The Movoto market update newsletter is back!
A quick update on current real estate market conditions:
- Prices are stable;
- Interest rates are low (Bankrate.com);
- Sales volume is low (NAR report)
- Mortgage applications are very low (Mortgage Bankers Assoc. Report);
- but inventory (especially at prices < $150,000), is down as foreclosures trickle through the system.
Our conclusion after digging into our Movoto listings statistics: we’re in a market where supply is short on the low end and demand is short on the high end.
Movoto’s August ending snapshot of 14 of the top 16 metros in the U.S. shows overall inventory down 4.5% since a peak in May. Grouping the inventory by price range, an interesting story emerges. Inventory of listings priced under $150,000 have declined an amazing 13.5% since December 2010, while listings priced over $250,000 have actually increased slightly since December of 2010.
What’s going on? We think:
- Foreclosures are still coming to market too slowly (more below)
- Savvy buyers have been bargain shopping and buying up sale priced homes.
- Low interest rates and low prices have encourage many low end buyers make a purchase
- Move-up buyers are stuck in their current homes and not buying in the higher price ranges
What does this all mean for you? It means that there are good higher priced homes on the market and medium to low competition for those homes. If you’re looking in the upper end of your local market, you should have a variety of choices and some time to make a decision. On the other hand, if you’re looking for bargain properties on the lower end of the market, the market is active and you’ll need to be ready to move quickly as move-in ready, good deals sell very quickly.
The foreclosure situation continues to be a drag on the overall market. People are still getting behind on payments at high rates, but banks are slow at completing foreclosures. According to LPS, the average foreclosed property owner hasn’t made a payment in 599 days. To add to the problem, those behind in payments more than 90 days, but not yet in foreclosure haven’t made a payment in more than a year. Most of these 4.1 million owners are still living in their homes for free! The only glimmer of good news in LPS’s latest report is that fewer home buyers are falling behind on their payments. Don’t hold your breath waiting for things to improve. Every solution will create undeserving winners and unfortunate losers and in the polarized environment in Washington, that means gridlock.
Our outlook is that the rest of the year will show a typical seasonal pattern with inventories and sales slowly declining into the holiday season and prices remaining stable. It’s a great time to buy a home – if you have available cash, a job and good credit, you’re in a great position to buy a home that’s much more affordable than at any time in the last 10 years.
