Wednesday, October 31, 2012
Monday, October 29, 2012
In the News.....
Analysts say that the considerable annual gain is leading to price stability, and to that point, the median sales price of new homes sold in September was $242,400, and the average sales price was $292,400. In terms of inventory, the estimate of new homes for sale at the end of September was 145,000, representing a 4.5-month supply at the current sales rate. In employment news, initial jobless claims filed in the week ending Oct. 20 dipped to 369,000, a decrease of 23,000 claims from the previous week's revised figure of 392,000, according to last week's report from the Employment and Training Administration. The four-week moving average was 368,000, an increase of 1,500 from the previous week's revised average of 366,500. The total number of unemployed Americans for the week ending October 13 skirted down to 3,254,000, a decrease of 2,000 from the preceding week's revised level of 3,256,000, the Administration also reported. The four-week moving average was 3,269,750, a decrease of 6,750 from the preceding week's revised average of 3,276,500. Turning to manufacturing, new orders for durable goods in September grew by 9.9 percent ($19.6 billion) to $218.2 billion, the Census Bureau reported last week. This increase followed a 13.1 percent August decrease and four monthly gains before that. Transportation equipment, up five of the last six months, had the largest increase, $16.8 billion or 31.7 percent to $69.6 billion. Excluding transportation, new orders gained 2 percent, and excluding defense, new orders grew by 9.1 percent. Shipments of durable goods during September expanded 0.8 percent ($1.8 billion) to $224.2 billion. This followed a 2.9 percent August decrease, and two prior monthly gains. Transportation equipment, also up two of the last three months increased the most, gaining 1.3 percent ($0.8 billion) to hit $64.7 billion. Inventories of manufactured durable goods in September, up 32 of the last 33 months, gained 0.3 percent ($0.9 billion) to hit $372.9 billion. This was at the highest level since the series was first published in 1992 and followed a 0.6 percent August increase. Transportation equipment, also up 32 of the last 33 months, saw the biggest increase, gaining 0.4 percent ($0.4 billion) to hit $112.6 billion. This also was at the highest level since the series was first published. This week we can expect:
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Monday, October 22, 2012
Sense of Urgency!
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Buy now while rates and prices are low: It’s been
your mantra for the last year at least. You may feel like a broken record
sometimes, but we both know that now really is the perfect time to buy, that
the market will change in the near future and that our clients’ purchasing
power will drop as rates and prices begin to rise. The question is, how do we
instill that sense of urgency in potential buyers who are coasting, waiting
to see if costs will drop further?
Creating a sense of urgency can be accomplished by
playing on clients’ fears, it’s true. But rather than take a negative
approach, it would be better to show them the huge opportunity that is right
in front of them — and then pull out some recent statistics that indicate
this favorable buying climate is not going to last forever. In fact, it may
already be slipping away.
Fewer Choices
The number of homes on the market has dropped precipitously over the last 12 months. According to the Wall Street Journal’s MarketWatch, “even hard-hit areas” that suffered foreclosures and housing gluts “have seen substantial decreases in for-sale inventory.” The National Association of REALTORS® says that national inventory was down 20.4% in May as compared to numbers from a year earlier.
It’s true that inventories haven’t dropped
everywhere, but this looks like a trend that will continue to spread as
foreclosures slow down and sellers see other homes selling for more and more
money.
Rising Prices
Which leads us to rising housing prices, also popping up in diverse markets across the nation. After seven straight months of declines, the S&P/Case-Shiller composite index of U.S. home prices rose 1.3% for the month of April 2012. It doesn’t sound like a lot, but it is an indication of coming change. Home values rose in 18 of the 20 major markets the Index follows. This is a positive sign for home sellers and real estate agents — but borrowers need to move quickly before the prices creep up any higher.
Mortgage Rates
Creeping Higher
According to BankRate, the two recent dips in the 30-year fixed-rate mortgage were followed quickly by just in interest rates. The 5/1 ARM is fairing much worse, with rates nearly double the low reached at the end of May. True, we’re talking tenths of percentage points here. But it’s worth reminding clients that every percentage point lowers their purchasing power by about 10 percent. In practice, that means at 5 percent, a homebuyer can pay around $1,600 per month on a $300,000 loan; but at 6 percent, $1,600 per month gets him a loan of $270,000.
We can’t stress it enough: it’s still a buyer’s
market and it won’t be this way for much longer. As the economy recovers, the
housing market will right itself and a once-in-a-lifetime opportunity will be
missed. Urge your clients to act now so they don’t miss out. And please feel
free to send them my way so I can show them the numbers specific to their own
unique circumstances and our own area. I look forward to helping you close
more deals!
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Thursday, October 18, 2012
Real Estate Report 10/17/2012
More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of. With big housing bargains and low rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.” A growing number of real estate professionals are reporting that childless, twenty-somethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later. A Minneapolis couple purchased a 3,000-square-foot-home as their first home. "The more starter homes we saw, the less impressed we became. .Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple," Joseph Simons told the Minneapolis Star-Tribune. "Why not buy a forever home with everything we want?" Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of Realtors®. Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to go big on their first home is low rates. Howe says first-time buyers worry that rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can. "If they can lock in a $300,000 or $350,000 loan at 3.5 percent, that's as good as gold," Howe says. Source: Star Tribune
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