Monday, January 26, 2009

Existing Home Sales Show Surprising Gain

In an interview on WTOP this morning, the NAR representative named Northern Virginia among the regions showing gains in existing home sales. - John

Existing-Home Sales Show Surprising Gain

Daily Real Estate News January 26, 2009

Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.

For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.

Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.

“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”

Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.

Yun said the market is underperforming and hurting the broader economy.

“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”

Housing Stats

National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.

Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.

Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.Existing-

Home Sales By Region

Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.

Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.

South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.

West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.

A Good Time to Buy

NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.

“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”

McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.

Source: NAR

Thursday, January 22, 2009

Great new FREE resource for Virgnia Homeowners

Virginia Homeowners Alliance

Background
A 2007 public opinion survey found that homeowners in Virginia were eager to join an organization that could look after and represent their best interests. In response to that need, the Virginia Association of REALTORS® and local associations of REALTORS® around Virginia have started the Virginia Homeowners Alliance.

Our Mission
The Virginia Homeowners Alliance (VHA) is an exciting new service provided by REALTORS® to help homeowners protect their most treasured investment, their home. It’s not an organization with boring meetings and a bunch of bureaucracy. It’s an organization residing on this website to provide homeowners with a free online one-stop-shop for improving the value of your home and keeping up with local government decisions that affect your home, your community and your quality of life.

Why you should join
By joining VHA, you can stay informed of all the latest news relating to real estate taxes, property assessments, new residential and commercial developments, transportation, school construction and a host of other issues affecting your home, family and neighborhood. Through the Alliance Web site, you can easily contact local government bodies including your City Council, Board of Supervisors, School Board, Planning Commission and Housing Authority to name a few. Your free membership will also provide you access to a variety of valuable resources ranging from tips on lawn care to report cards on your local schools. There’s even a “Kids’ Room” where children and parents can access practice SOL tests and learn more about the Commonwealth of Virginia.


Just click here to register Virginia Homeowners Alliance

Tuesday, January 20, 2009

Available Inventory of Homes for Sale Lower Than Average

2008 Northern Virginia Absorption Rate Favorable at Year-End The number of Northern Virginia active listings decreased in December to a low of 7,688 for the year, resulting in a lower-than-average 5-month supply of housing for this region.

This represents a marked improvement from the more than 12-month supply that existed in January of 2008. As described in detail below, lower prices are luring buyers, resulting in a 48 percent increase in the number of sales in Greater Northern Virginia in December compared with sales in December of 2007. Inventories typically fall sharply in December from November due to seasonal adjustment.

The housing market is considered roughly in balance between supply and demand when the inventory is around six months. Inventory numbers capture most, but not all of the entire housing supply. Newly constructed housing and homes in the early stages of the foreclosure process aren't always included in Realtors®' multiple-listing services.

Shop Carefully for Home Warranties

Home warranties can reassure nervous buyers and help a real estate practitioner seal the deal, but if ultimately the buyer feels cheated by the insurer, the policy could be more trouble than it is worth.The key to consumer satisfaction is picking a reputable insurer and reading the fine print."Any industry that deals with the public is going to have complaints," says Art Chartrand, a lawyer for the trade organization, National Home Service Contract Association. "It's important for people to understand these are limited benefit contracts."Home owners who are about to purchase a home warranty contract should consider these issues, says Georgia Insurance commissioner John Oxendine.

Get an opinion from the state insurance commission. While most state insurance commissions don’t police these kinds of policies, they are usually aware of companies that have a poor reputation.

Read the contract carefully before signing. If the company won’t give the customer a contract in advance, don’t buy.

Pre-existing conditions. If the system or appliance wasn’t working when the policy was purchased, the insurer won’t cover it.

Is there proof that required maintenance was done? Most insurers have clauses in their contracts that require specific routine maintenance for the systems or appliances to be covered.

Who will do the work? Find out how many approved contractors there are and where they are located.

Ask about service fees. Fees to determine the extent of the problem and whether it is covered can be high and buyers should know that in advance.

Source: The Atlanta Journal-Constitution, Alison Young (01/11/09)

30-Year Rates Fall Below 5 Percent

Daily Real Estate News January 16, 2009

Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.

"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.

Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.

Freddie Mac started recording mortgages in 1971.

Source: Reuters, Julie Haviv (1/15/09)

Friday, January 16, 2009

10 Cities Boasting Mini Sales Booms

Just received this from Realtor.com

Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country.

"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences. "We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."

Here are the cities where experts say it makes the most sense to buy now.

Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose
Atlanta