January is an exciting month for Movoto. This month’s Movoto.com visitors are motivated home buyers and they get busy searching, meeting an agent and finding homes to buy as soon as Christmas is past. Is this your year?
Here’s how real estate market conditions across our coverage area closed 2011:
- Median list price peaked in May and drifted back down to January 2011 levels by December;
- Interest rates managed to go even lower with 30 year rates below 4% for much of the month of December (rate history);
- November sales volume was down versus October, but sales are still on track to be slightly higher in 2011 versus 2010 (NAR report). Also, NAR reported that they’ve been overstating home sales for the last 4 years – their adjustment to correct the report brought stated home sales from 1997 to Nov. 2011 down by as much as 20% in some months. We all knew it was bad, these changes just emphasize how bad;
- MBA’s purchase loan index continues to scrape along at late 1990′s levels as December added to a string of slow months (Mortgage Bankers Assoc. Data From Calculated Risk);
- Finally, inventory bottomed in November and showed a small increase in December.
December marks the last month of the seasonal end of the year market slowdown. What will 2012 bring? We think more of the same – inventory, prices and sales volumes will show a typical seasonal increase from now through May or June, but overall transaction volumes and prices will probably be little changed over the year. We’ve reached bottom, but we’re not going to climb very high in 2012.
Check your local market stats on Movoto.com: http://www.movoto.com/market-statistics.aspx
One Forecaster Calls “The End of the US Housing Downturn”
Capital Economics analyst Paul Dales recently called 2011 the last year of the US housing downturn. Capital Economics forecast a 3% drop in home prices in 2011 and the actual Case-Schiller number will be around 2.3% and is showing signs of flattening. After recapping 2011 results, he says 2012 will be mostly sideways. “… for the first time in five years, months of unsold inventory (a measure of the balance between demand and supply) is almost in line with the long-term average…” They believe the biggest risk to the housing market is a melt down in Europe. Not too encouraging that we have to hope the Germans, Italians and French can all get along.
People with cash. From a recent Mortgage News Daily newsletter: “2011 has seen a surprisingly high level of cash home purchases, according to the real estate research firm Hanley Wood Market Intelligence. Analysts say tight lending standards and a search for yield by investors … has driven all cash purchases of homes higher. Per the report, 38% of homes purchased in 2011 were bought with all cash, up from 34% in 2010, and double the 19% rate in 2006.” The cash purchase trend is driven by the strength of rental demand and rents. In some parts of the country, a cash investor can realize 7-10% annual return from a fully rented unit.
Thanks for visiting Movoto in 2011 and we hope to see you on the site and to help you buy a home in 2012. Interest rates and prices will continue to be favorable for buyers in 2012. If your finances are ready, make the resolution to buy your dream home this year.
Check out these recent links for more news about the real estate market and Movoto.com
- Search For Mortgages on Movoto.com
- Movoto Launches in Michigan
- 5 Cities With the Lowest Cost Per Square Foot
- The 10 Safest Cities in America