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What Rising Rates?
New home sales rose by the
greatest margin in four years and prices reached
record highs in February. New home purchases
rose 9.4 percent to an annualized sales rate of
1.226 million and the median price increased 9.6
percent, the largest February gain since
February 1993, according to the Commerce
Department.
Economists previously predicted new home sales
would reach only a 1.15 million annualized sales
rate in February after January's 1.106 million
annualized pace.
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The
median price for new homes was $230,700
nationwide, the department said. The run on new
homes was sparked by slightly higher interest
rates which remain in the affordable 6 percent
range.
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Business Boost:
Furnished Second
Homes
 Buying a second home as an
investment also means buying a business and more
and more often that means buying a business that's
ready to go.
Kiplinger Magazine reports that furnished second
homes are increasingly common because investors
want to hit the ground running without wasting
time setting up shop. Appreciation may be
expected, but cash flow from rental income isn't
as guaranteed and investors need to quickly put
their property in front of travelers or other
renters looking for fully furnished
accommodations, Kiplinger reports.
Marquardt says an
itemized list of the furnishings is also helpful
when calculating depreciation. |
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Backyard Kitchen Trend Gathers
Steam
 Demand for backyard kitchens and
outdoor appliances has been on the rise in recent
years, as U.S. homeowners entertain more
frequently and increasingly spend family time
outdoors.
The
National Kitchen and Bath Association reports that
Americans spent 11.1 percent, or $47 billion, more
on kitchen remodeling last year than the previous
year, with homeowners citing a particularly strong
interest in outdoor kitchen space. Appliance
makers note that demand for outdoor appliances and
barbecue grills also has been increasing in recent
years.
Outdoor
kitchens vary widely in both design and price.
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Home
Sales to Stay in Record Territory
 Both new - and existing-home sales will
remain historically strong this year while the pace of
price appreciation should ease, according to the
National Association of REALTORS®.
Sales of existing-homes,
including single-family, condo, and co-op, are expected
to decline 3.2 percent to a total of 6.57 million in
2005 from a record 6.78 million last year. New-home
sales are seen at 1.13 million this year, 5.9 percent
below a record of 1.20 million in 2004; the projections
for both new- and existing-home sales in 2005 would be
the second best on record. Housing starts are forecast
to slip 0.7 percent to 1.94 million units in 2005. David
Lereah, NAR's chief economist, says home sales are
starting to ease to more sustainable levels. "After
setting four consecutive record years, the housing
market is due for a breather," he says. "As mortgage
interest rates creep up and home sales slow a bit, we
should see a better balance between home buyers and
sellers - that will take some of the pressure off of
home prices." Lereah expects the 30-year fixed-rate
mortgage to gradually increase to 6.7 percent by the end
of the year; for all of 2005 the rate should average 6.2
percent.
The national
median existing-home price for all housing types should
grow 5.6 percent this year to $195,500. |
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