In our Vero Beach Real Estate News for May 2014:
Vero Beach Housing Market Happy to See Spring Arrive
The term "Spring Thaw" means different things to different people, depending on where in the world they may live. But a thaw in the Vero Beach housing market is the same no matter where you may live.
After a weather-weakened winter for Vero Beach housing sales, as well as most everywhere else in the country, more potential buyers signed contracts to buy a Vero Beach home in March.
The National Association of Realtors says pending sales of existing homes rose 3.4 percent from the previous month, the first monthly increase in nine months.
Lawrence Yun, chief economist for the National Association, said, “After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers.”
Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy. The increase in contracts for Vero Beach homes was welcome news because actual sales of existing homes were flat in March. Contract signings in March were still 7.9 percent below March 2013.
A slow start to the year will likely mean fewer overall sales throughout this year compared with 2013. The NAR forecasts total existing home sales of 4.9 million this year, compared with 5.1 million last year. The association forecasts housing prices will rise another 6 percent to 7 percent this year.
Case-Shiller Thoughts on Home Pricing
The latest Case-Shiller Home Price Indices report, "Going forward, if home prices continue to rise, there are a limited number of options to offset the rising cost of purchasing a home: 1) an equally sizable increase in wages or 2) a marked reduction in credit restrictions. Given the significant slack in the labor market, the latter option of easing lending standards appears to be the most probable and fast-acting solution."
Despite continued price gains, most other housing statistics are weak.
Sales of both new and existing homes are flat to down. The recovery in housing starts, now less than one million units at annual rates, is faltering. Moreover, home prices nationally have not made it back to 2005. Mortgage interest rates, which jumped in May last year and are steady since then, are blamed by some analysts for the weakness. Others cite difficulties in qualifying for loans and concerns about consumer confidence. The result is less demand and fewer homes being built.
Vero Beach Homeownership at Lowest Level Since 1995
The Vero Beach homeownership rate in the first quarter of 2014 stands at the lowest since June 1995.
The rate of homeownership at the end of the first quarter of 2014 was 64.8%, which is 0.2 percentage points lower than the first quarter 2013 rate of 65%, according to the U.S. Census Bureau.
Mortgage Applications Dive
Applications for Vero Beach home mortgages fell last week to their lowest level since December 2000 as both refinancing and purchase applications declined.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.9 percent to 333.2 in the week ended April 25. That was the lowest level since December 2000.
The combination of higher rates, new regulation and tight inventory in the Vero Beach housing market are all leading to a weaker spring market than we have seen in years.
The MBA's seasonally adjusted index of refinancing applications declined 6.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.4 percent.
Fixed 30-year mortgage rates averaged 4.49 percent this past week, unchanged from the week before.
Call us today or use the contact link at our website to take advantage of the spring thaw in Vero Beach housing, and let us know how we can help you find the perfect Vero Beach home for your needs and your budget.