3/17/2012 -- How affordable is it to buy a home today? The answer to the question is more complex than you might suspect. Here is a very good analysis that is worth sharing with agents and housing professionals (it may make their heads explode) but it puts you in an educational role.
Unemployment Claims are improving however slightly. (DOL, Feb2012)
- There are approximately 3.5 million homes that make up rental and owned/vacant homes. This is the oversupply figure which measures the typical amount given historic norms versus what we have today; in other words, it is a cash, investor market for distressed, REO properties (still). Economists maintain this will be the case through CY 2013. We have approximately 5 months’ worth of inventory and this will be a drag on new construction permits (however National Association of Home Builder’s said builder sentiment has risen to its highest since 2007) although this will admittedly occur in targeted regions across the country. More stable markets such as OK, TX, MO, IA,NE, - and the mid-Atlantic states (government economy states).
- Sales Implications: focus on baby boomers, grandparents, gift money and all cash transactions; this account for 38% of ALL originations today.
“The pattern of home sales in recent months demonstrates a market in recovery,” Lawrence Yun, NAR’s chief economist, says. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
Property Values: Properties nationwide, will drop another 15% according to CoreLogic, however the housing market is expected to hit bottom in Q3 or Q4 in 2013. Depending upon the economy, which is improving however slightly and the election in November 2012, these forecasts will only hold steady or will be pushed out. I know we can expect them not to improve more quickly however it will mean that increased
January’s home sales numbers – nationwide was 3.5% higher than January 2011. We will see numbers accelerate and hold at paces higher than 2011 due to continued distressed properties – the longer they are on the market, the aggressive the pricing; the more aggressive the pricing, the strike price will eventually hit, and someone will buy the property.
- February’s numbers are due to be released 03/23/12
- For market share purposes, you can see by region the number of homes that are sold in each market in the United States. You can determine the ‘piece of the pie’ that exists in your market.
Federal Government Working For you: The Obama administration cut fees on federal insured mortgages that have prevented some borrowers from refinancing their home loans at low interest rates. These include borrowers refinancing into another FHA-backed mortgage. The cut off on borrowers are for loans closed prior to June 01st, 2009. Unfortunately, most loans performed prior to this period were not FHA loans.
Rick Roque, Managing Editor, TNR for Real Estate Agents & Brokers. firstname.lastname@example.org