April 8, 2019 – REsimpli’s Real Estate News and Market Update
Manhatten Real Estate Sales Fall for 6 Straight Quarter
Data just came out for the first quarter and total real estate sales fell by 3% in the first quarter. This is the longest streak in the last 30 years that the data was tracked. Currently there is an oversupply of luxury apartments because builders have only built for the high end market where margins are higher. Also, foreign buying has decreased and the change in the tax law for tax deductions has impacted high cost areas like New York and California the most. The sales decreases started in the high end market but have started to affect the entry level market as the sales declines have trickled down.
New Home Sales Rise to an 11-month High in February
As mortgage rates have decreased, sales of new single-family ho0mes have increased to an 11-month high and sales for January were also revised higher. Home sales rose 4.9 percent to a seasonally adjusted annual rate of 667,000 units last month. January sales were revised up to 636,000 units from the previously reported 607,000 units. New home sales rose 0.6 percent from a year ago. The 30-year fixed mortgage rate decreased to 4.06 percent last week from an average of 4.28 percent the previous week according to Freddie Mac (mortgage finance agency). This continues the trend of declining mortgage rates as the Federal Reserve has signaled it has stopped its interest rate hikes.
Mortgage Rates Weekly Drop Most in a Decade and Mixed Sales Data for February
The drop from 4.28 percent to 4.06 for the week ending March 28, 2019 is the biggest drop in a decade. This shows that the market believes the Federal Reserve has seriously stopped raising rates. A year ago the 30-year fixed-rate mortgage was 4.40 percent compared to 4.06 percent this week. This has led to closed home sales increasing dramatically in February compared to January, but it is still lower than the previous year. Pending home sales were less monthly and nearly 5 percent lower compared to last year.
Federal Reserve Key Information:
The Federal Reserve policy affects all asset prices – from housing to stocks. Thus knowing the outlook gives investors insight and better predictability of the future.
Interest Rate: On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%; they’ve kept this policy unchanged. The last release was on March 20th and they’ve decided to maintain the same rate.
Federal Reserve Outlook: Interest rates will not be hiked in the near future. “The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”
Other Key Data:
Data is backward looking and takes time to compile. That’s why the February data just came out for home sales even though it’s April. Home sales data from the National Association of Realtors:
***Note the 11.8% increase in sales from January to February which is the largest monthly gain since December 2015
Unemployment Rate: 3.8% through February 2019, a decrease from 4.0% in January
REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor i See more >>
REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor in Lake County, Indiana market and he manages his entire business from Carlsbad, California, where he lives. Using the systems that Sharad has developed, he is able to manage 3-4 rehabs a month from a distance.
At reSimpli, our mission is to ‘Simplify Real Estate Investing Through Technology.’ Our team is passionate about using technology to reduce the time and energy required to build and manage a successful real estate business. reSimpli is a cloud-based system that makes real estate investing more efficient by automating tasks and helping the investor manage their business more efficiently.
We are constantly building and improving features that aid in: creating accurate and detailed scope of work for rehab projects, creating contracts with digital signature support, deal analysis tools, etc. We are a team of very active real estate investors so everything we are developing is something we find useful in our day to day investing.
Our passion is to create the best software for your real estate investing business and aim to be the only software program that a real estate investor needs to run a successful, scalable business. See less >>