2M Real Estate News, Trends, Editorials, Blogs

According to a recent survey conducted by Trulia and RealtyTrac, an increasing number of American adults are becoming less confident in a full recovery for the housing sector soon.

Six months ago, a similar survey revealed that 42 percent of adults believed a recovery could happen in 2012, if it hadn't already occurred. However, in the companies' most recent survey, the total feeling the same way had declined to 23 percent. Furthermore, more than half of the survey's respondents - 54 percent - believed a full recovery wouldn't take place until 2014 or later.

"Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process," said Pete Flint, co-founder and CEO of Trulia. "Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate."

However, Flint still relayed that now might be the best time to enter the real estate market, as interest rates for mortgages will not remain low for much longer, nor will home prices continue to consistently decline.

Markets with healthy job sectors could experience an uptick in sales based upon these sentiments, as more consumers are able to afford long-term debt. Thus, in areas such as Houston, real estate transactions could improve drastically.

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RealtyTrac's recent Midyear 2011 Foreclosure Market Report revealed several trends in terms of foreclosure activity during the first half of 2011.

Overall, 1,170,402 U.S. properties entered the foreclosure process, which includes default notices, auction sale notices and bank repossessions, during the year's first six months. This total is down 25 percent from the second half of 2010 and 29 percent from 2010's first half.

During the second quarter, a reported 608,235 properties were foreclosed, which represents a decline of 11 percent from the first quarter and 32 percent from the second quarter of 2010.

"It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market," said James Saccacio, chief executive officer of RealtyTrac. "Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn't appear to be the case."

Regionally, California had the greatest amount of foreclosure activity during the quarter with 263,500 properties entering the process. Florida and Arizona followed, placing second and third, respectively. Texas was included in the top 10, placing seventh with 55,442 foreclosures taking place.

However, with a large number of Fortune 500 companies being headquartered in the state, recovery for Dallas and Houston real estate markets, among others, could improve quickly, as more workers could flock to the regions.

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According to the June 2011 RE/MAX National Housing Report, home sales and values both increased during the month across 53 metro areas in 45 states.

Overall, closed transactions taking place during the month were up 7.5 percent and median prices increased 4.5 percent from May. Furthermore, residential inventories were down, continuing what is now a 12-month downward trend, which may have taken place because of the nation's reduced number of foreclosures.

"It's very encouraging that both home prices and sales transactions have now risen for several months in a row,” said RE/MAX CEO Margaret Kelly. "It appears that this market is following traditional seasonal trends as it works its way through a recovery and back to more normal conditions."

While the year's buying season had gotten off to the slow start, RE/MAX reports, the seasonal performance has gotten back on track, as more metro areas now have experienced significant growth. Some areas have yet to record these gains, however, as unemployment, tighter lending standards from banks and weaker consumer confidence have increased.

While Burlington, Vermont, had the greatest number of closed transactions at 32.2 percent, Houston was recently named the fastest-growing metro area during the last 10 years by a Rice University study. Thus, the Houston real estate market has experienced its own gains during the last decade.

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According to Freddie Mac's most recent Primary Mortgage Market Survey, interest rates recorded for the week ending July 14 declined after experiencing a slight increase the previous week.

The rate for 30-year fixed-rate mortgages declined to 4.51 percent after it had rose to 4.6 percent the previous week. Compared to last year's same week, the rate was also lower than the 4.57 percent average. The rate for 15-year FRMs also recorded declines, falling to 3.65 percent from 3.75 percent last year and 4.06 percent last year.

"Long-term bond yields and mortgage rates fell this week following a weak employment report," said Frank Nothaft, Freddie Mac's vice president and chief economist. "The economy added 18,000 jobs in June, well below the market consensus forecast, and the unemployment rate rose to 9.2 percent, the highest since December 2010. In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term."

Interest rates for adjustable-rate mortgages were also down, with five-year ARMs settling at a rate of 3.29 percent and one-year ARMs at 2.95 percent. The averages are down from 3.3 percent and 3.01 percent last week, respectively.

The lower rates could spur more real estate transactions, especially in regions with healthy job sectors. Thus, the Houston real estate market could record higher sales shortly.

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According to the Mortgage Banker's Association, the total volume of mortgage applications submitted experienced a decline during the week ending July 8.

The MBA's Market Composite Index, which is seasonally adjusted, revealed a 5.1 percent decline for the most recent week, which accounts for the Fourth of July weekend. Unadjusted, the index is down 24 percent.

The Purchase and Refinance Indices also recorded lower figures as well. The Purchase Index' seasonally adjusted total was down 2.6 percent from the previous week, while the Refinance Index's similar data was down 6.2 percent. Unadjusted, the indices were down 21.9 percent and 42.1 percent, respectively.

The four-week averages for all indices recorded lower figures, as the Market Index was down 4.7 percent, the Purchase Index 1 percent and the Refinance Index 6.3 percent. All of these figures were also seasonally adjusted.

In Houston, as more jobs are created and the population continues to expand, mortgage activity could increase. Furthermore, if U.S. Senator Barbara Boxer is able to pass the Helping Responsible Homeowners Act, a significant number of owners of Houston properties could refinance their mortgages.

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Thanks to an increased job market touting more opportunities, Houston-suburb The Woodlands has experienced a significant upswing in real estate sales since December 2010. 

According to the J. Beard Real Estate Company, it has recorded 15 retail lease transactions in the region during this time period, six of which were food and beverage providers.

"The Woodlands residents love to dine out," Gil Staley, chief executive officer of The Economic Development Partnership of South Montgomery County, told UltimateWoodlands.com.

Many experts believe the region's strong real estate activity is a direct result of the retail sector's continued strength, while others believe the reverse is true.

"The retail real estate industry is doing really well," Staley told the news source. "It is certainly attributed to population and job growth in the area."

Recent reports have shown that the Houston region is among the country's most successful in terms of jobs and population increases. In fact, a Rice University study named the area the fastest-growing metro area in the country, which could prompt even more sales of Houston properties.

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A recent report from property research firm Reis revealed a notable recovery in the U.S. office market.

Overall, the market increased by 3.7 million square feet during the year's second quarter, which marks the third straight quarterly increase. Vacancies in nine of the 10 largest markets in the country either fell or were unchanged during the three months ending in June. Furthermore, vacancies fell in nearly half of the 79 metropolitan markets surveyed by the New York-based company.

Experts have pointed to the increased amount of space technology companies have been purchasing as a reason for the continued increases.

Amazon.com made news recently when it leased almost all of a 36-story building in downtown Seattle, which was built during the recession.

"The reduction of big blocks of space is always the first indicator of recovery," Patrick Callahan, chief executive officer of Seattle-based commercial real estate developer and investor with Urban Renaissance Group, told Bloomberg.

With Texas being home for 51 of the country's Fortune 500 companies, the office market is a popular sector. Thus, transactions for Dallas and Houston properties have remained healthy.

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According to recent information released the Houston Area of Realtors, single-family existing home sales improved in South Montgomery County, performing better than the overall Greater Houston area. However, year-to-date, transactions are down.

Overall, 256 homes were sold during May, which is exactly one more home than what was sold in May 2010. For the year, 998 properties have been sold, which is down from 1,025 from the same point last year.

The region's 4.8 percent decline this year, however, is still better than the Greater Houston's slide of 6.5 percent from last year.

Ken Brand, a local property sales manager, referred to home sales in the region as "great," Your Houston News reports.

Brand explained that, combined, the real estate builders in his local region sold 272 homes during June, which is well above the 177 sold last year. He relayed to the news source that the 2011 market is reverting to a normal sales trend, improving between January and August.

Other experts are also optimistic about the Houston real estate market.

"Overall I see a bright future," Beth Ferester, a Realtor for Coldwell Banker, told the news source. "It may take two or three years to see a it in this market, but with more people moving in and less space for new homes, they'll start selling better and better."

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While one major program in the region is shutting down, the Houston real estate market might receive a boost from a popular car shop.

According to a recent article from Tire Business, Pep Boys is currently eyeing Houston for potential expansion following its acquisition of seven My Mechanic auto repair stores located in the Houston metro area. Executives claim the move is the first of many in its aggressive growth strategy.

The Philadelphia-based company currently has one service and tire center in Houston and plans to have four for five more Supercenters and 15 additional service centers, the report relays.

Pep Boys president and CEO Mike Odell explained that acquiring the My Mechanic centers in the region allows his company to "leverage the existing inventory, distribution and advertising" that the firm currently uses.

The expansion could mean big things for unemployed workers in the area. Recently, as many as 2,000 workers have been laid off as NASA ended its shuttle program in the region. However, with more stores being established in the area, the unemployment rate could dwindle, potentially leading to increased property sales.

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While a recent report from the U.S. Conference Board revealed a paltry market for jobs throughout the country, a separate report from the Federal Reserve Bank of Dallas showed improvements in the Houston real estate and job sectors.

According to the report, homes prices for Houston properties rose slightly, moving up to $151,220, while employment grew by an annualized rate of 3.2 percent during May. Overall, the Greater Houston economy now boasts more than 2.5 million jobs.

"Should that pace continue in the second half of 2011, Houston will have added nearly 84,000 jobs this year," the Federal Reserve's report states.

Real estate expert Linda Jamail Marshall referred to Houston's economy as experiencing "continued stability."

The Dallas Fed relayed that economic activity in the greater Houston region was up by an annualized rate of 5.6 percent during May, which shows that the nation's fourth-largest city avoided much of the country's economic distress experienced recently.

"Houston has always held its own because of diversity in the job market," Marshall relayed.

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