Home sales have declined in some areas and its due to high demand, low interest rates and a shortage of homes to buy. This creates a change in the market place. Not good for buyers but good for sellers.
Buyers around the bay area are going to be happy to see more homes on the market. Currently homes that are under $400,000 are experiencing a seller’s market. Most sellers are receiving multiple offers for their home. Every home that I have made offers for my clients have had more then 1 offer. One house in Hayward had 18 to 20 offers. Another house in San Bruno had 6 offers. My listing in So. San Francisco received 2 offers above the asking price, right after my open house, and 1 was all cash. My other listing in Pacifica received 8 offers, all over the asking price. It’s like that all over the Bay Area. It’s pretty discouraging for buyers today.
Maybe there is some relief coming soon. There is a shadow inventory due to be release around summer. I hope this will help the buyers that are trying to get into their home.
It seems like the market is improving. Sales have been increasing and here are 8 areas that are showing signs of a recovery.
I have been experiencing a market that resembles the last seller’s market not a buyer’s market. There is not a lot of inventory available for all of the buyers here in the Bay Area. I have a property for sale in Pacifica, Ca, listed at $338k and received 6 offers and all above the list price. I have been also representing buyers and making offers to purchase, but have been in bidding wars. In San Mateo county, it would take approx. 4.1 months to sell all of the homes that are on the market compared to 4.5 months same time last year. Where are all of the bank owned properties?
California home sales are looking at a 1% increase in 2012 and the sales price may also increase 1.7%. Employment , low interest rates and an increase of affordable homes are going to fuel the sales activity and help get the recovery going. “It will take as long as five years for the state’s inventory of foreclosed properties to be absorbed” according to Leslie Appleton-Young, chief economist for the California Association of Realtors.
In many areas in the nation, there are areas that are cheaper to buy a home then to rent. You now can find a home for $100,000 in New York and through out the country including Hawaii.
It may seem like some areas have not been affected by the economy but that is not true. The properties that sell really quickly are usually the cream of the neighborhood.
The Bay Area has been hit as well but not as bad as other areas. It will be a while before we get out of this mess.
The Senate is proposing to change the FHA down payment to 5% and decrese the loan limits. Why make it harder to qualify for a loan when FHA is critical in providing affordable financing to help decrease the growing foreclosed properties. Currently the nation’s largest lending institutions own more then 872,000 homes which is twice that of 2007. It will take 400 days for lenders to foreclose on the home and 176 days to sell it. This will make our recovery even slower. Although financing isn’t the only factor to a recovery, it is one of the most important factor to decrease the ever growing inventory.
Although home sales have increased, the prices have decreased in 118 markets across the country. Prices have declined approx. 7.5% in March from a year ago. This is the eighth straight month of declining prices. So what’s keeping the sales going? I believe that the low interest rates and affordable prices are keeping sales alive.
San Francisco is showing signs of recovery along with San Mateo county. With gas prices continuing to rise, many buyers are moving back to big cities where they don’t have to use their car. This may be one reason why San Francisco has been experiencing a brisk recovery.
If our government continues to ignore our budget problems that we have today, we will be in the same credit classification as Greece. Once we loose our credibility, things will be more expensive. Something has to be done.
Although our budget is operating at a 60 % deficit, home sales have increased and is on track to out perform last year. This increase is fueled by homes being more affordable, historically low interest rates, and lower unemployment, according to Lawrence Yun, NAR Chief Economist. April did show signs of our economy improving but the housing industry is still fragile.
Even though we have an increase in sales, the values of the homes have dropped 3% in the first quarter of 2011, which makes this decline the largest since 2008.
With all this going on, it’s still a great time to make that investment in the “Great American Dream”.
Bank owned inventory nationally grew to a record high of 2.2 million in March and foreclosures starts increased by 33% month over month. This may sound bad but foreclosure sales have increased and delinquencies are down by 11% which is the lowest since 2008.
Pending sales have increased which is a good sign that the demand is strong and the inventory will decrease hopefully faster then any increase. The U.S. is expected to add at least 750,000 new households in 2011 which is a healthy demand. A lot of these new homeowners are a result of lower home prices that are cheaper to buy then to rent, low interest rates, and more confidence in the recovery of the economy.
“The good news is that recent home buyers are staying well within budget, leading to exceptionally low loan default rates among home buyers over the past two years,” Yun added.
Home sales rose slightly last month. This is the sixth month in a row that home sales have increased. Lawrence Yun, NAR chief economist, says “We’re clearly on a recovery path”. This is a good sign and sales should continue to increase.
There are all types of buyers out taking advantage of the market. First time buyers purchased 33% of homes sold in March and all cash buyers purchased 35% of the homes sold, for example. With the market current market conditions, it makes more sense to purchase a property then renting.
There are about 78,000 homes that are either vacant and for sale, or under construction. This is an improvement and with a normal level of buying, the homes would sell in 2 1/2 months. The study shows that there is a housing shortage brewing. If this happens, then it would change the market to a seller’s market and buyers will have a hard time purchasing again. The market today is still considered a buyer’s market and there are more bargain hunters out looking for deals. More investors are also very active making all cash purchases. There are 6 cities that are considered to be cheaper then renting the same house. All this may be history if unemployment rises, which it is decreasing today, interest rates continue to rise and become non deductible.
