Source:  Realtor Mag

House flipping activity surged to an 11-year high this year, with more than 207,000 homes flipped, according to ATTOM Data Solutions, a real estate data firm.  But the key is knowing where to be and when.  "The sweet spot for successful home flipping is finding the neighborhoods just emerging as the next hot neighborhoods in a city," says Daren Blomquist, a senior vice president at ATTOM Data Solutions.  The firm says the average profit for a housing flip in 2017 was $68,000.

Realtor.com ranked the 200 largest metros according to the share of all home sales categorized as a flip (defined as any type of home that is bought and resold within a three- to 12-month period).  Researchers limited their rankings to two metro per state for geographic diversity and only included markets where the average profit was at least $30,000.  Two of the top ten markets were California cities, with Fresno taking second place and Los Angeles ranking seventh in the nation.

Check out the full story here:
http://www.realtormag.realtor.org/daily-news/2018/05/23/best-housing-markets-for-home-flippers


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Source:  Trulia

For the first time in more than two years, when it comes to price, home-buyers and sellers are finally moving closer together.  Market mismatch - Trulia's measure of the price gap between search interest and available listings - is flat from a year ago, but has dropped 15 percent, falling to 11.1 from 13.1 the previous quarter; the first such drop since prior to the start of 2016.  In other words, more home-buyers are searching at price points where listings are more common.

- What looks like good news among very tough market conditions for starter home-buyers comes with some hefty caveats.  Rather than being a story of increasing inventory meeting high demand for starter homes, instead, searches are just shifting increasingly toward pricier options.

- Nationally, the mismatch gap shrunk to 11.1 from 13. 1 last quarter as the share of searches for starter homes fell to 28.7 percent from 31.1 percent.  While part of this shift could be attributed seasonality, it is the first quarter to quarter drop we have seen and compares with a mismatch increase from 9.7 to 11.1 during the same period last year.

- It's not all good news though as the starter listing's share continued to slide and is now down to 22.4 percent of all listings from 22.8 percent last quarter and the first quarter of 2017.

- Premium buyers got pinched this quarter for the first time in more than two years.  Premium home searches made up 41.4 percent of all searches and comprised 52.5 percent of listings.  Still comfortable, but down from a larger gap of 38.4 percent of searches going to 51.5 percent of listings last quarter and on par with the mismatch a year ago.

- What looks like starter home buyer relief on a national level may just be signs of shoppers giving up.  Recent changes are driven by search activity growing more slowly for starter homes than for trade-up and premium homes.

- San Francisco saw the biggest improvement for starter home shoppers from last quarter as starter inventory increased to 40.2 percent from 36.1 percent of all listings and searches to those homes dropped to 42.7 percent of all searches.

Check out the full story here:
https://www.trulia.com/blog/trends/mismatch-q12018    

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Source:  Housing Wire

As housing inventory sank to its all-time low during the fourth quarter, home prices increased, creating all-new highs in many U.S. markets, according to the latest quarterly report form the National Association of Realtors.

The national median existing single-family home price in the fourth quarter came in at $247,800, up 5.3 percent from $235,400 in the fourth quarter of 2016.  During the third quarter, home prices increased 5.6 percent from the third quarter of 2016.

Single-family home prices increased in 92 percent of measured markets, or 162 out of 177 metropolitan statistical areas.  In fact, 15 percent of metro areas saw double digit increases, and now 64 percent of markets reached a new all-time high in home prices.  This is up by 18 metros from last quarter.

Total existing home sales, including single family and condos, increased 4.3 percent during the fourth quarter to a seasonally adjusted annual rate of 5.62 million, up from 5.39 million in the third quarter.  This is also up 1.3 percent from the 5.55 million pace in the fourth quarter of 2016.

But due to these higher levels of home sales, existing homes for sale shrank 10.3 percent from the 1.65 million homes at the end of the fourth quarter of 2016 to an average supply of just 3.5 months.  This represents a new low in housing inventory and is down from 4.2 months of supply in the fourth quarter of the previous year.

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Source:  The Sacramento Bee

Latinos are the largest ethnic group in California but a new analysis reveals they make up just a fraction of people applying for conventional home loans and were more likely to be denied loans in two rural Northern California metro areas.

A national analysis by Reveal from The Center for Investigative Reporting found Latinos accounted for nearly half of the population in the Los Angeles area in 2015 - 2016, yet made up just 18 percent of conventional loan applications.

In the Central Valley city of Fresno, Latinos made up more than half of the population but only accounted for a quarter of traditional mortgage applications.

The data also showed disparities in two rural Northern California communities:  in Chico, when Latinos did apply for such loans, they were nearly 2.5 times more likely than whites to be denied; in Salinas, they were 1.7 times more likely to be denies.  The analysis compared applicants with similar incomes, loan amounts and purchasing neighborhood, among other factors.

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Source:  The Orange County Register

The dream of homeownership is slipping away for residents in many Southland cities as renters increasingly outnumber those who own homes.

That's the takeaway from figures released this week by the nationwide apartment search website RENT Cafe.  The latest communities to achieve this distinction are Pasadena, Lancaster, San Bernardino, Anaheim and Santa Ana.

In 2006, 49.9 percent of Pasadena's population were renters.  But by 2016, that had risen to 58.3 percent, an increase of nearly 17 percent.

Lancaster has experienced a similar trend with an even more dramatic increase.  Its share of renters rose from 36.2 percent in 2006 to 51 percent in 2016, an increase of nearly 41 percent.

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Source:  Realtor Mag

Mortgage rates are inching higher, and most home buyers seem unfazed by it.  Only 6 percent of prospective home buyers recently surveyed said they would stop their home search if mortgage rates rose above 5 percent, according to a new survey released by the real estate brokerage Redfin of more than 4,000 consumers.

Making Sense of the Story

- Mortgage rates hovered below 4 percent at the end of 2017, but in January the average 30-year fixed-rate mortgage surpassed 4 percent.

- For the last five consecutive weeks, rates have been on the rise, with the 30-year mortgage rate averaging 4.32 percent in Freddie Mac's most recent survey.

- However, 27 percent of consumers who plan to buy a home in the coming year did say that a 5 percent mortgage rate would cause them to slow their plans to buy.

- A quarter of buyers said that an increase would have zero impact on their plans.

- Higher rates may cause some buyers to rush their timelines.  Twenty-one percent of potential buyers surveyed said that a rate bump to 5 percent would cause them to increase their urgency to buy.

- Another 21 percent said that such an increase would instead make them want to look in more affordable areas or to buy a smaller home.

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Source:  CNBC

Homes today are selling in about 40 days on average, almost two weeks faster than a year ago.  But it is taking a lot longer for shoppers to find a home to buy.

Two-thirds of buyers are shopping for more than three months before signing a deal, according to a new survey from the National Association of Home Builders.  Why so long?  They can't find a home they can afford.

Forty-two percent of buyers surveyed said prices were out of reach for the homes they wanted.  Home prices have been rising at a fast clip in the past year - faster than income growth and inflation.  The primary reason is a lack of homes for sale, especially lower-priced homes.

About a third of those surveyed said they couldn't find a home with features they wanted or in a neighborhood they wanted.  Back to prices though, 27 percent said they kept getting outbid on their offers.  Bidding wars are now the rule, not the exception, in most major U.S. markets.


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Source:  Housing Wire

In 2016, the Department of Housing and Urban Development announced, with much fanfare and controversy, that the Federal Housing Administration would begin insuring mortgages that also carry liens created by the Property Assessed Clean Energy program, also called PACE.

But that was 2016.  Things are much different now.  HUD announced that the Trump administration is reversing the Obama administration's decision to insure FHA mortgages with PACE liens.

Through the PACE program, homeowners can obtain financing to make improvements to their homes to increase the home's energy efficiency.  Under programs like PACE, single-family energy retrofit financing programs can be structured to make loans through the homeowner's property tax assessment and require that borrowers repay their loans as part of their property tax bill, but in some states the PACE liens are given super priority status above the home's mortgage.

But the FHA is concerned about the impact of the PACE liens.

Source:  The Mercury News

As home prices skyrocket across the state, there's one California city where they've shot up more than anywhere in the U.S. - nearly doubling in the past five years.

No, it's not San Francisco, San Jose, or Oakland.  It's not even in the Bay Area.

It's Stockton, the Central Valley community twice dubbed America's "most miserable" city by Forbes Magazine because of its high rates of housing foreclosures, unemployment and violent crimes.

The jump in home prices in Stockton and neighboring Lodi - up about 92 percent over the past five years - is dramatic evidence of the ripple effects of the Bay Area's tight housing market and the increasingly out-of-reach cost of living here.

As people flee San Francisco and Silicon Valley in search of cheaper housing - heading to places like Stockton, Oakland and Sacramento - prices in those second-tier markets are rising.

Source:  San Diego Union-Tribune

The Union-Tribune examined if San Diego County can build more housing to slow the pace of rent and home price increases, concluding that zoning changes, a change in dwelling preference and reduced regulation are sorely needed if the current under-supply issue is to be properly addressed.

Making Sense of the Story:

- San Diego County is now rated as the 11th least affordable housing market worldwide, according to 2017's Demographia International Housing Affordability Survey.

- 2016 in San Diego County, only about 10,000 housing units were approved, and most were for rent, not for-sale homes and condos.

 - The price premium between San Diego and the national average has widened from 30.6 percent to 157.4 percent, census surveys show.  In 2017, the average value of a San Diego County house was listed at $527,600, compared with $477,500 statewide and $205,000 nationwide.

- On the rental side, vacancy rates stand at only 2 or 3 percent in most neighborhoods when at least 5 percent is considered optimal for a balanced market.

- What actually gets built in San Diego is aimed at the upper end of the market in both rental and for-sale housing.  That's where the most profit margin lies, given the restrictions imposed by lenders after the real estate collapse a decade ago.

- Since 2000, the county population has grown by 310,383 while the housing count is up by 161,468 units falling 40,500 homes short of what projected population growth would dictate.  San Diego should be building 16,500 homes per year over the next decade to make up for the shortfall and cover continued growth.

- Zoning changes, an emphasis on town-homes and reduced regulation would likely speed up construction, as would reducing opportunities for anti-development litigation.  A streamlined permitting process and a change in parking requirements would also help resolve the situation.