Home Sales Increase Nationally During May

For the first time in two months, the year-over-year increases in existing home sales increased during the month of May, according to the National Association of Realtors (NAR). The exact number of home sales was 5.34 million, increasing existing home sales by 2.5%. Part of this increase is due to supply. For many months, it’s been a seller’s market because the number of homes for sale has not been able to meet the demand of home buyers on a national level.

The number of homes for sale increased from April, 2019, to May, 2019, from 1.83 million units to 1.92 million units in May. The types of homes included were single-family homes, townhomes, condominiums, and co-ops. There was also a year-over-year increase in the number of homes available for sale from 2018, which saw 1.87 million units available to May, 2019, which had 1.92 million units, which is a 4.3-month supply for potential home buyers.

Home buyers are eager to pick up homes as soon as they come on the market, which has been great for sellers and Realtors alike. The average amount of time that an existing home stayed on the market before going under contract was 26 days, and that actually accounted for 53% of homes under contract. This statistic is kind of unusual because average home prices are up in 2019 – by 4.8%, averaging $277,700 for resales.

All statistics were made on a national level, but specifically in the Southern region, resale sales were up 1.8%, and home sales also increased by 1.3% in the Southern region. Locally, homes for sale have been “flying” off the market, so if you are in the market for a home for sale or are considering buying a new home for sale, Contact Ron Lee Homes for your next new home purchase! Call 985-626-7619 or Email Info@RonLeeHomes.com.

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A New Wave of Generations To Make Up Future U.S. Housing Market

Baby Boomers have been a big target in the housing market but the future will see a shift in who the future housing market will capture. According to Morgan Stanley, Millennials and Gen Z will slowly take over.

In 2019, it is reported that Millenials (those born between 1981 and 1996) will become the largest generation in the nation. If all follows as planned, Gen Z (those born between 1997 and 2012) will take over in 2034. What does these mean for the housing market? This “youth boom” which is the merging of these two generations will heighten the economy and encourage a drive for demand in

housing.

“We’re going to see strong demand for housing, both multifamily and single family, over the medium to long term,“ says Richard Hill, who leads Morgan Stanley’s U.S. REIT Equity and Commercial Real Estate Debt research teams.

We can already see the effects in the housing market in many U.S. regions. Areas report bidding wars as the Millennials a forming households. Home prices across the country continue to rise due to the lack in inventory. There are a reported 22 million people between the ages of 20 and 24 across the United States that will be adding 3.6 million new households within the next five years.

“Our findings show that household formation will increase 1.7 times annually over the next five years, compared with the prior eight years,” says James Egan, a strategist on the firm’s Securitized Products Strategy team.

The areas with the change in the trend market are definitely effected in different ways. The West and Southwest are seeing a rapid change because the Millenials outnumber the Baby Boomers. This is the exact opposite for New England and the Rust Belt which have the least Millenial population.

With a new generation comes a new way of buying, iBuyers. An iBuyer is a company that uses a web-based questionnaire and home-value algorithms to purchase homes. Basically they use technology to make an offer on your home instantly. iBuyers will account for 3% of the U.S. existing home sales by 2030.

“3% might seem small in percentage terms,” says Brian Nowak, Head of U.S. Internet Research, “But given the large size of the residential market, which is around six million transactions a year and $1.8 trillion in transaction value, it means iBuyers would purchase roughly 175,000 homes in 2030.”

The U.S. housing market will see a massive change in both target market and purchasing tools within the next decade. This is great news for both single-family homes and multi-family homes.


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Friendly Lenders For Potential Home Buyers

According to the Urban Institute Housing Finance Policy Center, mortgage lenders are becoming more flexible with riskier applicants. Their quarterly credit availability report found that they are lending to people with lower credit scores, higher debt-to-income ratios and smaller down payments.

The report finds that the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and the Department of Agriculture’s rural home loans are taking the highest risk levels since before the crash. In fact, Fannie Mae and Freddie Mac have steadily taken more risk since 2009. This is great news for potential home buyers, especially those with less than perfect credit scores.
“Significant space remains to safely expand the credit box,” Laurie Goodman, vice president of the Housing Finance Policy Center, says.

The current lender risk levels are very low and will still stay within the “reasonable lending standards.” Loan officers around the country have seen a creative side to the lending industry recently which gives the “credit-strained buyer” hope. John Meussner, executive loan officer with Mason-McDuffie Mortgage Corp. in San Ramon, California, says he has seen a perfect example of this.

“Recently we saw one investor roll out a product offering up to $2 million in financing for FICO scores down to 600,” said Meussner.

The loan mentioned, will allow the borrower to have made a late payment on a mortgage within the past year and have major incidents such as foreclosure or bankruptcy. Many lenders will now take a score in the mid-500s with a small down payment. In the past, Fannie and Freddie have required a FICO score of around 750 to obtain a home loan.

The requirements might be a little less risky but lenders are still doing their homework on their potential borrowers. Paul Skeens, president of Colonial Mortgage Group in Waldorf, Maryland believes that the attention to documents in unbelievable detail has kept the market from seeing a lot of defaults.





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Reasons to Buy An Energy-Efficient Home

Everyone wants to save money and have a little extra in their pocket each year. One way to do this is through saving on utilities. Energy-Efficient homes are the way to do this and here are some reasons why.

There are many benefits to owning an energy-efficient home. When it comes to utilities, 30% of homeowners say the cost to heat, cool and illuminate their home is expensive. Energy Star rated homes use 20% less energy according to the U.S. Environmental Protection Agency. Energy-efficient homes are known to sell faster and at a higher price than un-certified homes. Studies done by the

Energy-efficient homes are held to a higher standard. There are many certification rules and these can vary by region. The house itself is not the only thing that must be certified. Many contractors such as the HVAC contractor must have proper credentials and have EPA training. There is a close inspection of the homes lot design, home location, sustainability of building materials, and even access to alternative transportation to meet minimum standards.

These homes are in demand. James W. Mitchell, founder of Renewablue, a home energy consulting firm in Fort Collins, Colorado, believes that this is the only time someone will save money when borrowing it to purchase a home. When looking for an energy-efficient home look for keywords in listings such as “green”, use an “eco-savvy” agent, request past utility bills from the seller and consider an energy-efficient mortgage.
National Association of Home Builders have shown that they can bring in on average about $5,000 more.




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Pending Home Sales on the Rise

Spring is not the only thing warming up this year, the National Association of Realtors (NAR) just reported that the pending home-sales rose 3.8% in March 2019 (April 2019 will be released May 30, 2019.)

“There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,” said Lawrence Yun, NAR’s chief economist.

The Pending Home Sales Index reported its findings based on a forward-looking indicator of the contract signings which rose to 105.8 in March from 101.9 in February. Yun notes that the increase

The break down by region is contrasting. In the Northeast there has been a decline in pending sales of 1.7% in March to 90.5. In the Midwest however, pending home sales grew 2.3% to 95.3 in March. The two regions with the biggest jump in March were the South which rose to 127.2 (a 4.4% jump) and in the West to 95.1 an 8.7% rise.

So far spring is looking up for the housing market and only time will tell if the selling season will remain a hot market.
has been influenced by the influx of mortgage applications and favorable mortgage rates.


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St. Tammany New Property Tax Supports School Safety

St. Tammany Parish school system has 55 school campuses with 39,000 students. The school system takes no cuts when it comes to safety. Currently there are 1,793 security cameras in schools and buses, perimeter fencing around all campuses, and visitor photo id systems in place at each school.

The new property tax, which 64% of voters supported, gives the school system money annually allotted from the new 2-mill tax. The money will pay for police officers and mental health providers at each school campus. Luckily the 2 mills will not cost St. Tammany homeowners additional tax money due to the School Board decision to cut 2 mills from the district’s tax rate.

Other outcomes of the May 4, 2019 voting were also positive. Sixty-five percent of the voters agreed to allow $175 million in bonds to go to St. Tammany schools for construction and technology purposes. Covington elected Mark Verret as the final member of the City Council. There was also a 10-mill, 10-year property tax for Lacombe area recreation renewed as well as a 5-mill, 10-year tax for the Pearl River fire district.
This month St. Tammany Parish voters approved referendums “to pay for police officers and mental health providers on public school campuses.”



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Madisonville Shipyard to Reopen

Madisonville, Louisiana is rich in boat and ship building history. In fact, the U.S. Navy built their vessels and repaired them in Madisonville during the War of 1812. Today plans were announced to reopen an unoccupied barge manufacturing plant on the Tchefuncte River in Madisonville.

The 230-acre plant was the home to a Trinity barge-manufacturing plant which closed its doors in

2015 when Trinity Marine Products announced the “demand for larger tank barges that transport oil is currently soft.”

“Due to encouraging conditions in the barge construction market, we are pleased that Arcosa Marine is restoring the Madisonville barge facility to full operation,” Arcosa Marine president Thomas Faherty said. “Arcosa Marine is preparing the facility to produce barges for customer delivery in 2019.”

Arcosa Marine Inc. will begin a $7.5 million renovation on the project and will hire approximately 149 employees. Gov. John Bel Edwards said the state will give them an incentive package that will include a workforce training program and Arcosa will also use the state’s Quality Jobs and Industrial Tax Exemption programs. They plan to install new equipment and upgrade the plant in order to produce barges.

“We are excited to welcome back the manufacturing operations of a marine mainstay in the St. Tammany Parish economy,” Edwards said in the news release. “Manufacturing jobs generate great economic activity and a high number of supporting jobs throughout the area. We’re encouraged by the return of barge manufacturing in Madisonville and hope that this new investment by Arcosa will lead to greater growth in the future.”

This is a great boost for the St. Tammany area economy. There will be an additional 236 indirect jobs for the region. The average annual salary for new jobs will be $51,400 plus benefits.

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