Home Resales Boom Into The End Of The Tax Credit; Home Values Seen Rising.

Filed under Existing Home Sales by on April 23, 2010 at 7:47 am {no comments}

rose in March, as expected. U.S. home buyers closed on 7 percent more homes as compared to February.

Furthermore, versus March 2009 — a month many people equate to the low point of the U.S. economy — sales volume was up 16 percent.

“Existing home sale” is the technical term for a home resale; a home previously inhabited by a person.  It’s the opposite of a “new home sale” which is a sale of a newly-constructed home.

Existing Homes Data is tracked by the National Association of Realtors® and a closer look at the March data reveals some other interesting notes:

  1. Year-over-year sales are higher for the 9th straight month
  2. Real estate investors represented 19 percent of all homes purchased
  3. First-time home buyers account for 44 percent of all buyers

Also worth noting is that the supply of available homes is down on a broader basis.  At the current rate of sales, the existing home inventory will be exhausted in 8 months.

Despite banks releasing foreclosures and into the Chicago market, that’s still one half-month less from February.

When supplies drops, home prices tend to rise. It suggests an underlying strength in housing that should support home prices through the next few months — especially as the home buyer finishes working its way through the system.

That said, real estate markets are local. You shouldn’t assume that what’s happening on the national level is also happening here at home.  Be sure to check with your real estate agent about local market conditions before making a decision to buy or sell.

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Existing Home Sales Indicate A Busy Spring

Filed under Existing Home Sales by on March 24, 2010 at 7:47 am {no comments}

As expected, the February Home Sales figure dipped relative to January.  It’s four straight months of lower month-over-month totals.  However, it’s actually pointing towards rising values.

November of 2009 was an exception.  The expiration of the flooded the market with buyers.  These were buyers that would have ordinarily been more evenly distributed through the winter months, instead, that “December-February” buyer bought sooner.

The trends and moving averages all point towards continued momentum in the real estate recovery.

The rumor that the market is soft may not last much longer.  When the first time home buyer credit was extended until April 30th, it created a spot for another huge spike in buyer traffic.  Buyer traffic means multiple offer situations and that means less power in negotiating.

The report is based on February’s closings which is really a reflection of buyer traffic in December and January.   The reality of today’s market is that there are more buyers than the stats are tracking.

Existing Home Sales should gain through March and April, pressuring home prices higher. And, by the time the press reports the gains, the best deals may already be gone.  Consider acting sooner rather than later.

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Existing Home Sales Dip Again, But Stay True To Trends

Filed under Existing Home Sales by on March 2, 2010 at 7:46 am {no comments}

Winter has been tough for home sales.

After a big drop of 17% December, the January report yielded a 7% slide.  An “existing home” is a home not being resold by a previous owner.  It essentially excluded only .

Existing Home Sales data on an annualized and adjusted basis shows:

      1. Sales volume is at its lowest levels since June 2009
      2. Sales volume fell below its 12-month rolling average
      3. are at a 5-month high

This mirrors the data from the government’s data released last week.  That report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.

This is not a crisis and hasn’t moved housing off of its rebound.  Home sales are always cyclical and outside forces always influence the market.  Now is no exception.

For one, home sales were so high in October and November due to the original November 2009 expiration.  Many buyers shifted out of December/January and into October/November.  This is a natural reason for the dip.

Over the long-term trend, the numbers came in near to what you’d expect as a rolling average.  A smaller, but important part was that January’s weather was awful from Mexico to Canada.  That will slow down home sales.

We’re seeing higher activity in February and March.  It’s unlikely that we’ll see a repeat of last Apri-November’s run, but there are enough buyers to support this housing rebound. The good news of the sagging sales reports is that today’s buyers may find home prices are lower and sellers are more willing to negotiate.

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Pending Home Sales Recover

Filed under Pending Home Sales by on February 3, 2010 at 7:47 am {no comments}

recovered by 1% in December after November’s big drop.

A Pending Home Sale is a home under contract, but not yet closed. It’s compiled using over 60 large brokerages and over 100 regional data listing services and is considered to be one of the best indicators of home sales activity.

As such, it’s pretty accurate in projecting forward-looking housing reports.  Notably, with the data showing a moderate tick up on Pending Home Sales in December, it’s reasonable that we should see a tick up in in January.

With the ending soon, FHA interest rates likely to go up, and now housing looking like it is going to resume its upward trend, the time to buy might be now.

For home buyers in Chicago , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers.  When buyers outnumber sellers, like they did through most of 2009, dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009.

With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result.

Activity has since slowed, however, and fewer buyers are in today’s market. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same.

The net result: Home buyers have more homes from which to choose and that can create negotiation leverage for better prices and better concessions.

With still low and a looming deadline on the homebuyer’s tax credit, market activity should be strong between now and April.   Take your time and bid right. And when you’re ready, be ready. The best deals likely won’t last.

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FHA Interest Rate Predictions: January 25, 2010 Edition

Filed under FHA Interest Rate by on January 25, 2010 at 7:46 am {no comments}

The FOMC meets this week -- mortgage rates will be volatileConforming and FHA improved last week on the combination of soft economic data and new talk from the White House about tightening up banking regulations.

The S&P dropped 4% in its worst week since October.  As money left stocks, it went into bonds, and pushed lower.

Since a very ugly December, mortgage bonds have made up half of the losses and it is helping with home affordability and has opened the window on another surge of refinancing activity.

This week is loaded with news and could push rates back up in a blink.

Today, the December report came in and it was very weak.  This is because of a combination of factors including:

  1. The initial expiration date of November 30, 2009
  2. Sharply rising mortgage rates throughout the month of December
  3. A general slowdown from the holidays and from the weather

Home sales are down 16%, but there are a lot of reasons.

Later this week, we’ll see the Case-Shiller Index – a measure of home prices nationwide — and the report. The Index has registered mild home price improvement over the past 8 months and its latest report is expected to show the same.  New Home Sales should be similarly strong.

But, the biggest news of the week is the first Federal Open Market Committee meeting of 2010.

The Fed meets Tuesday and Wednesday this week and Wall Street will be watching closely.  The Fed is not expected to change the Fed Funds Rate from its current target range of 0.000-0.250 percent, so, instead, markets will watching for the Fed’s post-meeting press release.

As always, what the Fed says is almost more important than what they do. If the Fed says the economy is growing and everything is going as expected, mortgage rates should rise.  On the flip side, if the Fed says there are still significant risks, rates could drop a little lower.

Rates will be volatile all week, but once the Fed’s press release hits the wires, it’s anyone’s guess what will happen.

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