Monday, March 26, 2007

National Home Values Slip for the 7th Month

WASHINGTON, D.C. - The National Association of Realtors® released their existing home sales report today. The report indicated that although existing Single-family home sales rose 3.7 percent from the month prior, existing home sales are still off 3.4 percent from one year earlier. The report also indicated that home values fell 1.5 percent from just one year earlier, which marks the 7th straight month that home values declined.

David Lereah, NAR’s chief economist, said the strong gain is a bit of a surprise. “Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically-low mortgage interest rates and competitive pricing by sellers,” he said. “Even so, winter storms last month discouraged shopping, and buyers were chilled with the third coldest February on record. These unusual weather patterns mean home sales that close in March may decline before rebounding later this spring.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.16 percent in the last week, down from an average of 6.29 percent in February. The 30-year fixed was 6.22 percent in January, and 6.25 percent in February 2006.

Single-family home sales increased 3.7 percent to a seasonally adjusted annual rate of 5.88 million in February from 5.67 million in January, but are 3.4 percent below the 6.09 million-unit pace in February 2006. The median existing single-family home price was $211,100 in February, down 1.5 percent from a year ago.

On another negative note, total housing inventory levels rose 5.9 percent at the end of February to 3.75 million existing homes available for sale, which represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January. This rise in inventory might force home prices down further.

Regionally, existing-home sales in the Northeast surged 14.2 percent to a level of 1.21 million in February, and are 3.4 percent higher than February 2006. The median existing-home price in the Northeast was $265,900, down 1.4 percent from a year earlier.

In the Midwest, existing-home sales rose 3.9 percent in February to a level of 1.58 million, but are 1.9 percent below a year ago. The median price in the Midwest was $157,000, down 1.3 percent from February 2006.

Existing-home sales in the South increased 1.6 percent to an annual sales rate of 2.58 million in February, but are 4.4 percent below February 2006. The median price in the South was $175,900, down 2.9 percent from a year ago.

Existing-home sales in the West were unchanged in February, holding at an annual pace of 1.32 million, and are 9.6 percent lower than a year ago. The median price in the West was $337,100, up 2.2 percent from February 2006.

Thursday, March 08, 2007

Good news from Coldwell Banker Burnet President

As we begin 2007, I’m optimistic about the future, and I believe we are well positioned for a successful year.
Now is a perfect time for home buyers, thanks to interest rates that are still historically low and current tax laws that make home ownership more affordable. According to the Minneapolis Area Association of REALTORS®, affordability conditions have rebounded since last July to the highest point in 18 months.
In addition, there is a wonderful inventory of homes in our market in every price point. Consumers have a wealth of options in terms of the community they choose to move to and the style of home, including new construction, existing single-family homes, condominiums, town homes, co-ops, and lofts. Savvy consumers know that real estate is a great investment and a safe, secure way to build long-term wealth. Real estate in our marketplace has shown consistent appreciation through all market conditions.
This is also an ideal time for sellers to put their home on the market. The lower interest rates and favorable tax laws are giving consumers increased buying power and motivating them to look for a new home. According to the National Association of REALTORS® (NAR), most sellers are still seeing a very good return on their investment, with a median of more than 50 percent appreciation during the past six years. Sellers also benefit from favorable capital gains tax laws.
In addition, it’s important to emphasize that many of the recent national news media reports on housing trends don’t capture what’s happening in individual communities, especially in the Midwest. In our market, we have a diversity of industries and are not dependent on any one industry for jobs and growth. We also have a strong economy. The Minnesota Department of Employment and Economic Development recently reported that the state ended 2006 with 54,580 more jobs than at the end of 2005, the strongest job growth since 1999. In a report, the department said, "Our state’s economy continues to outperform the national economy in most areas…" This kind of positive economic news typically increases consumers’ optimism and motivates them to take advantage of strong buying opportunities.
We are already seeing growth in market activity, including more traffic at open houses, a larger number of showings compared to recent months, and multiple offers on homes that are well staged and priced right. This activity will increase even more when the weather warms up and we enter the busy spring buying and selling season.

Robin Peterson
President
Coldwell Banker Burnet