A collection of the most important stories this week that are making headlines in the real estate industry
From the Chicago Tribune | Home improvement sales rebound- Lowe’s, the nations second largest home improvement retailer, is reporting a 15% increase in seasonal hiring, a sign that the home improvement business is stabilizing ahead of the greater real estate industry. This appears to be another strange aftereffect of the real estate crisis, with the article attributing the increase in home improvements to existing home owners opting to fix up their old homes, as opposed to buying a new home. Overall 1Q 2011 spending is expected to increase 9.1% to $125.1 billion.
From Calculated Risk | CoreLogic- House prices declined 2.7% in February, prices now 4.1% below 2009 lows- The bottom of the slide in housing prices is still being determined, as the most recent numbers from CoreLogic paint a dreary picture for potential home sellers. Overall, the mean selling price of homes across the country continues to plummet, with a decline of 6.7% in February 2011 compared to February 2010. However, as this blog and many other real estate analysts are pointing out, the news isn’t as grim when the market is properly quantified. Currently the percentage of distressed homes being sold is significantly higher than market averages, causing an overall decline in the mean home prices across the country. According to Mark Fleming, chief economist with CoreLogic.
“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets. Price declines are increasingly isolated to the distressed segment of thee market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”
CoreLogic has adjusted figures (which exclude the sale of distressed properties) showing a decline of .1% over the same period, which continues a trend towards stabilization and hopefully indicates positive gains in home owners equity moving forward. to read the entire report click here.
From the Star Tribune | Almost half of all March closed home sales in the Twin Cities were foreclosures- Relating to the previous article, the Star Tribune reports that 43% of home sales in March were distressed properties. This sent the median home price into a nosedive, dropping 15% to $140,000, however excluding distressed properties, the picture is a little brighter. Looking at previous March sales, without including 2010 (the new home owner tax credit created unusual demand), sales in March 2011 were up 6% and 15% for 2009 and 2008 respectively.
From the Wall Street Journal | Malls face surge in vacancies- From a record low vacancy rate of 5.1% in 2005 to todays less rosy 9.1%, mall owners are facing increased pressure due to the changing shopping behavior of Americans, as well a loss of customers in the exurbs of America’s largest cities. One segment that appears to be regaining traction is the upscale mall industry, that has reduced its nationwide vacancy to 7%, although this is still above what is considered healthy in the sector. As technology and connectivity spreads to more individuals, retailers will be forced to ask serious questions about their business models, and the need for massive retail space in as many locations as possible.