Palm Beach County home sellers slash asking prices in Oct.

About 18 percent of Palm Beach County homeowners trying to sell their homes cut their asking prices in October, up from just 12 percent in May, according to a new report.

Redfin, a Seattle-based real estate firm that opened a Palm Beach County office in May, also found that 25 percent of Broward County sellers, and 21 percent of Miami-Dade county sellers had to cut their prices last month.

“Market indicators suggest that sellers are losing control of the market,” said Tommy Unger, in a Redfin blog about the report. “Sellers are increasingly disappointed in buyer interest.”

Sacramento saw the highest percent of sellers dropping prices at 39 percent, followed by Seattle (36 percent), and Phoenix (35 percent).

Palm Beach County Realtors have said the hype over rapidly rising home prices leads sellers to overestimate what they can get for their homes, creating a of tug-of-war between agent and client.

“Price drops are usually a sign sellers didn’t get the offers they hoped for when they originally listed or they simply didn’t assess the current market conditions adequately,” Unger said. “It’s no surprise that our number one home selling tip is pricing your home right the first time.”

The median price for a Palm Beach County single-family home during the third quarter of the year was $250,000, up 14 percent from the same time in 2012.

Of sales that closed between July and the end of September, the average percent of original list price received by Palm Beach County sellers was 94 percent. That’s up from 88 percent last year.

by Kim Miller

Fixed mortgage rates on the rise

A stronger-than-expected October employment rate helped push rates on fixed rate mortgages (FRMs) higher during the week ending November 14,
Freddie Mac reports the average rate for the 30-year FRM rose to 4.35% from 4.16%, putting the rate at its highest level since September 19, 2013, when it averaged 4.50%. A year ago at this time, the 30-year FRM averaged 3.34%.
The 15-year FRM averaged 3.35%, up 8 basis points from last week's averaged of 3.27%. The 15-year FRM averaged 2.65% a year earlier.
The average for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.01% this week , compared with 2.96% last week. Last year, the 5-year ARM averaged 2.74%.
One-year Treasury-indexed ARMs were unchanged this week, averaging 2.61% and up 6 basis points from 2.55% at this time last year.
Stronger than expected economic data releases were responsible for this week's increase in rates. “Nonfarm payrolls increased by 204,000 in October, above the consensus forecast,” noted Freddie Mac Vice President and Chief Economist Frank Nothaft. “In addition, revisions added 60,000 additional jobs to the prior two month releases,he said, adding, “preliminary estimates indicate Real GDP growth in the third quarter was 2.8% -- also above consensus."

Jobless claims

Separately, the government reports first-time applications for state unemployment benefits fell by 2,000
in the week ending November 9 to 339,000. Economists surveyed by Briefing.com had forecast a total of 330,000. The previous week's figure was revised higher by 5,000 to 341,000.
Analysts note that the Labor Department (DOL) had to estimate the initial claims levels for 5 states because of the Veterans Day holiday, but point out that these estimates are usually robust and should not result in a major revision in next week's data.
The 4-week moving average, which is less volatile and considered a more accurate barometer of the labor market, was down 5,750, from the previous week -- to 344,000.


By James Limbach

Where Prices are Headed over the Next 5 Years

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
The results of their latest survey
The latest survey was released last week. Here are the results:

• Home values will appreciate by 4.3% in 2014.
• The average annual appreciation will be 4.2% over the next 5 years
• The cumulative appreciation will be 28% by 2018.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.

by The KCM Crew

End of the 20 percent down payment?

Wealthy borrowers no longer need large down payments to get a mortgage.

More lenders are approving borrowers who put less than 20 percent down for million-dollar home purchases, suggesting banks are feeling sanguine about the luxury market.

Last month, Bank of America lowered its minimum down-payment requirement to 15 percent, down from 20 percent, for loans of up to $1 million. Wells Fargo cut down-payment requirements by the same amount to a minimum of 15 percent in July for private jumbo mortgages, which start above $417,000 in most parts of the country and exceed $625,500 in pricier housing markets, such as New York and San Francisco.

By AnnaMaria Andriotis, The Wall Street Journal