Good News On the Housing Front

Existing-home sales up and inventory down. Things seem to be evening out in the ole supply and demand.

~Existing-home sales jumped 6.5 percent
~Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a ~11.2-month supply in November.
~Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November.
~Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November.
~Homes sales in the Midwest increased 4.0 percent in December to a level of 1.04 million.
Homes Sales in the South rose 7.4 percent to an annual pace of 1.74 million in Decembe
~Homes sales in the West jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago.

NAR Housing wizard Yun said the market is actually “underperforming” and hurting the broader economy.

“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”

This is news to get to your fence sitter buyers.

Real Estate Web Traffic Surging

Not sure what this means, The Los Angeles metro area topped the list of most-searched areas in the U.S. at Realtor.com in December, parent company Move Inc. announced this week. I know from chats with my Realty peeps in and around So Cal that they are busier than they have been in a long time.

Chicago was second on the list, followed by the Riverside, Calif.; Phoenix, Detroit; Dallas; Tampa, Fla.; Philadelphia; San Diego, Calif.; and Boston metro areas. The heated markets seem to be following where the bulk of the foreclosures have been.

Sales Rise 6.5%

Sales of previously owned homes in the U.S. unexpectedly rose from a record low. Purchases rose 6.5 % to an annual rate of 4.74 million from 4.45 million in November .

Affordability More than Doubles in California

Just got this off of David Hoshaw’s Newsletter.  He is a Santa Clarita Valley Realtor.With a decline in home resale prices and recent drops in mortgage interest rates (around 5% today) are prompting more people to jump into a market that is dramatically more inviting for entry-level buyers.

A study conducted recently found that the percentage of households that could afford to buy an entry level home in California stood at 53 percent in the third quarter of 2008.  That’s more than double for the same period from a year ago when only 24 percent of households could qualify.

The First-Time Buyer Housing Affordability Index study conducted by the California Association of Realtors found that the minimum household income needed to purchase an entry-level home at $287,760 in California in the third quarter of 2008 was $56,100, based on an adjustable interest rate of 5.91 percent and assuming a 10 percent down payment.  At $56,100, the minimum qualifying income was 44 percent lower than a year earlier when households needed $100,500 to qualify for a loan on an entry-level home.

In Los Angeles County the index stood at 42 percent, up from 20 percent a year ago. The L.A. entry-level price of $332,680 requires a minimum-qualifying income of only $64,800 and comes with a monthly loan payment of $2,160. A condo can start near $100,000 and will require less income.

Inflation Lowest Since 1954

Remember the good ole days when inflation was a bad thing?

Inflation slowed to a half-century low this past year and industrial output fell for the first time since 2002, data showed on Friday, as the recession deepened toward year-end, raising the specter of deflation.

With consumer confidence remaining at depressed levels, the reports suggested the economy could take longer to pull out of a downturn that is on track to be the longest and possibly deepest since World War Two.

“We seem to be digging an economic hole of major proportion which will only add time to the turnaround,” said Kevin Giddis, head of fixed-income sales, trading and research at Morgan Keegan in Memphis.

Maybe it still is and noone knows what going on. Usually I would not leave in these negative words but I do to illustrate the “yah, but” nature of soothsayering the economy.

Sale Volume up Across Nation

Home prices are still dropping but volume of sales is rising. The question remains when will supply and demand reach equilibrium?. Soon says some. From Forbes by way of Realtor.com: Las Vegas real estate properties are down 28% in price, but sales of homes are up 15%.

“By the end of 2010 – that’s where we’re calling the bottom in the forward market. You’re going to get a small price appreciation in 2011,” says Patten. “It’s not like the turn is 10% per year, it’ll be something like 3% or 4%.”

Cities that are experiencing this paradoxical price to volume counter relationship and that should be out of recessionary pricing soon.

1. Las Vegas
2. Sacramento, Calif.
3. San Diego, Calif.
4. Los Angeles
5. Detroit
6. Phoenix
7. San Francisco
8. Washington, D.C.
9. San Jose
10. Atlanta

Burns Consulting Says Real Estate Reaching Very Affordable Levels

Many markets are most affordable in years.

Foreign Buyers See US at Bargain

From Newsmax A poll conducted by the Association of Foreign Investors in Real Estate of 100 of its members shows that 54 percent of lenders and 40 percent of equity investors intend to boost their global real estate activity this year.

The numbers are even higher for the United States. A whopping 73 percent of equity investors intend to allocate more money to U.S. real estate this year, and 58 percent of lenders plan to lift their activity here.

New York and Washington, D.C. — in that order — topped the city popularity chart for the respondents. That’s worldwide, not just in the United States.

Everyone knows what happened to the U.S. real estate market last year.

As credit flow halted, commercial property sales naturally fell.

But some now say the worst is over and believe the U.S. real estate market will rebound first, just as it fell first. The fact that it’s the world’s biggest property market doesn’t hurt either.

Accordingly, real estate has officially entered the financial lexicon as a value investment. It may be time to climb aboard.

“If you are going to be an international investor you’ll want a significant part of your portfolio in the largest market,” Jim Fetgatter, the association’s chief executive, told Reuters.

2009 Better Than Expected

From the Wall Street Journal

1 This will be a good year to invest in stocks.

2 It will be a good year to invest in real estate.

3 Americans will learn to live within their means.

4 President Obama will have a historic opportunity to reshape public policy.

5 Your (federal) taxes won’t rise.

Recovery to be Quick?

“Housing will probably bottom out by spring, many forecasters now argue. The Federal Reserve will play a role in making this happen by buying mortgage-backed securities and, in doing so, lowering the rate on 30-year mortgages to less than 5 percent, which is roughly the present level. That will encourage not only home buying, but also refinancing.”

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