Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Weakness shows in eighth straight month of annual declines

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its May 2014 Residential & Foreclosure Sales Report, which shows that U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 5,147,550 in May, virtually unchanged from April and an increase of less than 1 percent from May 2013.

The median sales price of U.S. residential properties — including both distressed and non-distressed sales — was $180,000, up 6 percent from the previous month and up 13 percent from a year ago. The year-over-year increase in May was the second consecutive month with a double-digit annual increase in U.S. home prices, and the biggest annual increase since U.S. home prices bottomed out in March 2012.

The median price of distressed sales — properties in the foreclosure process or bank-owned — was $120,000, 37 percent below the median price of non-distressed properties: $190,000. Distressed sales and short sales combined accounted for 14.3 percent of all U.S. residential sales in May, down from 15.6 percent of sales in April and down from 15.9 percent of all sales in May 2013.

“Distressed sales continue to represent a smaller share of the overall sales pie nationwide, helping to boost median home prices higher given that distressed sales tend to be in lower price ranges,” said Daren Blomquist, vice president at RealtyTrac. “When broken down by average price range, U.S. sales are clearly shifting away from the lower end. Properties selling below $200,000 represented 50 percent of all sales in May, but that was down from a 55 percent share a year ago. Meanwhile, the share of homes selling above $200,000 increased from a 45 percent a year ago to a 50 percent in May 2014.”

Home sales in higher price ranges represent growing share of market
Sales prices in every price range above $200,000 analyzed in the report increased as a share of total sales, both from the previous month and from a year ago, with the increase generally higher in the higher price ranges (see table below).

The share of home sales in the $200,000 to $300,000 price range increased 2 percent from the previous month and were up 6 percent from a year ago, but the share of home sales in all price ranges above $750,000 was up more than 20 percent from a year ago.

Meanwhile the share of home sales decreased from a year ago in all price ranges below $200,000, with bigger decreases corresponding to lower price ranges. The share of homes priced between $100,000 and $200,000 decreased 5 percent from a year ago, while the share of homes between $50,000 and $100,000 decreased 13 percent and the share of homes priced below $50,000 — often highly distressed homes — decreased 22 percent.

Home sales in the $100,000 to $200,000 price range accounted for one-third of all home sales in May — the largest percentage of any price range — but homes priced between $200,000 and $400,000 were close, accounting for nearly 32 percent of all sales for the month. Sales of homes priced in the $200,000 to $400,000 range were at their highest percentage of U.S. home sales since September 2008 — a 68-month high.

Markets with highest annual home price appreciation
States with the biggest increases in median prices in May compared to a year ago were New York (up 28 percent), Ohio (up 19 percent), Michigan (up 18 percent), Illinois (up 17 percent), and Georgia (up 16 percent).

Some markets in these states and others are continuing to see home price appreciation accelerate compared to last year:

• Cleveland: median home prices up 18 percent from year ago compared to 1 percent annual home price appreciation in May 2013. Second consecutive month with double-digit increase in home prices.

• Dayton, Ohio: median home prices up 18 percent from year ago compared to 1 percent annual home price decrease in May 2013. Fourth consecutive month with double-digit increase in home prices.

• Akron, Ohio: median home prices up 16 percent from year ago compared to 4 percent annual home price appreciation in May 2013. Third consecutive month with double-digit increase in home prices.

• Columbus, Ohio: median home prices up 13 percent from year ago compared to 3 percent annual home price decrease in May 2013. Fourth consecutive month with double-digit increase in home prices.

• Austin, Texas: median prices up 11 percent from year ago compared to 7 percent annual home price appreciation in May 2013. Eight out of last nine months with double-digit increase in home prices.

• Augusta, Ga.: median home prices up 11 percent from year ago compared to 4 percent annual home price decrease in May 2013.

“Housing demand across Ohio is currently outpacing supply in many metro areas. As demand remains healthy, we are seeing home prices rise in many areas year over year, creating a return of equity and enabling homeowners to now consider placing their homes on the market to take advantage of low interest rates,” said Michael Mahon, executive vice president/broker at HER Realtors, covering the Columbus, Cincinnati and Dayton, Ohio markets.

“While demand is high, concern still remains regarding the lack of available inventory particularly within the first time homebuyer segment of the market,” Mahon continued. “Home sellers should consider now an optimal time to review their financial and housing goals with a real estate agent, and consider taking advantage of the higher prices they could potentially receive on selling their home in today’s market.”

Cooling markets for home price appreciation
Although home price appreciation accelerated on a national basis in May, it continued to cool in some markets with torrid increases in 2013:

• Phoenix: median home prices up 6 percent from year ago compared to 28 percent annual home price appreciation in May 2013. Smallest annual increase in home prices since February 2012.

• Las Vegas: median home prices up 15 percent from year ago compared to 24 percent annual home price appreciation in May 2013. Smallest annual increase in home prices since August 2012.

• Los Angeles: median home prices up 11 percent from year ago compared to 27 percent annual home price appreciation in May 2013. Smallest increase since November 2012.

• Denver: median home prices up 7 percent from year ago compared to 14 percent annual home price appreciation in May 2013. Smallest increase since April 2012.

• Tampa: median home prices up 5 percent from year ago compared to 23 percent annual home price appreciation in May 2013.

Sales volume decreases annually in 23 states, 31 of 50 largest metro areas
The 1 percent increase in U.S. annualized sales in May from a year ago was the smallest increase in any month so far this year, and the 0.19 increase from the previous month marked the eighth consecutive month with flat or declining home sales on a month-over-month basis.

Annualized sales volume in May decreased from a year ago in 23 states and the District of Columbia, along 31 of the nation’s 50 largest metropolitan statistical areas.

States with decreasing sales volume from a year ago included California (down 15 percent), Arizona (down 10 percent), Nevada (down 7 percent), Michigan (down 3 percent), and Florida (down 3 percent).

Major metro areas with decreasing sales volume from a year ago included Boston (down 23 percent), Fresno, Calif., (down 22 percent), Orlando (down 18 percent), Los Angeles (down 16 percent), and Phoenix (down 13 percent).

“Sales continue to be down year over year, but inventory levels are beginning to climb giving prospective homeowners more choices to buy within the Southern California market,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market.

Highest share of distressed sales in Las Vegas, Lakeland and Modesto
Short sales and distressed sales — in foreclosure or bank-owned — accounted for 14.3 percent of all sales in May, down from 15.6 percent in April and down from 15.9 percent of all sales in May 2013.

Metro areas with the highest share of combined short sales and distressed sales were Las Vegas (36.6 percent), Lakeland, Fla., (33.3 percent), Modesto, Calif., (31.9 percent), Jacksonville, Fla., (31.7 percent), and Riverside-San Bernardino-Ontario in Southern California (29.3 percent).

Short sales nationwide accounted for 4.5 percent of all sales in May, down from 5.4 percent in April and down from 5.8 percent in May 2013. Metros with the five highest percentages of short sales in May were all in Florida: Lakeland (17.7 percent), Orlando (14.9 percent), Tampa-St. Petersburg-Clearwater (13.4 percent), Palm Bay-Melbourne-Titusville (12.9 percent), and Sarasota (11.6 percent).

Sales of bank-owned (REO) properties nationwide accounted for 8.6 percent of all sales in May, down from 9.1 percent of all sales in April and down from 9.3 percent of all sales in May 2013. Metros with the highest percentage of REO sales in May were Modesto, Calif., (26.7 percent), Riverside-San Bernardino-Ontario (23.3 percent), Las Vegas (23.1 percent), Stockton, Calif., (21.5 percent), and Bakersfield, Calif. (19.7 percent).

Sales at the public foreclosure auction accounted for 1.2 percent of all sales nationwide in May, up from 1.1 percent of all sales in April and up from 0.8 percent of all sales in May 2013. Metros with the highest percentage of foreclosure auction sales in May included Orlando (3.8 percent), Tampa-St. Petersburg-Clearwater (3.8 percent), Miami (3.7 percent), Indianapolis (3.5 percent), and Lakeland, Fla., (3.4 percent).

Biggest distressed discounts on scheduled auctions, vacant with negative equity
As a supplement to the May U.S. Residential & Foreclosure Sales Report, RealtyTrac analyzed residential property sales transactions in the 12 months ending in March 2014 to pinpoint which types of distressed properties are selling at the biggest discounts based on foreclosure status, occupancy status, equity and year built range.

The analysis looked at 24 different distressed property profiles based on these four factors, comparing the sales price to the estimated full market value for each sale. The final discount was calculated by comparing the average discount (below market value) or premium (above market value) for each property profile to the control of properties not in foreclosure that sold during the same time period.

Based on this analysis, distressed properties with the biggest discount were those scheduled for public foreclosure auction that were vacant, had negative equity and were built between 1950 and 1990. Properties in this category sold for an average discount that was 28 percent below the control group of non-distressed sales.

Other distressed property profiles with discounts among the top five nationwide were the following:

• Properties in default with positive equity (26 percent discount)
• Properties in default with negative equity, vacant and built in 1950 or before (26 percent discount)
• Properties scheduled for foreclosure auction with negative equity and vacant (25 percent discount)
• Properties scheduled for foreclosure auction and vacant (25 percent).

Distressed properties selling at a premium
The analysis found that not all distressed properties sold at a big discount, and in some cases even sold at a premium above non-distressed properties. Bank-owned properties overall sold at a 3 percent premium, while bank-owned properties built in 1950 or before sold at a 7 percent premium.

Some sub-categories of bank-owned homes sold at a discount. Bank-owned properties that were confirmed vacant — without the former homeowner or tenant still living there — sold at an 18 percent discount below the non-distressed control, and bank-owned properties that sold after 1990 and between 1950 and 1990 also sold at slight discounts.

Properties with negative equity that were not in foreclosure or bank owned sold at a substantial premium of 19 percent above the control of all properties with no foreclosure status.

Best distressed discounts vary by state
The analysis also found the property profiles with the biggest discounts — and the discounts available — varied significantly by state. Below are the distressed property profiles with the biggest available discounts for select states.

• California: scheduled for foreclosure auction with positive equity (17 percent discount)
• Florida: scheduled for foreclosure auction with negative equity, vacant and built between 1950 and 1990 (29 percent discount)
• Ohio: in default, negative equity, vacant and built between 1950 and 1990 (34 percent discount)
• Michigan: in default and vacant (34 percent discount)
• New York: scheduled for foreclosure auction with negative equity and vacant (38 percent discount)
  

Report methodology
The RealtyTrac U.S. Residential & Foreclosure Sales Report provides counts and median prices for sales of residential properties nationwide, by state and metropolitan statistical areas with a population of 500,000 or more. Data is also available at the county level upon request. The report also provides a breakdown of short sales, bank-owned sales and foreclosure auction sales to third parties. The data is derived from recorded sales deeds and loan data, which is used to determine cash sales and short sales. Sales counts for recent months are projected based on seasonality and expected number of sales records for those months that are not yet available from public record sources but will be in the future given historical patterns. Statistics for previous months are revised when each new monthly report is issued as more deed data becomes available for those previous months.

Definitions
Residential property sales: sales of single family homes, condominiums/townhomes, and co-ops, not including multi-family properties.

Annualized sales: an annualized estimate of the number of residential property sales based on the actual number of sales deeds received for the month, accounting for expected sales records for that month that will be received in future months as well as seasonality.

Distressed sales: sale of a residential property that is actively in the foreclosure process or bank-owned when the sale is recorded.

Distressed discount: percentage difference between the median price of distressed sales and a non-distressed sales in a given geographic area.

Bank-Owned sales: sales of residential properties that have been foreclosed on and are owned by the foreclosing lender (bank).

Short sales: sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property.

Foreclosure Auction sales: sale of a property at the public foreclosure auction to a third party buyer that is not the foreclosing lender.

Come back tomorrow to www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

http://www.realtytrac.com/content/foreclosure-market-report/us-residential-and-foreclosure-sales-report-may-2014-8088

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Annie Kasinecz has two different ways of explaining why, at age 27, she still lives with her mom. In the first version — the optimistic one — she says that she is doing the sensible thing by living rent-free as she plans her next career move. After graduating from Loyola University Chicago, Kasinecz struggled to support herself in the midst of the recession, working a series of unsatisfying jobs — selling ads at the soon-to-be bankrupt Sun-Times, bagging groceries at Whole Foods, bartending — in order to pay down her student loans. But she inevitably grew frustrated with each job and found herself stuck in one financial mess after another. Now that she’s back in her high-school bedroom, perhaps she can finally focus on her long-term goal.

One in five people in their 20s and early 30s is currently living with his or her parents. And 60 percent of all young adults receive financial support from them. That’s a significant increase from a generation ago, when only one in 10 young adults moved back home and few received financial support. The common explanation for the shift is that people born in the late 1980s and early 1990s came of age amid several unfortunate and overlapping economic trends. Those who graduated college as the housing market and financial system were imploding faced the highest debt burden of any graduating class in history. Nearly 45 percent of 25-year-olds, for instance, have outstanding loans, with an average debt above $20,000. (Kasinecz still has about $60,000 to go.) And more than half of recent college graduates are unemployed or underemployed, meaning they make substandard wages in jobs that don’t require a college degree. According to Lisa B. Kahn, an economist at Yale University, the negative impact of graduating into a recession never fully disappears. Even 20 years later, the people who graduated into the recession of the early ’80s were making substantially less money than people lucky enough to have graduated a few years afterward, when the economy was booming.

Some may hope that the boomerang generation represents an unfortunate but temporary blip — that the class of 2015 will be able to land great jobs out of college, and that they’ll reach financial independence soon after reaching the drinking age. But the latest recession was only part of the boomerang generation’s problem. In reality, it simply amplified a trend that had been growing stealthily for more than 30 years. Since 1980, the U.S. economy has been destabilized by a series of systemic changes — the growth of foreign trade, rapid advances in technology, changes to the tax code, among others — that have affected all workers but particularly those just embarking on their careers. In 1968, for instance, a vast majority of 20-somethings were living independent lives; more than half were married. But over the past 30 years, the onset of sustainable economic independence has been steadily receding. By 2007, before the recession even began, fewer than one in four young adults were married, and 34 percent relied on their parents for rent.

Childhood is a fairly recent economic innovation. For most of recorded history, a vast majority of people began working by age 4, typically on a farm, and were full time by 10. According to James Marten, a historian at Marquette University and the editor of The Journal of the History of Childhood and Youth, it wasn’t until the 1830s, as the U.S. economy began to shift from subsistence agriculture to industry and markets, that life began to change slowly for little kids. Parents were getting richer, family sizes fell and, by the 1850s, school attendance started to become mandatory. By the end of the Civil War, much of American culture had accepted the notion that children under 13 should be protected from economic life, and child-labor laws started emerging around the turn of the century. As the country grew wealthier over the ensuing decades, childhood expanded along with it. Eventually, teenagers were no longer considered younger, less-competent adults but rather older children who should be nurtured and encouraged to explore.

Jeffrey Jensen Arnett, a psychologist at Clark University who coined the term “emerging adulthood,” sees boomerang kids as the continuation of this centuries-long trend. Returning home, he told me, is a rational response to a radically different, confusing postindustrial economy. In past generations, most people took whatever work was available and, crucially, learned the necessary skills on the job. From 1945 to around 1978, amid the postwar boom, work life in America was especially benign and predictable. The wage gap between rich and poor shrank to its lowest level on record, and economic growth was widely shared.

But we now know that, during the ’70s, this system was becoming unhinged. Computer technology and global trade forced manual laborers to compete with machines at home and with low-wage workers in other countries. The changes first affected blue-collar workers, but many white-collar workers performing routine tasks, like office support or drafting or bookkeeping, were also seeing their job prospects truncated. At the same time, these developments were hugely beneficial to elite earners, who now had access to a larger, global market and productivity-enhancing technology. They were assisted by changes in government policy — taxes were cut, welfare programs were eliminated — that further rewarded the wealthy and removed support for the poor.

This uncomfortable fact, which many economists have recently accepted, suggests that we are living not simply in an unequal society but rather in two separate, side-by-side economies. For those who can crack the top 20 percent, there is great promise. Most people in that elite group, Rank told me, will spend at least part of their careers among the truly affluent, earning more than $250,000 a year. For those at work in the much larger pool, there will be falling or stagnant wages and far greater uncertainty. A college degree is an advantage, but it no longer offers any guarantee, especially for those who graduate from lower-ranked for-profit schools. These days, a degree is merely the expensive price of admission. In 1970 only one in 10 Americans had a bachelor’s degree, and nearly all could expect a comfortable career. Today, about a third of young adults will earn a four-year-degree, and many of them — more than a third, by many estimates — are unlikely to find lifelong secure employment sufficient to pay down their debt and place them on track to earn more than their parents. If they want a shot at making it into the top 20 percent, they now need to learn a skill before they get a job. And for many, even with their parents’ help, that’s going to be an impossibility.

For all these grim forecasts, people now in their 20s are remarkably optimistic. Arnett, who recently conducted a nationwide poll of the group, discovered that 77 percent still believe they will be better off than their parents. A Pew survey found that only 9 percent of young adults believe they won’t be able to afford the lives they want. This combination of confidence in the face of historic uncertainty might seem confusing, but Arnett argues that optimistic boomerang kids might not be as blithely naïve as their parents imagine. Many are rejecting the Dilbertian goal of a steady, if unsatisfying, job for years of experimentation, even repeated failure, that eventually leads to a richly satisfying career. Sleeping in a twin bed under some old Avril Lavigne posters is not a sign of giving up; it’s an economic plan. “Stop dumping on them because they need parental support,” Arnett cautioned. “It doesn’t mean they’re lazy. It’s just harder to make your way now than it was in an older and simpler economy.”

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So Smith came up with a more efficient idea. After doing some research on local clinics, she noticed that a rise in autism diagnoses mirrored the rising demand for clinic services. And with the convenience of modern technology, from smartphones to their attendant payment readers, she could build a clinic serving clients in their homes, one that could be leveraged into a larger regional network. With a bit of hustle, Smith thought, she could set herself up with a profitable business that would give her returns for the rest of her life. To afford the start-up costs, she moved back in with her parents, turned her sister’s old room into an office where she could work and store toys for her clients, and used what would have been rent money to develop a website and hire a few part-time therapists to make house calls. “I couldn’t have opened a clinic without my parents’ support,” she said. Now when Smith meets peers who deride her for living at home, she replies that it’s really just a business incubator.

I wasn’t surprised that Arnett was impressed by Smith’s plan. But I didn’t expect him to praise Kasinecz too. At 27, she had a lot of debt, no career in mind and a series of unsatisfying jobs. I worried that her prospects were dimming, that crossing that 20 percent threshold would seem harder and harder with each passing year. She seemed worried, too. “We’re kind of in this limbo phase where we’re expected to be these great professionals who come out of college with bomb-ass jobs,” she said of her generation. “And then we’re like, Wait. I’ve got 80 grand in debt. How am I supposed to do that?”

Arnett told me, however, that I wasn’t seeing her hidden strengths. In fact, he would be far more worried if she had done what the previous generations did — stayed in whatever job she took after graduating, no matter how little she liked it — or if she were similarly underemployed but expressed no urgency about finding a better job. Kasinecz, he said, was still searching for the right fit and refusing to settle for anything less. Somewhat counterintuitively, Arnett said, it’s the people most actively involved in this struggle, the ones who at times seem totally lost, who are likely to find their way. Kasinecz seemed to know this, too. And in that sense, she was emblematic of a generation in which there are no more average workers and even less certainty. Kasinecz may well find a job she likes and, eventually, the right career — even if she terrifies her mother, herself and a few hand-wringing economists in the process.

Come back tomorrow to www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

By ADAM DAVIDSONJUNE 20, 2014  – http://www.nytimes.com/2014/06/22/magazine/its-official-the-boomerang-kids-wont-leave.html?ref=business&_r=1