New Home Sales Surge 9.6% in July

New U.S. home sales surged 9.6 percent in July, rising for the fourth straight month and beating expectations as the housing market shows continuing signs of rebounding from its historic downturn.

The Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised
June rate of 395,000. Sales are now up 32 percent from the bottom in January, but off 69 percent from the frenzied peak four years ago.

Last month’s sales pace was the strongest since September and exceeded the forecasts of economists surveyed by Thomson Reuters, who
expected a pace of 390,000 units. The last time sales rose so dramatically was in February 2005.

The median sales price of $210,100, however, was still down 11.5 percent from $237,300 compared to the same time a year ago.
There were 271,000 new homes for sale at the end of July, down more than 3 percent from May. At the current sales
pace, that represents 7.5 months of supply, the lowest since April 2007. The decline means builders have scaled back on construction to the point where supply and demand are coming into balance.

Source: Associated Press, Alan Zibel (08/26/09

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Average Buyers Can Afford Most Homes

Housing is remarkably affordable these days.

A family earning the nation’s median income of $64,000 a year could afford to buy 72.3 percent of all homes sold in the United States during the second quarter of 2009, according to the National Association of Home Builders and Wells Fargo.

Sellers are the ones who are paying the price. More than 30 percent of all homes sold during the second quarter sold for less than the sellers paid originally, according to Zillow.com.

A significant percentage of owners who bought within the past five years and sold during the quarter lost money on the deal, according to Stan Humphries, Zillow’s vice president in charge of data and analytics.

[Editor's note: Although discussion of trends on a national level can be useful, conditions in a local market can be vastly different from what's happening statistically on a national level. For that reason, conditions for owners who've bought in the last five years might or might not resemble what analysts are seeing statistically on a national basis.]

Source: CNNMoney.com (08/19/2009)

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Local home sales jump in second quarter compared with 1Q

(Crain’s) — Chicago-area home sales jumped almost 68% in the second quarter compared with the first quarter, according to the Illinois Assn. of Realtors. Local sales fell about 15% compared with the second quarter last year.

“We are moving through inventories and that’s a good sign for the Illinois housing market,” Pat Callan, president of the association and owner of Realty Executives Premiere in Wheaton, said in a release Tuesday from the association. “Year-over-year sales are still lower, but one promising trend is the rate of decline has slowed in recent months and is now at a pace last seen in the third quarter of 2007.”

In the nine-county Chicago region, 17,622 homes were sold in the second quarter, up from 10,507 sales in the first quarter. Chicago-area sales were down 15.4% from 20,827 in second-quarter 2008, the Realtors group said.

In the city of Chicago, second-quarter sales rose 65.2%, to 4,947, compared with the first quarter. Sales fell 21.3% compared with the same quarter last year.

The Chicago-area median price — where half the homes sold for more and half sold for less — was $201,050 in the second quarter, up 7.2% from the first quarter but down 19.6% from the second quarter of 2008.

 In the city, the median price rose 7% to $230,000 compared with the first quarter but was down 25.8% compared with second-quarter 2008.

Statewide sales rose 61.8% in the second quarter compared with the first quarter and fell 16.4% from the second quarter last year.

The Realtors group’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

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Harvard Professor Says His Plan Will Save Market

When borrowers owe more than their homes are worth, they have considerable incentive to simply walk away. These defaults result in further declines in home prices.

Martin Feldstein, a professor of economics at Harvard University and economic adviser to the Reagan administration, says he has a plan that will encourage underwater borrowers to continue paying.

For any home owner with a loan-to-value ratio greater than 120 percent, Feldstein would offer a reduction in principal, the cost of which would be shared between the government and the lender down to the 120 percent level. In exchange, the borrower would accept a recourse loan that could not be discharged by bankruptcy.

He argues that this plan would stabilize the housing market and cap housing prices at the current level.

Source: The Wall Street Journal, Martin Feldstein (08/08/2009)

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6 reasons your house won’t sell

The spring selling season has quickly faded. Homeowners who want to sell now pin their hopes on the third quarter of 2009. With a strong buyers’ market in place, many sellers are bound to be disappointed as buyers skip over their homes for others nearby. Here’s my list of six reasons why your home won’t sell:

 1. It looks drab in photos. Since the vast majority of home buyers start their search for a home on the Web, your house had better look fabulous in print. If it doesn’t track well online, no one will take the time to see it in person. Even the top investment gurus get it wrong

2. It’s overpriced for the neighborhood. If your neighborhood is filled with foreclosures and short sales, you’ll be hard-pressed to get top dollar, even if your home looks better than all the rest. However, if you have just a few foreclosures, you may be able to overcome any objections by pricing your home correctly. In this case, correct pricing means figuring out at what price point buyers are looking in your neighborhood. If everyone is looking at homes priced at $250,000 or less, that’s the price point you want to be at. If you can’t afford to sell at that price level, then you should consider removing your property from the market.

 3. There’s no “wow” factor inside. Once you get buyers inside the house, you need them to be wowed by what they see. Hiring a professional stager can work wonders, turning a blah interior into one that looks sleek and polished, like the homes featured on HGTV. If you don’t want or can’t afford to spend the money on a professional stager, consider watching a few staging videos online.

 4. No one knows it’s there. Your agent isn’t getting the word out, either because the property isn’t listed properly on the multiple listing service, or because he or she hasn’t posted it on Craigslist, Zillow or other online search engines that don’t feed directly from the MLS posting. Online marketing should include a Web site that has the address as the URL (you can sell it to the buyer as part of the deal) and as many photos, floor plans and video as possible.

5. Your commission isn’t high enough or the agent isn’t splitting the commission equally. Agents will tell you that they won’t push a buyer to make an offer on a house simply because it has a higher commission. But many agents see no harm in making sure their buyers see as many properties that are in the right price range. Some agents take 60 percent. But you need to make sure your agent is splitting the commission equally.

6. Your house won’t pass inspection. If your house looks great, but the faucets leak, the windows don’t lock, the ceilings have water stains and the furnace is on its last legs, buyers may move on to the next house.

 

By Ilyce Glink | Tribune Media Services

August 2, 2009

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FHA Program to Help Struggling Home Owners

The newly enhanced FHA Making Home Affordable Loan Modification Program will help struggling home owners—who qualify—to significantly reduce their monthly mortgage payments and stay in their homes, said NAR President Charles McMillan in a public statement. The changes expand the Obama administration’s Making Home Affordable Loan Modification Program to include FHA borrowers. NAR is optimistic that this will have positive implications for thousands of home owners, McMillan said. “Until foreclosures have been significantly reduced and housing inventory reaches a more normal level, there can be no true housing recovery,” McMillan said. “The FHA–HAMP program will go a long way in achieving these important goals by helping FHA servicers bring mortgages current, buy down loans by up to 30 percent of the unpaid principal balance, and defer these amounts until the first mortgage is paid off.” NAR will continue to call on Congress and the Obama administration to expand the first-time home buyer tax credit to all home buyers and continue efforts to streamline the short-sale process. “Along with the expanded loan modification program, addressing these issues will help reduce foreclosures and housing inventory, and stabilize home values,” McMillan said.

Source: NAR

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