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Posts Tagged ‘supply and demand’

More from the “muddle through” file.  CoreLogic, one of the leading real-time data analytics firms tracking US house prices, says the housing market could remain “flat through 2013″:

“CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its October Home Price Index (HPI®) which shows that home prices in the U.S. decreased 1.3 percent on a month over-month basis, the third consecutive monthly decline.According to the CoreLogic HPI, national home prices, including distressed sales, also declined by 3.9 percent on a year-over-year basis in October 2011 compared to October 2010. This follows a decline of 3.8 percent in September 2011 compared to September 2010. Excluding distressed sales, year-over-year prices declined by 0.5 percent in October 2011 compared to October 2010 and by 2.1* percent in September 2011 compared to September 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“Home prices continue to decline in response to the weak demand for housing. While many housing statistics are basically moving sideways, prices continue to correct for a supply and demand imbalance. Looking forward, our forecasts indicate flat growth through 2013,” said Mark Fleming, chief economist for CoreLogic.”

As I’ve noted on several occasions, housing is a key component in the balance sheet recession theory.  If house prices remain flat in the coming years it’s highly unlikely to be accompanied by above average economic growth.  All in all, I think this outlook is in-line with my general macro perspective.

Source: CoreLogic

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As the holidays approach, I’m always asked the same questions:

  •    Should we keep our property on the real estate market or take it off?
    •    Do we list now, wait until after the first of the year, or hold off until spring?

In the past, conventional wisdom said you shouldn’t try to sell a home during the holidays. However, the old thinking doesn’t really apply any longer — thanks to the Internet and hectic lifestyles as well as traditional rules of supply and demand.

Whether to sell or not at the end of the year has to do with your particular situation and market. But in general, here’s some real estate advice about why you should consider listing your home during the holidays, or even in January.

Buyers are always looking for properties online

Historically, potential home buyers felt that the holidays were too hectic for home shopping. They were preoccupied with planning parties, cooking meals, buying presents or planning vacations. Going out with a real estate agent to look at properties conflicted with a busy holiday schedule. This made perfect sense — before the Internet, smart phones, and tablets came along.

In my opinion, traditional buying and selling seasons have evolved as a result of instant, ubiquitous access to property listings. Someone who is serious today about buying real estate is always looking. They may check out the latest listings on their Zillow iPad app before bed or while waiting for their kid’s soccer game to end.

Our hectic lifestyles also play a role. Often, serious buyers are working hard and not shifting into holiday mode until the last minute. Even during the holiday break, they’re squeezing in work. They’re already staying “on the grid,” so why not continue monitoring the real estate listings in their area too?

The inventory — and the competition — is usually lighter during the holidays

Despite our always-on access to property listings today, there’s still a lingering perception that the year-end holidays aren’t a good time to list a home. Similarly, if your property has been sitting on the market for months, conventional wisdom says to give it a rest during the holidays. Given these factors, we end up seeing the inventory for good homes tighten up this time of year. But buyers are still out there looking at real estate and no doubt wishing there were more properties available.

In fact, if I have a seller who has been talking about selling, is truly motivated, is flexible on timing, and has a home that truly sparkles, I often suggest they list right after Thanksgiving. There’s still a window of several weeks to get buyers into your home before the end of the year. And those buyers flipping through listings at their kid’s soccer game will be so excited to see something new and awesome hitting the market — especially if there’s a lack of good inventory in their area. Those motivated soccer moms and dads are the ones who’ll take the time to see your home, regardless of what the calendar says.

Home been on the market too long? This could be a great time to lower the price or change your strategy.

If your property has been sitting on the market for months, most buyers and their agents will see it as stale or overpriced and disregard it — no matter how great it is or how light the competition currently is.

In that scenario, it’s time to take action, and the year-end holidays can be a golden opportunity to shift course. Making a dramatic price reduction or overcoming some major obstacle that has been preventing the sale might be just the right thing to do this time of year. If you had lower offers early on but you weren’t ready to accept them, or you keep hearing that there are issues with the way your property shows, this could be your chance to show the market you’re listening and serious about selling. The motivated buyers will notice you and take a look.

You even stand a chance of getting a sale closed before the end of the year; I’ve seen it happen. As always, before you make any big changes, talk it over with your real estate agent.

Don’t want to be bothered during the holidays? List your property in January.

Admittedly, the thought of keeping the house clean, holding open houses, and vacating to accommodate last-minute showings during the holidays is a deal killer for some. If so, consider listing your property after New Year’s Day.

Traditionally, we don’t see much inventory coming on the market in January. It’s cold in most places, and many sellers prefer to wait until the spring, a more conventional time to sell. As a result, we don’t see much inventory in January. And yet, each January my phone rings with new buyers wanting to get into the market.

Or I’ll hear from on-the-fence buyers who may have lost interest earlier in the year and are now suddenly motivated again.

There’s something about the beginning of a new year that galvanizes people. The motivation to buy could be due to year-end tax planning, with buyers seeing how much they owe and how owning a home could help. It could be because of New Year’s resolutions to finally stop spending money on rentals and invest in property. Maybe a rich relative gave them money for a down payment (wouldn’t that be nice?).

Whatever the motivation, for sellers it means one thing: There can be an increase in demand at a time when inventory is traditionally low — resulting in less competition from other sellers. If you’re motivated to sell your home, you’ll have an even more “captive” audience in January.

This post originally appeared on Zillow.com

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NEW YORK (AP) — It will still be several months before Libya can export as much oil as it did before it descended into civil war earlier this year. But the killing of Moammar Gadhafi reduces the chance that violence will get in the way as Libya cranks up production again.

And as Libyan crude returns, it could lower the price of oil on the international markets and gasoline at American pumps.

The type of crude produced by Libya, known as light, sweet crude, is rare. It is especially valuable because it is easier for refineries to convert into diesel and gasoline. Many refineries can’t switch easily to processing other varieties of crude.

Before the civil war, Libya produced only 2 percent of the world’s oil. But even small interruptions in oil production can have a big effect on the price because the balance between supply and demand is delicate.

When fears arise that supplies might fall short, traders get nervous, and prices can go up fast.

The price of oil jumped 35 percent between Feb. 15, when protests started in Benghazi, and April 29, when oil hit almost $114 per barrel, the highest since 2008. Gasoline prices in the U.S. rose from $3.12 before the fighting to a three-year high of $3.98 on May 5.

High prices, plus the prospect that Libyan crude would disappear from the market for a long time, led a group of oil-importing nations to announce the release of 60 million barrels of oil from emergency stocks. That included 30 million from the United States.

The price of oil came down because traders figured Libyan oil would return after Gadhafi was ultimately overthrown — but also because of concerns that a worldwide economic slowdown would reduce demand for oil.

By Wednesday, oil had returned to its price before Libya’s uprising began. It fell 81 cents Thursday to $85.30 a barrel in New York trading. The average price of a gallon of gas in the U.S. was unchanged at $3.47.

The oil market’s reaction to Gadhafi’s death was muted because efforts to revive the Libyan oil industry have been under way for months under the Libyan transitional government.

“It was a foregone conclusion that Gadhafi was finished,” said Daniel Yergin, chairman of IHS CERA, an energy research firm, and author of a Pulitzer Prize-winning history of the oil industry.

Before the war, Libya, which sits on the biggest oil reserves in Africa, produced about 1.6 million barrels of oil per day. Production collapsed during the war. Libya now produces about 390,000 barrels a day, a Libyan official said earlier this month.

Analysts predict the country can produce 600,000 barrels per day by the end of the year and 1.6 million by the second half of next year. By then, oil, depending on where it is traded, could fall $10 to $25 per barrel, says Michael Lynch, president of Strategic Energy & Economic Research.

But getting back to regular oil production could prove difficult for Libya. Its government is still in its infancy. It has no parliament, no constitution and few remaining national institutions.

And infighting could spark a second uprising similar to the insurgency in Iraq, Barclays Capital analyst Helima Croft says.

“Certainly, having Gadhafi no longer on the scene takes away one source of instability. We just think the bigger problem might be the ‘game of thrones’ between various factions within the rebel ranks,” Croft said.

One major issue is figuring out how to divide oil revenue among more than 100 tribes in the country, says Frank Verrastro, director of the energy and national security program at the Center for Strategic and International Studies.

International companies will also have to be reassured that a new government won’t try to drastically change contracts that have already been signed. And they want to be assured that their oil-field engineers will be safe.

Still, Verrastro says, initial reports on the condition of Libyan infrastructure have been promising.

Already, major oil companies are working with the transitional government. Last week, an Italian company called Eni reopened the pipeline that runs natural gas from Libya to Italy for the first time in eight months.

In September, it resumed production at a Libyan oil field, and it is back to its full capacity of 70,000 barrels a day. And Eni and Libya’s state-run National Oil Corp. aim to restart gas production in November from a platform 70 miles off the Libyan coast.

The Spanish oil company Repsol, however, isn’t producing oil from its fields in the southwestern desert of Libya, where fighting was more intense. After Gadhafi’s death, the company would not predict when production would resume. Repsol won’t send its employees back to the fields until the company determines it is safe, says company spokesman Kristian Rix.

Hess Corp., which has a minority stake in one of Libya’s oil fields, said it hasn’t decided when to send employees back to the country. “Until we’re certain that things have settled down there, we can’t say when we’ll get back to business,” spokesman Jon Pepper says.

___

AP Business Writers Tarek El-Tablawy in Kabul, Alan Clendenning in Madrid, Afghanistan and Adam Schreck in Dubai contributed to this story.

___

Jonathan Fahey can be reached at http://twitter.com/JonathanFahey . Chris Kahn can be reached at http://twitter.com/ChrisKahnAP .

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According to housing intelligence group, Hometrack, house prices in England and Wales fell in September – the 15th consecutive monthly fall.

According to Hometrack, house prices dipped by 0.1% in September on a monthly basis and are 3.5% lower on the year.

Hometrack attributes the ongoing trend to weak demand for housing on the uncertainty surrounding the economy, the imbalance between supply and demand, as well as the euro zone debt crisis.

Over the nine month period to September, the number of new properties coming on to the market rose 22% compared to just an 11% increase in demand, the company said.

The London-based company said the number of new buyers registering with estate agents fell 2.6% last month and follows August’s 1.6% drop.

Richard Donnell, director of research at Hometrack, comments: “The September survey shows a clear shift in the balance between supply and demand in the housing market, with the number of people looking to buy falling for the second month in a row.

Mr Donnell expects demand to continue to fall over the remainder of 2011.

In the meantime, Hometrack said properties in the North, Midlands and Wales continue to see the longest time on the market at an average of 11 weeks before an offer is made, compared with around 6 weeks in London.

In other news, last week, the Nationwide Building Society said house prices rose by just 0.1% in September on a monthly basis.

Like Hometrack, the Nationwide expects prices to struggle throughout the remainder of the year due to the euro zone sovereign debt crisis which is denting confidence and driving up banks’ funding costs.

Last week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

Today’s figures from Hometrack, together with other housing reports over the last few weeks, suggest the housing market will remain depressed for the remainder of the year.

UK house prices fell by 0.6% in June, following a similar decline in May, Halifax has reported.
The average value of a home stood at £166,203, with the annual rate of gain easing back to 6.3%, compared with 6.9% in May.
That being said, prices in the April to June quarter were largely unchanged compared with the [...]