Home Values Climb 0.8 Percent In April

Maybe homes in Greece are holding value better than we thought.

Between March and April of this year, home values rose 0.8 percent nationally, according to the Federal Housing Finance Agency's Home Price Index. It's the index's first month-to-month improvement since May of last year.

Values are down 19 percent since peaking 4 years ago.

Private-sector data affirms the government's report. 

Tuesday, the S&P's Case-Shiller Index also showed home values higher by 0.8 percent in April, on a monthly basis. Led by Washington, D.C. and San Francisco, 13 of the Case-Shiller's 20 tracked markets showed improvement in April. 

In March, just 2 markets did.

As a home seller , it's nice to see reports of rising home prices after multiple months of "bad news". However, the data may not be as rosy as it appears to be. National real estate surveys including the Home Price Index and the Case-Shiller Index are flawed for everyday buyers and sellers.

The biggest flaw is "age". Both the Home Price Index and the Case-Shiller Index report on a near 2-month delay.

This week, the calendar turns to July. Yet, we're still discussing housing news from April. The housing market of 60 days ago was very different from the housing market of today. Mortgage rates are different, market drivers are different, and the pool of buyers is likely different, too.

We can't discuss today's housing market with "April" in mind. The data is irrelevant.

Another flaw is that both reports are national in scope. Real estate, by contrast, is local.

When we cite the Home Price Index or the Case-Shiller Index, for example, and say "home values rose 0.8% in April", we're just giving a national average. On the local level, some markets rose by more, some rose by less, and others actually fell.

People buy homes on a specific block of a specific street in a specific neighborhood. Data for homes like that can't be captured in a national survey.

The group that gets the most value from the Home Price Index and Case-Shiller is Wall Street and policy-makers. The indices do a fair job of reporting how housing behaves as a whole, but for individuals concerned with buying and selling homes, the best place to find real-time, accurate data is from a real estate professional.

Top 25 Least Expensive U.S. Cities

A report issued Monday by the U.S. government showed core inflation rising 2.5 percent in the last 12 months for its biggest one-year gain since January 2010.

Everyday living is becoming expensive, it seems.

But there are some U.S. towns in which the cost of living remains affordable -- and downright cheap -- as compared to the national average. They're detailed in a BusinessWeek piece titled "The Cheapest 25 Cities In The U.S".

In comparing costs across 340 urban areas as compiled by the Council of Community & Economic Research, cities in Texas, Arkansas, Tennessee and Oklahoma ranked consistently high. Cities in Hawaii did not.

Take note, though. Although the BusinessWeek piece highlights inexpensive cities in which to live, a low cost of living does not necessarily correlate to a high standard of living. Cost-leader Harlingen, Texas, for example, boasts a poverty rate nearly triple the national average.

Other "Inexpensive Cities" feature similar poverty rates.

The Top 10 "cheapest cities", as shown by BusinessWeek are:

1. Harlingen, Texas
2. Pueblo, Colorado
3. Pryor Creek, Oklahoma
4. McAllen, Texas
5. Cookeville, Tennessee
6. Commerce-Hunt County, Texas
7. Brownsville, Texas
8. Fort Smith, Arkansas
9. Muskogee, Oklahoma
10. Springfield, Illinois

And, at the other end of the spectrum, the top 5 most expensive cities/areas were, in order, Manhattan, New York; Brooklyn, New York; Honolulu, Hawaii; San Francisco, CA; and Queens, New York.

Manhattan's cost of living is more than twice the national average.

The complete list is available at the BusinessWeek website.

How Do I Clean Up A Broken Compact Fluorescent Bulb?

Compact fluorescent light bulbs are widely praised for their energy-efficiency and relatively low price points. However, unlike traditional light bulbs, they pose a specific health risk to humans and pets.

Most compact fluorescent light bulbs are loaded with mercury vapor and mercury is poisonous -- even in very small doses.

And, unfortunately, sometimes light bulbs break, releasing toxins into the air.

To assist homeowners in Greece , the EPA published a series of CFL-handling guidelines on its website under the heading "How Should I Clean Up A Broken Fluorescent Bulb?".

The EPA's advice is specific and geared toward safety. A few of the tips include:

1. Have people and pets leave the room immediately
2. Shut down your home's HVAC unit to prevent airflow
3. Using rubber gloves, place glass fragments and "powder" in a glass jar, or sealed plastic bag.

In addition, the EPA says to throw out all clothing and bedding that has come into direct contact with a broken bulb. You should not attempt to wash items such as these. They may contain mercury fragments that could contaminate your laundry machines and/or your sewage system.

Lastly, make sure to keep your CFLs separate from your regular trash; they're not meant for landfills. Compact fluorescent light bulbs should be recycled with a verified waste management company.

You can find one at http://earth911.com.

New Home Supplies Drop, And So Does Homebuilder Confidence

On paper, the market for newly-built, single-family homes looks healthy.

Last month, the number of new homes sold on an annualized, seasonally-adjusted basis tallied 319,000. The May reading is the second-highest of the year, and 6 percent above the current 12-month average.

These are strong numbers in isolation. However, after accounting for the dwindling supply of new homes for sale as well, the figures look even stronger.

In May, at the current pace of sales, the complete, national inventory of new homes for sale would have been sold in just 6.2 months. 

That's the quickest pace in a year and a 3-month improvement from a year ago.

To hear it from homebuilders, though, you'd think that sales were crashing.

Homebuilder confidence slipped to a 9-month low this month; builders report slowing foot traffic; and the prospects for the next 6 months appear weak. This is not the portrait painted by HUD's May New Home Sales report.

As a home buyer in Rochester , this dichotomy may work to your advantage.

Falling supplies and rising demand correlate to higher home prices. Yet, builders are pessimistic for their market. Therefore, despite the economics, psychology may help buyers experience more favorable negotiations, including complimentary upgrades and other builder concessions.

If you're a buyer in today's market, it's a reason to consider the new home market. There may be good value once you know where to look.

A Simple Explanation Of The Federal Reserve Statement (June 22, 2011 Edition)

Wednesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 10-0 -- the fourth straight unanimous vote for the nation's Central Bank.

In its press release, the FOMC said that the economy is recovering, although "somewhat more slowly" than what was expected. Labor markets have been weaker than anticipated and the Fed believes that is, in part, a result of higher food and energy costs, and supply chain disruptions as a result of "tragic events in Japan".

Some economic bright spots identified by the Fed include expanding household spending, and increased business investment.

These comments were in-line with what Wall Street expected from Chairman Ben Bernanke and the members of the Federal Open Market Committee.

The Fed stayed on message with respect to inflation, too. It acknowledged inflationary pressures on the economy, but attributed them to rising commodity costs and the aforementioned supply-chain disruption. The Fed expects long-term inflation to be stable. 

And, lastly, the Federal Reserve re-affirmed its plan to end its $600 billion pledge to bond markets June 30, and to hold the Fed Funds Rate near zero percent "for an extended period" of time. 

Again, no surprise.

Mortgage market reaction to the FOMC statement has been even this afternoon. Mortgage rates in Greece are unchanged and leaning lower. Note that sentiment can shift quickly, however. If today's mortgage rates fit your budget, consider locking in your rate.

The FOMC's next scheduled meeting is August 9, 2011.

Existing Homes Sales Slip In May

Home resales slipped 4 percent in May, falling below the 5,000,000-unit mark on a seasonally-adjusted, annualized basis for the first time since February.

April's resales were revised lower, too.

Analysts were surprised by the figures because it runs counter to the National Association of REALTORS® monthly Pending Home Sales reports.

The association's Pending Home Sales Index is purported to be a forward-looking indicator for the housing market because 80% of homes under contract close within 60 days and recent Pending Home Sales readings show an increase in "pending" homes.

This month's Existing Home Sales, however, fell flat.

May's drop in home resales wasn't limited to a particular region or price point, either. All 4 geographic regions lag last May's results. Five of the 6 valuation ranges fell, too.

• $0-$100,000 : +6.7 percent annual change
• $100,000-$250,000 : -21.6 percent annual change
• $250,000-$500,000 : -16.0 percent annual change
• $500,000-$750,000 : -11.0 percent annual change
• $750,000-$1,000,000 : -20.7 percent annual change
• $1,000,000 or more : -11.0 percent annual change

The Existing Home Sales report wasn't all bad, however.

Although the months of housing stock rose to 9.3 in May, the number of homes for sale nationwide fell 1%. This suggests that there weren't as many buyers in May as compared to April -- a function of weather, jobs and the economy. Since April, the jobs market and the economy have shown steady, slow improvement and Mother Nature has been less destructive.

Home resales should rebound in June and July, therefore.

If you're a buyer in today's market, home supplies are higher and mortgage rates are lower. The combination makes for ample bargain-hunting. There's excellent "deals" to be found in Greece. Ask your real estate agent for help in finding them.

Homebuilder Confidence Slips To 9-Month Low

Despite rising new home sales and an increase in building permits nationwide, home builder confidence slipped to a 9-month low in June. The monthly Housing Market Index from the National Association of Homebuilders registered 13 this month -- three ticks lower than last month, and its lowest level since September 2010.

June's 3-point drop from May is the biggest one-month move since May 2010, the month after the expiration of the federal home buyer tax credit. The retreat could signal favorable pricing for new home buyers in Greece in the months ahead.

When builders get less bullish on housing, they may be more willing to negotiate for upgrades and discounts. Ultimately, this can help new home buyers buy homes at better, lower prices.

A closer look at the Housing Market Index shows why this may be true.

The Housing Market Index is not a single-reading statistic. It's a composite; the result of 3 separate surveys, each meant to measure a specific facet of a home builder's business. The survey questions are:

 

How are market conditions for the sale of new homes today?

How are market conditions for the sale of new homes in 6 months?

How is prospective buyer foot traffic?

1. How are market conditions for the sale of new homes today?
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

When builders reply, their responses are tallied and mapped to a scale of 1-100. Readings over 50 are considered favorable. Readings under 50 are considered unfavorable. The HMI has not been higher than 50 in more than 5 years.

In June, the HMI composite reading of 13 was anchored by falling foot traffic and reduced expectations for "future sales". Homebuilders expect new home sales to be down through the New Year.

Therefore, if you're a home buyer in New York and have considered "buying new", the time may be right for making an offer. Financing is cheap, home values are low, and builders are pessimistic -- a terrific combination for today's home buyer.