Monday, July 27, 2009

Home Sales Rise - is this good?

Home sales are up and prices are down, but it that the whole story? Many articles in the past week have mentioned this trend but on careful reading how does this news impact home sellers? Here are a few core facts we noticed in the avalanche of data:

  • Inventories of previously owned homes fell 0.7% at the end of June to 3.82 million available for sale. That represented a 9.4-month supply at the current sales pace, compared to 9.8 in May. - Wall Street Journal, June 23
  • The median sales price was $181,800 in June, down 15 percent from year-ago levels but up slightly from $174,700 in May. - CBS News
  • The real improvement was in the months’ supply of inventories which dropped significantly to 8.8 months from 10.2 in May and its peak of 12.4 in January. - WSJ Blogs
  • ...buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales must be completed by the end of November for buyers to take advantage. - Associated Press
Now we're not jumping on the "Everything is rosy now" bandwagon, but these are all indications that prices and supply are starting to level off. For home sellers it is important to understand what part of the market your in. For sellers on the high end time is still a factor; most of the sales are concentrated with first time buyers at the low end of the market and with investors snapping up houses for rental. For higher end sellers it is important to have a realistic time horizon and take the time to create a home marketing plan.

Homes are selling if you take the time to know your market.

Tuesday, July 21, 2009

Jumbo Loan Limits May Get Extended

The House Appropriations Committee yesterday voted to extend Fanny Mae, Freddy Mac and the FHA's loan limits through September 2010. This is good news for home sellers and buyers in higher cost areas as it will significantly increase the easy of buyers obtaining affordable mortgage financing for homes over the 417,000 initial limit.

Limits were lifted last year because the market for secondary loans had collapsed. Banks could sell a loan under $417,000 to Fannie, Freddie and FHA and get it off their books. Larger loans were sold on the secondary market to other banks an investors. When this market collapsed banks and credit unions were left holding these loans on their books. By raising the the conforming loan amounts Congress is making larger loans much easier to obtain and the impact on the market is starting to be seen.

Read More

House committee votes to extend home-loan limits - OC Register

FHA Loans Set New Record in June
- Wall Street Journal