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?
There has been more then 610,000 foreclosures last month and represents a 1% increase then the previous quarter. On average it took 336 days to complete the foreclosure process nation wide. New York took 986 days to complete the process while Texas only took 86 days. Wow, Texas seems to be doing something different.
President Obama is expected to help struggling homeowners with their mortgage payments. The Wall Street Journal reports, ”The administration’s plan is expected to eliminate “appraisals and extensive underwriting requirements for most borrowers” who are up-to-date on their mortgage and want to refinance at a lower rate”. This should help those who have been keeping up with their payments and were looking for assistance in avoiding foreclosure.
While most the country is having foreclosure problems, there are areas that are still doing well. These areas are the most expensive areas in the United States. The economy today doesn’t seem to hurt these types of properties. In fact, it seems to have increased the sales activity in this price range.
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.
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.
If you plan to purchase a home in the near future, you might want to speed up the process in order to have 3.5% of your closing cost paid by Fannie Mae. That’s right, Fannie Mae is trying to decrease their inventory of REOs. If you close on a HomePath property by June 30, 2011, you’ll be able to save 3.5% of the purchase price in closing cost. So act now!!!!
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.
In the coming months San Francisco will experience an increase in closed sales because the number of pending sales has increased by 8.9% which represents 2.6 months of the current supply of homes. If supplies continue to decrease and demand stays strong, maybe a seller’s market might be on the horizon.
The market will change if employment increases and interest rates stays affordable. However, if more distressed homes come on the market, we may not see a market shift for a long time or we may see a double dip in prices.
