More than two-thirds of Canadian households own their home, the highest rate of homeownership since the government started keeping track of that information.
Source:
Canadian Census Highlights Homeownership Trends
If you want an independent, authoritative guide to where the economy is heading, check out the composite quarterly forecast of the members of the National Association of Business Economics.
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Real Estate Outlook: No Recession In Sight
Maybe Amy Hoak of Marketwatch started something with her - pardon the pun - groundbreaking story “Home prices aren’t tanking everywhere” back in April. She pointed out then that there were really only five states in a housing recession — California, Arizona, Nevada, Florida and Michigan. Other parts of the country are “doing fine,” she wrote.
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Realty Viewpoint: Finally, Financial Columnists Write Positive Housing Stories
Well this morning, I got up at 4:15am to do a live C-Suite interview on Fox Business News at 6:45am. Always fun and I enjoyed meeting Jenna Lee in person after having known her only via telephone when she was a reporter. I must have done ok since they invited me back next friday morning. 
We talked about both housing starts and my appraisal firm, Miller Samuel. I had thought that the April numbers would show further decline. March was the lowest in 17 years and was down by 2/3 from the January ‘06 high. Economists surveyed generally thought starts would be down around 1.4%.
Starts jumped 8.2% but that was due to multi-family starts. Single family starts were actually down 1.7%. Overall starts are down 30.6% from the same time last year.
Bad Stats 101
Check out the Census’ press release quote:
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,032,000. This is 8.2 percent (±14.5%)* above the revised March estimate of 954,000, but is 30.6 percent (±6.7%) below the revised April 2007 rate of 1,487,000.
Translation of up 8.2 percent (±14.5%): Overall housing starts were anywhere from -6.3% to +22.7%. Seems wildly vague, doesn’t it?
Single-family housing starts in April were at a rate of 692,000; this is 1.7 percent (±11.7%)* below the March figure of 704,000. The April rate for units in buildings with five units or more was 326,000.
Translation of down 1.7 percent (±11.7%): Single-family starts were anywhere from -13.4% to +10%. Seems wildly vague as well.
If you think about it, nothing has really changed since last summer’s credit crunch that would change the direction of the housing market.
The credit markets are still frozen, mortgage rates have risen, underwriting standards are higher and reduced the buyer power of consumers.
“The headline increase in starts means nothing; it is all due to a rebound in the hugely volatile, but essentially trendless, multi-family sector,” said Ian Shepherdson of High Frequency Economics.
Builders have been reluctant to build because demand for new homes has plunged and the supply of unsold property remained high. The latest data show new-home sales, for March, were down 36.6% from a year earlier. On Thursday, the National Association of Home Builders reported its index for sales of new, single-family homes slipped to 19 in May from 20. The gauge is based on a survey of builders asked about prospects for sales.
“The magnitude of the housing bubble was unprecedented, and the corrective process promises to be a long and painful one,” MFR Inc. Joshua Shapiro said of the NAHB data. “Hence, it is hardly surprising that builder sentiment is still languishing very near its all-time low.”
As far as Miller Samuel (my appraisal firm) goes, we have been booming since February. Fox Business inadvertently inserted a text banner during my interview that referred to our now defunct acquisition by RL from last fall. I had terminated the take-over in March.
Our firm is built for a down housing market because lenders as well as other clients actually want to know what the value is and the nuances of housing markets we cover, rather than only the number needed to make the deal. We did not fare as well as others during the housing boom because of the erosion of underwriting standards and the shift of appraisal work from retail lenders to mortgage brokers.
The current lending environment is encouraging, in a contrarian sort of way, by getting back to basics. Hopefully this will permeate the entire lending process.
The housing boom was tough for appraisers who refused to bow to pressure to push values higher than they should have been and the work was given to those who would.
But the world is changing, and like the IRS, we are here to help…
From the:
Who Cares But
It’s Still Cool Department:
Christine Haughney’s Collateral Foreclosure Damage for Condo Owners in the NYT yesterday that sourced and used us for background, was the most emailed article in the New York Times both yesterday and today. THAT is cool (to me). It was designated to be an A1 story but was bumped for the earthquake in China coverage.
Source:
[In The Media] Fox Business C-Suite Interview for 5-16-08
McLEAN, VA — Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.05 percent with an average 0.3 point for the week ending May 8, 2008, down very slightly from last week when it averaged 6.06 percent. Last year at this time, the 30-year FRM averaged 6.21 percent.
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Little Movement in Mortgage Rates Seen This Week
Getting Graphic is a semi-sort-of-irregular collection of our favorite BIG real estate-related chart(s).
Click here for full sized graphic.
In the It’s Newer Homes That Stand Empty as Vacancies Rise by Floyd Norris the sharp increase in vacant houses are more heavily weighted toward new construction.
The Census Bureau reported that 2.9 percent of homes intended for owner occupancy were vacant at the end of the first quarter. That figure had begun to rise even during the housing boom, a little-noticed byproduct of the aggressive construction of homes encouraged by easy credit. Before 2006, that figure had never exceeded 2 percent.
The ease of credit combined with limited underwriting resulted in an excessive level of new construction to enter the market. That’s why the rental market is as weak as the sales market in those areas that were characterized by new development. The speculation drove development beyond the level of reasonable absorption causing investor units to enter the market as competitors to existing rentals.
Credit:
[Getting Graphic] Empty And New And More Of Them
If gas prices are any indicator of what’s going to happen to housing, then home builders should listen to what new car buyers are planning to do.
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Realty Viewpoint: New Home Sales Blue, Say Reports
