U.S. Home Builder Focuses on Entry-Level HomesFirst Preston HT

25April

U.S. Home Builder Focuses on Entry-Level Homes

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The current housing market’s supply of homes continues to be tight with the majority of homes available for sale being higher-end properties. This leaves those who would be first-time homebuyers with fewer choices. But the nation’s largest home builder (by market value), DR Horton, is shifting its attention from high-end homes to building entry-level residences.

The company’s new line of homes, Express Homes, will start at $120,000-$150,000 and will be be rolled out in Texas, Georgia and Florida. Executives of the company see a strong demand for this market segment that is lacking in supply. D.R. Horton CEO Donald Tomnitz said, “We wouldn’t be getting into Express Homes if we didn’t think it was the next segment of the market to recover… As we move into this recovery we’ll see some encouragement from the government in terms of trying to get more people into entry-level homes.” Pictured above is an Express Home in Dallas, TX and below is another located in Houston, TX.

Outside analysts also see this shift in the market place. Stephen East from research firm ISI Group commented, “We view it as the right move. Horton’s cost structure and operational experience at the entry level makes them one of the few builders that can do this profitably. Also, we are firmly convinced the first-time-buyer segment is getting access to more credit, which will lead to more demand for this low-entry level product.”

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

18April

Best Markets for First-Time Homebuyers

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Spring is in the air and with that brings the beginning of home buying season. Everyone knows the three most important things about real estate are location, location, and location. So what are the best markets for first-time homebuyers to purchase in?

Realtor.com compiled a list of the top 10 markets for first-time buyers to purchase residential property in and based it on median listing price, inventory, unemployment rate, and age of inventory:

Pittsburgh, PA
Tampa – St. Petersburg – Clearwater, FL
Philadelphia suburbs in New Jersey
Fort Worth-Arlington, TX
Orlando, FL
Jacksonville, FL
Philadelphia suburbs in PA
Dallas, TX
Raleigh-Durham Chapel Hill, NC
Phoenix-Mesa, AZ

Steve Berkowitz, CEO of Move, Inc. the operator of realtor.com said, “As we head into home buying season, these markets show favorable conditions for first-time buyers, which is encouraging because these buyers are crucial to the housing market. First-time buyers have a widespread impact on the local housing markets. In transitioning from renters to owners, new buyers pay property taxes and other fees and taxes associated with home ownership that benefits local schools and services.”

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

14April

Castle Peak Homes Gives New Life to Older Properties

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Last year the housing market was mostly dominated by cash investors, many planning to flip properties or lease them out. So far during 2014 investors still play a large role in the market although to a lesser degree since interest rates and prices have continued to rise. Today we are taking a break from the housing market’s latest news and economic data reports to focus on a part of our business that brings new life to properties in need of a facelift.

Castle Peak Homes takes pride in improving the neighborhoods where we purchase properties by completing renovations that bring back the original glory of structures while including modern updates. Each neighborhood has its own charm and style and keeping this intact is important in preserving these areas. Castle Peak Homes embraces the original architectural style of each property and enhances them with modern day elements such as hardwood floors, granite counter tops and updated bathrooms.

One property Castle Peak Homes recently purchased and renovated was in Ft. Worth, Texas. From the outside this duplex looked worn down and tired. A fresh exterior coat of paint and bright new shutters helped transition this house to a home. The existing hardwood floors were refinished, new interior paint throughout added, and a privacy fence in the backyard was installed along with some beautiful landscaping. One of the kitchens was tiled to give it an undated feel as well. The ‘before’ pictures first and and the ‘after’ pictures are next.

2713 exterior before

Another purchased property, also situated in Ft. Worth, received a facelift. This house had worn carpet and out-dated dark wood paneled walls. A complete interior paint job, removal of the carpet and refinishing of the hardwood floors helped bring this house back to life. A highlighted area of transformation was in one of the homes bedrooms which featured a fireplace.

Fire Place Before Fire Place After

Castle Peak Homes is proud to add value to neighborhoods through the renovation of purchased properties and, at the same time, maintaining the character of each home as well as the charm and style of the neighborhood.

Please visit Castle Peak Homes for more information on our properties. For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

4April

Housing Market Thawing Slowly as Supply Increases

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The Federal Reserve’s recent two-day policy meeting painted a picture of sluggish growth in the economy for the first quarter of the year, mostly attributed to colder than normal weather which hindered economic activity. Federal Reserve Chair, Janet Yellen, commented on labor conditions being tougher in some ways now than in any other recession and stressed the Fed’s “extraordinary commitment” to aid recovery in the form of massive bond-buying and super-low interest rates for some time to come. The economic data has not been improving as quickly as many would have hoped for but there have been some positive reports that still point to a rebound. This should have a positive impact on the housing market. It’s time to put the first quarter behind us now and look for signs of growth during the second quarter in jobs, home supply, and home prices.

The U.S job’s report released Friday helped paint a brighter picture for the coming months. The economy added 192,000 new jobs during March and the unemployment rate held at 6.7 percent according the Bureau of Labor Statistics. These numbers came in around consensus but still do not point to a robust rebound. Kathy Bostjancic, director of macroeconomic analysis at The Conference Board, said, “Undoubtedly, there was some catch up in hiring following the inclement weather this winter. Still, the underlying hiring trend is encouraging, with more good news expected this spring and summer.” As the employment picture brightens up, this will help strengthen the housing market as more people will look to purchase homes.

Housing supply has been on the rise since January, an important factor in getting the housing market to thaw out and eventually start booming. The noted monthly supply in February was up slightly from January’s five month supply, citing 5.2 months of supply. Six months of supply is considered a healthy housing market. As more homes are built to increase inventory numbers, analysts believe this will help spur growth in the housing market. Homeowners looking to sell their property will have an easier time looking for a new residence, which should encourage sales and purchases.

As discussed in previous blog posts, the continued increase in home prices have made this a seller’s market, but have priced some potential buyers out of the market. While prices have continued to grow, they are increasing at a decreasing rate (January noted a slight drop of 0.08% in the Case-Shiller 20 City Home Price Index). This points to a possible retreat in gains, reflecting a more normal range in prices over the next few months. This will open the door to more market participants and will help get some momentum behind the housing market.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

26March

Key Indicators Point to Possible Pickup in Housing

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The U.S. housing sector has faced some challenges over the past several months with a colder than normal winter taking center stage in the minds of many. It seems as though spring couldn’t come soon enough. Inventories have remained tight, home affordability is still low, and home sales haven’t ticked up as quickly as most had hoped for. But with warmer temperatures ahead and the economy slowly improving, some key indicators show housing could start to see some growth in the coming months.

Homebuilder confidence rose slightly in March, signaling a pickup in housing. The National Association of Home Builders/Wells Fargo Index of builder confidence climbed to 47 from 46 in February. The Index gauges builder perceptions as “good,” “fair” or “poor” as it relates to current single-family home sales and sales expectations for the next six months. Although this number rose less than anticipated by economists, it’s a positive sign when taking into account that February’s reading was the biggest drop on record thanks to snowstorms, fewer prospective buyers shopping, and market and labor shortages. Readings below 50 indicate survey respondents reported more poor market conditions than good. The index’s components were mixed in March. The component gauging current sales conditions increased one point to 52 and the component measuring buyer traffic increased two points to 33. The component gauging sales expectations in the next six months dropped one point to 53.

U.S. weekly job claims for unemployment benefits increased by 5,000 two weeks ago but this number was lower than expected. The four-week moving average of new job claims which help to smooth out volatility, fell by 3,500, the lowest level since last November. Reported claims dropped 14,000 from February to March, pointing to further proof of job growth improvement. If this trend continues, housing should reap the positive benefits from increased hiring. People who have a steady income are more likely to consider purchasing a home. On Wednesday, Janet Yellen, the new Federal Reserve Chair, said harsh weather played an important role in the economy’s weakness during the first quarter and added that labor market conditions continue to improve.

Manufacturing also had some positive news to report citing faster than expected growth in February. ISM’s (Institute for Supply Management) U.S. manufacturing index rose to 53.2 from 51.3 in January. Readings for this index above 50 are a sign of expansion. Russell Price, senior economist at Ameriprise Financial Inc. in Detroit and, according to Bloomberg data the best ISM index forecaster over the past two years, commented, “Manufacturing remains a bright spot for the economy. There’s still a sizable amount of pent-up demand in the consumer and corporate sectors.” This bodes well for the housing industry which has been facing pent-up demand. As manufacturing for housing supplies picks up, more homes should be constructed.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

13March

Housing Geared Up to Grow this Spring

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The mercury is rising and springtime is just around the corner. Regions hit hard by winter storms are starting to thaw and analysts are predicting the housing market will do the very same in coming months. A tight housing supply continues to keep home prices high making this undoubtedly a seller’s market. The overall housing market for the year is positioned for continued growth.

Housing industry and home construction real estate concept as two gears or cog wheels shaped as family residential structures as an icon of neighborhood cooperation and community network connections. Demand for housing is still strong and expected to stay this way through the spring according to some analysts. The Conference Board, a nonprofit association of businesses, found the percentage of consumers who intend to buy a home within the next six months is the highest it has been since 2000. One reason for this rising demand is young people who are still facing a tough job market. A housing analyst with Moody’s Analytics predicts the economy will expand enough this year to enable these young people to move out of their parent’s home. While they may mostly rent, a decrease in vacancy rates should put upward pressure on rental prices prompting interested home buyers who currently rent to make a real estate purchase.

The rise in home prices is great news for millions of homeowners who have been underwater on their mortgage. Rising values should encourage owners to put their property on the market, helping to ease the tight housing supply. CoreLogic reported almost 3.5 million homeowners were lifted out of negative equity between the end of 2012 and mid 2013. Zillow estimated even more borrowers are back above water, citing 3.9 million homeowners. Chief Economist Stan Humphries, of Zillow stated in a recent release, “We’ve reached an important milestone as negative equity has fallen below 20 percent nationwide, which has helped free up marginally more inventory and contribute to further stabilization of the market.”

During the past year, existing home and condo sales have increased 11 percent almost topping the highest level in four years. The National Association of Realtors (NAR) predicts sales will remain about the same during this year.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

4March

New Home Sales Reach 2008 Highs

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Good news surrounding the housing market was released this week. It looks like the effects from abnormally cold weather hasn’t kept the housing market down as formerly suspected. January sales of new single-family homes was reported at a seasonally adjusted annual rate of 468,000 units. This number showed a huge jump in sales, surging to a 5 ½-year high since July 2008.

Previously reported, December home sales were down 7 percent from the month prior. This number was revised upwards from 414,000 to 427,000 sighting just above a 3 percent increase. This revision equates to only a 4 percent drop in new home sales in December showing that the housing market might not have been hit as hard by the cold temperatures as mentioned last week.

The 9.6 percent jump in new home sales in January exceeded what economists had forecast; 400,000 units. The Northeast, which has been bearing the brunt of the cold weather, actually recorded a 73.7 percent increase, hitting a seven month high. The South reported a five-year high sighting a 10.4 percent rise in sales. Sales in the Midwest dropped 17.2 percent and the West recorded an 11 percent increase.

New home sales numbers reported from the Commerce Department are based on signed contracts with the house being in any stage of construction. Existing home sales data is provided by the National Association of Realtors (NAR) and they report once the sales contract has closed. Given this difference, new home sales usually lead existing home sales by a month or two as it can take 30-60 days for a closing on a house to occur. Pending home sales, which are also reported on from time-to-time in this blog, overcome the lagging effect of existing home sales and center around existing home sales where the contract has been signed but not currently closed.

Housing prices still continue to ramp up. The Case-Shiller composite index reported a 0.8 percent increase in prices in December from the prior month, which was higher than economists predicted. Year-over-year, the index reported a 13.4 percent rise. Higher costs of labor and construction materials have been attributed to the increase in home prices.

As we move closer to the spring season it will be interesting what the trend in new home sales along with existing and pending home sales will be.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

25February

Home Affordability Harder to Find

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Today’s housing market is witnessing tight inventories, high prices and tighter credit requirements, making homes less affordable for Americans. The proof can be found in the pudding, or more specifically, in the U.S. mortgage applications report from The Mortgage Bankers Association (MBA) and in the home price report from the National Association of Realtors (NAR).

Applications for U.S. home mortgages dropped 2 percent to 397.2 as purchase and refinancing application decreased the week of February 7th. The index recorded its lowest level since December 2000 at the end of last year. The MBA’s refinancing index reported a .2 percent drop while loan requests for home purchases dropped 5 percent. Some analysts attribute the drop in applications to the extreme winter weather much of the country has experienced but the data points to the theory of home affordability dropping.

NAR recently released its data showing home prices increase 10.1 percent year-over-year in the fourth quarter of 2013. The third quarter of 2013 reported 12.5 percent year-over year gains. NAR chief economist Lawrence Yun in a release stated, “The vast majority of homeowners have seen significant gains in equity over the past two years, which is helping the economy through increased consumer spending. At the same time, home prices have been rising faster than incomes, while mortgage interest rates are above the record lows of a year ago. This is beginning to hamper housing affordability.” Although home prices have pulled back some, affordability is still waning.

Interest rates might also be playing a hand in this situation. Income levels have remained flat while interest rates have crept upward. The expensive home prices, caused in part to lack of supply and higher rates, have knocked out several potential buyers from the market. As rates increase, the amount of house one can afford drops, leading to issues of affordability. “Pricing is still reacting to demand outstripping supply, and until we see an increase in inventory, you’re going to continue to see price increases that will be higher than what has been anticipated,” said Richard Smith, CEO of Realogy.

Housing supply has been impacted by the harsh winter weather touching most of the country in the past several weeks. Builders can’t build new homes in these harsh conditions which keep the supply tight and buyers don’t want to venture out in these conditions to shop. Once the weather warms up, the market could experience pent-up sellers looking to buy which would be reassuring of the housing market recovery.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

21February

Weakness in Housing Permits and Starts

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The past few months have brought unusually cold weather to much of the nation and for the North East and Upper Midwest particularly, the polar vortex as they are calling it, doesn’t seem to be over. The frigid temperatures have some analysts wondering how it will affect some of the macro-economic data reports, like retail sales, unemployment, housing and the overall growth of the economy. December retail sales were revised downward; hiring did slowdown in December and January. Housing is also not faring well, specifically with regards to housing permits, housing starts and home sales. However, the brutally cold weather can’t take all the blame for the slowdown in growth.

January U.S. housing starts recorded their biggest decline in almost three years. The Commerce Department commented Wednesday that ground breaking dropped 16 percent to a seasonally adjusted annual rate of 880,000 units. This is the lowest level since September and the largest percentage drop since February 2011. Economists had expected starts to fall to only a 950,000-unit rate in January.

Housing starts can be strongly affected by the weather. Freezing temperatures, snow and ice can prevent construction but once the weather clears up, construction will ensue. For this reason it is anticipated that over the next few months, housing start data should rise as the weather warms up. We should see a resumption of construction on the backlog of homes.

Some have poked holes in the weather theory, noting that the Northeast, which bore the burden of the cold temperatures and snow storms, saw starts hitting its highest level since August 2008. Starts in the West, where temperatures have been warmer, declined. What is more concerning is the housing permit data recently reported.

Housing permits recorded a third straight month of declines, pointing to some underlying weakness in housing. Housing permits are not as strongly tied to weather and are a better representation of the fundamental state of the housing market. Housing permits fell 5.4 percent in January, citing the largest drop since June, reporting a 937,000-unit pace. Single-family housing permits waned 1.3 percent while multifamily permits slid 12.1 percent.

Thomas Costerg, a U.S. economist at Standard Chartered Bank in New York, stated, “The housing sector already slowed down in the fourth quarter and it’s not picking up. There is more than the weather at play and the underlying dynamics are not as favorable as people thought they were.”

Homes sales have been trending lower as buyer traffic was slowed in part to cold weather and lack of supply. Home resales fell more than expected in January and hit an 18 month-low. There are a lot of factors at play in these numbers and some analysts are counting on a surge in the Spring to bring the housing market out of the deep freeze.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

13February

First Preston HT Celebrates 26th Anniversary

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On February 14^th, the First Preston HT family of companies celebrates 26 years of business innovation and exemplary customer service. First Preston HT extends appreciation to our employees, our national network of associates, and our clients who have helped to cultivate a legacy of business success and community service.

The First Preston HT family of brands includes: First Preston, HomeTelos, HomeTracker, BidSelect, Lender Center, HT Solutions and Outdoor Quota Solutions. To learn more about First Preston HT, visit www.FirstPrestonHT.com. Remember to Like us on Facebook and follow us on Twitter.

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