Archive for April, 2011
March home sales increased by double-digits from a month earlier in nearly all U.S. metropolitan areas, according to the RE/MAX National Housing report released Tuesday. That's an encouraging sign for the housing market as it enters spring buying season.
Home sales jumped more than 10% in 53 of the 54 metros tracked by RE/MAX between February and March, with only New York not achieving double-digits gains. In New York, home sales rose 8%.
"This represents a complete reversal from January, when none of the 54 cities saw even single-digit monthly sales increases," RE/MAX said.
Although home sales are down from a year ago, the Denver-based real estate firm said the data isn't comparable because sales this time last year were artificially inflated by the first-time homebuyer tax credit.
Home sales are down 8.2% nationally from March 2010. In the hard-hit markets of Tampa, Phoenix and Las Vegas home sales increased 19.8%, 13.5% and 8.5% in March.
"It’s encouraging that home sales are rising at a faster pace than we would normally see this time of year, and they’re doing so without any artificial stimulus," said Margaret Kelly, RE/MAX CEO. "If sales continue at this pace into the traditional spring and summer buying season, we would expect to see prices follow as well."
Freddie Mac said in its recent economic outlook that the market is poised for a strong spring buying season. The government-sponsored enterprise is anticipating a 5% increase in annual home sales this year to a projected 4.9 million sales.
Home prices showed the same trends as sales, edging up on a monthly basis, but coming up short on an annual basis. In March, the median sale price was $177,001, down 8.2% from a year earlier, according to RE/MAX.
Prices in 35 markets increased during the month, up from 17 in February and just three markets in January. San Francisco witnessed the only double-digit increase in March with a 13.3% rise.
RE/MAX reported homes for sale in March were on the market for an average of 104 days. The monthly supply of housing inventory shrunk 23% to 7.1 months from 9.3 months the previous month, the firm said.
Write to Christine Ricciardi.
Follow her on Twitter @HWnewbieCR.
So far, this earnings season is a welcome event on Wall Street because of some much needed market stability.
Many companies are reporting an improving corporate environment despite the sluggish growth in the broader economic recovery. Corporate America is working in a different kind of economy. And State Street Corp. (STT: 38.84 +0.15%) is a perfect example.
The institutional investment advisory firm is reporting it costs more to do business. Basel 3 requirements, the implementation of Dodd-Frank and continual expenses to credit ratings agencies to have their investments rated are dragging down the bottom line, according to State Street.
(Editor's note: The firm seems especially irked at the last example. Considering the markets must rely on ratings agencies, State Street isn't happy with the necessary evil. The company lists costs to the agencies as a future loss risk due to the "maintenance of credit agency ratings for our debt and depository obligations as well as the level of credibility of credit agency ratings.")
It cost more to do business, so State Street is charging more.
For example, investment management fees, generated by State Street Global Advisors, rose 12% in the first quarter to $236 million from $211 million in the first quarter of 2010.
This is interesting considering securities finance revenue fell 8% in the quarter to $66 million from $72 million a year earlier due primarily to lower volumes, offset partially by improved spreads.
So business is slow, and it costs more, but State Street found a simple way to earn a profit.
Future homebuyers should take note of the development of such pass-through economies.
Incoming consumer protections, mortgage servicer fees, consent orders, etc., all mean the cost of business is going up. And when it comes to homebuying, the borrower unfortunately is still the bottom line.
For if the consumer wants consumer protection, then the consumer has to pay for it.
I just hope it's worth it.
Write to Jacob Gaffney.
Follow him on Twitter @JacobGaffney.
Tags: State Street Corp.
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