Existing-Home Sales Continue to Improve in April

Existing-home sales rose again in April with buyers motivated by the tax credit, improving consumer confidence and favorable affordability conditions, according to the National Association of Realtors®. Existing-home sales, which are completed transactions that include single-family, town homes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Lawrence Yun, NAR chief economist, said the gain was widely anticipated. “The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” he said. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

Total housing inventory at the end of April rose 11.5 percent to 4.04 million existing homes available for sale. The national median existing-home price for all housing types was $173,100 in April, up 4.0 percent from April 2009. Distressed homes accounted for 33 percent of sales last month, compared with 35 percent in March. Single-family home sales rose 7.4 percent to a seasonally adjusted annual rate of 5.05 million in April from a pace of 4.70 million in March. NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said buyer traffic is mixed. “It looks like the level of home sales that close in May and June will stay elevated, but many buyers remain in the market even without the tax credit,” she said. “Some Realtors® tell us they are very busy with clients who are entering the market now as a result of improved conditions, while others are welcoming a slowdown from frantic market conditions in recent months.”

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Not Enough Homes To Sell

Despite the housing bust and high foreclosure rates, in some areas real estate agents are complaining that they don’t have enough homes to sell. There is currently an eight-month supply of homes on the market — meaning that, at the current sales pace, it would take eight months to run through the backlog. That’s still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In Denver, Phoenix and San Francisco they are even bidding-war tight. In California, almost all cities have a short supply of single-family homes. That’s especially true in the lower-priced categories, according to Leslie Appleton-Young, chief economist for the California Association of Realtor. There are plenty of more expensive homes in California, but this inventory is going quick: inventory for million-dollar-plus homes has dropped from 21.6 months to 10.9 months.

Ordinarily, rising prices are an indication of shrinking inventory. But these are far from ordinary times. Never have there been so many properties that could be for sale — but aren’t. This so-called “shadow inventory” comes from two main sources: properties lenders have not yet repossessed or have not yet put back on the market; and homeowners who want to sell but who have refrained because of low prices. Lenders are also holding back on foreclosing at all, either because they’re having trouble handling the volume of repossessions or because they want to sell off some of the inventory they already have. Zillow.com surveys estimate that 8% of homeowners are very likely to try to sell their homes in the next twelve months if they see signs of improvement in their local markets.

Let this be the early warning for all you home owners sitting on the fence waiting to sell their home. Now might be the time get your home in top shape and ready to sell. If your looking for a real estate marketing expert that will guarantee maximum exposure, than you need to contact me now so your not playing catch up. Call me at 253-209-9701 and I can consult you on what you need to do get you home or real estate ready to sell fast.

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Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of Realtors®. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. This forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0; this follows an 8.3 percent increase in February.

The data reflects contracts and not closings, which usually occur with a lag time of one or two months. Lawrence Yun, NAR chief economist, said favorable affordability conditions have been working with the tax credit. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing. Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages,” Yun said. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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Below is a report that indicates that the mortgage rates are starting to move up. It is predicted that by the end of the year the rates will be close to 6%.

Freddie Mac’s weekly survey put the average rate for a 30-year fixed-rate mortgage (FRM) at 5.01% with a 0.7 origination point for the week ending February 4, up from last week’s average rate of 4.98%. It’s the first week-over-week increase in 2010. A year ago, the 30-year FRM was 5.25%. Bankrate.com’s weekly survey of large banks and thrifts put the 30-year FRM at 5.15%, up from 5.13% last week. Freddie put the 15-year FRM at 4.4%, up from last week’s average rate of 4.39%, but still down from last year’s rate of 4.92%. Bankrate.com put the 15-year FRM at 4.55%, up from 4.54% last week. Freddie Mac vice president and chief economist Frank Nothaft said despite the increase, rates remain relatively stable amid other positive developments, including recent increases in pending home sales and mortgage applications. “Even more encouraging news came from the Federal Reserve’s Senior Loan Officer Opinion Survey, which reported that banks have generally stopped tightening standards on most types of loans in the fourth quarter of 2009, with commercial real estate as the exception,” Nothaft said. “However, banks have yet to unwind the tightening that occurred over the last two years. Moreover, substantially fewer banks expected credit quality to deteriorate over the coming year,” he added. Freddie said the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.27%, up from last week’s rate of 4.25%. Last year, the five-year ARM averaged 5.26%. Bankrate.com’s average rate for five-year ARMs was 4.56%, up from 4.54% last week. Freddie’s survey of the one-year Treasury-indexed ARM put the average rate of 4.22%, down from last week’s rate of 4.29% and last year’s 4.92%.

Now is the time to buy a home! The mortgage rates are still at an all time low and the home prices are at there best. You still have time to take advantage of the $8000 and $6500 tax credit available to home buyers. If you are looking to buy a home in the Bonney Lake, Lake Tapps, Sumner, Puyallup, Buckley, Enumclaw or any of the surrounding Puget Sound areas, call me at 253-209-9701 and chances are I will be able to help you.

Do it now before this once in a lifetime perfect storm passes by!

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Home prices rebound

National housing prices dropped 32% from the peak in Q206 to trough in Q109 and rebounded 6.3% by the end of 2009, according to a Standard & Poor’s (S&P)/Case-Shiller home price index annual report. S&P chief economist David Wyss projects housing sales and starts to drop over the winter, but to remain well above their early 2009 lows, and to recover in the spring. Wyss projects 750,000 total housing starts in 2010, followed by an additional 1.18 million housing starts in 2011. He also projects national house prices to decline 8% over the winter months. The S&P/Case-Shiller 10-city and 20-city composites peaked in June and July 2006, respectively and both troughed in April 2009.

The 10-city composite fell 33.5% and appreciated 5.6% through the end of 2009, while the 20-city composite fell 32.6% and appreciated 5.3% by year’s end. The composite indices are still reporting year-over-year price declines. The 10-city and 20-city composites reported annual declines of 6.4% and 7.3%, respectively. In January 2009, 10-city composite declined 19.4% and the 20-city declined 19% year-over-year. While the national peak occurred in the summer of 2006, but regionally, the downturn in home prices began in late 2005 when home prices peaked in the Boston, Detroit, and San Diego markets, the report said. By January 2007, national home prices began their current three-year decline and hit a new record low in the indices 22-year history. Home prices are now at their autumn 2003 level.

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What’s up with real estate in 2010?

According to Michael J. Malpede, of Easy Forex, the rebound in US housing market is another potential positive for the outlook for the US economy. The US housing market has improved and shows sign of stabilization. The housing market will benefit because the inventory of new homes are at their lowest level in 17 years, but the outlook for housing remains uncertain. A number of analysts suggest that the housing market remains weak and that the recovery was driven by foreclosures and short sales. The Fed announced plans to add additional support to government mortgage agencies (Fannie Mae, Ginnie Mae, and Freddie Mac) and the tax credit for first time home buyers has been extended to April 2010. This could keep the recovery in US housing market going during the first half of 2010, but it’s uncertain what happens to the housing market when the Fed stops buying mortgage-backed securities next year. Still-rising mortgage delinquencies signal more foreclosures. “Delinquencies are a precursor to foreclosures,” said Cameron Findlay, chief economist at LendingTree.com, in an interview Tuesday. “We’re not seeing any decreases in delinquencies, which is very concerning.”

More people are falling behind on their monthly payments during the recession as unemployment hovers around 10%, and this figure isn’t expect to do any wild dips in the immediate future. Earlier this week, Fannie Mae (FNM) said serious delinquency rates in its conventional single-family-home mortgage portfolio rose to 4.98% in October from 4.72% the previous month. A year ago, the rate stood at 1.89%. A wave of foreclosures would only add to the inventory overhang of unsold homes and delay a lasting recovery in residential real estate. In spite of all this, Moody’s Investors Service upgraded its outlook on the U.S. home-building industry to stable from negative. It cited strengthening indicators like housing starts, sales, and improving home affordability. “The industry’s recovery remains precarious, however, given the sizable number of potential foreclosed homes that might eventually come to market, as well as the anticipated continued decline in home prices in 2010,” Moody’s said. “The U.S. government’s support for the sector is a critical source of strength. A premature removal of government backing would put the industry’s outlook at considerable risk of returning to negative.”

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Existing home sales up

As expected, the National Association of Realtors reported that existing-home sales showed another big gain in October, surging 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million. Lawrence Yun, NAR chief economist, expects a decline over the winter: “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.” Since the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through – there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said. Of course, very low interest rates also play into the demand too. A more accurate reflection of economic activity will be closely watched later this week when new home sales are released.

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Freddie Mac’s weekly survey of average interest rates put the 30-year fixed-rate mortgage (FRM) at 4.83% with an average 0.7 points for the week ending Nov.12, down from the average rate of 4.91% the previous week. That’s a mere 5 basis points shy of Freddie Mac’s record low of 30-year FRM rates, reached twice in April this year. Last year, the rate was 6.04%. Freddie Mac put the 15-year FRM at 4.32% with an average 0.6 points, down from last week’s 4.4% and the lowest rate for the product since Freddie Mac began its 15-year FRM survey in 1991. A year ago, the average rate for the loan was 5.73%. Bankrate.com’s survey of large US banks and thrifts put the 30-year FRM at 5.06%, the lowest in the survey’s 24-year history and down 13 basis points from the previous week. The previous low on the Bankrate survey was 5.13% in April. Bankrate.com put the average rate for a 15-year FRM at 4.48%, down 13 basis points from the previous week. “Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan,” said Freddie Mac vice president and chief economist Frank Nothaft. “Moreover, for the fourth consecutive quarter, more than 95% of prime borrowers who originally had an ARM selected a conventional fixed-rate mortgage in the third quarter of this year.”

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