Existing-Home Sales Up Again

Washington, July 23, 2009
Existing-home sales rose for the third consecutive month with inventory easing and home prices declining less sharply in June, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.6 percent to a seasonally adjusted annual rate1 of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but are 0.2 percent lower than the 4.90 million-unit level in June 2008.
Lawrence Yun, NAR chief economist, is hopeful about the gain. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions. Despite the rise in closed transactions, many Realtors® are reporting lost sales as a result of new appraisal standards that went into effect May 1 of this year.”
A June survey of NAR members shows 37 percent experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality.
“Clearly the process needs to be revised, but the most logical approach is to use appraisers with local expertise, industry designations and access to local data, who make a physical examination of the property and use apples-to-apples comparisons with nearby home sales,” Yun said. “In many cases, normal homes are being compared with distressed homes sold at a discount, which often are in subpar condition – this is causing real harm to both buyers and sellers.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.42 percent in June from 4.86 percent in May; the rate was 6.32 percent in June 2008. Mortgage interest rates have trended lower in recent weeks.
Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply2 at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago.
“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year,” Yun said.
An NAR practitioner survey in June showed first-time buyers accounted for 29 percent of transactions, unchanged from May, and that the number of buyers looking at homes is up nearly 12 percentage points from June 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are very good opportunities. “Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” he said. “The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since it’s taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the December 1 expiration date. As a consequence, consumers need the expertise of Realtors® more than ever to navigate both the obstacles and opportunities in today’s market.”
The national median existing-home price3 for all housing types was $181,800 in June, which is 15.4 percent below June 2008. Distressed properties, which accounted for 31 percent of sales in June, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

CAMBA Festival of Trails

It's not too late to beat feet to Cable this weekend and take part in the CAMBA Festival of Trails. Sounds like a fun weekend of activities and summer like weather is finally arriving to the Northwoods.

http://www.cambatrails.org/festival-of-the-trails.html

$8,000 Tax Credit As Downpayment

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

This is great news for first time home buyers!

New Listing on Lake Owen

Take a look at this brand new listing on Lake Owen. Property is hard to come by on this very special lake. The views are excellent and the swimming is great.

Click here for more info: http://www.mckinneyrealty.net/detail.php?id=563&category=Waterfront%20Property

Scott McKinney

Trusted Advisor for Real Estate Dreams

715-798-3445 Office

715-580-0093 Cell

scott@mckinneyrealty.net

Spring to Summer

With almost two weeks of fishing under our belts its time for the Cable Off-Road Classic. This 23 mile mountain bike race from Lakewoods to Cable has a history of being a grinding mud bog. Not this year though. Dry conditions have the track firm and unless we get doused this week the course should be fast. Approximately 500 riders will wind their way through the Chequamegon National Forest to finish in downtown.

After an April respite, the local restaurants are expanding their hours again. Have you heard? Redbery Books has moved downtown and can be found in the front of the Ideal Market. Early reviews are good and was a great place to find a Mother's Day present this year.

The trees are blooming and the area is coming alive. I look forward to seeing you all in the area soon.

Ice Out!

Late last week we saw the last of the ice on even the most stubborn lakes in the area. This is the one sure sign that spring is finally here. For the waterfront buyer this means it is finally possible to see what is under all that frozen stuff. Is it a sand bottom great for swimming or is the bottom more appropriate for fishing? Lake maps and local expertise usually tell the story but seeing it with your own eyes is still comforting.

Spring historically brings new properties to the market and this year is no exception. Buyers will find a selection of excellent homes and a marketplace in their favor. Interest rates remain low and price reductions are common. The $8,000 homebuyer tax credit has had a positive effect for first time homebuyers and remains available but only until December 1, 2009.

My phone has been ringing more frequently and I hear the same from my colleagues. It appears the buyers may be awakening from their winter slumber.

Pleasant Surprise - Sales Up

Nationwide sales of existing homes were up 5.1%, the largest jump since July of 2003. First time buyers accounted for half of all home sales last month, evidence that the $8,000 tax credit for purchase of a home by a first time buyer is working. First time buyers were looking for bargains though and operating in the lower price ranges. The median sales price was down 15.5% from a year ago. In the Midwest sales increases were more modest at 1% over the previous month but the median sales price was only down 7.8% from a year ago.

Many of these sales were distressed sales. Removal of these homes is important to stabilize the marketplace and relieve consumer anxiety. Locally, there is less in the way of distressed sales and as a result prices have not dipped as drastically as they have elsewhere in the country.

Scott McKinney
Trusted Advisor for Real Estate Dreams
715-798-3445scott@mckinneyrealty.net