T.S. Eliot famously said “April is the cruellest month…”. Not true in real estate – the cruelest months are upon us as the real estate market rolls into its annual end of the year hibernation.
A quick update on current real estate market conditions across our coverage area:
- Prices continue near May 2011 levels;
- Interest rates are AMAZINGLY low (Bankrate.com);
- August sales volume was up from July 2011 (NAR report)
- Refinance applications are up and purchase loan applications are down from last year (Mortgage Bankers Assoc. Report);
- and inventory continues a slow decline that started in May 2011.
So how is the real estate market really doing? We think it’s too early to take away the handicapped sticker. Looking at NAR’s reported unit sales for the first 8 months of 2011, year-to-date sales are actually down 1.8% from 2010. Consider that sales are down with historically low interest rates, an economy that was considered “healthy” through July and a somewhat lower unemployment rate in 2011 than in 2010. It seems to us that since the first-time buyer stimulus ended in April, 2010 the US home market has been going nowhere.
Check your local market stats on Movoto.com: https://www.movoto.com/market-statistics.aspx
Trying to Predict Inventory? Watch Foreclosures.
In September, inventory of homes priced under $250,000 was steady and low. We think 2012 will bring an increase in lower priced inventory in states that don’t require court judgements to foreclose. LPS reported Notice of Default counts climbed in August and September as banks got back in the business of moving on deliquencies. By early 2012 the increased notices will move through the foreclosure process and become actual home listings. LPS’s data also shows fewer home owners getting behind on their payments – is this a positive hint for 2012 or 2013?
Watch for More Help from Washington
Did you know that Fannie Mae has been having a foreclosure sale, offering up to 3.5% in closing cost assistance for owner occupying buyers of Fannie Mae owned properties? You have to close escrow by Oct. 31, so it’s too late to get into contract now, but look for more programs like this after January 1. The government sponsored mortgage agencies all own a lot more homes than they want and they’re motivated to sell to first time buyers who will occupy the home.
Expect the “cruellest months” to show a typical seasonal pattern with inventories and sales slowly declining into the holiday season and prices remaining stable. If you’re renting and you have good credit, the end of 2011 and early months of 2012 are a great time to consider buying. The double effect of low prices and low interest rates is creating a rare situation where buying is a much better deal than renting in most of the country. Call us if you want help thinking it through.
The Movoto Team
888-766-8686
Check out these recent Movoto Blog Posts for more news about the real estate market and recent Movoto.com improvements:
https://www.movoto.com/blog/real-estate/new-feature-private-notes-for-homes/
https://www.movoto.com/blog/homes-for-sale/rising-home-values-make-these-10-metro-markets-hot/
https://www.movoto.com/blog/real-estate-trends/2012-housing-market-10-areas-anticipating-further-collapse-this-year/
https://www.movoto.com/blog/interest-rate/borrowers-we-have-5-home-refinance-tips-for-you/
https://www.movoto.com/blog/category/product/
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