the housing market has gone through and how much progress has been made since the crash,” said Roger Aliaga-Díaz, Vanguard senior economist. “The growth in housing starts since last year is great news, but at 750,000 we’re still only half of the way to the normal pace of housing construction.”

All of August’s gains came from single-family housing starts, which rose 5.5%, while multi-family starts declined 4.9%. The Midwest led the gains on a regional basis, with starts also up in the South but down in the Northeast and the West. Housing permits, an indicator of the pace of future construction, fell 1% from July but are ahead nearly 25% from a year ago. Completions increased 0.7% from July and 11.7% from a year ago.

http://www.vanguard.com/us/insights/article/economic-week-review-09212012

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