I started this year by sharing with you the mixed bag of information that we are receiving from National news about the real estate market and all the issues that surround it. The questions continue to arise from the overload of reporting.
Is the market headed up, down, stabilizing or what? Should we buy or should we sell or should we just attempt to settle in for the long haul? We have heard forever that real estate is all about location, location, location. I was recently reminded by a reader that there is also a factor in there called timing.
So let’s talk a little bit about timing and remember that whatever is said about real estate nationally needs to be taken with a grain of salt. Each individual market is different, just like individual neighborhoods are different. If you have questions about your specific property or situation, please always consult a local Realtor who can help you decipher the maze of information and allow you to make the best decisions for you at this time. We know that the value of anything is affected by supply and demand, right? The best time to purchase then is usually right before everyone else does and causes prices to rise. That time may be right now.
Kim Chipman recently reported on www.bloomberg.com that prices for U.S. homes may climb as soon as the third quarter, ending declines as foreclosures decline make more home available for sale, Housing and Urban Development Secretary Shaun Donovan said. “It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN. “The real question is when will we start to see sustainable increases? Some think it will be as early as the end of this summer or this fall.”
Home sales have increased in six out of the past nine months and the number of property owners in default is declining, Donovan said on CNN’s “State of the Union” program. Housing prices will begin rising as the number of foreclosures declines, he said. “In the long run, it’s a good time to buy,” Donovan said. “It’s so affordable today compared to where it’s been for generations.”
Contracts to buy previously owned U.S. homes rose 8.2 percent in May, following a revised 11 percent drop in the previous month, the National Association of Realtors said on June 29. A separate report by the Chicago-based group on June 21 showed sales of existing houses, which make up about 96 percent of the market, declined in May to a six-month low. Home prices fell 4 percent in April from a year earlier, the biggest drop in 17 months for the S&P/Case-Shiller index of values in 20 cities.
An estimated 1.7 million U.S. homes were in the foreclosure process and expected to be put on the market as of April, down 18 percent from the peak, as fewer loans entered delinquency and more distressed homes were sold, CoreLogic Inc. said in a report on June 22.
The so-called shadow inventory represented a five-month supply at the current sales pace, the Santa Ana, California-based real-estate information company reported. The inventory’s size is a barometer of housing-market health because foreclosed homes sell for lower prices and falling values discourage buying, said Sam Khater, CoreLogic’s chief economist.
Donovan said lenders are adding requirements “that don’t make sense” for risky borrowers after the government, through the Federal Housing Administration, raised the minimum down payments for a house purchase. “We can’t over correct,” Donovan said. “We can’t go so far in the other direction that we cut off homeownership for people who really can be successful homeowners.” Encouraging home ownership should avoid giving buyers an expectation of making $1 million overnight, Donovan said. “We can get back to the place where it’s a good investment and we will be able to make money over time.”
There needs to be a balance in the markets. Home prices need to be stable with increases that mirror inflation. Good financing needs to be available to qualified buyers and without extreme requirements that limit accessibility. Home ownership is still the American Dream and it should be encouraged to help stabilize our communities. Home buying whether it is to live in or as an investment needs to make sense. Talk to a local lender about pre-qualification for a loan and then talk to a local Realtor to see what makes sense for you and help you find the property that meets your needs.
Questions or comments can be made to Kerry Suess at firstname.lastname@example.org.