Over a five year period, the current immigration legislation in the Senate, if passed, could create a pool of 3 million new homeowners and $500 billion in sales income into the U.S. housing economy according to the National Association of Hispanic Real Estate Professionals (NAHREP).
The immigration bill in the Senate creates a path for citizenship for the estimated 11 million illegal immigrants currently residing in the United States.
The estimate assumes about half, or 6 million of the new immigrants, will pursue legalization and it assumes half of those will also purchase a home based on “past purchase trends.”
Up to 3 million undocumented foreign-born householders could potentially afford a home worth $173,600, the national median sales price of a home. This would generate more than $500 billion in new home sales and mortgages.
By dollar volume, home sales in Wenatchee are up 20% through April as compared to 2012. In transaction volume, sales are up by 17% and the average home price is up 2% over 2012 through April according to the latest Snapshot Report from Pacific Appraisals.
The inventories for all homes $350k and under are all under six months, while homes above that price range have a 9 month supply or greater inventory level. Homes over $700k have a 30 month supply!
So, home sales are improving in Wenatchee. The demand for luxury homes has not kept pace with lower price levels.
That is a question that folks have been asking with home prices in many areas rising as quickly as they did during the last bubble. Trulia weighs in with an analysis on that question today.
On a national basis, the Trulia analysis found that, when looking at traditional price drivers such as rents and incomes, home prices are undervalued on a national basis by around 7%, compared to being 39% overvalued in early 2006.
At the bottom of the downturn in 2011, home prices were undervalued by 15% according according to the same analysis.
Nevertheless, there are markets which are overpriced according to Trulia’s analysis. Orange County California is about 9% overvalued. Austin, San Antonio, Los Angeles, San Francisco and San Jose are also over valued compared to traditional drivers according to the report.
Of course, Trulia is looking at things based on current interest rates. When the Federal Reserve changes policy and interest rates rise, the higher cost of interest will put downward pressure on home prices. So, the bubble we are seeing, it we are seeing a bubble, is caused by interest rate manipulation by the government.
According to a new report from Redfin, sales of homes priced $1 million and above are up 36% in the first quarter over 2012. The Seattle area market ranks 7th nationwide with 268 home sales over $1M in the first quarter in the 98004 zip code.
Yes, we have even noticed the trend in the Chelan area. In the Lake Chelan market, there were three sales of homes over $1 million in the 1st quarter compared to zero in 2012.
I’ll let you know if there is other big news from “Lives of the Rich and Famous.”
Yes sir! The daytime temperatures have already been hitting the nineties. The skies are usually cloudless and the lake and hills are sparkling in the sun.
The fishing is wonderful this spring. The fish like the water, but unless you like to swim in water that is still in the fifty degree range, most folks consider the lake cold for swimming.
That is why swimming pools are popular in Chelan. They extend the swim season. Typically, I am not swimming in the lake until July, but a dip in a pool in April is a great idea.
With an outdoor pool, you can swim from April until October. Indoor pools are great all year around!
Pools are in demand. For people that vacation rent their homes, a pool can extend the season with an additional 1/3 more income!
For the first time in Fannie Mae’s survey, over 50% of Americans believe housing prices will go up in the next year. In April, the percentage rose 3% from March to 51% of respondents believing home prices will go up.
30% of folks believe now is a good time to sell, up from 15% in April of 2012. Fannie Mae polled 1001 Americans live, by telephone to generate the results.
There is a lawsuit in process over a cabin in the Mazama area. Local residents see it as an eyesore, or “boil on the landscape.” Yet the owners, including a nationally renowned architect who is known for his nature sensitive design, believe it fits into the landscape.
It will be interesting to see how this plays out.
“The overhanging structure stands out in stark contrast to the natural surroundings and the negative visual impact is significant,” the lawsuit contends. Other than a wireless antenna and the Goat Peak lookout tower, it’s the only manmade structure visible on the ridgeline in the whole Mazama area.
“It’s like a boil sitting up there,” said Midge Cross, who looks out at the cabin from her livingroom window.
“It’s something none of us anticipated would ever happen in Mazama,” added Bill Pope, owner of the Mazama Country Inn. Mazama’s pristine ridgeline didn’t happen by mistake, he said. People have long recognized the value of their views, and protected them.
Filed in Okanogan County Superior Court last week, the lawsuit relies on protective covenants placed on the land in 1987 that require any construction to minimize the visual impacts to neighbors, those on the valley floor, and anyone with a direct line-of-sight to the land. – Wenatchee World
The link above has a photo of the home.
An example of everyone trying to do the right thing, yet they are way into each others’ business. Small town drama for sure.
Home sales at Lake Chelan were down significantly in April compared to last year. Only 15 home sales were closed this year compared to 21 in April of 2012. Average sales price was down as well, with this year’s average sale price coming in at about $305,000 compared to last April having an average sale price over $360,000.
Those numbers combined to reduce total sales volume in dollars to just over 60% of the number last April.
The decline can’t be blamed on waterfront or community waterfront properties. Both categories remain 1 home sale above last year’s total at the end of April. While community waterfront prices are a bit softer than last year, waterfront home prices are up significantly over 2012.
Inventory also isn’t the problem with a total of 44 home sales so far as compared to 199 listed.
The year started out strong in January and February. In March, sales volume dropped below last year but the sales price was still well above 2012. With the April numbers, both sales volume and price dropped below 2012.
You can see the details in our Lake Chelan Residential Real Estate Sales Summary.
According to reports both nationally, and in other regions of the state, this would make the Lake Chelan area a bit of an outlier the last couple of months. Other areas report much stronger sales this year.
In a few weeks, we will see what May has to bring.
Zillow’s Home Prices Expectation Survey had respondents predicting an increase in housing prices of 5.4% for 2013. That is up from their expectation of 4.6% during the survey in February and March.
The survey of 105 economists, real estate experts and investment and market strategists was sponsored by Zillow, Inc. (NASDAQ: Z) and is conducted quarterly byPulsenomics LLC. Panelists said they expected median U.S. home values to rise to $165,280, on average,by the end of 2013. At the end of 2012, the U.S. Zillow Home Value Index stood at $156,800.
The latest survey also asked the panel about concerns over a new housing bubble. Only 4% of panelists see no risk of a bubble from the Fed’s policy of keeping interest rates near historic lows. 48% of respondents saw a little risk with another 48% saying there is a moderate to high risk of another housing bubble due to current policy.
Most respondents felt the Dodd Frank consumer protection bureau made a mistake by not requiring a minimum down payment for a “qualified residential mortgage” (QRM) under Dodd-Frank. QRMs are exempt from many risk retention rules for originating lenders.
Yes, housing prices are increasing rapidly, inventory is low and homes are selling with strong buyer demand. Frankly, we haven’t seen these types of increases since the last boom. The market recovering is a wonderful thing, but there is reason for caution in real estate. Being highly leveraged on housing is a recipe for high risk moving forward.
For example, flipping is risky in the current market. The current housing demand is being fueled by record low interest rates. If you plan to flip a home in 2 or 3 years, and interest rates are up to 5 or 6%, planning on buyers being able to pay more for that home is planning for failure.
Also, the government is currently underwriting virtually all of the home mortgages. Government policies can change, and the mortgage market could change with it virtually overnight.
If you look at the even bigger picture, there are threats to the economy. The international monetary system is in trouble. The Euro has been struggling and the United States Dollar is at risk of losing its status as the world’s reserve currency. That would be tragic for the U.S. economy. Plus, the Middle East is as unstable as I’ve seen it in my lifetime.
It is wonderful the housing market is recovering. We are in a nexus of extremely low interest rates and discount home prices. But, keep those seat belts fastened. The ride from here could still be bumpy.