Home Sales Slip As Prices Rise By Most Since 2005
Source: NBC NEWS
U.S. home resales edged downward in March, a pause in the housing market recovery that has helped boost the economy.
The National Association of Realtors said on Monday that existing home sales edged down 0.6 percent last month to a seasonally adjusted annual rate of 4.92 million units.
--CLIP
Nationwide, the median price for a home resale rose to $184,300 in March, up 11.8 percent from a year earlier, the biggest increase since November 2005. The limited supply of available properties is pushing up home values.
The share of distressed sales, which also include those where the sales price was below the amount owed on the home, accounted for 21 percent of home resales last month, down from 25 percent a month earlier. It was the lowest since the NAR began tracking the number in October 2008 as the foreclosure crisis escalated.
Read more: http://www.nbcnews.com/business/economywatch/home-sales-slip-prices-rise-most-2005-6C9539397
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Rockholm
(4,628 posts)There is practically no inventory. There are multiple offers on homes that are well priced. Overall, there were few short sales and foreclosures (when compared to the rest of the state).
The housing recovery will slow down if inventories continue to fall and if prices rise too quickly.
Purveyor
(29,876 posts)graham4anything
(11,464 posts)And in much quicker time.
And it's only April.The leaves just are starting to appear, and people's gardens are not in bloom yet. Gardens are a great selling point.
geek tragedy
(68,868 posts)
reformist2
(9,841 posts)Over the longer term, it is the first-time buyer which controls the market. Investors have moved into some markets in a big way, but the finances of the first-time home buying crowd won't support much in the way of price increases, which is why sales are suppressed.
If people can't find a home now, they can wait a couple of years and the situation will change. FHA insurance costs are high and will impact the younger crowd very adversely.
Over a decade, we still have significant price decreases to come.
Rockholm
(4,628 posts)"Over a decade, we still have significant price decreases to come."
Nobody knows the future. If we did, we would all be rich.
The only one's who "knew" the future were the big banks who were writing bad loans, NINJA loans in the early-mid 2000's. They knew what would be coming down the pike with ARM's, so they changed the bankruptcy laws to protect themselves. As far a knowing what's coming in the real estate market, you don't know.
In my market, the low end and high end are moving briskly. The middle market is moving, but not as fast.
Yo_Mama
(8,303 posts)I have a very good track record over decades, and I stopped a number of banks from getting into the bad loans in 2005 and 2006, and I predicted the recession's start within 3 months, in 2005.
It is not at all a crystal ball, but a technique of looking at incomes and what they cover to come up with real discretionary incomes, demographics, etc. The fact is that a lot of people knew what was coming. The big banks were not interested in knowing what was coming, because they are paid bonuses over a very short time frame, so they just worry about the immediate.
As it so happens, the income/price picture now looks worse than it did then for one significant cohort.
I think there is large pent-up demand on the lower-end, decent neighborhood level in many places. The problem is that people don't have downpayments and in many cases they also have built-up debt. This will naturally resolve over time, but if prices go up much and we have even a small interest rate increase, this will knock a lot of people out from buying.
FHA premiums keep rising, and this is limiting the effect of low interest rates. When the annual is 130 bps, a mortgage rate of 3.7% turns into 5%. If your dp is less than 5%, it's now 135 bps.
http://www.fha.com/fha_requirements_mortgage_insurance
Tarheel_Dem
(31,220 posts)"The housing shortage is going to continue," claimed Yun, who says the builders need to ramp up housing starts by 50 percent. He admits that is unlikely to happen due to land, labor and supply constraints.
Weak supplies are pushing home prices up far faster than wage growth, which is keeping first-time buyers especially on the sidelines. These buyers made up just 30 percent of the market in March, compared to the historical norm of 40-45 percent. They just can't compete with all cash investors.
dmallind
(10,437 posts)Two houses this week, another next week. The highest for any of them was 37500 and that was furnished. Liveable, sound, up-to-code 2BR houses with no major repair needs. Blue collar neighborhoods sure, but hardly bullet-scarred slums.
Down payment wouldn't be much more than starting a lease (no you don't always need 20%) and payments would be a fraction of rent. I paid cash but any one of them would have been < 250 a month PITI.
I have people lined up to rent them at 550. People with FICOs that would get them mortgages. I'm even suggesting rent to own, but nobody seems willing to pay for their own equity rather than my ROI for some reason.
greiner3
(5,214 posts)My house went from $70,000 when I bought it 3 years ago to $96,000 as of yesterday.
Not a bad investment if I say so myself.
Sunlei
(22,651 posts)Not all to private families, 2 homes sold to some larger real estate group.
PasadenaTrudy
(3,998 posts)In SoCal. But that's typical. Plug my zip code, 91030, into Redfin if you want a good laugh!
