June 2015 Newsletter

 

Jeff Fleming headshot 2012

Ahh, Summer in the South.  Boating, biking, fishing, playing golf, or just enjoying the beach.  What’s your favorite?  Which one would you like to do in retirement?  Maybe it’s time to think about your new life in a more temperate climate.  AARC is your source for retiree-friendly communities.  What are you waiting for?  Check out AARC’s Seal of Approval communities and explore your options for the retirement destination that fits your lifestyle. AARC is your source for the best in retirement destinations.  Whether it’s a planned retirement community or just a great town that welcomes retirees, AARC has already done the research for you!  I hope you’ll take to time to learn about our Seal of Approval communities here.

Whether it’s a planned retirement community or just a great town that welcomes retirees, AARC’s got you covered.

I hope you’ll take to time to learn about our upcoming annual conference in Charleston, SC November 11th – 13th – Click to learn more

Sincerely,

Jeff Fleming Chair, The AARC



Charleston is Chosen For The Site of AARC’s Annual Conference

A Year of Change, Renewal and Re-Imagination

Charleston_1The AARC’s Annual Conference is a not to be missed event for anyone who works in retiree attraction. The conference blends together seasoned professionals in the retirement community industry. Whether it’s your first time or you’re an AARC regular, this conference will offer you: Unparalleled networking opportunities and innovative ideas from the people driving success and change in our industry. You’ll hear from such industry insiders as Chris Fair, Jeff Humphries and many more…

The American Association of Retirement Communities is a 20 year old not-for-profit professional association that assist communities interested in targeting and attracting retiree buyers – and the AARC’s Annual Conference is the largest retiree research, training and networking event of its kind. Don’t miss the opportunity to share with your peers the valuable techniques and best practices to attract retirees to your destination or development. In addition to general sessions this conference also offers two breakout tracks – one for communities and one for developers – to provide you and your team with the latest trends in retiree attraction.

Click Here To Sign Up or Learn More

See you in Charleston!



July 9th Webinar – 50+ Market Place – Review and Analysis

What is projected need for housing?  How much of that need will actually be met?  What has changed since 2009 in regards to regulatory environment (both banking and local added-cost to developer)?  Why/how are developers driving down cost-to-develop (removing amenities, relying on cities to invest in shared amenities)?  It’s a retiree-recruitment audience, so the importance of retirees.  The Del Webb denial in Williamson County was of interest.  Why are retirees such an attractive market?  The webinar will discuss these things and also the Nashville, Memphis (including north Mississippi), Chattanooga, Knoxville, Greensboro, Coastal Georgia, Charleston and the Wilmington, NC markets.

Edsel_101_Color200wEdsel Charles is the founder and Chairman of the Board for MarketGraphics Research Group, Inc., a new home market research company headquartered in Franklin, Tennessee.

After building over $100,000,000 of new single-family homes during the late 1970s and 1980s, Mr. Charles started MarketGraphics® in 1988 with Nashville, Tennessee being the first market.  The company has grown to be one of the largest privately-owned companies of its type in the United States with research in 26 markets in 20 states.  MarketGraphics® clients include builders, developers, banks, retailers, health-care institutions, planners, utility companies, Realtors, appraisers, city and national government offices.

Mr. Charles has been a National Life Director of the National Association of Home Builders Board of Directors since 1987 and a past president of the Middle Tennessee Home Builders Association.  He is a member and a past National Trustee for the NAHB’s Institute of Residential Marketing Council; a 3 year Trustee for the National Sales and Marketing Council (N.S.M.C); a member of the Graduate Realtor Institute (G.R.I.), and has his State of Tennessee Real Estate broker’s license.

Click To Learn More or Sign Up – Click Here



Builder Confidence Hits Yearly High in June

National Association of Home Builders/June 15, 2015

NAHB-Color-LogoBuilder confidence in the market for newly built, single-family homes in June rose five points to a level of 59 on the NAHB/Wells Fargo Housing Market Index (HMI) released today. This is the highest reading since September 2014.

“Builders are reporting more serious and committed buyers at their job sites and this is reflected in recent government data showing that new-home sales and single-family construction are gaining momentum,” said NAHB Chairman Tom Woods.

“The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead,” said NAHB Chief Economist David Crowe. “At the same time, builders remain sensitive to consumers’ ability to buy a new home.”

thumbsupDerived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted healthy gains in June. The component gauging current sales conditions jumped seven points to 65, the index charting sales expectations in the next six months increased six points to 69, and the component measuring buyer traffic rose five points to 44.

Looking at the three-month moving averages for regional HMI scores, the South and Northeast each rose three points to 60 and 44, respectively. The West posted a two-point gain to 57 while the Midwest dropped by one point to 54.



Housing Forecast:  What To Expect In the Second Half of 2015

Erin Carlyle, Forbes.com/June 22, 2015

The recession may be over, but the housing market still bears scars. Take the homeownership rate. In 2005, America’s homeownership rate was 69.1%. Today, it’s 63.7%, the lowest level the nation has seen since 1993.

0619_houses-aerial-view_1200x675

The good news for sellers is that demand for housing is back, and prices are continuing to rise. But for buyers–especially first-time ones—inflating price tags are clearly not a positive. Add to rising prices the triple whammy of rapidly rising rents, sluggish wage growth, and high student debt loads, and buying into the American Dream is fairly tough for the younger and lower-earning end of the population. And that has a ripple effect. “The housing market conveyer belt requires people to buy the homes,” explains Stan Humphries, chief economist at Seattle-based real estate data site Zillow. “If we can’t get people on the first rung the whole conveyer belt slows down.”

At the beginning of the year we surveyed experts for their predictions for 2015. Now that we’re halfway through, here’s what you need to know about how the rest of the year is likely to unfold:

Demand is still on the rise
In the largest 100 markets in the nation, it’s still cheaper to own than rent, by a whopping 38% on a national basis, says real estate data firm Trulia. Of course, real estate  is local and conditions vary widely. Still, the rent-v-buy trade-off isn’t likely to shift until mortgage rates hit about 10.6%,Trulia predicts. Many renters see how much of their paychecks go to housing and know it makes sense to buy.

The improving jobs market is another reason for increased housing demand. Last year, the nation gained three million jobs. This year we’re on track to add another two million, says Doug Duncan, chief economist at Fannie Mae. Household formation has picked up in the past couple of quarters, indicating that younger people are feeling more confident about leaving their parents’ nests to form households of their own. “The pickup in jobs is resulting in some increase in real incomes, so the demand side is strengthening faster than the supply side,” Duncan says.

There aren’t enough homes for sale 
The biggest story of 2015 by far is the lack of inventory. Despite the fact that investors have mostly left the market (since the great deals of the recession are now gone), regular people are still competing for too few homes. One key reason: developers simply aren’t building enough new houses. In May, groundbreakings stood at an annual rate of 1.036 million, well below the 1.5 million needed to get supply back in line with demand.

Too many homes are listed at higher price points
Compounding the problem, builders are focusing on higher-end homes.  Typically, new homes sell for about $25,000 more than previously-owned ones. These days they’re selling for about $75,000 more; the skewed numbers are a good indication that builders are catering to the affluent. This focus is likely part of the reason that the share of first-time buyers is stuck around 30%, when historically it’s been closer to 40%. Of the major homebuilders, only DR Horton’s Express Homes and LGI Homes are specifically targeting lower-tier buyers.

Many people can’t sell their home for a profit
Another factor holding back the housing market: low and negative equity. At the end of the first quarter of 2015, 7.3 million homes (13.2% of all properties with a mortgage) were seriously underwater, meaning that loans exceeded property values by at least 25%, according to RealtyTrac, an Irvine, Calif.-based firm.

Zillow’s Humphries puts it another way: “One out of three homeowners with a mortgage are locked out of trading their homes.” According to Zillow, some 15% of homes are underwater while another 18% have less than 20% equity in their homes. Since most people with underwater mortgages won’t put their homes on the market, it’s no surprise that April’s 2.21 million supply of existing (previously-owned) homes represents just a 5.3 month supply. Economists generally agree that a six-month supply is needed to balance supply and demand.

Better have your offer letter ready
The result of all these factors is that homes are moving like hotcakes. “Over one-third of homes sell in two weeks or less in the markets we track,” says Nela Richardson, chief economist at Redfin.

Existing properties sold within 39 days in April on average, the second-fastest sales time since the National Association of Realtors began tracking this metric in May 2011. Forty-six percent of homes sold in April were on the market less than a month.

“In Cambridge it takes eight to 11 offers before most people get an acceptance,” Richardson notes. In Denver, Colorado, homes sell within a week, she says. “What happens to buyers is they get a sense of fatigue. You can only miss so many hoops before throwing isn’t fun anymore.”

Prices will rise around 5.5% through December
In the first part of 2014, prices were up between 10% and 13% year-over-year each month. But by the end of 2014 they had stabilized to an annual gain of 5.8%, NAR reports.What will happen this year depends who you ask: the experts we spoke with projected gains ranging from 3% to 8%.

Supporting the lower-end estimate is the latest data from S&P/Case-Shiller, which shows single-family home prices grew just 4.1% year-over-year in March. Then again, the National Association of Realtors reported the median existing-home sales price up 8.9% over the previous year in April. “I think prices will continue rising, possibly at rates higher than anticipated,” predicts Trulia’s chief economist Selma Hepp. “I think we are looking more at 7% to 8%.”

Mortgage rates will hit 4- 5% by year’s end
Economists have been forecasting a rise in mortgage interest rates for so long now that it’s almost hard to take them seriously. But at some point the Fed will act. Duncan predicts a first rate hike in September and a second in December; he says 30-year conventional rates will hit around 4% by the end of the year (which, incidentally, is about where they were last week).  Zillow forecasts mortgage rates at 5% by the end of 2015. Whether we reach 4% or 5% this year, remember that these rates are still very low by historical standards. In the early 1980s rates were above 10%. When rates do finally rise, that could create a drag on home sales.

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