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As Chicago Alderman Howard B. Brookins sees it, Walmart isn’t...

Mon, 11 Jun 2012 10:09:38 -0400

As Chicago Alderman Howard B. Brookins sees it, Walmart isn’t perfect, but at a time when unemployment in the city still hovers around 10 percent, it makes sense to embrace the world’s largest — and perhaps most controversial — retailer. “People can no longer say that not having a job is better than working at Walmart,” says Brookins, whose support for the store has made him a political target of some of the city’s labor unions.

Walmart opened its first Chicago store less than six years ago. Today, it’s up to five stores, having just opened one in the city’s West Chatham neighborhood in Brookins’ ward. Construction is slated to begin this summer on a sixth store in the East Lakeview neighborhood, and another three Chicago stores are in the works. The company hopes to eventually have dozens of stores throughout the Windy City.

Walmart, one of the most recognizable symbols of modern suburbia, is going urban.

In addition to its push in Chicago, the store is expanding its footprint in Atlanta. It’s hoping to enter New York City and Boston for the first time. And in perhaps its most aggressive move, Walmart last year announced plans for six stores within Washington, D.C., a city that currently doesn’t have any. Walmart isn’t the only store that’s expanding into central cities. In recent years, Target, Best Buy and Home Depot, among others, have been turning their focus to urban markets, which for political reasons (like labor opposition) and more practical concerns (like tighter land-use regulations) have posed a challenge for the big-box market in the past.

But times have changed. The country’s largest retailers have oversaturated rural and suburban America, and companies view urban centers as huge, largely untapped markets. Meanwhile, cities are desperate for the property and sales tax revenue the stores can generate, not to mention the jobs they’ll create and the access to fresh food they can provide at a time when the issue of food deserts has become a national concern. To be sure, there’s no lack of opposition to the big-boxification of cities. Most recently, the federal investigation into alleged government bribes by Walmart’s Mexican subsidiary has threatened to slow the retailer’s urban growth campaign in the United States. And there are still plenty of very vocal opponents who say that big-box retailers will hurt urban livability by driving away smaller independent businesses. Nevertheless, city leaders from Atlanta to Chicago and New York to New Orleans are now actively courting Walmart and other mega-retailers. Is it time to learn to love the big box?

Over the last half-century, the volume of retail in the country has grown at an astonishing clip. In the 1960s, the nation had about 4 square feet of retail per American; by 2000, that figure had increased nearly 10 times over. Most of that growth occurred in suburbs, as central cities emptied out. When the recession hit in 2008, retail took a massive hit, leaving an estimated 1 billion square feet of space vacant, much of it in suburban areas. Meanwhile, cities have become increasingly attractive destinations for many of the same types of people who historically left for the suburbs.

Today, big-box retailers look at urban centers like Washington and New York as “oases in this recession” with relatively strong economies, says Winston Orzechowski, research director at commercial real estate investment brokerage firm Calkain Companies. These companies don’t just want to move to the city — they have to in order to survive. Cities, which for so long were one of the few places in America ignored by major retailers, have now become their final frontier. “It’s not like they have anywhere else to go,” says Ed McMahon, senior resident fellow with the Urban Land Institute. “They’ve already saturated every suburb and small town in America.”

Yet moving to the city hasn’t been easy. Building suburban stores is simple: A Walmart Supercenter in the suburbs of Houston, for example, is basically identical to one outside Orlando. Urban markets, however, force retailers to adapt to existing spaces or lots, and sometimes require other creative steps. In Chicago, a Target is slated for the landmark Carson, Pirie, Scott and Company Building, designed in 1899 by Louis Sullivan. In Washington, several of the proposed Walmart buildings include plans for apartment housing above the store.

Walmart has also created new formats that seem particularly well tailored to the urban environment, like the Walmart Express, with a typical footprint of less than 15,000 square feet, and the Walmart Neighborhood Market, measuring about 40,000 square feet. It’s not using those models exclusively in the city — all of the company’s planned Washington stores will measure 80,000 to 120,000 square feet — but that’s still smaller than the typical Supercenter, which can measure up to 180,000 square feet.

It’s hard to overstate how much these kinds of innovations represent a reversal from just a decade ago. When Walmart and other big-box stores tried to crack urban markets back then, they were largely unsuccessful. Experts say their inflexibility on design issues was too big a hurdle to overcome. “Trying to do something that seems appropriate for the outskirts of Las Vegas … in a big city like San Francisco or New York or Chicago is not going to work,” says John Norquist, a former mayor of Milwaukee and current head of the Congress for the New Urbanism. “I think they’ve finally figured that out.”

There are other questions they’re being forced to answer, mostly for the first time: where to put loading docks, how many underground parking spots to have and how to incorporate transit stops. If done right, urban big-box stores could actually help foster the goals of the smart growth crowd by creating retail opportunities that are easily accessible to pedestrians and transit users, instead of forcing them to drive to the suburbs to shop. Advocates for the trend also cite the “transformative effect of retail” and believe the stores could help improve transitional neighborhoods.

Casey Chroust, executive vice president for retail operations at the Retail Industry Leaders Association, a trade group that represents just about all of the country’s major big-box stores, points to the 40,000-square-foot Whole Foods Market that opened in Washington’s Logan Circle neighborhood in 2000. Less than 20 years ago, the area was a hub for prostitution and other crime; today, it’s one of the city’s most desirable locations, replete with high-end furniture stores, gourmet restaurants and expensive real estate. Many observers say the Whole Foods (which originally opened under the name Fresh Fields) was a catalyst for change in the area. “It’s like having an anchor in a shopping mall,” says McMahon of the Urban Land Institute. “It’s bringing people into the neighborhood.”

Each city is taking a different approach to the big-box movement. While Mayor Michael Bloomberg of New York City has welcomed the prospect of Walmart, many local leaders like New York City Public Advocate Bill de Blasio and some City Council members vigorously oppose the retailer. As it stands, Walmart doesn’t have firm plans for a single store in the city, even though it’s aggressively eyeing the market. In Washington, D.C., Mayor Vincent Gray has welcomed the retailer; some City Council members have questioned the merits of the stores, but their criticism has generally been muted. Walmart’s first store is expected to open in the district next year. In both New York and D.C., labor groups and activists have loudly criticized the entrance of big-box stores — and Walmart in particular — into urban markets.

Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance, a national group that advocates for local businesses, says Walmart’s strategy is to saturate urban markets. She believes the company’s announced plans for cities like Chicago and Washington are merely the earliest stages of a broader effort. Cities, she says, should start developing plans now for how they will address the rapid expansion of Walmart and others so they’ll be prepared. She and other advocates argue that the economic benefits to a city from stores like Walmart have been overstated.

Both Walmart and city leaders often cite “leakage” — money that a city’s residents spend in Walmarts outside their city limits — as one of the primary reasons cities should embrace the stores. Residents are shopping at Walmart anyway, the logic goes, so why shouldn’t their own city get a piece of the action through property tax and sales tax revenue? “People are shopping the brand,” says Walmart spokesman Steve Restivo. “Our goal is to make access more convenient.” According to Walmart, Chicagoans spend nearly $500 million each year at Walmart stores outside the city; New Yorkers spend $200 million; and Washingtonians spend $40 million.

But Mitchell and other big-box opponents argue that the money isn’t significant enough to compensate for the negative impact Walmart could have on a local economy. A given market only has a limited amount of dollars to spend, and if residents start spending those dollars at Walmart, they’ll necessarily spend less at smaller, local retailers, causing job losses at those businesses. That’s particularly bad news, critics say, because a dollar spent at a local store will be more widely circulated in the local economy than one spent at a national chain with headquarters elsewhere. Opponents of Walmart’s urban endeavor like to cite a 2009 study of the chain’s first store in Chicago, which identified 82 stores that closed in its wake. (That study, notably, did not look at any new businesses that may have been created as a result of Walmart moving in, ignoring the “transformative effect” cited by Chroust and others.)

“The problem with the big-box stores is they have such economic clout in the marketplace that they’re able to undercut local businesses,” says D.C. Councilman Phil Mendelson. He’s pushed for legislation — so far, unsuccessfully — that would require big-box stores in his city to pay a living wage and benefits. The intention, he says, is to prevent a race to the bottom in terms of wages. Theoretically, if a big-box store offering low wages had a large enough presence in a city, it could drive down wages across the entire retail sector. Mendelson’s legislation would only apply to big-box stores; other businesses could still pay the minimum wage. His argument? Big-box stores can afford it. Supporters of Walmart say that the very fact that its stores have employees proves the company pays the market rate wage.

Still, Mendelson says he isn’t entirely anti-Walmart, just very skeptical. “I would say, superficially, having the world’s largest retailer interested in locating in the city when we’ve lost almost every other department store over the last four decades — that’s a good thing,” Mendelson says. “Having an economic competitor who underprices the market and causes a descent to the bottom, in terms of wages — that’s not a good thing.”

There’s also a debate within cities about whether they should use their planning and zoning regulations to block the store. In many urban markets, Walmart isn’t seeking tax incentives, making it difficult for city leaders to make demands. That’s a stark departure from what big-box stores have historically done in the suburbs, where they often play jurisdictions off one another to see who will offer a lucrative package of tax abatements and incentives.

With that dynamic removed, cities may see that the best way to exercise leverage is through the zoning process. But even that’s a difficult situation. In Washington, Planning Director Harriet Tregoning says the only way the city could block Walmart — even if it wanted to — would be essentially to make the store illegal, since its plans generally comply with existing zoning regulations. In New York, the city has had a bit more flexibility with a Brooklyn site that Walmart is rumored to be considering, because part of the development’s land is titled to the government.

Big-box supporters say it’s a gross misuse of the planning and zoning process to try to block a store on political grounds. In a free market, they argue, a big-box store such as Walmart shouldn’t face roadblocks so long as it operates legally. Others see it differently. “We’re in a highly regulated system,” says Tom Angotti, an urban affairs professor at Hunter College in New York. “I’d love to see where this free market is. Show me a municipality that doesn’t have zoning regulations, that doesn’t have taxes, that doesn’t have a regulatory structure that limits what businesses can do all the time because of an overwhelming public interest.”

There’s a bigger, less quantifiable argument against big-box stores’ move to the city, and that’s the question of whether the widespread urban expansion of these major chains will have profound changes on the character of city life. Urbanist Jane Jacobs wrote that “the trust of a city street is formed over time from many, many little public sidewalk contacts” at places like the bakery, the newsstand, the grocery store and the drug store. “We’re in danger of obliterating those things if we greenlight these retailers,” says Mitchell of the Institute for Local Self-Reliance.

Could those places really disappear if Walmart and other big-box stores come to dominate city life? Maybe. But that might not necessarily be a bad thing. “Cities are evolutionary,” says Tregoning, the D.C. planner. “New uses replace old uses.” As Tregoning sees it, Walmart doesn’t offer any meaningful shopping experience. It competes solely on price and convenience. She doesn’t sugarcoat her message to small businesses afraid that they can’t compete. “If Walmart can beat you,” she says, “then you are in the wrong business to begin with.” Instead, she says businesses that offer something Walmart can’t — like bars, restaurants and stores selling specialty goods or offering personalized levels of service — will continue to thrive.

Washington has less than 9 square feet of retail per resident, while the national average is more than two dozen, according to Tregoning. Anything that gives residents more shopping options — especially affordable ones — is a good opportunity in her book. Other city leaders appear to be embracing that philosophy. In Chicago, Alderman Brookins sees Walmart filling a similar void. “It may not be right for everybody, but in our community, it works,” Brookins says. “In our community, the mom-and-pop stores have long since left.”

In many ways, the notion of major retailers opening huge stores in central cities is a return to the way things were half a century ago, says the Urban Land Institute’s McMahon. “It was 1960. We called it a department store.”

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Affordability could be an issue in the Washington area’s...

Tue, 05 Jun 2012 10:04:20 -0400

Affordability could be an issue in the Washington area’s recovering housing market

By Lisa A. Sturtevant

The D.C. region has been called the leader of the nation’s housing market. Indeed, even as other markets across the country begin to recover, prices in the Washington area continue to rise and have been up for 26 out of the last 30 months, according to data from RBIntel.

But, as everyone knows, all real estate is local, and the recovery has been markedly different around the region. In the Washington metropolitan statistical area, or Washington MSA (which is defined as the District and 21 counties and cities in Maryland, Virginia and West Virginia), the median sales price is at 80 percent of the peak. However, there is wide variation across the region. In general, price recovery is more likely to be in closer in locations. The Virginia suburbs generally have fared better than the Maryland side of the river.
(RBIntel, GMU Center for Regional Analysis, April 2012)

The uneven recovery across the region suggests that affordability is a minor issue in some places but an increasingly pressing issue in others. For example, in Prince George’s County, where the median sales price in April is still just half of the county’s peak, housing remains relatively affordable. In the District, and in Arlington County and the City of Alexandria, on the other hand, affordability is a pressing issue again. The median home price in Arlington County was nearly $550,000 in April. The median price of a single-family home (excluding condos, but including townhouses) in the county was $680,000.

These are the same prices we saw five or six years ago when affordability was a front and center issue. Interest rates are somewhat lower now than they were at the market peak — which makes the overall cost of housing lower — but incomes and families’ purchasing power have been flat. In jurisdictions where prices have returned close to peak, it is very difficult for anyone but the highest income families and individuals to buy a house.

Amid the news of the continued recovery of our housing market, it is important to acknowledge that affordability is still an issue for many people. In some jurisdictions, affordability is just as big a problem now as it was at the peak of the housing market.

Lisa A. Sturtevant is an assistant research professor at George Mason University’s Center for Regional Analysis.

WALKING isn’t just good for you. It has become an indicator of...

Mon, 04 Jun 2012 13:02:53 -0400

WALKING isn’t just good for you. It has become an indicator of your socioeconomic status.

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Josh Cochran

Multimedia

Graphic

A Life of Walking Vs. Driving

Until the 1990s, exclusive suburban homes that were accessible only by car cost more, per square foot, than other kinds of American housing. Now, however, these suburbs have become overbuilt, and housing values have fallen. Today, the most valuable real estate lies in walkable urban locations. Many of these now pricey places were slums just 30 years ago.

Mariela Alfonzo and I just released a Brookings Institution study that measures values of commercial and residential real estate in the Washington, D.C., metropolitan area, which includes the surrounding suburbs in Virginia and Maryland. Our research shows that real estate values increase as neighborhoods became more walkable, where everyday needs, including working, can be met by walking, transit or biking. There is a five-step “ladder” of walkability, from least to most walkable. On average, each step up the walkability ladder adds $9 per square foot to annual office rents, $7 per square foot to retail rents, more than $300 per month to apartment rents and nearly $82 per square foot to home values.

As a neighborhood moves up each step of the five-step walkability ladder, the average household income of those who live there increases some $10,000. People who live in more walkable places tend to earn more, but they also tend to pay a higher percentage of their income for housing.

Although we have not studied all urban areas to the same degree, these findings appear to apply to much of the rest of the country. In metropolitan Seattle in 1996, the suburban Redmond area, home to Microsoft, had the same price per square foot as Capitol Hill, a walkable area adjacent to downtown, based on data from Zillow. Today, Capitol Hill is valued nearly 50 percent above Redmond.

In Columbus, Ohio, the highest housing values recorded by Zillow in 1996 were in the suburb of Worthington, where prices were 135 percent higher than in the struggling neighborhood of Short North, adjacent to the city’s center. Today, Short North housing values are 30 percent higher than those of Worthington, and downtown Columbus has the highest housing values in that metropolitan area.

In the Denver area, Highlands Ranch, an upscale, master-planned community 20 miles south of downtown, had housing in 1996 that cost on average 21 percent more than housing in Highlands, a troubled neighborhood adjacent to downtown Denver. Today, Highlands has a 67 percent price premium over Highlands Ranch.

People are clearly willing to pay more for homes that allow them to walk rather than drive. Biking is part of the picture, too. Biking and walking are part of a “complete streets” strategy that public rights of way should be for all of society — not just cars.

The rise in bike-sharing systems in Minneapolis, metropolitan Washington, and soon New York City makes it possible to imagine a future in which a third of a city’s population gets around primarily by bicycle. The popular Web site Walk Score has just added Bike Scoreto let people know which neighborhoods are most bikable.

Demand for walkable urban space extends beyond city centers to suburbs; in metropolitan Washington, more than half of the walkable places are in the suburbs, like Reston Town Center, 22 miles from downtown Washington; Ballston, in Arlington County; and Silver Spring, in suburban Maryland. Residents can easily get to grocery stores, cafes, libraries and work by rail transit, biking and walking.

Why is there an urbanization of the suburbs? Some baby boomers want to sell their large suburban houses and move to a walkable urban place but stay close to friends and family. Young families want the advantages of walkable urban life but also high-quality suburban schools. This trend is about both the revitalization of center cities and the urbanization of the suburbs.

To address the affordability challenge, a sensible strategy would include changes like zoning that allows homes with units in the back or over the garage. But the long-term solution is encouraging the building of more walkable places, which will reduce the price premiums by creating more supply.

(Disclosure: I am the president of Locus, a coalition of real estate developers and investors, and a project of Smart Growth America, which supports walkable neighborhoods and transit-oriented development.)

Different infrastructure needs to be built, including rail transit and paths for walking and biking. Some research has shown that walkable urban infrastructure is substantially cheaper on a usable square foot basis than spread-out drivable suburban infrastructure; the infrastructure is used much more extensively in a small area, resulting in much lower costs per usable square foot.

It’s important that developers and their investors learn how to build places that integrate many different uses within walking distance. Building walkable urban places is more complex and riskier than following decades-long patterns of suburban construction. But the market gets what it wants, and the market signals are flashing pretty brightly: build more walkable, and bikable, places.

A professor at the George Washington University School of Business and a senior fellow at the Brookings Institution.

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Mon, 04 Jun 2012 12:58:24 -0400

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Housing Prices Find Stability! Good news for real-estate...

Tue, 29 May 2012 23:53:00 -0400

Housing Prices Find Stability!

Good news for real-estate agents: In a recent Gallup poll of trustworthiness, they ranked higher than lawyers, a turnaround from a 2008 survey. And they continue to leave telemarketers, members of Congress and stockbrokers in the dust.

Some gauges on housing appear to be turning the corner, as Spencer Jakab reports on Markets Hub. Photo: AP.

The public even may start to believe the message from the National Association of Realtors, advertised throughout the housing debacle, that this is “one of the best times to buy a home.

With the Case-Shiller index down 35% over six years and mortgage rates hitting record lows, affordability has improved.

Sinking prices have made a mockery of their exhortations, but the S&P/Case-Shiller index of home prices in 20 major cities is showing signs of stabilizing. And, if it stops falling when the March reading is released Tuesday, it would mark the first time since last August that the index hasn’t shown a month-over-month decline.

Meanwhile, other housing gauges using different methodologies already appear to be turning the corner. CoreLogic’s national home-price index perked up in late winter and has risen in recent months at the fastest pace since the bubbly spring of 2006. And the Federal Housing Agency’s purchase-only house-price index rose 1.8% in March from the prior month.

With the Case-Shiller index down 35% over six years and mortgage rates hitting record lows, affordability has improved. The National Association of Realtors’ Housing Affordability Index for the first quarter was at its highest level ever.

Supply and demand are playing a role, too. In early 2006, housing starts peaked near 2.3 million on an annualized basis. They crashed below 500,000 by the spring of 2009 and have climbed back to just over 700,000 in April. That is still below the pace of household formation, which is close to one million.

Any recovery will be a far cry from the good old days, though. Home-price tracker Zillow Inc. reports that 31% of borrowers remain “underwater” on their mortgages and so are unable to sell even while there is a backlog of homes yet to enter foreclosure. And household income will have to rise when mortgage rates increase from today’s artificially low levels to keep affordability constant.

So it is premature to predict a boom. But if prices really are turning the corner, that has positive implications for banks’ and consumers’ balance sheets.

Don’t take a real-estate agent’s word for it, but prices don’t lie.

Write to Spencer Jakab at spencer.jakab@wsj.com

A version of this article appeared May 29, 2012, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: Housing Prices Show Signs of Stability.

Freddie Mac Releases New Trends Report

Sun, 27 May 2012 20:36:22 -0400

PR Newswire

MCLEAN, Va., May 25, 2012

MCLEAN, Va., May 25, 2012 /PRNewswire/ — Freddie Mac (OTC: FMCC) today issued the company’s Monthly Volume Summary for April 2012.

The summary, available on the company’s Web site at www.FreddieMac.com/investors/volsum, provides information on Freddie Mac’s mortgage-related portfolios, securities issuance, risk management and delinquencies.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today, Freddie Mac makes home possible for one in four homebuyers and is one of the largest sources of financing for multifamily housing.

SOURCE Freddie Mac

This week, interest rates took a major dive, if you’re in...

Fri, 25 May 2012 09:23:12 -0400

This week, interest rates took a major dive, if you’re in the market for a new home, read here to find out why you may want to buy right now!

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Wed, 23 May 2012 11:05:00 -0400

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As any real estate professional and many frustrated buyers know,...

Wed, 23 May 2012 10:42:51 -0400

As any real estate professional and many frustrated buyers know, FHA has “tightened up the purse strings” over the last few years. Now, it seems that’s starting to change. With increased property values and consumer confidence fueling the market, FHA might once again be a great financing option. Read the full story here.

Home Sales Up In April

Wed, 23 May 2012 10:31:54 -0400

PRESS RELEASE

May 22, 2012, 10:01 a.m. EDT

Home Sales Up, Prices Rise Again

WASHINGTON, DC, May 22, 2012 (MARKETWIRE via COMTEX) — Existing-home sales rose in April and remain above a year ago, while home prices continued to rise, according to the National Association of Realtors(R). The improvements in sales and prices were broad based across all regions.

Total existing-home sales(1), which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.4 percent to a seasonally adjusted annual rate of 4.62 million in April from a downwardly revised 4.47 million in March, and are 10.0 percent higher than the 4.20 million-unit level in April 2011.

Lawrence Yun, NAR chief economist, said the housing recovery is underway. “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices,” he said. “The general downtrend in both listed and shadow inventory has shifted from a buyers’ market to one that is much more balanced, but in some areas it has become a seller’s market.”

Total housing inventory at the end of April rose 9.5 percent to 2.54 million existing homes available for sale, a seasonal increase which represents a 6.6-month supply(2) at the current sales pace, up from a 6.2-month supply in March. Listed inventory is 20.6 percent below a year ago when there was a 9.1-month supply; the record for unsold inventory was 4.04 million in July 2007.

“A diminishing share of foreclosed property sales is helping home values. Moreover, an acute shortage of inventory in certain markets is leading to multiple biddings and escalating price conditions,” Yun said. He notes some areas with tight supply include the Washington, D.C., area; Miami; Naples, Fla.; North Dakota; Phoenix; Orange County, Calif.; and Seattle. “We expect stronger price increases in most of these areas.”

The national median existing-home price(3) for all housing types jumped 10.1 percent to $177,400 in April from a year ago; the March price showed an upwardly revised 3.1 percent annual improvement. “This is the first time we’ve had back-to-back price increases from a year earlier since June and July of 2010 when the gains were less than one percent,” Yun said. “For the year we’re looking for a modest overall price gain of 1.0 to 2.0 percent, with stronger improvement in 2013.”

Distressed homes(4) — foreclosures and short sales sold at deep discounts — accounted for 28 percent of April sales (17 percent were foreclosures and 11 percent were short sales), down from 29 percent in March and 37 percent in April 2011. Foreclosures sold for an average discount of 21 percent below market value in April, while short sales were discounted 14 percent.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said home buyers should look into financing in the early stages of their search process. “With the tight lending environment it’s a good idea to consult with a Realtor(R) about mortgages and program options in your area, and tips for boosting your credit score well in advance of making an offer on a home,” he said. “It helps to go into the process knowing what it takes to succeed.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to 3.91 percent in April from 3.95 percent in March; the rate was 4.84 percent in April 2011. Last week the 30-year fixed rate dropped to a record weekly low of 3.79 percent; recordkeeping began in 1971.

First-time buyers rose to 35 percent of purchasers in April from 33 percent in March; they were 36 percent in April 2011.

All-cash sales fell to 29 percent of transactions in April from 32 percent in March; they were 31 percent in April 2011. Investors, who account for the bulk of cash sales, purchased 20 percent of homes in April, compared with 21 percent in March and 20 percent in April 2011.

Single-family home sales rose 3.0 percent to a seasonally adjusted annual rate of 4.09 million in April from 3.97 million in March, and are 9.9 percent higher than the 3.72 million-unit pace a year ago. The median existing single-family home price was $178,000 in April, up 10.4 percent from April 2011.

Existing condominium and co-op sales increased 6.0 percent to a seasonally adjusted annual rate of 530,000 in April from 500,000 in March, and are 10.4 percent above the 480,000-unit level in April 2011. The median existing condo price was $172,900 in April, which is 8.1 percent above a year ago.

Regionally, existing-home sales in the Northeast rose 5.1 percent to an annual level of 620,000 in April and are 19.2 percent higher than a year ago. The median price in the Northeast was $256,600, up 8.8 percent from April 2011.

Existing-home sales in the Midwest increased 1.0 percent in April to a pace of 1.03 million and are 14.4 percent above April 2011. The median price in the Midwest was $141,400, up 7.4 percent from a year ago.

In the South, existing-home sales rose 3.5 percent to an annual level of 1.79 million in April and are 6.5 percent higher than a year ago. The median price in the South was $153,400, up 8.0 percent from April 2011.

Existing-home sales in the West increased 4.4 percent to an annual pace of 1.18 million in April and are 7.3 percent above April 2011. The median price in the West was $221,700, a surge of 15.9 percent from a year ago.

The National Association of Realtors(R), “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

NOTE: For local information, please contact the local association of Realtors(R) for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

(1) Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from multiple listing services. Changes in sales trends outside of MLSs are not captured in the monthly series. A rebenchmarking of home sales is done periodically using other sources to assess the overall home sales trend, including sales not reported by MLSs.

Existing-home sales differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

(2) Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).

(3) The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

(4) Distressed sales (foreclosures and short sales), all-cash transactions, investors and first-time buyers and are from a monthly survey for the Realtors(R) Confidence Index, posted at Realtor.org.

The Pending Home Sales Index for April will be released May 30 and existing-home sales for May is scheduled for June 21; release times are 10:00 a.m. EDT.

Information about NAR is available at www.realtor.org . News releases are posted in the website’s “News and Commentary” tab. Statistical data in this release, as well as other tables and surveys, are posted in the “Research and Statistics” tab of www.realtor.org .

What’s Hot? What’s Happening? Find out this...

Wed, 16 May 2012 13:55:47 -0400

What’s Hot? What’s Happening?

Find out this Saturday, May 19th at Urban Pace’s Spring Fling Event. This is your opportunity to find out about all of the newest condominium projects in all of the best locations throughout the metro area. From 12pm-4pm, come join us at 1104 17th Street, NW for refreshments and VIP updates on the hottest new homes in DC. Sales Managers will be on site to answer all your questions and hopefully, help you find your new home. Don’t miss it!

Is now a good time to enter the housing market, or...

Wed, 16 May 2012 13:45:20 -0400

Is now a good time to enter the housing market, or should you wait? The Wall Street Journal recently tackled this perpetually-asked question by asking two experts with opposing views on the matter to weigh in.

Economist Eric Lascelles said “Yes.” Here are a few highlights from his argument:

Buying is cheaper than renting in 98 out of 100 major metros (according to Trulia).
Housing prices are down 34 percent from their 2006 peak.
Investors ramped up their home buying by 64 percent in 2011, so it must be a good time to buy.
We are seeing unprecedented low interest rates; even if home prices are still dropping, rates may be rising and you don’t want to miss out.

Financial Analyst A. Gary Shilling said “No.” Here are a few of his reasons:

Five million future foreclosures are still “waiting in the wings” and will soon enter the market, pulling prices down even more.
If those who are foreclosed on double up or move in with their parents, excess inventory will rise further.
In December 2008, rates and prices seemed low and experts recommended buying, but prices have since fallen by 9.2 percent.
According to Shilling, prices may still drop by about another 20 percent.

Experts can debate this topic all day long, but in the end an individual’s decision as to whether they will buy a home requires taking a number of variables into account (property taxes, down payment, interest rates) as well as their own financial situation, for the total cost of ownership. The decision for DC area residents is further complicated by the fact that the region continues to be both an expensive place to rent or buy a home.

Average U.S. home prices - down by a third since 2006 and still...

Sun, 13 May 2012 19:22:15 -0400

Average U.S. home prices - down by a third since 2006 and still falling - will rise almost 4% a year for the next five years, according to a new forecast.

Market watcher Fiserv sees prices stabilizing by summer’s end and then climbing, quickly in some places until gains taper off. The forecast is based on an analysis of leading home price indexes.

Investors will drive much of the momentum, as they are now in cities such as Las Vegas and Phoenix.

First-time and trade-up buyers will eventually follow.

By the time home prices stop falling, they’ll be almost 35% below their 2006 peak, Fiserv says.

Separately, market researcher CoreLogic said Tuesday that U.S. home prices rose 0.6% in March from February, the first month-over-month increase since July.

Good affordability and declining inventories are key factors.

Conventional mortgage payments now account for just 12% of median family incomes vs. a historical norm of 20%, says Fiserv economist David Stiff.

The Fiserv forecast, done with Moody’s Analytics, assumes steady economic growth with no major shocks. Markets hardest hit by foreclosures will show the biggest five-year increases in home appreciation, it adds.

Six of the 10 markets where annualized prices are expected to rise most over the next five years had price drops of more than 50% from their peaks.

Las Vegas, for instance, is 61% off its 2006 peak.

Meanwhile, Realtor.com says Florida has more cities than any other state that show the strongest signs of a housing recovery.

Each quarter, the real estate website assesses housing data, including changes in list prices, inventories of homes for sale and local economies.

Phoenix, Miami and Orlando are the top turnaround cities in itsstudy, based on those markets’ improvements in the first quarter compared with a year earlier.

Asking prices are up more than 20% in Phoenix and Miami, says Realtor.com. Inventories are down more than 40%.

Naples, Fla., and Boise are also climbing in the rankings.

New to the list of top 25 markets are Oakland and San Jose, which are benefiting from growth in the tech industry.

The continued performance of local markets will depend a lot on the economy as well as on how quickly lenders dispose of distressed homes, says Realtor.com CEO Steve Berkowitz.

Realtor.com is owned by Move, which operates a network of real estate websites.

Our Capitol Hill Executive Residence at 1340 Maryland Ave, NE...

Wed, 09 May 2012 09:47:43 -0400

Our Capitol Hill Executive Residence at 1340 Maryland Ave, NE offers unparalleled living with complete access to Washington‚s most cherished landmarks and amenities. This extraordinary home for $899,900 features 3 bedrooms with 3 and a half bathrooms, historic details throughout, a private courtyard, 2 car garage parking and Viking Stainless Steel kitchen appliances. Contact Jeremy Aldridge at 202.303.3443 for more information.

Lyon Pointe in Arlington has begun its presale period. Eight...

Wed, 09 May 2012 09:20:41 -0400

Lyon Pointe in Arlington has begun its presale period. Eight luxury residences with outdoor space and parking available with easy access to Metro. For more information, visit www.lyonpointe.com today and make your appointment.

Mortgage Rates Continue Grinding Into Historically Low...

Wed, 09 May 2012 09:10:42 -0400

Mortgage Rates Continue Grinding Into Historically Low Territory

Mortgages rates were able to scrape together some minor improvements today but continue to have an exceedingly tough time keeping pace with the rest of the interest rate world. Slow-going gains aside, rates are still chipping away at some of their best levels of all-time. We’re now getting into territory where only a few days in history have seen more aggressive rate sheet offerings.

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The Conventional 30yr Fixed Best-Execution Rate remains unchanged unchanged at 3.875%. But we’re starting to see some softening of the buydown costs to move to 3.75%, but this varies greatly from lender to lender. In other words, the most aggressive lenders in the market are increasingly close to being at a 3.75% Best-Execution rate, but when considered in conjunction with the other large lenders’ rate sheets, average Best-Ex isn’t that close to moving down to 3.75% yet. (read more about Best-Execution calculations).

If Best-Ex does make it to 3.75% on average, it will be the first time in history that it has done so. We’re not necessarily expecting this to happen soon, but there’s a sort of tension building in the marketplace that makes it more and more possible if current levels are held or improved upon. This has to do not only with the low yield levels of interest rates in general, but also with the underlying MBS market.

MBS are the mortgage-backed-securities that most directly influence lenders’ rates. In order for rates to be as low as they are in the first place, loans with similar characteristics have to be pooled together to spread out risk to investors. After all, if you invested in a single loan that defaulted, you’d lose 100% of your money even if the default rate for all similar loans was 3%. But if you invested in 100 similar loans and the expected 3% defaulted, now you’d only lose 3%.

This oversimplified example is one of the reasons that securitization exists (the process of turning lots of little debt obligations into one bigger security). The securitization process for mortgages divides various pools of mortgages by 0.5% differences in rate. The bottom line is that your average plain vanilla mortgage will end up being slotted into the dominant 3.5% bucket with the next lowest option being 3.0%.

3.5% is the lowest bucket that’s ever seen much water, and for several reasons that are beyond the scope of our discussion, lenders can’t create new mortgages that fit into 3.0% buckets as safely as they can create 3.5%-bucket mortgages. This then, is the main reason that 3.875% has been so darn “sticky” as the lowest stable Best-Execution rate in history. Anything lower starts to become “3.0% bucket” material. We talked more about this in the past HERE.

Long story short, it will take more time and more stability at low rates before the underpinnings of the MBS market can adapt to make room for those frontier buckets. Until then, further gains are minimal and hard-fought.

Tomorrow brings a bit of a high risk event in the form of the 10yr Treasury Note Auction. This could help us or hurt us, but just like the recent Employment Situation Report, the extent to which a negative result could hurt us probably outpaces the extent to which a positive result would help us.

Today’s BEST-EXECUTION Rates

30YR FIXED - 3.875%
FHA/VA -3.75%
15 YEAR FIXED - 3.125-3.25%
5 YEAR ARMS - 2.625-3. 25% depending on the lender

Ongoing Lock/Float Considerations

Rates and costs continue to operate near all time best levels
Current levels have experienced increasing resistance in improving much from here
Rates could easily move higher or lower, but given the nearness to all time lows, there’s generally more risk than reward regarding floating
But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn’t always mean they’re done improving.
(As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

Buying A Home Won't Get Much Cheaper

Fri, 04 May 2012 09:42:00 -0400

Buying a home won’t get much cheaper

By Les Christie @CNNMoney May 3, 2012: 11:48 AM ET

Several housing experts are predicting that this year will be the last chance for homebuyers to cash in on the weak housing market.

NEW YORK (CNNMoney) — Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services (PNC,Fortune 500),said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

Mortgage payments at lowest level in decades

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Prospective homebuyers who’ve been sitting on the fence shouldn’t worry if they aren’t quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Hoffman, for example, is forecasting a 2% increase in 2013 compared with 2012. Meanwhile David Stiff, chief economist for Fiserv, predicts that prices will turn in the last quarter of 2012 and will rise 4.2% for the 12 months through September 2013.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentagedropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processingof hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

Home buying much cheaper than renting“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said. In some markets hit hard by foreclosures, the turnaround in prices is already underway. Phoenix recorded an 8.4% jump in home prices during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.“It’s crazy,” said Tanya Marchiol, founder of Team Investments, a Phoenix real estate investing firm. “Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000.”Miami saw a 4.6% increase quarter-over-quarter through April, andTampa, Fla., was up 4.4%, according to Clear Capital.Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”The Mortgage Bankers Association is forecastingthat the 30-year fixed will hit 4.5% by the end of the year.Greater demand for loans will help fuel the increase, according to Lebda.

6 Ways to get a great mortgage deal

Even though mortgage rates have been cheap, borrowing for home purchases has been sluggish. The Mortgage Bankers Association estimatesthat homebuyers will take out mortgage loans totaling about $415 billion this year, an increase of less than 3% compared with 2011. Next year, however, it forecasts that amount will almost double to $706 billion.As housing markets stabilize and prices stop falling, homebuyers will be even more confident about buying, said Humphries.”People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.”

First Published: May 3, 2012: 5:25 AM ET

New Homes Just Released at McGill Row

Fri, 04 May 2012 09:30:46 -0400

McGill Row at 2201 2nd Street is pleased to announce new releases! Now offering one and two bedroom condos with a few spacious duplexes. Please contact our McGill Row Sales Manager Michael Hundley at 202-580-6003 to schedule a tour.

The Standard Eleven was designed to celebrate the old while...

Fri, 04 May 2012 09:27:56 -0400

The Standard Eleven was designed to celebrate the old while pushing the envelope of the new. The homes are unique in every sense of the word: preservation of historic details and character, creative floor-plans, luxurious and thoughtful design details and cutting-edge technology combine to create these stand-out homes

- THE BUILDING
- Complete renovation of 1920’s Edwardian townhome
- Newly constructed rear addition
- Historically accurate wood replacement windows on front facade
- High-efficiency low-E glass in all windows
- Custom vintage lighting gives a warm, welcoming and distinctive atmosphere to the common corridors
- IN THE UNITS
- Select-grade white oak flooring in custom stain colors
- Luxurious Berber carpet in bedrooms
- Recessed lighting throughout
- Wall-wash lighting on select “art” walls within units
- Pre-wired junction boxes for additional custom lighting
- USB outlets in bedroom and living for direct charging of mobile devices
- KITCHENS & BATHS
- Bosch appliances standard in all units
- Upgrade available to retro Big Chill refrigerator in a broad range of fun custom colors
- Grohe kitchen faucet
- Painted maple cabinets with soft-close drawers and doors come standard in antique white but are available in any custom color of your choice if you buy during the pre-sale period.
- For more information call 202-580-6005 or visit www.thestandardeleven.com