Listed below are a variety of news bits that address the state of the real estate market and the prospects for its improvement. There was an article in the May 31st edition of the Charlotte Observer indicating that housing prices in Charlotte have declined an additional 6.8%.It is a shame that that a scare tactic like that is forcing buyers to be more demanding.
Consider that this is a buyers market and the number of financially distressed properties that have sold have caused sellers to reconsider their options. Other articles in this issue address the fact that financially sound sellers are choosing to rent as opposed to sell below the true value of the property.
• A report from the Housing Opportunity Index indicated that almost 75% of all new and existing homes sold in the first quarter of 2011 were affordable to families earning the national median income of $64,400.
• “With interest rates remaining at historically low levels, today’s report indicates that homeownership is within reach of more households than it has been for more than two decades,” says Bob Nielsen, chairman of the National Association of Home Builders (NAHB) “While this is good news for consumers, home buyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales.”
• Price declines will end and average U.S. home prices will stabilize by Labor Day. Prices in even the hardest-hit markets will level out by the end of 2012. That’s the latest prediction from the authoritative Moody’s Analytics and Fiserv, Inc, after an analysis of home price trends in 375 markets tracked by the Fiserv Case-Schiller Indexes.
• Fiserv also reports that home prices are at pre-bubble levels, creating affordable housing relative to income which, coupled with a slowly improving economy, will finally end price declines.
• However, while Fiserv and Moody’s project the national U.S. home price average will stabilize in the third quarter of 2011, a 3 percent decline is expected in the first half of this year. “The first step toward restoring confidence in housing markets is an improvement in consumer sentiment, which we expect will increase slowly through 2011 due to stronger job gains and a falling unemployment rate,” says David Stiff, chief economist, Fiserv. “As confidence rises, the decline in home sales that started in 2006 will, finally, come to an end.”
• News released early last week that housing starts and permits were down. New homes are finding it hard to compete with all the great prices of existing listings out there. How could this be good news? When new home construction slows it certainly hurts overall economic growth. However, construction of fewer new homes makes room to get rid of excess inventory caused by foreclosures. In other words, fewer new homes built represents good news as long as existing home sales continue to increase in strength.
• The trend is up for existing home sales which have unevenly increased in six out of the last nine months. Americans continue to see a buyer’s market in housing, according to an April 2011 Gallup poll. Sixty-nine percent of respondents say now is a good time to buy a house.