The days of rock-bottom housing prices may be reaching an end.
According to the National Association of REALTORS, the number of Existing Home Sales fell by a modest 140,000 units last month. It’s the fifth straight month in which home sales straddled the 4.5 million mark.
The national housing inventory is down 900,000 from its July 2008 peak.
These are two encouraging signs.
Meanwhile, in a separate report, the Commerce Department said the supply of newly-built homes for sale is at a 7-year low. This, too, is a positive signal for housing.
Home values are based on supply and demand. If the number of homes for sales falls while the number of buyers stays constant, home prices will rise. This is because the same number of buyers are competing for fewer properties. It’s basic economics and that may be what we’re seeing right now in the marketplace.
But the balance could shift further. Remember: the March housing data doesn’t account for first-time home buyers that used the $8,000 First-Time Homebuyer Tax Credit. Because the stimulus package didn’t pass until February, buyers on the program likely hadn’t closed on their respective homes before March data was released.
There’s a big piece of the demand side of the equation unaccounted for, in other words, and if you’re an active home buyer now, you’re probably hearing a lot about multiple-offer situations and seeing this action first-hand.
Data from the housing market hasn’t been outstanding, but it’s definitely not looking worse. Sales levels, inventories and home prices appear to be leveling off nationally and the number of active seems to rising.
Overall, it points to higher home values ahead.
SECURE & CONFIDENTIAL
6 Comments So Far»
Really a question here.
How do you see the coming large influx of new foreclosures and failing credit card market affecting this in both the near and longer term?
Also how do you see the 25% decrease in lending by banks since the TARP started affecting this?
Will this offer situation be long term or just another short term blip?
I am looking into purchasing an investment property in new Orleans. The home has road home covenants attached. I am having trouble finding out what exactly transfers to new owner. Have any thought?
I am looking into purchasing an investment property in new Orleans. The home has road home covenants attached. I am having trouble finding out what exactly transfers to new owner. Have any thoughts?
There is still a huge shadow inventory of REO properties that haven’t been brought to market yet. In Atlanta, foreclosure rates are still at an all-time high. Prices may have bottomed (they can’t go much lower!), but there will be a ton of REO inventory hitting the market this Summer.
Armando,
Most covenants transfer with the title unless they are explicitly excluded by the contract and recognized by the county board or in this case what qualifies for a county board as they have parrishes and wards in New Oreleans. It rarely gets approved and if you try it tends to end in court.
If you can show a really good reason it benefits everyone involved you can some times get a change in convenants. Most often hard to do. Talk with the government agency to see if it might even happen. The most common reason for a road covenant is access to another property or part of the approval for the original plat.
Good luck, hope this helps.
Chris B
Lets see, 15,000 MORE layoffs at GM, 25% decrease in lending by banks, unemployment over 8% (some economiosts say the real unemployment figures exceed 10%). My problem is this; Where is all the money that is going to lift the real estate market, going to come from? More layoffs mean that more people will be without an income. The people who do keep their jobs, are having to accept pay cuts, hours cut, or both. And lest we forget, inflation and a sinking dollar due to incompetence in Washington over the past umpteen years. So, who is going to star buying houses again other than investors who are jumping in too soon?
This is exactly the type of pessimism that’s encouraging to me. This comment reflects the mood of the general public. The general public is frequently wrong, as it has been for the past 6-12 months, at the very least. Reminds me of that great old philosopher Eeyore, who in a sudden flash of overwhelming optimism famously stated:
“It’s snowing still,” said Eeyore gloomily.
“So it is.”
“And freezing.”
“Is it?”
“Yes,” said Eeyore. “However,” he said, brightening up a little, “we haven’t had an earthquake lately.”
Bryan Ellis
Leave Comments Below»
Gravatar are enable in this blog, if you want a picture associated with your comments, register yourself a gravatar here