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Housing starts post sharp rebound | Reuters

WASHINGTON (Reuters) – Housing starts rebounded more strongly than expected to their highest level in six months in January, while permits fell slightly less than forecast, pointing a mild housing market recovery.

Housing Market

The Commerce Department said on Wednesday housing starts increased 2.8 percent to a seasonally adjusted annual rate of 591,000 units, reversing the prior month’s weather-induced drop.

Analysts polled by Reuters had expected housing starts to rise to 580,000 units. December’s housing starts were revised upwards to 575,000 units from the previously reported 557,000 units. Compared to January last year, starts surged 21.1 percent, the largest increase since April 2004.

“It’s a positive surprise on all fronts and shows that overall demand has moved higher. That’s an important element to watch as we move through a cycle going from incentive-based to more organic growth,” said Craig Peckham, equity trading strategist at Jefferies & Co. in New York.

U.S. stock index futures held gains, while Treasury debt prices extended losses on the report.

Groundbreaking for single-family homes rose 1.5 percent last month to an annual rate of 484,000 units after declining 3 percent in December. Starts for the volatile multifamily segment increased 9.2 percent to a 107,000 unit annual pace after rising 12.6 percent in December.

Housing, which is at the core of the most painful economic downturn since the Great Depression, is crawling out of a three-year slump, supported by government programs. New home construction contributed to economic growth in the third quarter of 2009 for the first time since 2005.

But activity slowed sharply in the fourth quarter and while homebuilder sentiment edged up this month, it remains at levels consistent with poor conditions.

Even with mortgage rates near record low, demand for home loans remains lethargic. Mortgage applications dipped 2.1 percent last week, while refinancings slipped 1.2 percent, the Mortgage Bankers Association said in a separate report.

New building permits, which give a sense of future home construction, fell 4.9 percent to 621,000 units last month after rising to a 14-month high of 653,000 units in December, the Commerce Department said. That compared to analysts’ forecasts for 620,000 units.

The inventory of total houses under construction fell 2.3 percent to a record low 503,000 units last month, while the total number of units authorized but not yet started eased 0.9 percent to 94,300 units.

A separate report from the Labor Department showed import prices rose 1.4 percent in January, led by a jump in prices for natural gas and other fuels. Export prices gained 0.8 percent in January after a 0.6 percent rise in December.

Analysts surveyed before the report had expected a 0.9 percent rise in import prices and a 0.4 percent rise in export prices.
If you are thinking of buying or selling real estate in Garrett County or Deep Creek Lake, Maryland, call Jay Ferguson of Long & Foster Real Estate for all of your real estate needs! 877-563-5350

Decoding Housing Market Data- Deep Creek Lake

Great article from Zac Bissonnette @ WalletPop. His ultimate conclusion is to contact a local Realtor who can assist in decoding housing data for your community/area. I am always happy to try and assist buyers or sellers with statistics that matter most to them, so feel free to call me or email me if you want more information about the Deep Creek Lake real estate market.

The problems with housing market data: What does it all really mean?
Zac Bissonnette
Feb 16th 2010 at 7:00AM

Housing data contradictory

We’re inundated with data on the housing market every day, and the stock market moves rapidly in either direction depending on the perception of the moment: Are things getting better or are they getting worse?

One of the problems with studying the housing market is that it’s nearly impossible to draw any useful conclusions from the data. Consider the following data points:

* The USA Today reports that existing home sales “skyrocketed” 27% in the fourth quarter of 2009 versus the prior year period, and the “national median price for an existing single-family home was $172,900, or 4.1% below the median price in fourth-quarter 2008.”
* On a more local level, Trulia reports that the “Median sales price in Boston, MA went up 5.55% to $532,500 from prior quarter.” Furthermore, “Average price per square foot in Boston, MA went down 5.41% to $612/sq ft from prior quarter.”

The problem is that relatively minor changes in the mix of homes being sold can have a dramatic impact on the data, making apples to apples comparisons absolutely impossible.

As the jumbo mortgage market continues to struggle and investors pick up bargain-priced income properties, the median sales price skews lower because such a high percentage of the homes that are selling are low-end properties: million dollar listings just aren’t moving these days.

So, you say, no problem: looking at the “average price per square foot” will solve that problem. That irons out the differences in product mix, right?

Nope. The problem is that larger homes typically sell for a lower per-square-foot price than smaller homes of comparable quality in similar areas. A two-bedroom condo might have 900 square feet compared with 600 square feet for a one-bedroom condo in the same complex, but the two-bedroom is unlikely to sell for 50% more money. The 300 square feet represents an extra bedroom, but the greatest cost of the property comes from factors like bathrooms, kitchens, heating systems, etc., which do not rise proportionately with square footage. The extra bedroom is relatively cheap square footage, and that’s why smaller properties tend to have a higher per-square-foot value.

Take the Boston market for example: median sales prices are rising while prices per square foot are falling. That seems like a contradiction, but it could make perfect sense: if the market for larger homes has strengthened that would explain the jump in median sales price and the fall in price per square foot. But, and this is the problem, it tells you absolutely nothing about home values. It just tells you what kinds of homes are selling.

If you’re trying to get a handle on the real estate market in your area, looking at broad data points like this is probably not the way to go. Instead, look at a certain property and then see what prices comparable properties sold for last year and the year before — and note changes in the days on market too, to get an idea of liquidity. A local realtor can supply you with all this information, or you can find much of it yourself online.

If you are thinking of buying or selling real estate in Garrett County or Deep Creek Lake, Maryland, call Jay Ferguson of Long & Foster Real Estate for all of your real estate needs! 877-563-5350