Home Prices Up 17% (Highest Increase Since 2007)

Home sellers in March sold their homes for an average 17% gain, or $30,500 more than the purchase price, making it the highest average monthly price gain for home sellers since December of 2007, according to RealtyTrac’s March and Q1 U.S. Home Sales report.

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(http://www.housingwire.com/articles/36848-home-prices-see-highest-increase-since-2007)

 

Home sellers in March sold their homes for an average 17% gain, or $30,500 more than the purchase price, making it the highest average monthly price gain for home sellers since December of 2007, according to RealtyTrac’s March and Q1 U.S. Home Sales report.

Although home sellers may be rejoicing at these increases, in some markets, the increasing home prices are actually stalling the market. In California, increased home prices have caused a slower start to the Spring homebuying season, with a decrease of 4.7% in home sales from March 2015.

shutterstock_112186253“Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom,” RealtyTrac senior vice president Daren Blomquist said. “That should encourage more homeowners to take advantage of the prime seller’s market and list their homes for sale this year.”

“Banks are already taking advantage of that market as evidenced by the uptick in the distressed sales share over the last two quarters,” Blomquist said.

He cited increasing home prices as the culprit to the faltering home price appreciation occurring in some markets.

“Given that bank-owned homes are selling at a median price that is 40% below the overall median sales price nationwide, the uptick in distressed sales combined with affordability constraints are contributing to faltering home price appreciation in some markets, most notably the bellwether markets of Washington, D.C. and San Francisco,” Blomquist said.

shutterstock_128578916On the other hand, home sellers sold their home for less than the purchase price. Among the markets that experienced a loss in the sale price versus purchase price were Rockford, Illinois with a 11% loss, Winston-Salem, North Carolina with a 10% loss, Cleveland Ohio with an 8% loss, Columbia, South Carolina with a 7% loss and Wilmington, North Carolina with a 5% loss.

About 36% of markets reached all-time price peaks in the past 15 months. The seven markets that reached new price peaks in March 2016 were Boulder, Colorado; Denver; Portland; Fort Collins, Colorado; Austin, Texas; Greeley, Colorado and Cincinnati, Ohio.

A total of 17% of markets had annual declines in home prices.

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How Landlords Are Cashing In On The Housing Recovery (and the markets they are targeting)

Home prices nationwide increased over 5 percent in November, according to the S&P/Case Shiller U.S. National Home Price Index, which tracks home prices in 20 U.S. metro areas. Since the nadir of the market in March 2012, home prices have increased nearly 35 percent, although national prices are still below the peak levels seen in late 2007. 

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(http://www.realtytrac.com/news/home-prices-and-sales/home-price-recovery-signals-boon-for-landlords/)

 

November marks the 12th consecutive quarter of home price appreciation. Furthermore, home inventories are well below the norm; as of December, the supply of existing homes represented a 3.9 month supply, well below the 6 months that economists believe indicates a healthy market. All signs indicate that we are in a “sellers’ market” for residential real estate.

All this bodes well for owners of residential rental properties. Surging home values deter many families from becoming homeowners; and home affordability is predicted to get worse in 2016, forcing more into the rental market. Many younger people, facing significant debt and flat wages, simply cannot stretch to buy a house. These trends, coupled with a long term trend of increasing household formation, indicate a large influx of would-be homeowners into the rental housing market. In particular, those households with families or otherwise needing more space and outdoor access, will be attracted to the single family rental market.

bgs-02814r-4d03d4b8-f9f4-465f-a03d-ae84639967e8There is other good news for single family residential landlords. The mortgage market for single family residential real estate has recently emerged, like a phoenix from the ashes of the housing crisis. Never before has there been a predictable, efficient and affordable way to finance non-owner occupied properties. Significant investments by private equity, Wall Street and even the government-sponsored housing giants, Fannie Mae and Freddie Mac, have moved the single family residential market into the mainstream. Owners of rental properties, backed by strong renter demand and appreciated property values, can unlock significant value and cash proceeds from their real estate holdings.

It is an excellent time for owners of single family rental properties to position their investments for years of stable, predictable income. Demand for rental housing continues to grow, and tenants in houses tend to have much longer occupancies than those in traditional multifamily properties. And the availability of long term fixed-rate mortgages has never been better. Simply call your mortgage broker or search “rental property finance” on the web, and find a lender that can finance one, five or 100 properties all at once. Investors are anxious to partner with owners and participate in the burgeoning rental housing market.

(http://www.realtytrac.com/news/home-prices-and-sales/home-price-recovery-signals-boon-for-landlords/)

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World’s Richest Banker Charged With Corruption (4.2M in Bribe Money to Tax Auditors)

Brazilian prosecutors on Thursday charged Joseph Safra, the world’s richest banker, in connection with an alleged scheme to pay bribes to government officials in return for waiving tax debts.

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(http://www.businessinsider.com/banker-joseph-safra-has-been-charged-with-corruption-by-brazilian-prosecutors-2016-4)

 

In a statement, prosecutors saidSafra had knowledge of a 2014 plan by executives at his BancoSafra SA to pay 15.3 million reais ($4.2 million) in bribes to federal tax auditors. The accusation is based on tapped phone calls between Banco Safra executive João Inácio Puga and tax officials, the statement added.

Safra, who alongside his family owns Banco Safra SA and a number of private-banking institutions including Switzerland’s J Safra Sarasin, was not directly involved in the negotiations on the bribery plan, the statement noted. Still, the conversations showed that Puga reported to Safra on the bribery talks, prosecutors said.

In a separate statement, Safra‘s investment holding company Safra Group said the allegations “are unfounded,” adding, “There have not been any improprieties by any of the businesses of The Safra Group.”

No Safra Group representative “offered any inducement to any public official and the Group did not receive any benefit in the judgment of the tribunal,” the Safra Group statement said.

2002The charges filed are a follow-up of a broader police inquiry, known as “Operation Zealots,” into kickbacks by companies through lobbyists. Dozens of other Brazilian firms, including the steelmaker Gerdau SA, have also been under investigation for suspected kickbacks.

The case is investigating whether companies bribed members of CARF, a body within the Finance Ministry that hears appeals on tax disputes, to get favorable rulings that reduced or waived the amounts owed. More than 70 industrial, agricultural, civil engineering, and financial companies, including banks, are being investigated in Operation Zealots.

The Lebanese-Brazilian billionaire, whose fortune is estimated at about $18 billion by Forbes Magazine, controls a banking and financial conglomerate that operates in 19 countries.

In addition to Operation Zealots, Brazil has been gripped by the far-reaching corruption investigation around the state-run oil company Petroleo Brasileiro SA, known as Petrobras, and major engineering conglomerates in the past couple of years.

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Mortgage Rates On The Rise (Is it time to start worrying?)

Mortgage rates ticked higher for the first time this year, with the average 30-year, fixed rate loan going for 3.64 percent. Last week, the average rate was 3.62 percent and at this time last year it was 3.75 percent, according to Freddie Mac’s weekly survey. Loans are still way cheaper than they were in December, when the Federal Reserve raised its own short-term rates.

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(https://www.redfin.com/blog/2016/03/mortgage-rates-up-a-little-but-no-cause-for-worry.html)

 

historicals-2016Mar3Why did rates go up? The market determines how much your home loan will cost, but mortgage costs generally follow the path of 10-year Treasury bonds. Treasuries have been falling as global investors pour money into the safety of government bonds. But the world’s financial markets caught their breath last month, meaning there was less demand for Treasuries. That pushed their yields up a pinch and mortgage rates followed suit.

rates-v-yields-2016Mar3But look — Treasuries ticked down again last week, which means mortgages might fall again, too.

No matter what happens, home loans are really cheap right now and will stay that way for a while.

“The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality,” Freddie Mac chief economist Sean Becketti said. “Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook and the market expects the Fed to refrain from any further short-term rate increases for now.”

Translation: Mortgage rates aren’t going anywhere anytime soon. Relax.

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