Bidding wars are back – at least in some parts of the country where falling prices are pitting investors against homebuyers looking for a good deal.The parts of the country most likely to see warring bids are parts of California and Arizona, Washington D.C., and Minneapolis-St. Paul, according to real estate practitioners and other observers.Having cash in hand can be persuasive in a bidding situation.
Sellers are inclined to choose offers that aren’t likely to fall through, says Frank Borges Borges LLosa, owner of FranklyRealty.com, a real-estate brokerage in Arlington, Va.Connie Vaughn, an associate with ZipRealty in the Los Angeles area, says one of her clients won the bidding when he offered $20,000 above the $66,000 asking price for a four-bedroom home in Adelanto, Calif., that sold for $200,000 in 2004.Vaughn says she believes that mortgage companies are deliberately setting prices low on REO homes just to stimulate bidding situations
.Source: The Wall Street Journal, James R. Hagerty (04/23/2009)
Saturday, April 25, 2009
Home Sales Slip, But First-Time Buyers Rise
Home Sales Slip, But First-Time Buyers Rise Existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits, according to the NATIONAL ASSOCIATION OF REALTORS®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.Lawrence Yun, NAR chief economist, said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008.
The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.First-Time Buyers Drive MarketAn NAR practitioner survey in March showed first-time 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.Affordability Looking GoodAccording to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February; the rate was 5.97 percent in March 2008; data collection began in 1971.“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.Regional Sales, Pricing DataRegionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008.Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million but are 11.1 percent lower than March 2008. The median price in the Midwest was $141,300, which is 6.1 percent below a year ago. In the South, existing-home sales slipped 1.7 percent to an annual pace of 1.71 million in March and are 10.9 percent below a year ago. The median price in the South was $146,900, down 12.2 percent from March 2008.
Existing-home sales in the West declined 4.2 percent to an annual rate of 1.13 million in March but are 18.9 percent higher than a year earlier. The median price in the West was $252,400, which is 11.1 percent below March 2008.
Source: NAR
The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.First-Time Buyers Drive MarketAn NAR practitioner survey in March showed first-time 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.Affordability Looking GoodAccording to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February; the rate was 5.97 percent in March 2008; data collection began in 1971.“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.Regional Sales, Pricing DataRegionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008.Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million but are 11.1 percent lower than March 2008. The median price in the Midwest was $141,300, which is 6.1 percent below a year ago. In the South, existing-home sales slipped 1.7 percent to an annual pace of 1.71 million in March and are 10.9 percent below a year ago. The median price in the South was $146,900, down 12.2 percent from March 2008.
Existing-home sales in the West declined 4.2 percent to an annual rate of 1.13 million in March but are 18.9 percent higher than a year earlier. The median price in the West was $252,400, which is 11.1 percent below March 2008.
Source: NAR
Bidding Wars Seen More Frequently
Bidding Wars Seen More Frequently Bidding wars are back – at least in some parts of the country where falling prices are pitting investors against homebuyers looking for a good deal.
The parts of the country most likely to see warring bids are parts of California and Arizona, Washington D.C., and Minneapolis-St. Paul, according to real estate practitioners and other observers.
Having cash in hand can be persuasive in a bidding situation. Sellers are inclined to choose offers that aren’t likely to fall through, says Frank Borges Borges LLosa, owner of FranklyRealty.com, a real-estate brokerage in Arlington, Va.Connie Vaughn, an associate with ZipRealty in the Los Angeles area, says one of her clients won the bidding when he offered $20,000 above the $66,000 asking price for a four-bedroom home in Adelanto, Calif., that sold for $200,000 in 2004.Vaughn says she believes that mortgage companies are deliberately setting prices low on REO homes just to stimulate bidding situations.
Source: The Wall Street Journal, James R. Hagerty (04/23/2009)
The parts of the country most likely to see warring bids are parts of California and Arizona, Washington D.C., and Minneapolis-St. Paul, according to real estate practitioners and other observers.
Having cash in hand can be persuasive in a bidding situation. Sellers are inclined to choose offers that aren’t likely to fall through, says Frank Borges Borges LLosa, owner of FranklyRealty.com, a real-estate brokerage in Arlington, Va.Connie Vaughn, an associate with ZipRealty in the Los Angeles area, says one of her clients won the bidding when he offered $20,000 above the $66,000 asking price for a four-bedroom home in Adelanto, Calif., that sold for $200,000 in 2004.Vaughn says she believes that mortgage companies are deliberately setting prices low on REO homes just to stimulate bidding situations.
Source: The Wall Street Journal, James R. Hagerty (04/23/2009)
Cities Where Home Prices Could Fall More
Cities Where Home Prices Could Fall More With incomes falling and loans remaining hard to get, the best bargains are probably yet to come in some of the nation’s largest housing markets, predicts Forbes magazine.To figure out which housing markets still haven’t hit bottom, Forbes calculated the spending power, unemployment, credit availability and housing stock over the last 27 years in the country’s 50 largest metropolitan statistical areas.
The projections determined how much each area’s home prices would have to change to bring that housing market into historical balance. Analysts said the employment rate is the great unknown. The more employment falls, the more likely home prices will follow.Here are the 10 cities where Forbes believes prices are likely to continue to fall the most:
Orlando
Miami
Jacksonville, Fla.
Tampa
Los Angeles
Phoenix
Las Vegas
Oakland, Calif.
San Diego
New YorkSource: Forbes, Matt Woolsey (04/17/2009)
The projections determined how much each area’s home prices would have to change to bring that housing market into historical balance. Analysts said the employment rate is the great unknown. The more employment falls, the more likely home prices will follow.Here are the 10 cities where Forbes believes prices are likely to continue to fall the most:
Orlando
Miami
Jacksonville, Fla.
Tampa
Los Angeles
Phoenix
Las Vegas
Oakland, Calif.
San Diego
New YorkSource: Forbes, Matt Woolsey (04/17/2009)
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