Homes sales drive DOW through 14,000

A rise in home sales helped fuel the Dow Jones stock market average through 14,000, for the highest close of the year. Rising 175 points, the market closed at 14,075. Investors were encouraged with the FEDS announcement they were holding interest rates at current levels, and news that January home sales were strong.

Home prices moving up nicely

In December, Case Schiller reports that home prices increased +6.8% over 2011. This was up from a +5.5% gain in November.  Tampa beat the national average at +7.2%. Forecasters are looking for a +9% increase during 2013 in the housing market. It is worth pointing out that today's home prices are about -30.0% below 2006 summer prices at the height of the housing bubble.

Sales of Condos in Pinellas up in January

 

David Bennett, CEO of Pinellas Realtors Organization has released a report of sales for the       condo/town home market in Pinellas for the month of January. Again, as in the single housing

market sales figures, three indices stood out.

 

1. sales increased by +6.6%

2. Median days on the market were down -26.0%

3/ Inventory was down -16.2%

 

There were 419 condo/town home sales reported as opposed to 660 single family homes. That points out the significance of condos (40% of all sales ) and their important contribution to the well fare of the Pinellas County real estate market. Also of note is the number of cash sales...75% of the units sold.

 

Sales of singe family homes in Pinellas County

 

David Bennett, CEO of the Pinellas Realtor Organization has released the market report above for single family home sales in Pinellas Country for January.  Three things stand out.
                                         1. Sales were up + 17.6% over last year
                                         2. The number of days on market dropped -22.6%
                                         3.  Inventory was down -15.5%
These trends have been reported for most major markets. It is interesting to note that 52% of the sales are cash.  There was a time when this figure was around 40%. This may be indicative of the number of coroporate buyers entering the market with cash.  Low inventories are holding back a faster recovery in the housing market.

Cash buyers gobbling up homes

Investment firms are rapidly becoming a major force in the housing resale market. In a market where there are more buyers than homes to purchase, these investment firms pay top dollar, close quickly, and grab many of the nicer homes. The Tampa Tribune reports that over a 6 day period in February,
American Homes for Rent purchased 19 homes, T-H-R Florida bought 21 homes, and Tropics Investment Group purchased 5 homes. Homes particularly attractive to these corporate cash buyers are in the $100-$200,000 range which can be rented a very respectable returns. For the individual home buyer coming up against these cash buyers, it can be a very frustrating experience when they lose out to them because the seller "prefers cash".

"Jetson's" home coming?

The "Jetson's" were on television 50 years ago living in a futuristic home. Today's home is rapidly becoming more like the Jetson home. "Smart phones" allow you to turn on your lights, check on your kids, and lock up your house.  You can even monitor the elderly, watch your pet door and any number of other things. Home automation is coming rapidly to the mainstream of American homes. So, I guess that begs the question..."What's in your smart phone?"

Interest rates tick up last week

The average rate on a 30 year fixed rate mortgage went up to 3.56% from 3.53% the week before. Interest rates continue to hover around their historic lows which should continue supporting the recovery taking place in the housing industry.

2012 homes sales reach 4.65 million

Existing home sales role +.4% in January creating an annual pace of 4.9 million units. This is the second highest level in 3 years reported by the National Association of Realtors. This rate for 2012 as up 9.2% over 2011. First time home buyers accounted for 30% of sales in December, short of the 40% usually found in a robust market. Economists look for 5.5 million home sales as a strong market. Low inventory levels continue to hold back market expansion.

Low housing inventory slowing recovery

At the end of the fourth quarter there were 1.82 million existing homes available for sale, which is 21.6 percent below the close of the fourth quarter of 2011 when 2.32 million homes were on the market. Unsold inventory is at the lowest level since January 2001 when there were 1.78 million homes for sale. This was reported by the National Association of Realtors.

Home values increasing the fastest in 7 years

WASHINGTON (February 11, 2013) - A growing number of metropolitan areas had higher median home prices in the fourth quarter, with the national price showing the strongest year-over-year increase in seven years, according to a National Association of Realtors quarterly report.

High gasoline prices to continue

Record high gasoline prices in February are likely to continue. Global crude oil futures continue to climb and seasonal maintenance of refineries has reduced supplies. Gasoline futures are up 11% this year and prices at the pump are up 14%. The AAA reports we have seen 33 straight days of price increases at the pump.

New home building confidence drops

The National Association of Home Builders/Wells Fargo reported a drop from 47 in January to 46 in February in consumer confidence with respect to new home purchases by prospective customers. A number below 50 suggests negative sentiment about the housing market.

What does $9.6 million buy in a house?

If you  had $9.6 million for a home, this is one approach you could take toward the life of luxury. This home video was featured on the CNN Money web site.

http://money.cnn.com/video/pf/2013/02/07/pf-unique-homes-model-airplane.cnnmoney/index.html

$100 Million oil recycling project at Port of Tampa

NexLube is investing $100 million to build a processing plant at the Port of Tampa to reclaim used oil. The plant goes into operation at the end of the year. This is the 12th such plant in the U.S., and the first for Florida. Over 1 billion gallons of used oil is collected each year in the U.S., with 146 million of that collected in Florida. The Tampa plant will process about 28 million gallons annually.The reclaim process produces motor oil, hydraulic oil, transmission fluid, and technical white oil used in food production. In the next decade, the U.S. will pass Europe as the world's largest producer of re-refined lubricants.

Depopulation move at Citizens Insurance

Citizens Insurance in Florida is making a move to send thousands of policy holders to private insurance carriers. This continues the trend to lessen the potential liability for Citizens and Florida tax payers.

Not normal housing recovery

Economists agree that we are in a housing recovery, but it is far from a normal recovery as seen in the
past. They see housing having a positive impact on 2013 growth expectations. The current forecast is for 5 million existing home sales and 500,000 new home starts. That would represent an increase of
about +8.5% for 2013. The recovery will continue, but not be robust.

Mortgage interest rates level

The rate on a 30 year fixed rate mortgage stayed at 3.53% last week, the same as the previous week. The rate on a 15 year fixed rate was 2.77% dropping from 2.81%.

Jobless claims drop

There were fewer requests for unemployment benefits this past week. The four week average dropped to 350,.500, the lowest level in 5 years. The decline was 5,000 requests lower than previous week.

Atlanta International Airport largest again

Hartsfield-Jackson Atlanta International Airport had an increase in passenger count of +3.1 million more in 2012 bringing total passenger count to 95.5 million passengers. This was 3.35% higher than the previous  mark of 92.4 million in 2011.

Home prices jump largest in 6 1/2 years

U.S. Homes jumped +8.6% in December, the biggest annual gain since May 2006. Low inventory was cited as the most important contributing factor. December home prices increased +.4% over November.

Retirement home sales increasing

WCI Communities announced a total of 461 new home sales in 2012 totaling $185.9 million, a 73% increase over 2011. The Company also announced 360 home closings generating $141.1 million, a 229% increase year over year. Other retirement communities are also reflecting growth in this market segment.

Sunshine in the housing markets

·The news for housing sales is extremely positive, according toReal Trends. Nationally sales are up

  across the board as are the prices of the homes that are selling.

·Construction on new properties rose nationally in December at the fastest clip in four years and

  the sale of new homes in the last month of 2012 is likely to remain at a two-and-a-half-year high.

·Existing homes are selling at their strongest pace in three years across the country.

·Historically low mortgage rates, an improving job market and an increasing number of households

 will probably keep spurring demand for housing this year.

·   “The housing market is coming back, gaining momentum, and it’s one of the bright spots for the economy

       as we start 2013,” said Robert Dye, chief economist at Comerica Inc.

·    The average price of newly sold homes in October jumped 13.1% year-over-year to $234,244 per unit

       according to figures recently released by Builder Local Markets.

·    Florida reestablished its top-10 ranking this year in a national education report that judges states by their education policies and performance.

·    Florida’s seasonally adjusted unemployment number remained relatively unchanged in December, dropping 0.1 percentage points to 8 percent. U.S. unemployment rate was 7.8 percent in December

 

S      Source:  Weekly Report, Prudential Tropical Realty, Clearwater, Fl.