The Weekly Economic & Real Estate Forecast – 07/25/16 to 07/29/16

forecast

By Matthew Gardner via The Windermere Economist

What I Saw Last Week

In a release that surprised all economists including myself, the National Association of Homebuilders Housing Market Index for July soured a little and dropped to 59 from 60.  I had anticipated it to rise to 61.

All three components of the index —current sales, future sales expectations, and buyer traffic — slipped in July with the greatest drop (3 points) coming in builders’ views toward future sales.

That said, builders in three out of four regions did have a positive outlook (50 points and higher) for the housing market. Builders in the West are most confident, posting a reading of 70 in July (the highest of any region), one point higher than a month earlier. The Midwest and Northeast saw their regional housing market index rise from 55 to 56, and from 39 to 42, respectively. Builders in the South reported a score of 60 in July, cutting four points from June, but still above the 50-point threshold.

For the past six months, builder confidence has remained in a relatively narrow positive range that is consistent with the ongoing gradual housing recovery that is underway.  However, builders are still reporting scattered softness in some markets, due largely to regulatory constraints and shortages of lots and labor.

U.S. Building Permits increased in June to a seasonally adjusted annual rate of 1.153 million (I had forecast an increase to 1.150 million) while the prior month saw a small downward revision to 1.136 million from 1.138 million.

Permits

The three-month moving average for permits rests at 1.140 million versus 1.184 million in February. Permits for single-family units increased 1.0% and were up 2.5% for multi-unit dwellings. The Northeast led the way, with permits up 13.7% for single-family units; however, the West was the only other region to show a gain in single-family permits (+0.6%). The Midwest was flat and the South was down 0.3%.

U.S. Housing Starts in June jumped 4.8% to a seasonally adjusted annual rate of 1.189 million units (I had forecast an increase to 1.164 million) on the heels of a downwardly revised 1.135 million (from 1.164 million) in May.

Starts

The improvement in starts in June was fueled by a 4.4% pickup in single-family starts and a 5.4% increase in multi-unit starts.

The Northeast was the main driver of the improvement in single-family starts, logging a 31.6% increase. Single-family starts, though, were up in all regions, including a 7.3% gain in the Midwest, a 3.1% increase in the West, and a 0.5% uptick in the South.

By and large, the starts and permits data for June were largely as expected when factoring for the downward revisions to May. The trouble there is that neither starts nor permits have exhibited any real growth in recent months.  With the latest report, the three-month moving average for starts stands at 1.160 million versus 1.167 million in February and, as mentioned earlier, the three-month moving average for permits rests at 1.140 million versus 1.184 million in February.

Contrary to my forecast for a modest contraction, U.S. Existing Home Sales increased 1.1% in June to a seasonally adjusted annual rate of 5.57 million (I had forecast 5.5 million units).  Existing home sales in May were revised from 5.53 million to 5.51 million.

Existing sales

Single-family home sales increased 0.8% in June to a seasonally adjusted annual rate of 4.92 million while existing condominium and co-op sales rose 3.2% to 650,000 units on the same basis.

On a regional basis, existing home sales declined 1.3% in the Northeast, increased 3.8% in the Midwest, remained unchanged in the South, and jumped 1.7% in the West.

The high-price obstacle didn’t go away in June, which produced a 4.8% increase in the median existing-home price for all housing types to $247,700. That is the 52nd straight month of year-over-year gains and tops May’s peak median sales price of $238,900. It goes to show, too, the importance of mortgage rates staying low to help affordability conditions.

Existing sales $

Price support continues to be underpinned by limited supply and it doesn’t sound as if there will be a meaningful break in the pricing trend on the near horizon. To that end, unsold inventory is at a 4.6-month supply at the current sales pace versus 4.7 months in May.

The most encouraging aspect of the June report was that first-time buyers accounted for 33% of home sales, which was up from 30% in May and marked the highest share since July 2012.First-time buyers are an essential part of the existing home sales mix because they bolster the capability of existing homeowners to sell their house.

What to Watch for This Week

The Case Shiller Index rose at an annual rate of 5.4% in April and data for May should show the annual rate of home price growth matching that seen the month before.  The Seattle region should see price growth up by 10.9% following the 10.7% increase seen in April.

Consumer Confidence rose to 98.0 in June and the July number will have likely dropped to 96.0 following the Brexit vote (regardless of how this has really been a non-issue).

U.S. New Home Sales dropped by 6% month-over-month in May and the June number will be better. I am anticipating an increase of 1.6% to an annual rate of 5606,000 units.

The NAR Pending Home Sales Index in May dropped by 3.7% and I am expecting to see the June number higher by 1.1%.

This week we will get our first view on US growth in the second quarter with the release of GDP data. As has been the case for many years, the second quarter tends to be the one that stands out and I anticipate that it will show the US expanding by 2.6% versus the 1.1% growth rate seen in Q1.

We get the final July number for Consumer Sentiment and I expect to see this retreat to 90.4 from the early July figure of 93.5.

Posted on July 25, 2016 at 8:26 am
Cindy Kelly | Category: Real Estate | Tagged , ,

5 Ways to Increase The Value of Your Home

Hey all! I found this article really helpful to give you ideas on how to increase the value of your home! Need anymore tips? Feel free to contact me!  

Witt Construction Header

Originally posted by Peter Kim on Porch.com

The phrase “your home is an investment” is thrown around too often, without the clarification of what that actually means. For years, the promise of homeownership has been synonymous with the American dream – a lofty goal for many, but taken for granted by even more. If you and your family have an expectation of upgrading to another property in your future, it’s important to make occasional improvements to your home’s functionality, amenities, and basic elements, in order to garner a higher resale value.

Consider the following points of focus if you’re thinking of remodeling your home this summer.

1. Rethink your bathroom

Reworking your master bathroom is a great way to add value to your home. There’s plenty to be done to refresh a master bath, especially if it’s been neglected compared to the rest of the house. Even if you have a small bathroom, adding new lighting or extra storage is possible over a productive weekend.

If you want to dig deeper or need to replace construction materials that have been infested by mold or mildew, start with the floor and work your way up. Adding radiant heat flooring to your bathroom is an energy-efficient option where heat will rise naturally and evenly throughout the rest of the room. Additional ventilation will boost the comfort of your room and reduce the risk of future mold growth in your bathrooms, but consider starting any serious bathroom remodel with the centerpiece of the room: the bathtub and shower.

Charles Vincent George Architects

 

 

 

Image Credit: Charles Vincent George Architects

2. Upgrade your kitchen

Right up there with the master bathroom, is the kitchen. Aside from seeking out natural stone surfaces, new appliances, and wood flooring throughout your kitchen, implementing smaller upgrades such as pull-out storage and waste areas, pocket doors, and special areas for pets or phone charging stations are all great options for contemporary kitchen remodels.

Darwin Webb Landscape Architects

 

 

 

Image Credit: Darwin Webb Landscape Architects

As a bold and beautiful alternative to the typical kitchen remodel, consider an outdoor upgrade to your home by investing in an outdoor kitchen! A functional outdoor food preparation and dining area is a sought-after feature for homeowners, and many are willing to pay the extra cash. As an essential item to consider on your home improvement list, an outdoor kitchen can even include a stone pizza oven, built-in grill, and fire pit for family fun all summer long.

3. Focus on the exterior

Does your home need a new coat of paint? What about an upgrade to the gutters? The possibilities for exterior upgrades are endless, but focusing on the basics first will help shape the rest of your exterior work throughout the summer.

Checking your roof for damage after the winter season is a good place to start, but from there you’ll need to take note of your gutters, siding, and foundation. Look for cracks, signs of wear, and any visible damage. Catching these problems early can potentially save you thousands of dollars in future repairs.

Phinney Ridge Painting, LLC

 

 

 

Image Credit: Phinney Ridge Painting, LLC

If the critical elements of your home’s exterior are in decent working order, cosmetic upgrades like a fresh coat of paint, deck or patio refinish, and a colorful new front door or garage door will all add to your home’s curb appeal.

4. Consider natural stone

Natural stone is one of the few construction materials that will simply never go out of style. Think about investing in granite for your home. As a homeowner, granite is a wise investment due to its longevity, durability, and difficulty to stain. Plus, it’s easy to clean. Though the material and installation costs can be expensive depending on the color and finish you choose, the potential return on investment makes it an easy choice.

Witt Construction

 

 

 

Image Credit: Witt Construction

If you’re focused on outdoor upgrades to your home, try utilizing natural stone for pathways, entryways, or as part of your water feature to add aesthetic value to your home’s exterior.

5. Boost your curb appeal

Creating a beautiful, serene natural environment around your home can bring endless enjoyment to your family and boost your home’s curb appeal. Before you get too lost in the details of which tone of gravel you should use or which plants you want in your flowerbeds, taking a big picture approach to your landscaping can help improve your design and allow your landscaping to perfectly compliment your home. By utilizing your home’s lines of force (or projection of lines from the home’s edges) on a site map or aerial photo of your home, you can begin to plan paths, plants, and additional features along a solid, reliable grid.

The most successful garden and landscaping remodels take advantage of the home’s proportions and existing features to suggest the appearance of the landscaping being an existing, integral aspect of your property rather than an add-on.

Mi Fiori Landscape

 

 

 

Image Credit: Mi Fiori Landscape

One of the most rewarding aspects of homeownership is the ability to continually upgrade and improve the various features of your home. With the right combination of research and energy, as well as an experienced professional at your side, you’ll be able to enjoy your home for as long as you live there and attract future families into a beautiful and rewarding lifestyle should you decide to put your home on the market.

Posted on July 1, 2016 at 10:28 am
Cindy Kelly | Category: Real Estate | Tagged , , ,

Welcome!

Welcome to my blog! This blog will keep you up to date with current real estate data, luxury home design, and lifestyle trends! Follow along as I share my experiences and ideas!

-CK&Associates

5

Posted on June 28, 2016 at 2:55 pm
Cindy Kelly | Category: Real Estate | Tagged , ,