Pieces are in place for the housing industry to continue on its road to recovery. However, there are plenty of uncertainties that can derail the market, according to NAR Chief Economist Lawrence Yun.
Yun told more than 800 attendees at the CRE Finance Council annual conference in Washington, D.C. last month that for the last four years home sales have been essentially flat, at roughly 4.2 million homes. Good news though, NAR is forecasting a solid increase by the end of 2012 to about 4.6 million sales.
The reason: affordability remains at an all-time high, interest rates remain low, foreign buyers and investors remain interested in residential real estate, and the U.S. economy is strengthening, albeit modestly.
At the same time, corporations continue to sit on strong profits, the stock market is still heading up, and inflation remains relatively subdued. Even more encouraging for the housing market is that rental rates are rising. Home prices nationally have appeared to stabilize and all major home price trackers show prices going up in many areas, a trend that should help boost confidence among buyers and sellers.
The improvement in the U.S. economy remains modest at best, job gains still have a long way to go before the U.S. makes up for the 8 million jobs lost during the recession, home mortgage lending remains tight, and the federal budget deficit continues to weigh down on the country’s prospects.
The other area of uncertainty is what Washington will do. Until the real estate industry gets clarity on the rules and legislation coming down the pike in the next year, lenders are unlikely to restore their underwriting standards to something more normal.
For example, the qualified residential mortgage (QRM) rule: will regulators publish a rule next year with a minimum down payment requirement on “safe” loans? Will other provisions implementing the massive Dodd-Frank Wall Street reform law from two years ago chill lenders’ willingness to lend? What tax law changes, if any, will Congress talk about over the next year?
The bottom line: Despite all the favorable pieces in place for a meaningful housing recovery, the economy continues to be beset by uncertainty, and that’s leaving it an open question how much the housing market can recover in the next year.
The following article is a special report from Zillow.
Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.
According to the April Zillow Real Estate Market Reports, national home values rose 0.7% in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.
Zillow also reported that rents rose from March to April, increasing by 1.6%, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78% experienced a rise in rents.
The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7%.
“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”
Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March.
We all know the economy hasn’t been doing well the past few years. Most notably, the housing and construction industries have suffered tremendous setbacks. However, after several lean years, the home remodeling industry is starting pick up not only in certain areas around the country but also nationwide as a whole. This is in part thanks to a slight rise in existing home sales and existing home sale prices and continued low interest rates.
According to the National Association of Home Builders (NAHB) residential remodeling expenditures for owner-occupied improvements are growing nationally. Spending for 2011 topped $107.4 billion, up 3.5% from 2010. NAHB also tracks an index of remodeling contractors’ confidence and this index hit its highest level in five years in the last quarter of 2011.
Although overall spending has steadily increased, homeowners are spending more cautiously than they were before the economy crashed in 2008. This is causing homeowners to focus more on projects that most need renovating to keep up with modern trends and to keep up the overall value of the homes. Projects like kitchens and bathrooms are particular good investments in today’s remodeling market.
According to a Boston Globe report “between 2003 and 2008, there was a lot of upper-end activity. People were doing expensive kitchen projects. What we hear now is that they’re not gutting everything, but picking and choosing aspects to update.”
This particular trend is especially true for homeowners in the Northern Virginia, Washington, D.C. and Maryland markets. Homeowners want to make sure that they are getting the absolute best bang for their buck and are much more specific and demanding of where their dollars are being spent. This is a product of homeowners focusing most on what they need versus what they want.
Homeowners are also doing much more homework when it comes to selecting the type of fixtures and appliances they need to add to their remodeling projects. Homeowners aren’t looking so much at what they want to install but what is best for the overall value of their home and what is mostly likely to sell. Most homeowners are still a little timid about having their house stand out too much as the market is still tilted towards home buyers.
Fortunately, as the market and home owners evolve, so too does Elite Home Remodeling. We make sure to stay up to date with all of the latest trends and developments in the residential remodeling market and we make sure to give our award-winning service to every home owner we work with. Be sure to visit our website to see how Elite Home Remodeling can help you today!
Contrary to popular belief, you don’t need loads of cash to remodel or renovate your house. There are plenty of projects that Elite Home Remodeling can do for you without breaking the bank.
A great way to update a boring laundry room or mud room is to add a built-in bench, some new shelves or some beadboard paneling. These great additions will not only provide plenty of organizational and storage space, but you will get plenty of new design elements out of a once boring room.
In the kitchen, upper cabinets are a great way to increase the amount of storage space. Having taller upper cabinets allows you to not only store more things in your kitchen, but it will also make your room look taller which in turn gives your kitchen more value. Another great tip for your kitchen remodeling project is to refinish or reface your existing cabinets. This is a small fix that can make your kitchen look brand new. Plus, doing something as simple as changing the cabinet door hardware can give your kitchen a new style.
If you are looking to do some work in your dining room, a great and less expensive way to improve the look of the room is to add some chair railing and wainscoting. Keep the profiles of these trim features low and you will be surprised at just how affordable they really are.
Sometimes staying flexible is the secret to renovation success. No matter what room you are looking to remodel, always be on the lookout for discounted materials and fixtures at specialty stores. This is a great way to keep the overall cost of your projects down. Even ask your contractor if they have any leftover materials from previous jobs that they can use on your job.
Just because you are on a budget, does not mean you have to sacrifice style and elegance in your new renovations. Keep searching for unique and creative solutions and you can have a great looking home. Be sure to call Elite Home Remodeling to find out how we can serve you today!
At Elite Home Remodeling, we believe we have many advantages that set us apart from our competition. One of the best advantages we can provide to you, our current and future clients, is our ability to work with you when it comes to your budget.
Any home remodeling project can be a big investment both for your time and your money. We want to make sure your budget is the last thing you worry about on your remodeling project. That is why Elite Home Remodeling has many different ways of working with you to help afford the costs of remodeling.
Every home remodeling project in Northern Virginia, Washington DC & Maryland is going to be different. Therefore, we will cater our services to exactly fit your specific job and your specific needs. We will work with when determining deposits and down payment requirements, if any.
Elite Home Remodeling also accepts many different types of payment plans. Most remodelers today will only accept cash or personal check, unnecessarily increasing the financial burden on families undertaking remodeling projects.
At Elite, we accept the four major credit cards: Visa, MasterCard, Discover Card and American Express. Many home owners choose to pay with credit cards to not only pay off their remodeling projects on their own time line, but paying for your remodeling project with your credit card is a great way to earn rewards points through your credit card’s reward program.
We also accept online payments through PayPal’s online business invoices. It is as simple as making any other online payment. In fact, we will email you the invoice directly! You don’t even need a PayPal account. All of our online transactions are handled through PayPal’s secure invoice system.
Finally, Elite has recently teamed with SunTrust Bank to accept many different types of remodeling-specific loans. They offer many flexible financial options for your to pay for your remodeling project. We are also working on partnering with more local banks to offer even more services.
Be sure to contact Elite Home Remodeling today to find out all of our terms of service as well as how we can help you when it comes to your next home remodeling project.