Residential Rents Rising at Faster Rate in Most U.S. Cities

5.3 Percent Fewer U.S. Homes on the Market Than in 2017 

According to the May 2018 Zillow Real Estate Market Report, median rent is appreciating more quickly this spring than last in 27 of the 35 largest U.S markets.

Pittsburgh, Detroit and Houston reported the greatest jumps in annual rent growth this spring compared to last. Median rent in all three of these metros was falling at this time last year, but is now appreciating over 1 percent annually.

In some of the nation's most expensive rental markets, median rent is appreciating more slowly now than last spring. In Seattle, for example, where annual rent growth has been among the highest in the country, rent appreciation has slowed from a 5.8 percent annual growth rate last spring, to a 3.3 percent annual growth rate now. A similar trend holds true in Los Angeles, Portland and Boston. 

Across the U.S., rent growth has been holding steady at about a 2-3 percent annual appreciation rate for the past 11 months. Median rent rose 2.1 percent over the past year to $1,440 per month.

Saving enough money for a down payment is one of the greatest hurdles to homeownership, and rising rents is one of the main reasons why saving is so difficult. Even in markets where rent growth is slowing, high prices have already been established. With mortgage rates rising and mortgage affordability deteriorating, owning a home may start to feel out of reach for many Americans.

"Over the past two years, rent growth slowed across the country as new apartments hit the market and renters with the financial means to do so increasingly became homeowners," said Zillow Senior Economist Aaron Terrazas. "The slowdown in rent growth was most prominent in the markets that moved most quickly to add units - either because it was easy to build or because of local demands. But the ever-swinging pendulum is again on the move. This spring rent appreciation has perked back up nationwide, though it remains well within a long-term sustainable range. The ebb-and-flow of supply and demand is following slightly different timeliness in different markets, but over the past two years, we have seen similar trends in markets from the Southeast to the Northwest."

Home values continue to appreciate across the country. The median U.S. home value rose just over 8 percent over the past year to $216,000. San Jose, Calif., Las Vegas and Seattle reported the greatest annual home value appreciation among the 35 largest U.S. metros.

The median home value in San Jose is now $1,265,300, up almost 26 percent since last May. Home values rose 15.5 percent over the past year in Las Vegas and 12 percent over the past year in Seattle.

Spring home shoppers will have 5.3 percent fewer homes to choose from than last year, though the pace of inventory declines has been slowing for the past 10 months. Markets with the greatest drop in for-sale inventory are Denver, Atlanta and Pittsburgh. Home shoppers in Denver and Atlanta will have 15 percent fewer homes to choose from than a year ago, and 13 percent fewer in Pittsburgh.

May ended with mortgage rates on Zillow at 4.29 percent, after starting the month at 4.38 percent. May mortgage rates peaked in the middle of the month at 4.51 percent, the highest rate since the beginning of 2013, and hit a month low in the last few days of the month when rates were at 4.28 percent. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Miami Luxury Home Sales Spike 24 Percent Annually in May

Miami Cash Home Buyers Double the National Average 

According to the Miami Association of Realtors, total Miami luxury home sales rose 24.1 percent year-over-year in May as existing condominium sales rose for the second consecutive month.

Total Miami luxury sales ($1 million-and-above) increased from 158 to 196 in May 2018, a rise of 24.1 percent. Condo luxury sales led the surge by posting a 58.6 percent jump (from 58 luxury transactions in May 2017 to 92 last month). Condo and single-family $1 million-and-above transactions have each now increased year-over-year in four of the last five months.

"Miami real estate luxury sales continue trending upward," MIAMI Chairman of the Board George C. Jalil said. "Strong pent-up demand for $1 million-and-above Miami properties, sellers becoming more reasonable with their prices and the federal tax reform leading more home buyers from high-taxed northern states to purchase in Florida, which has no state income tax, are several key factors."

Miami Condo Sales Increase for Second Consecutive Month

Miami existing condominium sales increased 0.6 percent year-over-year in May 2018, rising from 1,384 to 1,392. The increase comes on the heels of a strong April 2018 which saw condo transactions jump 24.6 percent.

Total Miami home sales decreased 3.9 percent year-over-year, from 2,728 to 2,622. Miami single-family home sales decreased 8.5 percent in May 2018, from 1,344 to 1,230. The decrease is due to a lack of inventory in lower price points. Inventory decreases for Miami single-family homes selling at $400,000 and below.

Total sales volume increased to $1.3 billion from $1.2 billion in May 2017.Existing condos saw the biggest increase, rising from $517.9 million total sales volume to $645.8 million (an increase of 24.7 percent). Single-family home total dollar volume rose 3.4 percent, from $651.2 million to $673.6 million.

Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.

6.5 Consecutive Years of Price Appreciation in Miami

Miami-Dade County single-family home prices increased 7.7 percent in May 2018, increasing from $325,000 to $350,000. Miami single-family home prices have risen for 78 consecutive months, a streak 6.5 years. Existing condo prices rose 8.9 percent, from $225,000 to $245,000 in May. Condo prices have increased in 81 of the last 84 months.

Low mortgage rates makes purchasing a home more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased for the seventh straight month to 4.59 percent in May (highest since 4.64 percent in May 2011) from 4.47 percent in April. The average commitment rate for all of 2017 was 3.99 percent.

Miami Distressed Sales Continue to Drop, Reflecting Healthy Market

Only 6.4 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 10.0 percent in May 2018. In 2009, distressed sales comprised 70 percent of Miami sales.

Total Miami distressed sales declined 38.3 percent year-over-year, from 274 to 169 last month.

Short sales and REOs accounted for 1.3 and 5.1 percent, respectively, of total Miami sales in May 2018. Short sale transactions dropped 52.1 percent year-over-year while REOs fell 33.5 percent.

Nationally, distressed sales accounted for 3 percent of sales (lowest since NAR began tracking in October 2008), down from 5 percent a year ago.

Miami Real Estate Selling Close to List Price 

The median number of days between listing and contract dates for Miami single-family home sales was 44 days, an 8.3 percent decrease from 48 days last year. The median number of days between the listing date and closing date for single-family properties was 92 days, a 6.1 percent decrease from 98 days.

The median time to contract for condos was 73 days, a 2.7 percent decrease from 75 days last year. The median number of days between listing date and closing date decreased 2.6 percent to 112 days.

The median percent of original list price received for single-family homes was 96.0 percent. The median percent of original list price received for existing condominiums was 93.3 percent.

National and State Statistics 

Nationally, total existing-home sales decreased 0.4 percent to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month's decline, sales are now 3.0 percent below a year ago and have fallen year-over-year for three straight months.

Statewide closed sales of existing single-family homes totaled 28,071 last month, up 0.8 percent compared to May 2017, according to Florida Realtors. Statewide closed condo sales totaled 12,012 last month, up 4.1 percent compared to a year ago.

The national median existing-home price for all housing types in May was $264,800, an all-time high and up 4.9 percent from May 2017 ($252,500). May's price increase marks the 75th straight month of year-over-year gains.

The statewide median sales price for single-family existing homes was $255,000, up 6.7 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in May was $188,688, up 6 percent over the year-ago figure.

Miami's Cash Buyers Represent almost Double the National Figure 

Miami cash transactions comprised 39.0 percent of May 2018 total closed sales, compared to 39.4 percent last year. Miami cash transactions are almost double the national figure (21 percent).

Miami's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash. Miami has a higher percent of cash sales for condos due to lack of financing approvals for buildings.

Condominiums comprise a large portion of Miami's cash purchases as 50.9 percent of condo closings were made in cash in May compared to 25.5 percent of single-family home sales.

Balanced Market for Single-Family Homes, Buyer's Market for Condos

Inventory of single-family homes increased 0.4 percent in May from 6,195 active listings last year to 6,219 last month. Condominium inventory increased 2.2 percent to 15,502 from 15,326 listings during the same period in 2017.

The increase in inventory is for properties above $400,000. The market had a 3.5 percent jump in properties listed for $400,000 to $599,999 in May 2018, 4.4 percent for $600,000 to $999,999, and 3.4 percent for $1 million and above.

Miami saw a drop in inventory for properties below $400,000.

Monthly supply of inventory for single-family homes increased 7.1 percent to 6.0 months, which indicates a balanced market. Existing condominiums have a 14.1-month supply, which indicates a buyer's market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.

Total active listings at the end of May increased 0.92 percent year-over-year, from 21,521 to 21,721. Active listings remain about 60 percent below 2008 levels when sales bottomed.

New listings of Miami single-family homes decreased 0.4 percent to 1,881 from 1,888. New listings of condominiums increased 8.1 percent, from 2,431 to 2,617.

Nationally, total housing inventory at the end of May climbed 2.8 percent to 1.85 million existing homes available for sale, but is still 6.1 percent lower than a year ago (1.97 million) and has fallen year-over-year for 36 consecutive months. Unsold inventory is at a 4.1-month supply at the current sales pace (4.2 months a year ago).

The Average U.S. Home Sells in 34 Days...

According to Redfin, across 174 U.S. housing markets, the typical home sold in May 2018 went under contract in 34 days, breaking April's record of 36 days, which was the fastest month on record going back to 2010. Amid the speed, the national median home sale price rose to $305,600, a 6.3 percent increase from May 2017.

The number of newly listed homes for sale increased 4.3 percent compared to May of last year, driving a 3.6 percent increase in the number of homes sold. However, the overall supply of homes declined 5.4 percent during the same time period. Just 2.5 months of supply remained at the end of the month, compared to the six months that generally signals a balanced market.

Among homes that sold in May 2018, 27.6 percent sold above their list price, the highest percentage Redfin has recorded, indicating strong competition for the few homes available. At the same time, nearly a quarter of homes for sale had a price drop in May, the highest percentage of price drops since September of 2017.

"Prices are still increasing, but not at the same rate we saw earlier in the spring," said Redfin senior economist Taylor Marr. "The record percentage of homes sold above list price is at odds with the higher percentage of price drops in May. This tells us that while it's still very much a seller's market, price growth and rising mortgage rates may be pushing buyers to the limit of what they're able to pay."




For the seventh month in a row, San Jose topped the nation with price growth over 25 percent. The supply of San Jose homes fell 13.8 percent compared to last year. That drop is actually the smallest decline in a 16-month stretch of inventory declines, an indication of the intensity of San Jose's inventory shortage. A bit of good news for San Jose buyers: the number of homes newly listed in May ticked up 11.2 percent compared to last year.

After a prolonged period of inventory declines, some metro areas are finally seeing more homes hit the market. Washington, D.C. and Portland, OR have now had four months in a row of year-over-year increases in inventory. Seattle inventory increased for the second month in a row, up 17.4 percent in May compared to last year.

"Two months of growing inventory is a positive sign for Seattle buyers, but the previous 43 consecutive months of inventory declines won't be reversed overnight," said Jessie Culbert, a Redfin agent in Seattle. "Even so, we can already feel a slight easing in the market. Homes are still selling quickly and often over-asking, but where last May a seller may have gotten 15 to 20 offers, this May it was two to five."
Other May 2018 Market Highlights

Competition

• Denver was the fastest market, with the typical home going under contract in just six days. Seattle and Tacoma, WA were the next fastest markets at seven median days on market, followed by Boston and Grand Rapids, MI at eight median days on market.

• The most competitive market in May was San Jose where 83.8% of homes sold above list price, followed by 79.6% in San Francisco, 76.2% in Oakland, 63.1% in Tacoma, WA, and 61.9% in Seattle.

Prices

• San Jose had the nation's highest price growth, rising 27.6% since last year to $1,250,000. Tacoma, WA had the second highest price growth at 19.6% year-over-year, followed by Memphis, TN (16.9%), Las Vegas, (15.9%), and Rochester, NY (15.4%).

• No metros saw price declines in May.

Sales

• Thirteen out of 73 metros saw sales surge by double digits from last year. Warren, MI led the nation in year-over-year sales growth, up 38.5%, followed by Baltimore, up 31.8%. Camden, NJ rounded out the top three with sales up 24.7% from a year ago.

• Buffalo, NY saw the largest decline in sales since last year, falling 17.2%. Home sales in Rochester, NY and Baton Rouge, LA declined by 16.6% and 12.8%, respectively.

Inventory

• Indianapolis had the largest decrease in overall inventory, falling 37.7% since May of last year. Rochester, NY(-37.1%), Buffalo, NY (-32.8%), and Milwaukee (-22.9%) also saw far fewer homes available on the market than a year ago.

• Portland, OR had the highest increase in the number of homes for sale, up 35.3% year over year, followed byDetroit (28.4%) and Allentown, PA (24.4%).

Pricing Strategy

• To see trends in sellers' pricing strategies, we compare the list price to the Redfin Estimate, Redfin's automated home-value estimate. When sellers consistently price their homes below the Redfin Estimate in a market, this can indicate a common strategy to deliberately underprice to create a bidding war.

• The median list price-to-Redfin Estimate ratio was 93.2% in San Francisco, the lowest of any market. This indicates the typical home for sale in May was listed at 94.1% of its estimated value. Only 5.9% of homes in San Francisco were listed for more than their Redfin Estimate.

• Conversely, the median list price-to-Redfin Estimate ratio was 102.4% in Miami and 102.1% in West Palm Beach, FL, which means sellers are listing their homes for more than the estimated value in those metro areas. In Miami, 84.7% of homes were listed above their Redfin Estimate, the highest percentage of any metro.

I can sell your Home or condo for the "Best Price", in the least amount of time. Call for a Free Home Evaluation. (786) 525-9430.

U.S. Homeowners Enjoyed Over $1 Trillion of Equity Gains in Last Year

Based on CoreLogic’s latest Home Equity Report for the first quarter of 2018, U.S. homeowners with mortgages (which account for roughly 63 percent of all properties) have seen their equity increase 13.3 percent year over year, representing a gain of $1.01 trillion since the first quarter of 2017.

Additionally, the average homeowner gained $16,300 in home equity between the first quarter of 2017 and the first quarter of 2018. While home equity grew nationwide, western states experienced the largest increase. Washington homeowners gained an average of approximately $44,000 in home equity, and California homeowners gained an average of approximately $51,000 in home equity (Figure 1).

High-level U.S. market FAQs:

• In the First Quarter of 2018, 84,000 Residential Properties Regained Equity.
• About 2.5 Million Mortgaged Residential Properties Are Still in Negative Equity.
• An Additional 500,000 Properties Would Return to an Equity Position if Home Prices Gained Another 5 Percent.
• Over the Past Four Quarters, the Average Homeowner Gained $16,300 in Home Equity.

From the fourth quarter of 2017 to the first quarter of 2018, the total number of mortgaged homes in negative equity decreased 3 percent to just under 2.5 million homes or 4.7 percent of all mortgaged properties. Negative equity decreased 21 percent year over year from 3.1 million homes – or 6.1 percent of all mortgaged properties – in the first quarter of 2017.

Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity the primary driver of home equity wealth creation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018, the largest 12-month increase in four years. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Washington led all states with 12.8 percent appreciation, and its homeowners also had much larger home-equity gains than the national average.”

Negative equity, often referred to as being underwater or upside down, applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.

The national aggregate value of negative equity was approximately $284.8 billion at the end of the first quarter of 2018. This is up quarter over quarter by approximately $100 million, from $284.7 billion in the fourth quarter of 2017.

“Home equity balances continue to grow across the nation,” said Frank Martell, president and CEO of CoreLogic. “In the far Western states, equity gains are fueled by a long run in home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”

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Florida home sale prices rise, a lack of homes makes it tough on buyers

As Florida home sale prices rise, a lack of homes makes it tough on buyers

Home sale prices continued to rise both nationally and statewide in April as a prolonged dearth of available homes on the market is making it tough on buyers. A total of 24,804 single-family homes changed hands across Florida last month, up 4.1 percent from a year ago, the Florida Association of Realtors reported.

 New listings for single-family homes in April rose 9.8 percent year-over-year, while new townhouse-condo listings increased 8.3 percent. This trend will hopefully continue, which would help ease the too-tight inventory in many areas."

Sales of single-family homes statewide totaled 24,804 last month, up 4.1 percent compared to April 2017. Meanwhile, the statewide median sales price for single-family existing homes was $253,895, up 8.1 percent from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in April was $190,000, up 10.5 percent over the year-ago figure.

April was the 76th month in a row that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in March 2018 was $252,100, up 5.9 percent from the previous year; the national median existing condo price was $236,100. In California, the statewide median sales price for single-family existing homes in March was $564,830; in Massachusetts, it was $369,000; in Maryland, it was $283,405; and in New York, it was $260,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 11,236 last month, up 9.2 percent compared to a year ago. Closed sales data reflected dwindling short sales and foreclosures in April: Short sales for townhouse-condo properties dropped 27.5 percent and foreclosures fell 41.8 percent year-to-year; while short sales for single-family homes declined 48.8 percent and foreclosures fell 50.7 percent year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

Demand for single family homes remains strong across the state and this abundance of buyers continues to deplete active inventories and drive up prices."

For-sale inventory in April remained tight, at a 3.8-months' supply for single-family homes and 5.8-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.47 percent in March 2018, significantly up from the 4.05 percent averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Research & Statistics section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors' website.