California Housing Rises

Home sales increased 63.8% in March in California compared with the same period a year ago.

“The March sales figure of 522,980 homes indicates that the market continues to be very active,” said C.A.R. President James Liptak. “All of the regions in the state experienced increases in month-to-month raw sales, with the smallest gain in the Sacramento region at 9.7% and the largest gain in the Riverside/San Bernardino region at 32.2%.”

Closed escrow sales of existing, single-family detached homes in California totaled 522,980 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local Realtor® associations statewide. Statewide home resale activity increased 63.8% from the revised 319,290 sales pace recorded in March 2008. Sales in March 2009 decreased 16% compared with the previous month.

“The statewide median price showed the first monthly increase since August 2007, and has remained in the $250,000 range over the past three months,” said C.A.R.’s Chief Economist Leslie Appleton-Young. “A number of regions around the state also have registered monthly gains for one or more months since the beginning of this year.  … Low mortgage rates and house prices, coupled with the federal first-time home buyer tax credit, is having a definite impact on the California housing market,” Appleton-Young added.

Highlights of C.A.R.’s resale housing figures for March 2009:
-C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2009 was 5 months, compared with 12.2 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
-The median number of days it took to sell a single-family home was 48.3 days in March 2009, compared with 56.8 days (revised) for the same period a year ago.
-Statewide, the 10 cities with the highest median home prices in California during March 2009 were: Santa Monica, $755,000; Danville, $738,500; Santa Barbara, $735,000; Mountain View, $700,000; Redondo Beach, $630,000; San Ramon, $621,000; San Clemente, $620,000; San Francisco, $617,000; Santa Cruz, $610,000; and Yorba Linda, $561,500.
-Statewide, the cities with the greatest median home price increases in March 2009 compared with the same period a year ago were: Lemon Grove, 18.6% and Rancho Santa Margarita, 3.1%.

Things are Looking Up

The Wall Street Journal has issued a few articles about various positive signs in the economy . Economic observers point to several factors that indicate the economy in general and the housing market in particular may be on the mend.

Positive signs include:

• Sales of single-family homes in March remained flat compared to January and February at $358,000, the U.S. Commerce Department reported.
• The Labor Department reported claims were down in the week ending April 11. While some argued this could just reflect the shortened Easter/Passover holiday, others took the optimistic view that some segments of the economy are stabilizing.
• New-home construction remains low because there is so much inventory

Real Estate Stabilizing in Key Cities
There is reason for optimism in several areas, according to the Federal Reserve, which released its periodic “Beige Book” report of economic activity on Wednesday.

In Boston, Fed contacts reported “early signs of improvement” in the residential real estate sector, and the news was equally good in New York where the book said banks are reporting “the most widespread rise in demand for residential mortgages in more than seven years.”

In Richmond, Va., commercial real estate is reporting moderate increases in activity and residential lending is rising because of strong demand for refinancing, the report said. Demand for refinancing is “hard to keep up with,” one of the Fed’s contacts said.

So Affordable

“Record-high housing affordability conditions are helping markets recover, with home sales higher than a year ago in Minneapolis, Northern Virginia, Las Vegas, Phoenix and most areas of California and Florida.”

Total housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.

Single-family home sales slipped 2.8 percent to a seasonally adjusted annual rate of 4.10 million in March from a pace of 4.22 million in February, and are 5.7 percent below the 4.35 million-unit pace in March 2008. The median existing single-family home price was $174,900 in March, which is 11.5 percent lower than a year ago.

Existing condominium and co-op sales fell 4.1 percent to a seasonally adjusted annual rate of 470,000 units in March from 490,000 in February, and are 17.8 percent below the 572,000-unit pace a year ago. The median existing condo price was $177,600 in March, down 18.7 percent from March 2008.

First Time Home Buyers=the bulk of sales

From an NAR practitioner survey in March :

1st time home buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

NAR President Charles McMillan said first-time buyers are crucial at this stage of a housing recovery. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down, according to their needs,” he said.

“Although homeownership builds wealth over the long term, buyers need to evaluate their options. In this market, buyers and sellers who use a REALTOR® to represent them are making a smart move,” McMillan said.

Florida Housing Rebounds First

Housing Predictor says Florida is turning itself out of the Housing doldrums first instead of California.

In previous real estate depressions California has been the first state in the nation to signal a turn around in the housing market. But higher home and condo sales in Florida that have lasted for more than a half year and increasing buyer inquiries signal the Sunshine State is making a turn for the better in real estate.

Record population growth in Florida may contribute to the more promising market after nearly a four year slow down in home sales, which started after the state was battered by a series of hurricanes and the financial crisis. As a result home sales turned sluggish in Florida before any where else in the country.

However, nearly two-thirds of all sales are foreclosures and short sale properties, many of which are not counted by real estate agents since they are sold at auction or by banks directly to home buyers. The new trend demonstrates better times are on the horizon for housing markets troubled by the credit crisis.

More banks in many Florida housing markets are beginning to make mortgages, especially locally based lenders, and nearly a fifth of all sales are owner financed.

Housing Predictor forecasts more than 250 local housing markets in all 50 states, and regularly tracks markets from coast to coast. Search foreclosures, check your market forecast and other real estate news at http://www.housingpredictor.com

OC at 2005 Demand

I have been getting reports all over SoCal of multiple offers. As the article points out, someone turned on the spigot.

http://lansner.freedomblogging.com/2009/04/20/demand-for-oc-homes-back-at-2005-levels/19395/

• It would take 2.97 months for buyers to gobble up all homes for sale at the current pace vs. 3.40 months two weeks vs. 6.55 months a year ago vs. 7.75 two years ago.
• Homes listed for under a million bucks have a market time of 2.34 months vs. 14.51 months for homes listed for more than $1 million.
• Just 19 days worth of O.C. foreclosures for sale!

Bottom

U.S. housing sales are near a bottom, the chief economist of Freddie Mac, Frank Nothaft, said on Saturday.
He noted that Federal Housing Administration lending is up sharply, with FHA loans at the largest share of the U.S. housing market since 1942, and mortgage rates are at a 50-year low.

Sacramento Investor Betting On Real Estate

Ethan Conrad, a Sacramento real estate investor, has spent millions in recent months buying vacant residential lots throughout the Central Valley, the epicenter of the housing meltdown.But timing the market is nearly impossible, and a business investor should jump in now if he or she can pull it off, said Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento.

He said waiting too long can be counterproductive. Once the recovery becomes obvious, prices for everything will have shot up.

“If this (economy) turns in late 2009 or early 2010, if you wait until 2010, it’s already too late,” Varshney said.

Realtors Get Into Home Buying Incentive Plans

Nervous consumers have been offered free suits,plane ticket refunds and the chance to return new cars if they lose a job after making a purchase.

Now builders and real estate companies are rolling out incentives to pay a laid-off homebuyer’s monthly mortgage in hopes of jump-starting the weak housing market.

Long & Foster Real Estate Inc. started a program Wednesday offering insurance that helps pay a buyer’s mortgage for up to six months.

Earlier this week, Drees Homes, which is building communities in Frederick and Laurel, said it will cover up to $2,500 of a monthly mortgage payment for six months. It joins builder Ryland Homes, which last month began offering out-of-work buyers a similar program.

In Indiana: lose your job, and your Realtor will make your mortgage payment for you.  It’s called “H.E.L.P.”–short for Homeowner Education and Loan Protection, and its concept is fairly simple. Buyers who enroll in the program will be eligible for 6 months worth of mortgage payments in the event that they involuntarily lose their job.

Agents and brokers from Elkhart based Century 21 Landmark Realty Group unveiled the idea this week, and claim they are among the first in the nation to offer it.

They hope the new “mortgage payment protection plan” will help stop uncertainty from controlling the local housing market.

Optimism Is Back!

From www.realestateconsulting.com :

• Land Buying is Increasing: Already this year, 18% of survey participants have purchased land and 29% indicate they will buy land in 2Q09. By 2010, 47% expect to be buying.
• Builders are targeting Washington D.C., Charlotte, Dallas and Tampa for near-term land buys. There was a pronounced message that buying would not be occurring in Phoenix, Atlanta, Austin, Chicago, Denver, Las Vegas, Orlando and Orange County for quite some time. There were mixed messages in California markets of Riverside-San Bernardino, San Diego and Sacramento.
• Sales, Traffic and Expectations Jump: The builders’ rating of current sales reached a record level since our survey’s inception, traffic ticked up in every region but one, and expectations climbed as builders’ outlook appears to be brightening. No region of the country reported declining net sales per community. Average net sales per community rose to 1.7, which is the highest level since September.
• More Home Building Starts: 70% of builders started homes this month, compared to only 59% last month
• Declining Inventories : The average number of unsold, finished units per community is continuing to trend down nationally, to 4.0 units from 4.2 last month. This is the lowest number we have seen in more than six months.

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