National Market
Mortgage interest rates are on the rise. In the past few weeks, interest rates have ticked upwards. The raise in the interet rates hurt for sure: it reduces the amount of house many buyers can afford. My buyers and have sellers have felt the sting. Reality is that we had historically LOW interest interest rates and they couldn't last forever below 4%.
So where are they going? And how is the real estate market going to be impacted?
Lawrence Yun, the chief economist of the National Associaton of Realtors, had the following points:
- Anticipates hitting 5% by mid year 2014 & may climb higher in 2015
- it will push some buyers out of the market (especially as sales prices are increasing)
- improvements in underwriting loans as they return to less restrictive requirements
- Yun estimates that 15-20% MORE households are qualifying for safe, affordable mortgages with conventional financing (Loans up to $417,000) with credit scores of 720 or above. (In recent years the credit score needed to be 760-770)
- FHA Loans - credit scores of 660 (prevously was 680-700)
- Freddie Mac & Fannie Mae have greatly improved their performance & are starting to turn profits. Hopefully once they have repaid tax payer funds they will reduce some of these fees
It's important to remember as mortgage interest rates rise, they are still low and it is a great time to buy a home.
National Market
Pending home sales for the month of March 2010 increased 5.3% from the previous month to 102.9. The March 2010 is 21.1% higher than March 2009 which was 85.0. The data is provided by the National Realtors Association and is for homes under contract - not closed.
Definitely the increase is in part to the end of the buyer tax credit (must be under contract by April 30, 2010 and closed by end of June 2010). According to Lawrence Yun, the NAR's chief economist, "Clearly the home buyer tax credit has helped stabilized the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales. 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 ome values stablizing."
From my persepective - yes - we will probably see a slow down in under contracts and sales after April 30th but many Atlanta buyers are out there. They want to buy even if they didn't get the tax credit. Home prices seem to be stabilizing in areas (still early but the numbers are showing some improvements), and loans are becoming readily available in the jumbo market (loans over $417,000) as banks' begin to show healthy balance sheets. Buyers want great deals and sellers are understanding this and working to price their homes right for the current market. I am talking to buyers who still want to buy!
In Metro Atlanta - we are starting to see
a slight reduction in the unemployment rate which is a lagging indicator of the economy. The unemployment rate will follow other improvements in the economy - such as the increase in the pending sales numbers. The good news is that March 2010 the unemployment rate dropped for the Metro Altanta area.
National Market
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South is definitely seeing some improvement and movement in the market. While we will have to wait a few more weeks for the December 2009 numbers - what will be more important is the cumulative numbers for the year 2009.The following information is provided by NAR in their November 2009 update. Data was released at the end of December. The data is for resales.
Regional Sales by Price |
| Existing Single Family Homes |
| November 2009 |
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| % Change in Sales from 1 Year Ago |
| Region |
$0-100K |
$100-250K |
$250-500K |
$500-750K |
$750K-1M |
$1M+ |
| Northeast |
29.1% |
75.3% |
50.5% |
31.7% |
9.4% |
30.2% |
| Midwest |
44.0% |
70.0% |
47.6% |
29.9% |
10.7% |
-13.1% |
| South |
24.5% |
53.6% |
37.9% |
55.2% |
60.6% |
28.4% |
| West |
28.9% |
46.8% |
24.3% |
35.9% |
58.2% |
64.2% |
| U.S. |
32.4% |
60.0% |
38.8% |
38.2% |
40.7% |
39.0% |
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| Sales Distribution |
| Region |
$0-100K |
$100-250K |
$250-500K |
$500-750K |
$750-1M |
$1M+ |
| U.S. |
20.8% |
49.8% |
22.1% |
5.0% |
1.2% |
1.1% |
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National Market
Moody's economists report to Forbes.com the recovery of the real estate market. Some analysts are predicting the National market to hit bottom by mid 2010. Predictions indicate that from 2009 to 2014 - an 11.35% increase in prices. Good news indeed! It is a great time to buy with LOW interest rates and LOW prices.
Here is the full
Forbes.com article.
National Market
The National Association of Realtors said today that home sales rose 7.2% to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the 4th straight monthly increase and the highest level of sales since August 2007. Sales had been expected to rise to annual pace of 5 million, according to surveyed economists. July's increase to 5.24 million was higher than anticipated. "The housing market, with today's strong rise in sales, has decisively turned for the better," said Lawrence Yun, the chief economist for the National Association of Realtors.
National the median sales price is down by 15 percent to $178,400. Sales of foreclosures & distressed properties make up about a third of all transactions in July which is down from half of all transactions from earlier this year. In several markets across the US - buyers are purchasing foreclosed properties at deep discounts.
The tax credit for first time buyers - also seems to have helped sales. In order to qualify for the First-time buyer tax credit - homes must be CLOSED by November 30, 2009. The tax credit is for 10% of the purchase price upt to a maximum of $8,000. And while it is billed for the first time buyers - you may qualify if you haven't owned a primary property for the past 3 years.
The 9.4-month supply of current inventory at the current sales pace is unchanged from June.
National Market
At the annual Federal Reserve conference in Jackson Hole, Wyoming, Federal Reserve Chairman Ben Bernanke says the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession. Bernanke said that economic activity in both the U.S. and around the world appears to be "leveling out," and "the prospects for a return to growth in the near term appear good."
~sourced AJC.com
National Market
The Commerce Department reported that new home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. WOW.
It is the fastest increase in more than eight years for new construction home sales.
Indeed home prices are still falling, but the improvement in new construction sales is another sign the national housing market is starting to bounce back. Earlier this month, the government reported that national home resales rose almost 4 percent in June, the third straight monthly increase.
"The worst of the housing recession ... is now behind us," said David Resler, chief economist at Nomura Securities. "We're turning the corner toward increased activity in housing."
The median national sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May. In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage. You must
close by November 30, 2009.
June's results were the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
There were 281,000 new homes for sale at the end of June, down more than 4 % from May. At the current sales pace, that represents 8.8 months of supply which is the lowest level since October 2007. Some analysts say that when the inventory falls down around a 6 month supply, builders will feel more comfortable ramping up construction.
Portions of this article were sourced from a July 2009 article by real estate columnist Alan Zeibel & FMLS
National Market
There was an increase in the number of sales in the intown markets from March 2009 to April 2009. In single family houses - there were 23 more closings and in increase in sales volume of $16,631,268.
April 2009 Numbers:
Homes:
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market |
| 21 |
43 |
$ 8,645,504 |
$ 201,058 |
$ 221,666 |
94.7% |
120.8 |
| 23 |
47 |
$ 11,501,906 |
$ 244,721 |
$ 268,637 |
97.0% |
155.4 |
| 24 |
1 |
$ 190,000 |
$ 190,000 |
$ 210,000 |
95.2% |
25 |
| 52 |
23 |
$ 3,867,405 |
$ 168,148 |
$ 182,914 |
95.0% |
120.4 |
| TOTALS |
114 |
$ 24,204,815 |
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Condos & Townhomes:
| Area |
# of Sales |
Total Sales Volume |
Avg Sale Price |
Average Original List Price |
Sales Price to Final List Price |
Average Total Days on the Market |
| 21 |
43 |
$ 8,645,504 |
$ 201,058 |
$ 221,666 |
94.7% |
120.8 |
| 23 |
47 |
$ 11,501,906 |
$ 244,721 |
$ 268,637 |
97.0% |
155.4 |
| 24 |
1 |
$ 190,000 |
$ 190,000 |
$ 210,000 |
95.2% |
25 |
| 52 |
23 |
$ 3,867,405 |
$ 168,148 |
$ 182,914 |
95.0% |
120.4 |
| TOTALS |
114 |
$ 24,204,815 |
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Key to the Areas is
here. March 2009 numbers are
here and February 2009 numbers are
here.
Here are the national housing indicators for the April:
Existing-Home Sales 4.68 million units*
Existing-Home Median Price $170,200
Housing Starts 458,000*
New Home Sales 352,000 units*
*seasonally adjusted annual rate
National Market
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April 2009, rose 6.7 % to 90.3 from a reading of 84.6 in March 2009, and is 3.2%. when it was 87.5.
Lawrence Yun, NAR chief economist, says buyers are responding to very favorable market conditions. "Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market," he says. "Since first-time buyers must finalize their purchase by November 30 (2009) to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers."
Geographical Breakdown of Pending Home Sales Index
Northeast: The index shot up 32.6 % to 78.9 in April and is 0.8 % above a year ago.
Midwest: The index rose 9.8 % to 90.4 and is 11.1 % above April 2008.
South: The index slipped 0.2% to 93 in April but is 3.5% higher than a year ago.
West: The index rose 1.8 % to 94.8 but is 2.9 % below April 2008.
National Market
As is my custom - I was listening to Good Morning America as I let the dogs out, make the coffee and get started on waking up. But this morning - I was delightfully jolted out of my early morning haze by Liz Ann Sonders, Chief Investment Strategist at Charles Schwabb, who proclaimed that the recession had ended. What is even better is that she was agreeing with Barry Knapp, of Barclay's Capital, who recently announced that the recession may have ended last month in April. Knapp actually said the economy appears "to be in the sweet spot of a recovery".
One of the indicators pointing to a recovery is unemployment. Unemployment is a lagging indicator of the economy - meaning unemployment may not improve for several months and you can expect that unemployment will peak by year end. Historically employment figures don't seem recover until six months after the end of a recession. However, Sonders indicated that layoffs are slowing down and the unemployment claims are starting to edge lower.
Another indicator pointing to a economic recovery is the housing market. One of the leading indicators of how the housing marketing is faring is the inventory level - the number of homes on the market. According to Pat Lashinsky of Zip Realty, "Inventory levels are actually declining and median home prices of homes available for sale have actually gone up." When the number of homes on the market goes down - prices rise and the market improves. "The fact that inventory is declining is suggesting that soon we may see home prices begin to stabilize. In some markets, it may begin to turn upward. But the downturn in the housing that we've had for the last three years may be coming to an end," said Lawrence Yun, the chief economist for the National Association of Realtors. "Buyers are a lot more engaged," Yun said. "There's an excitement and a passion that hasn't been seen in the last 18 months right now."
These statistics are for the national markets and it will be interesting to see what our metro Atlanta numbers will be. It will be a week or two before our April numbers our out but even our
March numbers showed improvement. NAR's numbers for the national market showed improvement in march as well -
here they are.
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a slight reduction in the unemployment rate which is a lagging indicator of the economy. The unemployment rate will follow other improvements in the economy - such as the increase in the pending sales numbers. The good news is that March 2010 the unemployment rate dropped for the Metro Altanta area.
