Checking In On the Real Estate Market
Is the Real Estate market up or down? You be the judge. Photo Credit: pnwra
Let’s just dig right into the meat of the matter. I’ve put together information on the housing market in both existing home sales and new home sales, as well as new home starts. My gut feeling is if you’re a homebuyer, buy soon or you may miss the bus.
The National Association of Realtors (NAR) posts sales of existing homes, including condo’s and co-op’s, by units sold, inventory unsold, and pricing. The numbers are updated every month and will give you a true picture of what’s happening in the real estate market from coast to coast.
The total number of units sold in the U.S. is down -5.7% vs. last year and down -2.8% vs. last month. To further break down those numbers, the Northeast is down -21.2% vs. last year and -7.1% vs. last month, the Midwest is down -7.6% vs. last year and 0.0% vs. last month, the South is down -11.3% vs. last year and -1.9% vs. last month, and the West was up 19.5% vs. last year and down -4.6% vs. last month.
The median sales price across the nation fell by -11.5% vs. last year. The breakdown: the Northwest fell by -19.6% vs. last year, the Midwest fell only -3.7% vs. last year, the South fell by -11.2% vs. last year, and the West fell by -11.3% vs. last year.
Median sales price from 2006 – 2008 and a look at the median sales price for March 2009:
Though the median sales price has continued to plummet, the last few months have shown an increase in price, which is bad news for homebuyers and great news for homeowners. With the exception of the Northeast, prices are inching back up.
Using the West as an example, the following graph shows that prices hit their lowest in January; however, they climbed in February and March. Perhaps we hit bottom in January and these numbers reveal a positive market adjustment.
From personal experience I can say, with the exception of short sales, each house I’ve made an offer on has sold overnight. I still have offers on short sales but I’ve given up hope on those. If the bank ever does respond it’s usually months after submitting an offer and most buyers have already moved on. I looked at an REO last week that had been on the market for 2 days and made an offer the same day, but it had already sold. You need to move fast and in some cases offer more than the asking price, ask for no concessions, and put down a larger deposit.
All this points to a stabilizing market in existing homes. Now, let’s take a look at new home sales and starts.
The National Association of Home Builders (NAHB) has reported that single-family home production is unchanged over the past three months despite housing starts. They forecasted that housing starts will bottom out in second quarter after new-home sales stabilize.
Builders have been seeing an increase in homebuyer office traffic and phone calls in recent weeks due to the buying conditions, historically affordable pricing, the new-home tax credit, and the first-time homebuyer tax credit. However, many builders can’t secure credit for acquisition, development, and construction financing.
In March total housing starts were down 10.8% and multifamily starts were down 29%. The Midwest was the only region that saw an increase – up 16%. All in all, after a 74% decline from the peak in July 2005, new home sales seem to be bottoming out.
March’s new home sales fell only 0.6% to a seasonally adjusted annual rate of 356,000. And, after 40 months of decline it appears the drop in demand for new homes is ending. Prices remain weak; with a 12% drop from last year the median sales price dropped to $201,400.
In the West new home sales rose 15% from February, which could be the result of a $10,000 state tax credit that California offers; but the Midwest dropped by nearly 8%, the South remained unchanged, and the hardest hit Northeast saw sales plunge more than 32%.
Has the real estate market gotten any better? Overall the answer is yes. Builder’s confidence is up, buyers are out there buying up bargains, the incentives are plenty; tax credits, historically low interest rates, and affordable homes finally available for first-time homebuyers.
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