Well, the good news just keeps coming in on the performance of the real estate market. The National Association of Realtors has indicated that June marked the fifth month in a row that pending home transactions improved over the prior month.
If sales remain at the current pace, this year home sales may surpass last year's mark of a total of 4.9 million, at an annualized rate. June home sales brought us to 4.89 million sales annualized.
We are seeing a dent in home inventories, including the number of foreclosed properties on the market. In June the inventory of homes for sale dropped to 3.8 million homes across the US, compared to 4.5 million properties in June 2008. The projection is that the US could be down to an 8 month supply of homes on the market by December end. But, it is important to remember that real estate is local in nature. So, there will be variations in different areas on this information.
But, we still don't know what lies around the corner. Some feel that banks have an inventory of foreclosures on their books that they haven't placed on the market yet. Are these properties purposefully being held back so as not to flood the market, and drag property values down? Or, are the banks backlogged, and unable to get through the masses of paperwork on those properties to get them on the market?
We know that many homeowners are struggling to make their mortgage payments. How long can they continue, before they decide to try to short sale it; to sell it for less than the mortgage balance? And today, the statistics on short sales are bleak at best. Recently, we are finding that some of the banks are becoming more aggressive in placing more demands on short sale owners, thus only about 1/2 of short sales are making it to closing. So, those properties will eventually fall into foreclosure. So, in effect it will be like dominoes...one property at a time.
Some owners tell us they are waiting to put their house on the market, until the market improves. Improves how much? How long will that be?
And, don't forget November 30 the first time homebuyer tax credit expires. This has spurred the market along. How will this affect the market, will it take a large group of buyers out of the market? These have been our lower priced properties, competing with investors and making multiple offers on houses under $120,000 in order to "win" the bid. This segment of the market has been quite brisk.
So, what does it all mean? And, where do we go from here?
No one really knows for sure.
Sandy Shores REALTOR®, Melbourne/Palm Bay FL Real Estate
Brevard County Real Estate & Investing
I also buy, sell, rent, own and manage Investment Property.
that for you
Sandy things are better than they were. I guess they could only go one way. If we can get a handle on the foreclosures things would definitely pick up for the better.
Hi John, I have to concur with what you have said. Here they really only had one way left to go, and that was up - so very true. So it is positive news. Agreed, it could take some time to get a handle on the foreclosures. Have you been out on your boat lately?
Sandy, Now if everyone would let the price settle. It seems Sellers read one article about how the market is improving and lets raise the listing price now!
Hi Sandy, Oh I wish we all had a crystal ball for the future, but the markets are showing a lot of positives. I think you're right, there is only one way it can go and that is up!
Hi Sandy- I hope you are right because we don't need to go any lower. :-)
Hi Paul, We'll have to see which way that goes. You know that can go either way, depending on who you talk to.
Hey Mary, A crystal ball would be great. It would have kept us out of some of the sticky messes we have gotten into, that's for sure.
Hi Pat, Going lower wouldn't be a positive. We'll have to wait and see what happens and how it all plays out.