September Existing-Home Sales Down but Prices Continue to Improve (www.horizonpropertiesguam.com)

WASHINGTON (October 19, 2012) - September existing-home sales declined modestly, but inventory continued to tighten and the national median home price recorded its seventh back-to-back monthly increase from a year earlier, according to the National Association of Realtors^®.

Total existing-home sales¹, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 1.7 percent to a seasonally adjusted annual rate of 4.75 million in September from an upwardly revised 4.83 million in August, but are 11.0 percent above the 4.28 million-unit pace in September 2011.

Lawrence Yun , NAR chief economist, said the market trend is up. "Despite occasional month-to-month setbacks, we're experiencing a genuine recovery," he said. "More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest. Rather, inventory shortages are limiting sales, notably in parts of the West."

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.47 percent in September from 3.60 percent in August; the rate was 4.11 percent in September 2011.

The national median existing-home price² for all housing types was $183,900 in September, up 11.3 percent from a year ago. The last time there were seven consecutive monthly year-over-year increases was from November 2005 to May 2006.

Distressed homes³ - foreclosures and short sales sold at deep discounts - accounted for 24 percent of September sales (13 percent were foreclosures and 11 percent were short sales), up from 22 percent in August; they were 30 percent in September 2011. Foreclosures sold for an average discount of 21 percent below market value in August, while short sales were discounted 13 percent.

Total housing inventory at the end September fell 3.3 percent to 2.32 million existing homes available for sale, which represents a 5.9-month supply ⁴ at the current sales pace, down from a 6.0-month supply in August. Listed inventory is 20.0 percent below a year ago when there was an 8.1-month supply.

"The shrinkage in housing supply is supporting ongoing price growth, a pattern that could accelerate unless home builders robustly ramp up production," Yun said.

The median time on market was 70 days in September, unchanged from August, but down 30.7 percent from 101 days in September 2011. Thirty-two percent of homes sold in September were on the market for less than a month, while 19 percent were on the market for six months or longer.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said some buyers who could easily afford a mortgage can't assume they'll get one. "Home buyers need to be more focused on the mortgage process in the current environment where lenders and banking regulators are being risk averse," he said. "Shopping for competitive mortgage terms is a good idea, but it may be more important to find a bank that is willing to work with you given your credit history. Realtors^® can often recommend lenders that may have more reasonable underwriting standards."

First-time buyers accounted for 32 percent of purchasers in September, compared with 31 percent in August; they were 32 percent in September 2011.

All-cash sales were at 28 percent of transactions in September, up from 27 percent in August; they were 30 percent in September 2011. Investors, who account for most cash sales, purchased 18 percent of homes in September, unchanged from August; they were 19 percent in September 2011.

Single-family home sales declined 1.9 percent to a seasonally adjusted annual rate of 4.21 million in September from 4.29 million in August, but are 10.8 percent higher than the 3.80 million-unit level in September 2011. The median existing single-family home price was $184,300 in September, up 11.4 percent from a year ago.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 540,000 in September, but are 12.5 percent above the 480,000-unit pace a year ago. The median existing condo price was $181,000 in September, which is 10.0 percent higher than September 2011.

Regionally, existing-home sales in the Northeast fell 6.3 percent to an annual level of 590,000 in September but are 7.3 percent above September 2011. The median price in the Northeast was $238,700, up 4.1 percent from a year ago.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.10 million but are 19.6 percent higher than a year ago. The median price in the Midwest was $145,200, up 7.0 percent from September 2011.

In the South, existing-home sales increased 0.5 percent to an annual level of 1.93 million in September and are 14.2 percent above September 2011. The median price in the region was $163,600, up 13.1 percent from a year ago.

Existing-home sales in the West fell 3.4 percent to an annual pace of 1.13 million in September but are 0.9 percent above a year ago. With continuing inventory shortages in the region, the median price in the West was $246,300, which is 18.4 percent higher than September 2011.

The National Association of Realtors^®, "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.

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NOTE: For local information, please contact the local association of Realtors^® 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 The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to a 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.

³ Distressed sales (foreclosures and short sales), days on market, credit scores, all-cash transactions, investors and first-time buyers and are from a monthly survey for the NAR's Realtors^® Confidence Index, posted at Realtor.org.

⁴ 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).

The Pending Home Sales Index for September will be released October 25 and existing-home sales for October is scheduled for November 19; release times are 10:00 a.m. ET.

Horizon Properties Inc. is Guam’s leading real estate services provider and property managementcompany. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towardsproperty management results in outstanding property care and profitability. 

Commercial Real Estate Recovering at a Slower Pace ( www.horizonpropertiesguam.com)

Media Contact: Walter Molony / 202-383-1177 / Email

WASHINGTON (August 27, 2012) – Positive underlying fundamentals continue to support all of the major commercial real estate sectors, but a slowdown in job creation and ongoing tight loan availability has tempered growth in some areas, according to the National Association of Realtors® quarterly commercial real estate forecast. Lawrence Yun, NAR chief economist, said there are mixed results among the commercial sectors. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,” he said. “Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner – Canada.”

Although still positive, dampened demand is slightly moderating rent growth with the exception of the multifamily market.  “Sharply higher demand for apartments is causing rents to rise at faster rates,” Yun said.  “A return to normal household formation will mean even lower vacancy rates and higher rents in the future.”

The current commercial real estate cycle has been driven by shifts in demand without an oversupply of new construction.  “The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,” Yun explained.  “Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.”

With the exception of multifamily, vacancy rates remain above historic averages seen since 1999. Over that timeframe the typical vacancy rate has been 14.4 percent for the office market, 10.1 percent in industrial, 8.1 percent for retail and 5.8 percent in multifamily.

Vacancy rates are marginally declining and rents are modestly rising in all of the sectors, but significant changes in the outlook are unlikely before the end of the year. Many corporate decisions on spending and job hiring are on hold given uncertainty over the upcoming elections, whether Congress will effectively avoid a “fiscal cliff,” and unsettled issues such as health care and banking/financial regulations.

"Overall companies hold plentiful cash reserves, but they are hesitant to hire without clarity over how these outstanding issues will impact the bottom line,” Yun said.

"Commercial real estate gains could be thwarted if lending from small and community banks dry up from excessive regulatory compliance costs, and if international big-bank capital rules are applied to smaller lending institutions,” Yun added.

NAR’s latest Commercial Real Estate Outlook¹ offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets.  Historic data for metro areas were provided by REIS, Inc.,² a source of commercial real estate performance information.

Office Markets

Vacancy rates in the office sector are expected to fall from an estimated 16.1 percent in the third quarter to 15.6 percent in the third quarter of 2013. 

The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 10.0 percent; and New Orleans, 12.8 percent.

Office rent is projected to increase 2.0 percent this year and 2.6 percent in 2013.  Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, should be 24.1 million square feet in 2012 and 47.8 million next year.

Industrial Markets

Industrial vacancy rates are forecast to decline from 10.7 percent in the third quarter of this year to 10.5 percent in the third quarter of 2013.

The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.6 percent; Los Angeles, 4.8 percent; and Miami at 6.8 percent.

Annual industrial rent is likely to rise 1.7 percent in 2012 and 2.4 percent next year.  Net absorption of industrial space nationally is seen at 59.8 million square feet this year and 67.2 million in 2013.

Retail Markets

Retail vacancy rates are projected to decline from 10.9 percent in the third quarter to 10.7 percent in the third quarter of 2013.

Presently, markets with the lowest retail vacancy rates include San Francisco, 3.8 percent; Fairfield County, Conn., 3.9 percent; and Long Island, N.Y., and Orange County, Calif., both at 5.3 percent.

Average retail rent is forecast to rise 0.8 percent this year and 1.3 percent in 2013. Net absorption of retail space should be 10.3 million square feet this year and 20.1 million in 2013.

Multifamily Markets

The apartment rental market – multifamily housing – is expected to see vacancy rates drop from 4.3 percent in the third quarter to 4.2 percent in the third quarter of 2013; vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.

Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.0 percent; New York City and Minneapolis, both at 2.2 percent; and New Haven, Conn., and San Jose, Calif., both at 2.4 percent.

Average apartment rent is likely to increase 4.1 percent in 2012 and another 4.4 percent next year.  Multifamily net absorption should be 219,300 units this year and 236,600 in 2013.

The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community.  NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.

The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.

Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.

The National Association of Realtors®, “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.

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¹Additional analysis will be posted under Economists’ Outlook in the Research blog section of Realtor.org in coming days at: http://economistsoutlook.blogs.realtor.org/.

²Beginning in the third quarter of 2011, NAR commercial forecasts have been generated based on historical data provided by REIS, Inc., and do not correspond with prior historical information from previous forecasts.  This source permits coverage of more metro areas than were previously covered.

The next commercial real estate forecast and quarterly market report will be released on November 26 at 10:00 a.m. EST.

Horizon Properties Inc. is Guam’s leading real estate services provider and property managementcompany. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towardsproperty management results in outstanding property care and profitability. 

Strong, Independent Appraisal Industry Vital to Market and Loan Origination Process, Say Realtors® - (www.horizonpropertiesguam.com)

Media Contact: Sara Wiskerchen / 202-383-1013 / Email

WASHINGTON (June 28, 2012) – Developing and reporting property values more accurately is critical to improving market performance, reducing risk and strengthening the housing finance system, according to the National Association of Realtors^®.
That was the message delivered today by Frank Gregoire, immediate past chair of NAR’s Real Property Valuation Committee, in testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Involvement regarding appraisal oversight.

“As the leading advocate for housing issues, Realtors^® know that an accurate appraisal is an important part of the home buying process and that a strong and independent appraisal industry is critical to restoring faith in the mortgage origination process,” said Gregoire, a state-certified residential appraiser and president of Gregoire & Gregoire, Inc., in St. Petersburg, Fla. “There are many challenges currently facing the appraisal industry, and we see appraisals as one of the most crucial and overlooked aspects of the recovery of the real estate market.”

In his testimony, Gregoire said that a number of issues are impacting the credible valuation of real property, including appraiser competency and local market knowledge, challenges in accurately estimating market value in stabilizing markets, and the lack of oversight and regulation of Appraisal Management Companies (AMCs).

While many AMCs provide legitimate services for legitimate fees, a large number of AMCs are contributing to problems in the appraisal business and the overall housing market, said Gregoire. There is evidence that AMCs are often compromising appraiser independence by insisting appraisers include specific transactions as comparable sales, complete appraisals in unreasonably short turnaround times and comply with a broad scope of work not commensurate with the fee paid.
Many AMCs also require appraisers to accept any and all liability if a loan defaults if there is any claim related to the value of the property. All of this puts pressure on the appraiser, compromises their independence and negatively impacts the quality of the appraisal report, said Gregoire.

“Appraisers are facing undue pressure by AMCs to complete appraisals using distressed transactions as comparable sales, to deliver completed appraisal reports faster, and do a greater scope of work for a lower fee than a competing vendor,” said Gregoire. “The end result is that lenders and consumers are being underserved, and all of this is contributing to the failure to recognize positive movement in prices and values in many markets, creating an additional obstacle to the housing market recovery.”
NAR strongly supports the independence of appraisers and the appraisal process, and believes that all AMCs should be required to register with the state appraisal regulatory agencies where they are providing appraisal management services. Currently, AMCs that are subsidiaries of lenders are regulated at the federal level and not subject to state AMC registration requirements, which exacerbates problems because it leads to different standards and creates confusion. Lenders should also be prohibited from retaining an AMC’s services if that lender maintains any level of ownership in the AMC.

Other appraisal challenges include limitations of the current reporting format, lagging market information, discrepancies in market definitions, the funding structure of appraisal programs, and a declining number of appraisers. NAR represents about 30,000 state-licensed and certified appraisers throughout the country, who report that their colleagues are leaving the industry for many reasons, but among the most cited is that experienced appraisers refuse to work under the current AMC-imposed climate.
Gregoire said that while appraisals are the gold standard for mortgage origination, there is also an important role for broker price opinions, comparative market analyses and automated valuation models. While some organizations focus only on appraisals, NAR is the only real estate trade association that can speak with authority on appraisals and alternative valuation products.

NAR has long been seeking to ensure credible valuation of real property for the industry and since 1993 has encouraged appraiser members to demonstrate their professional competence by earning one or both of NAR’s appraisal designations. The Residential Accredited Appraiser (RAA) and General Accredited Appraiser (GAA) are awarded to certified appraisers with education and experience in excess of the minimum state qualifications.

Earlier this year, NAR also adopted the Responsible Valuation Policy, which serves as a guide for members and staff in advocacy efforts for federal legislation and regulatory policy. Through its subsidiary, the Realtors^® Property Resource (RPR), and its Real Property Valuation Committee, NAR is able to provide one of the most comprehensive sets of data and tools for determining credible home values.

The National Association of Realtors^®, “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.


Horizon Properties Inc. is Guam’s leading real estate services provider and property managementcompany. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towardsproperty management results in outstanding property care and profitability. 

Strong, Independent Appraisal Industry Vital to Market and Loan Origination Process, Say Realtors® (www.horizonpropertiesguam.com)

WASHINGTON (June 28, 2012) – Developing and reporting property values more accurately is critical to improving market performance, reducing risk and strengthening the housing finance system, according to the National Association of Realtors^®.

That was the message delivered today by Frank Gregoire, immediate past chair of NAR’s Real Property Valuation Committee, in testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Involvement regarding appraisal oversight.

“As the leading advocate for housing issues, Realtors^® know that an accurate appraisal is an important part of the home buying process and that a strong and independent appraisal industry is critical to restoring faith in the mortgage origination process,” said Gregoire, a state-certified residential appraiser and president of Gregoire & Gregoire, Inc., in St. Petersburg, Fla. “There are many challenges currently facing the appraisal industry, and we see appraisals as one of the most crucial and overlooked aspects of the recovery of the real estate market.”

In his testimony, Gregoire said that a number of issues are impacting the credible valuation of real property, including appraiser competency and local market knowledge, challenges in accurately estimating market value in stabilizing markets, and the lack of oversight and regulation of Appraisal Management Companies (AMCs).
While many AMCs provide legitimate services for legitimate fees, a large number of AMCs are contributing to problems in the appraisal business and the overall housing market, said Gregoire. There is evidence that AMCs are often compromising appraiser independence by insisting appraisers include specific transactions as comparable sales, complete appraisals in unreasonably short turnaround times and comply with a broad scope of work not commensurate with the fee paid.
Many AMCs also require appraisers to accept any and all liability if a loan defaults if there is any claim related to the value of the property. All of this puts pressure on the appraiser, compromises their independence and negatively impacts the quality of the appraisal report, said Gregoire.

“Appraisers are facing undue pressure by AMCs to complete appraisals using distressed transactions as comparable sales, to deliver completed appraisal reports faster, and do a greater scope of work for a lower fee than a competing vendor,” said Gregoire. “The end result is that lenders and consumers are being underserved, and all of this is contributing to the failure to recognize positive movement in prices and values in many markets, creating an additional obstacle to the housing market recovery.”
NAR strongly supports the independence of appraisers and the appraisal process, and believes that all AMCs should be required to register with the state appraisal regulatory agencies where they are providing appraisal management services. Currently, AMCs that are subsidiaries of lenders are regulated at the federal level and not subject to state AMC registration requirements, which exacerbates problems because it leads to different standards and creates confusion. Lenders should also be prohibited from retaining an AMC’s services if that lender maintains any level of ownership in the AMC.

Other appraisal challenges include limitations of the current reporting format, lagging market information, discrepancies in market definitions, the funding structure of appraisal programs, and a declining number of appraisers. NAR represents about 30,000 state-licensed and certified appraisers throughout the country, who report that their colleagues are leaving the industry for many reasons, but among the most cited is that experienced appraisers refuse to work under the current AMC-imposed climate.

Gregoire said that while appraisals are the gold standard for mortgage origination, there is also an important role for broker price opinions, comparative market analyses and automated valuation models. While some organizations focus only on appraisals, NAR is the only real estate trade association that can speak with authority on appraisals and alternative valuation products.
NAR has long been seeking to ensure credible valuation of real property for the industry and since 1993 has encouraged appraiser members to demonstrate their professional competence by earning one or both of NAR’s appraisal designations. The Residential Accredited Appraiser (RAA) and General Accredited Appraiser (GAA) are awarded to certified appraisers with education and experience in excess of the minimum state qualifications.

Earlier this year, NAR also adopted the Responsible Valuation Policy, which serves as a guide for members and staff in advocacy efforts for federal legislation and regulatory policy. Through its subsidiary, the Realtors^® Property Resource (RPR), and its Real Property Valuation Committee, NAR is able to provide one of the most comprehensive sets of data and tools for determining credible home values.

The National Association of Realtors^®, “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.


Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Shadow Inventory Falling (www.horizonpropertiesguam.com)

The discussion of inventory shortage has become more prevalent and more pronounced. The data at the national level clearly shows fewer listings. The decline in inventory has been particularly sharp in the following markets based on large broker reports from those areas: Phoenix, Las Vegas, San Jose, Cape Coral, downtown Seattle, and even the suburbs of Detroit. Local inventory data from Realtor.com also confirms that most markets have a measurably lower inventory now compared to one year ago.

Though new home construction has started to recover, the number of new homes coming onto the market today is far below the historical average and not even close to satisfying the current inventory shortage. In fact, the absorption of new homes is greater than new supply, thereby resulting in an actual fall in the number of newly constructed homes for sale.
The only potential source of relief to inventory shortage could be from distressed properties, the homes with a seriously delinquent mortgage problem or homes already in some stage of foreclosure. But any inventory addition from this submarket will only be for the short term because the pipeline of distressed homes is thinning out as well. At peak a couple of years ago there were 4.7 million homes with mortgages that were late by at least 3 months or already in foreclosure (according to a NAR estimate based on data from the Mortgage Bankers Association). As of the first quarter, 3.5 million homes are in the distressed stage. The more aggressive refinancing programs via HARP and HAMP for distressed homeowners will also further reduce the figure. Foreclosure completions occurring with each passing day further removes more properties off the distressed list and into financially-strong hands as evidenced by exceptionally low mortgage default rates of homebuyers from 2009 onward. Therefore, one cannot assume that some looming shadow inventory numbers are on the horizon to help relieve the housing shortage conditions of today.

Interestingly, the states with the increasingly acute housing shortages are the ones facing a rapid depletion in shadow inventory. Arizona and California are two examples. These states are non-judicial foreclosure states, meaning that a homeowner who does not pay his or her mortgage on time faces the immediate prospect of being forced out (California has been recently passing new laws to slow that process, however).

Meanwhile, states with continued decent numbers of inventory have a high shadow overhang. Illinois and Connecticut are examples. These two states require judicial proceedings before a home can be foreclosed and judges have been taking their time.

Very interesting dynamics are developing. Areas facing housing shortages today will likely continue to face shortage conditions over the intermediate future. Areas without a housing shortage could have excess inventory in the near future.

The one important unknown to all the inventory equations is the number of normal (non-distressed) homeowners who have been waiting and waiting to put their homes on the market. It is not possible to quantify. However, one would suspect that most of these non-delinquent homeowners would only list their home for sale with the intention of buying another one as a trade-up or trade-down property, so the net impact on inventory would be a wash.


Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

International Sales Continue to Climb in U.S. Market, Realtors® Report (www.horizonpropertiesguam.com)

WASHINGTON (June 11, 2012) – Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment.
According to the National Association of Realtors^® 2012 Profile of International Home Buying Activity, total residential international sales in the U.S. for the past year ending March 2012 equaled $82.5 billion, up from $66.4 billion in 2011. Total international sales were evenly split between non-resident foreigners and recent immigrants. The survey asked Realtors^® to report their international business activity within the U.S. for the 12 months ending March 2012.

“Today’s advantageous market conditions have drawn more and more foreign buyers to the U.S. in recent years, signaling how desirable and profitable owning property in this country can be,” said NAR President Moe Veissi, broker-owner of Veissi & Associates, Inc. in Miami, Fla. “Low housing prices, a good inventory condition and increased buying power with today’s exchange rates help attract international clients. Foreign buyers also have the advantage of working with a Realtor^®. Realtors^® who specialize in serving international clientele have a truly global perspective; they know what hurdles foreign buyers face when purchasing property in the U.S., and have the expertise and knowledge that comes from working with clients from different cultures and real estate practices.” 
 
International buyers bought homes throughout the country, but four states accounted for 51 percent of the purchases – Florida, California, Texas and Arizona. Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases. California was second with 11 percent and Texas and Arizona accounted for seven percent. Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers. Locations on the East Coast generally attract European buyers, while Asian buyers tend to purchase on the West Coast, particularly California. Florida attracts a diverse set of international buyers including South Americans, Europeans and Canadians. Meanwhile, Texas remains popular among Mexican buyers. Within markets in an individual state, it is not unusual to find concentrations of people grouped by nationality.
  
“Foreign buyers recognize that owning a home in the U.S. has many benefits, both financial and social,” said Veissi. “Many purchase property as an investment, vacation home, or to diversify their portfolio. In addition, many recent immigrants view homeownership as an important accomplishment. They believe that being a homeowner is one of many ways they become established in the U.S. and attain stability, security, and a sense of community.”

International buyers came from all over the globe, but Canada, China (The People’s Republic of China including Hong Kong), Mexico, India, and the United Kingdom accounted for 55 percent of all international transactions, according to the survey. Canada and China remain the fastest-growing home countries. Canada accounted for 24 percent of international sales while China accounted for 11 percent, up from nine percent in 2011. Mexico was third with eight percent of sales and India and the U.K. both accounted for six percent.

Forty-five percent of international purchases were under $250,000. In addition, there appears to be a gradual increasing trend toward purchases in the $250,000 to $500,000 price range. In 2012 this range accounted for 30 percent of purchases, up from 28 percent in 2011. The average price paid by an international buyer was $400,000 compared to the overall U.S. average of $212,000. Several reasons account for why the average international home price is higher than the average overall price. The international client is typically wealthier than the domestic buyer and is looking for a property in a specialized niche, for example, a larger property suitable for multi-generational living, or a property that establishes the individual’s presence and standing in the community.

Many homes purchased by foreign buyers are used as a primary residence. Vacation and rental use are also major reasons for a purchase. More than half – 66 percent – of survey respondents reported international buyers purchased detached single-family homes. About half of international buyers, 52 percent, preferred to buy in a suburban area and about a quarter, 23 percent, bought in a central city/urban area.

Sixty-two percent of international purchases were all cash, which has increased since 2007. International buyers still experience many financing challenges when purchasing a home in the U.S. In fact, among transactions that failed, Realtors^® reported that in 26 percent of the cases financing issues were the problem. The difficulties facing foreign buyers in trying to obtain a mortgage include lack of U.S.-based credit history and hurdles in meeting mortgage requirements. Other reasons for not purchasing properties were cost/taxes/insurance and immigration laws. 
    
Twenty-seven percent of Realtors^® reported having worked with international clients this year. Fifty-two percent of Realtors^® reported that international transactions accounted for one to 10 percent of their total transactions, while 27 percent reported that they made up more than 10 percent of total transactions. Realtor^® specialization on the buyer’s side of the market – such as foreign language capabilities, cultural affinity or orientation with the prospective purchaser and experience in explaining the U.S. real estate – appear to be important in working with foreign buyers.

NAR helps Realtors^® expand their businesses globally. The Certified International Property Specialist designation prepares Realtors^® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues. The CIPS^® Global Network is comprised of over 2,000 Realtors^® worldwide.

In addition, Realtor.com^® International delivers U.S. residential listings to buyers across the global, as well as listings from international data providers. As NAR’s official property website, Realtor.com^® increases exposure of U.S. properties to global markets and helps Realtors^® grow their global business. Last month over 950,000 international unique visitors searched for U.S. properties on the site (as reported by Omniture Site Catalyst for May 2012 as an aggregate of all countries other than the U.S.).

The National Association of Realtors^®, “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.




Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability. 

Future of Housing Finance Will be Top Issue for Next President (www.horizonpropertiesguam.com)

Future of Housing Finance Will be Top Issue for Next President

Media Contact: Sara Wiskerchen / 202-383-1013 / Email

WASHINGTON (May 16, 2012) – The future of housing finance in the U.S. will be a key issue facing the winner of the upcoming presidential election. That’s what a panel of industry experts told several thousand Realtors® gathered at a symposium, Housing Policy in 2013: Challenges, Opportunities and Solutions, during the Realtors® Midyear Legislative Meetings & Trade Expo.

The National Association of Realtors® supports a comprehensive reform strategy for the secondary mortgage market to help maintain a level of certainty in the marketplace and not further disrupt the still fragile housing market recovery.

“As leading advocates for homeownership, Realtors® want to make sure that everyone who wants to own a home and is able to afford one can do so,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami.  “Without a secondary market, mortgage interest rates would be unnecessarily higher and unaffordable for many Americans, and products like the 30-year fixed-rate mortgage would likely be inaccessible for most borrowers.”

During the symposium, Federal Housing Finance Agency Acting Director Ed DeMarco noted progress made toward recovery, but cautioned that more remains to be done.

“We all are cautiously optimistic that the signs of stabilization, and in some places, strength, that have begun to emerge in various housing markets are true signals that a long-awaited recovery is taking place,” said DeMarco. “While FHFA will keep its focus on foreclosure alternatives, refinancing, and ongoing liquidity in the marketplace, it is time for policymakers to begin work in earnest on the future housing finance system.”

DeMarco outlined several public policy goals to ensure a more effective and efficient housing finance system, including building a new infrastructure for the secondary mortgage market; establishing standards that promote a safer and more efficient housing finance system; and increasing private capital while retracting government participation in the secondary mortgage market. FHFA assumed conservatorship of the government-sponsored enterprises Fannie Mae and Freddie Mac in 2008, and DeMarco said the entities have played a critical role in ensuring access to mortgage capital following the market downturn when private lenders left the market. Since 2008 the GSEs have bought or guaranteed approximately 75 percent of mortgages originated in the country.

DeMarco noted that FHFA has completed more than 1 million loan modifications since 2008 and helped millions more families avoid foreclosure through a short sale, deed-in-lieu or other alternative. He said changes to the agency’s refinancing program has created more opportunities for homeowners who current but underwater on their mortgages to take advantage of low interest rates and refinance into more affordable terms.

Also speaking at the symposium was Federal Housing Administration Commissioner and Assistant Secretary for Housing Carol Galante. “Future generations deserve the same home buying opportunities as past generations,” said Galante.

Toward that end, Galante noted that FHA helped ensure access to safe, affordable financing in the absence of private market involvement following the economic downturn. She said the agency is working to preserve its mission of providing liquidity while ensuring its continued viability, and has increased premiums to compensate for losses that resulted from increased foreclosures. Galante said the long-term financial health of the agency looks good and that loans originated in recent years are performing well.

Following Galante’s speech, a panel of industry experts debated the future of the GSEs and the government’s role in promoting the American dream of homeownership.

Moody’s Analytics Mark Zandi identified an uncertain regulatory environment as a key issue facing the industry. After rules like the Qualified Mortgage (QM) and the Qualified Residential Mortgage (QRM) are defined, private participation in the market might increase. Zandi warned however, that without a government backstop there would be no 30-year fixed-rate mortgage, which most consumers currently use to finance home purchases.

Wharton School of Business Professor Susan Watcher agreed that there is tremendous uncertainty in the market about the future of housing finance and suggested that policymakers lack a clear vision. She said that without the right system in place, the country could face a similar market downturn in the future.

The National Association of Realtors®, “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.

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Information about NAR is available at www.realtor.org. News releases are posted in the website’s “News and Commentary” tab. The National Association of Realtors® supports public policies and policymakers who support the positions of Realtors® and their clients and customers on private property rights, housing issues and homeownership, regardless of political party affiliation.

 Horizon Properties Inc. is Guam’s leading real estate services provider and property management company. We work diligently to fulfill the requirements of buyers and renters, while working towards a smooth, hassle-free transaction for sellers. Our innovative and “customer first” approach towards property management results in outstanding property care and profitability.