Lake Tahoe
Real Estate News - March 9, 2005 |
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| RAINY WEATHER SLOWS HOUSING STARTS IN CALIFORNIA Housing starts dropped significantly across California during January due to the bad weather, according to a recent report by the California Building Industry Association (CBIA). New housing permits issued for the month decreased 28.8 percent from December 2004 to 13,775. Of the permits issued, 71 percent were for single-family homes. "January's relatively low production is a direct result of the torrential rainfall in the state, particularly in Southern California. December 2004 was a much more accurate picture of where we are trending," said Alan Nevin, CBIA's chief economist. "I expect total housing starts in 2005 to be very close to 2004's levels, with interest rates rising a bit but still staying low by historical standards." COASTAL STATES LEAD HOME PRICE GROWTH The Pacific states led the nation in annual home price appreciation for the seventh consecutive quarter with home values increasing 17.7 percent the fourth quarter of 2003 compared with the fourth quarter of 2004, according to Freddie Mac's Conventional Mortgage Home Price Index (CMHPI). During the last five years, home values in the Pacific states, which include Alaska, California, Hawaii, Oregon and Washington, have increased 80.3 percent. The CMHPI for the fourth quarter of last year showed strong growth primarily along the coasts, where populations are on the rise but land availability for new home construction is limited. The South Atlantic states followed the Pacific states with the second highest annual home price appreciation at 14.1 percent. Nationally, home values rose 10.7 percent on an annual basis, and the slowest home price growth occurred in the East South Central, West South Central and East North Central regions. Economic activity in these areas was weaker due to significant decreases in manufacturing jobs. NAR CREATES NEW REAL ESTATE MARKET INDICATOR This week NAR announced the development of the Pending Home Sales Index (PHSI), a new leading indicator for the housing market. Based on pending sales of existing homes, including single-family, condo and co-op, the PHSI will gauge future home sales activity. A home sale is considered pending when the contract has been signed but the transaction has not closed; pending sales typically close within one or two months of contract signing. In January, the PHSI stood at 120.6, where an index of 100 is equivalent to the average level of contract activity during 2001. As 2001 was the first of four consecutive years of record home sales, a PHSI of 100 coincides with a historically high level of home sales activity. Regionally, the PHSI was highest in the West, where it increased 21.8 percent from one year earlier to 135.3. In the South, the PHSI increased 8 percent to 123.2. The Midwest and Northeast regions also experienced annual increases, reaching 113.5 and 105.9, respectively. FEWER AMERICANS ARE SATISFIED WITH THEIR JOBS Only half of all Americans in the workforce say they are satisfied with their jobs, The Conference Board recently reported. While a decline in job satisfaction prevailed among workers of all ages and across all income brackets, the largest decrease occurred among workers between the ages of 35 and 44 and those who earn from $25,000 to $35,000 annually. The survey found that companies' bonus plans, promotion policies, health plans and pensions are sources of worker dissatisfaction, while employees are most content with their commutes to work and their relationships with colleagues. "As large numbers of Baby Boomers prepare to leave the workforce, they will be increasingly replaced by younger workers, who tend to be as dissatisfied with their jobs, but have different attitudes and expectations about the role of work in their lives. This transition will present a new challenge for employers," said Lynn Franco, director of The Conference Board's Consumer Research Center. MAJORITY OF AMERICANS OVER AGE 65 OWN HOMES Nearly 80 percent of Americans age 65 and older own their homes, according to a recent study by the MetLife Mature Market Institute. The study, titled, "Demographic Profile of Americans 65+," shows that nearly one in eight Americans are 65 or older, and 10 percent of this age group lives below the poverty line. People between age 65 and 69 have a median net worth of $114,000, but home equity comprises 75.8 percent or $86,412 of that net worth. For those between 65 and 74 years of age, the average before-tax income is $35,118, with most coming from Social Security. "As we consider increased longevity rates, coupled with the low savings patterns of the Baby Boomers, we can anticipate that the older population of the future will not fare any better financially than this 65-plus generation," said Sandra Timmermann, director of the MetLife Mature Market Institute. "In addition, the fastest growing population group is those age 85 and older -- the group most likely to be frail and in need of care. These facts point to the pressure that will be placed on our economy, particularly our health and long-term care systems, and the need to help individuals plan for their economic security." Fast Facts Calif. median home price - Jan. 05: $485,700 (Source: C.A.R.) Calif. affordability index - Dec. 04: 19 percent (Source: C.A.R.) Calif. highest median home price by C.A.R. region - Jan. 05: St. Barbara So. Coast $1,206,250 (Source: C.A.R.) Calif. lowest median home price by C.A.R. region Jan. 05: High Desert $252,440 (Source: C.A.R.) Mortgage rates - week ending 3/3: 30-yr. fixed: 5.79%; Fees/points: 0.7% 15-yr. fixed: 5.33%; Fees/points: 0.6% 1-yr. adjustable: 4.14%; Fees/points: 0.8% (Source: Freddie Mac) Information provided by - C.A.R. Newsline is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 155,000 REALTORS® statewide. |
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