U.S. Housing Market Roars Into 2017

Case-Shiller Says Home prices shrug off higher interest rates to cap year of robust growth in 2016

Home prices jumped in December to their fastest full-year growth since 2013, as buyers shrugged off the effects of higher interest rates.

The S&P CoreLogic Case-Shiller Indices, covering the entire nation, rose 5.8% in the 12 months ended in December, compared with a 5.6% year-over-year increase reported in November.

The 10-city index gained 4.9% over the year, up from 4.4% the previous month, while the 20-city index gained 5.6% year-over-year, versus a 5.2% increase in November.

“The big takeaway from this report is that all signs that the housing market was going to cool in 2016 are now reversed,” said Ralph McLaughlin, chief economist at Trulia. “The spring selling season is going to be another doozy for home buyers.”

The hottest markets in the country remain concentrated in the northwest, as many buyers priced out of the Silicon Valley area flee to secondary technology hubs. Seattle led the way with a 10.8% increase, while Portland posted a 10% year-over-year gain and Denver had an 8.9% annual increase.

A number of markets that have seen prices grow modestly since the recession are starting to see much faster rates of increase than they had in the recent past. Tampa, Fla., jumped 8.4%, while Atlanta enjoyed a gain of 6.3% and Las Vegas increased 5.8%.

Nationwide, home prices hit a record in September and have continued climbing by more than 5% year-over-year since then, driven by strong demand and a shortage of homes for sale.

Housing inventory in December hit its lowest level since 1999, when the National Association of Realtors started tracking the data. The number of homes for sale was down 7.1% in January compared with a year earlier, the Realtors said.

“With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural,” said David Blitzer, managing director at S&P Dow Jones Indices.

While Mr. Blitzer said the rate of appreciation is much higher than the average pace of 1.3% since 1975, it remains within the range economists consider normal. “Home prices are rising, but the speed is not alarming,” he said. Annual growth has ranged from -4% to 7% about two thirds of the time since 1975.

If mortgage rates continue to rise, economists said, the current rapid rate of home-price growth likely will slow.

“I’m not sure that it’s a bubble because demand is coming from solid job growth and improving demographics,” said David Berson, chief economist at Nationwide Insurance. “I don’t think it’s a bubble, but I don’t think it’s sustainable, nor is it healthy.”

Wages increased 2.5% in the year ending in January, better than the 2% gains that were common earlier in the recovery but still much slower than the rate of home-price growth.

Month-over-month the U.S. Index rose 0.2% in December before seasonal adjustment, while the 10-city and the 20-city index increased 0.3% from November to December.

After seasonal adjustment, the national index rose 0.7% month-over-month, while the 10-city and 20-city index rose 0.9% month-over month. After seasonal adjustment, all 20 cities posted price gains.

December’s numbers reflect the peak of a sharp rise in mortgage rates since Election Day. Average rates for 30-year fixed mortgages rose from roughly 3.5% around Election Day to 4.32% at the end of December, according to mortgage company Freddie Mac. In the past week they averaged 4.16%, Freddie Mac said last Thursday.

Purchases of existing homes increased 3.3% in January from a month earlier, the National Association of Realtors said Wednesday, suggesting continued strong demand.

Looking for an experienced realtor who is an associate broker with 25 years experience and a strong negotiator call Lori Shaw 928-420-3013 Lori Shaw Associate Broker

Prescott Arizona – Everyone’s Hometown

The Beautiful Central Highlands of Arizona

Here in the cool highlands of central Arizona awaits an experience that can become yours for a lifetime. Yavapai Hills has been master-planned and engineered to preserve the natural beauty of the land. Its paved roads curve gently around pinion pine and juniper. Comfortable suburban living is combined with all the facilities and conveniences of urban living.

Beautiful Central Highlands

Prescott, Arizona

Voted one of the top places to retire in the US, Prescott lies in a mountainous section of west central Arizona surrounded by 1.2 million acres of the Prescott National Forest. Prescott’s mile high elevation assures clean clear air and an ideal year round climate. The average daytime temperature is 70 degrees, with the summer daytime average reaching 89 degrees and the winter daytime average reaching 52 degrees. Prescott combines the charm of Arizona’s historic past with modern schools, shopping, medical facilities and community programs.

whiskey-row--prescott-saija-lehtonenThe hub of many cultural activities, Prescott is home to five museums, four art galleries and the dramatic offerings of Yavapai College and Prescott Fine Art Association. In addition, the city offers acres of parks providing such activities as tennis, softball and golf.

 

Cathedral Glow

More About Prescott, AZ

Things to do in Prescott

City of Prescott Trails System

See Homes for Sale in the Prescott Area

Surrounding Region

Distance to Phoenix: 100 miles
Distance to Tucson: 215 miles
Distance to Las Vegas: 250 miles
Distance to Los Angeles: 390 miles
Distance to Flagstaff: 90 miles
Distance to the Grand Canyon: 120 Miles
Distance to San Diego: 395 Miles

The Ranch at Prescott Homes from $350,000 to 1 Million Plus!

The Ranch at Prescott, surrounded by the Prescott National Forest, is a planned community three miles east of downtown Prescott. The site of the former Bullwhacker Ranch, the approximately 1000 acres allow for large, spacious homesites, many with breathtaking, panoramic views …over 1,100. The natural beauty of The Ranch is maintained and protected by the Homeowner’s Association, operated by the homeowners. Tennis courts, walking paths and other common areas are added benefits of living in this prestigious community of distinctive custom homes.

Very convenient location to shopping (Gateway Mall, Costco & Trader Joes), golf courses, local lakes and hiking.

Visit www.WeKnowPrescott.com  to see all active listings along with valuable Buyer and Seller information.

The Lori Shaw Group 928-420-3013 will give you the valuable local knowledge you need to make a smart purchase on any homes in the greater Prescott Area. Lori is an Associate Broker with HomeSmart Fine Homes and Land and has over 23 years of experience.

Are You Really Ready for Home Ownership?

5 Signs It’s Time

You think that you’re ready to buy a home, but how can you be sure? The thought of owning a home is an exciting one, yet not everyone is ready. If you’ve been considering purchasing your first house, here are five signs that you’re ready to take the plunge into home ownership:
1. You Stick to a Budget
Financial experts will tell you that creating and sticking to a budget is a sign of financial maturity. With the over 1.5 million foreclosures in the United States, it’s easy to understand why this is so important. If you have already created a budget and have stuck to it, you’re more ready than the next guy to own your own home. When you follow a budget, you know exactly where your money is going each month. When you know where your money is going, you know whether or not you can afford a home of your own.
2. You Have a Down Payment
The old rule of thumb still stands: Enough money should be saved for a 20 percent down payment on a house. When you put 20 percent down on a home, you immediately have equity built into the property and you negate the necessity of private mortgage insurance. Even with a 20 percent down payment, you should still stay away from home’s that are out of your realistic price range. If you’ve budgeted for a $150,000 house, having 20 percent to put down doesn’t mean that you should look for an $180,000 home.
3. Your Income is Stable
Finding a stable job can be tough to do in today’s economy, but if you have a stable source of income, you can feel relatively safe making an investment in a home. If you are reliably employed, don’t forget to factor in any life-changes that may crop up in the near or distant future. Do you plan to go back to school? Are you going to start a family? Budget for the home you can afford five years from now, not the one you can afford today.
4. Your Credit Score is High
The higher your credit score, the better your interest rate will be. The better your credit score, the more likely you are to be accepted for a loan. If your credit is in excellent shape, you’re ready to buy a home. If, on the other hand, your credit needs some work, whip it into shape before you being the home-buying process. Before you buy a house, your debts should be paid off, any collections accounts should be closed satisfactorily, and your credit score should be in the 700’s.