According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper,
homes sales in the region increased from June to July. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, have been driving this increase in activity and increase in
sales prices over the past year or so. Sales volume is increasing, and sales prices have shown a slowing increase. A higher inventory in homes for sale would help boost sales activity.
Among the 15 counties in Northeast Ohio, we saw a miniscule 0.11% increase
for
single family homes and a 3.6% increase for condominiums. Single family
home sales are up 1% from July
of last year, while condos sales prices are up 3.9%. Bear in mind that condo sales are a very small portion of the market.
Ohio's
sales volume showed an increase of 1.2% from June to July, but down
1.2% from last year. Ohio's sales
prices rose by 3.7%, compared to last July. National figures have
shown a 2.4% increase in sales volume from last month, but down 4.3%
from last year. Meanwhile, national prices have increased 4.9% from
last year. Ohio and
Northeast Ohio's price increases have
slowed or stabilized recently, but the increases are what would be
typically expected for the region when compared with the nation.
Good News:
Nationwide, there has been a decline in sales of
foreclosures and other distressed properties. Bank owned and distressed
properties accounted for only 9% of all sales in July - the lowest
level since 2008.
The
key
point here is that the market is starting to stabilize and shifting to a
balanced/seller's market. Sellers are
getting more for their homes than last year, with
buyers paying a bit more to purchase a home to take advantage of the low
interest rates. Buyers should note that interest rates have decreased
slightly, hovering around 4.2%. A recent report indicates that
economists are projecting rates to rise to 5-5.5% in 2015.
This is a
great time for buyers who also have a home to sell, because rates are
still relatively low on the buying side, but home values have risen in
many areas to improve the financial return on the selling side. If the
economy continues to improve, buyers in the current market will be able
to realize value gains for the homes they purchase as well.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Monday, August 25, 2014
Friday, July 25, 2014
Cleveland, Northeast OH Area Real Estate Market June 2014
According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper,
homes sales in the region increased from May to June. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, have been driving this increase in activity and increase in
sales prices over the past year or so. Sales volume is increasing, and sales prices have shown a slowing increase. A higher inventory in homes for sale would help boost sales activity.
Sales from May to June show an increase, however, sales from June 2013 to June 2014 show a decline. Among the 15 counties in Northeast Ohio, we saw a healthy 11.1% increase for single family homes and a 2.5% increase in sales volume from last month. Single family home sales are up 1.3% from June of last year. Halfway through the year, local home sales are lagging last year's levels by 2.5%, but average sale prices are up 1.3% from June 2013 to June 2014.
Ohio's sales volume showed an increase of 7.5% from May to June. Ohio's sales prices were relatively flat, with a 1.2% improvement from last June with an annual increase total of 1.2%. National figures have shown a 2.3% decrease in sales volume and 2.6% price gain. Ohio and Northeast Ohio's price increases have slowed or stabilized recently, but the increases are what would be typically expected for the region when compared with the nation.
"Inventories are at their highest level in over a year, and price gains have slowed to much more welcoming levels in many parts of the country," Lawrence Yun, chief economist for the national Realtors, said in a written statement. "This bodes well for rising home sales in the upcoming months, as consumers are provided with more choices." He added, supply concerns won't dissipate until homebuilding rebounds.
The key point here is that the market is starting to stabilize and shifting to a balanced/seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.2%. A recent report indicates that economists are projecting rates to rise to 5-5.5% in 2015.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Sales from May to June show an increase, however, sales from June 2013 to June 2014 show a decline. Among the 15 counties in Northeast Ohio, we saw a healthy 11.1% increase for single family homes and a 2.5% increase in sales volume from last month. Single family home sales are up 1.3% from June of last year. Halfway through the year, local home sales are lagging last year's levels by 2.5%, but average sale prices are up 1.3% from June 2013 to June 2014.
Ohio's sales volume showed an increase of 7.5% from May to June. Ohio's sales prices were relatively flat, with a 1.2% improvement from last June with an annual increase total of 1.2%. National figures have shown a 2.3% decrease in sales volume and 2.6% price gain. Ohio and Northeast Ohio's price increases have slowed or stabilized recently, but the increases are what would be typically expected for the region when compared with the nation.
"Inventories are at their highest level in over a year, and price gains have slowed to much more welcoming levels in many parts of the country," Lawrence Yun, chief economist for the national Realtors, said in a written statement. "This bodes well for rising home sales in the upcoming months, as consumers are provided with more choices." He added, supply concerns won't dissipate until homebuilding rebounds.
The key point here is that the market is starting to stabilize and shifting to a balanced/seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.2%. A recent report indicates that economists are projecting rates to rise to 5-5.5% in 2015.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Thursday, July 3, 2014
Cleveland, Northeast OH Area Real Estate Market May 2014
According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper,
homes sales in the region increased from April to May. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, have been driving this increase in activity and increase in
sales prices over the past year or so. Sales volume is increasing, and sales prices have shown a slowing increase. A higher inventory in homes for sale would help boost sales activity.
Sales from April to May show an increase, however, sales from May 2013 to May 2014 show a decline. Among the 15 counties in Northeast Ohio, we saw a healthy 16.3% increase for single family homes and a 33.1% increase in sales volume from April. Single family home sales are down 6.3% from May of last year. Over the past 5 months of 2014 compared to 2013, we have witnessed a 3.3% decline in sales volume, but a 1.8% increase in prices for single family homes and 1.4% for condos. Local home prices dipped slightly by 1.1% from May 2013 to May 2014.
Ohio's sales volume showed an increase of 6.2% from April to May. Ohio's sales prices were relatively flat, with a 0.8% decline from last May with an annual increase total of 2.9%. National figures have shown a 4.9% increase in sales volume and 5.1% price gain. Ohio and Northeast Ohio's price increases have slowed or stabilized recently, but the increases are what would be typically expected for the region when compared with the nation.
The key point here is that the market is starting to stabilize and shifting to a balanced/seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.2%. A recent report indicates that economists are projecting rates to rise to 5-5.5% by year-end.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Sales from April to May show an increase, however, sales from May 2013 to May 2014 show a decline. Among the 15 counties in Northeast Ohio, we saw a healthy 16.3% increase for single family homes and a 33.1% increase in sales volume from April. Single family home sales are down 6.3% from May of last year. Over the past 5 months of 2014 compared to 2013, we have witnessed a 3.3% decline in sales volume, but a 1.8% increase in prices for single family homes and 1.4% for condos. Local home prices dipped slightly by 1.1% from May 2013 to May 2014.
Ohio's sales volume showed an increase of 6.2% from April to May. Ohio's sales prices were relatively flat, with a 0.8% decline from last May with an annual increase total of 2.9%. National figures have shown a 4.9% increase in sales volume and 5.1% price gain. Ohio and Northeast Ohio's price increases have slowed or stabilized recently, but the increases are what would be typically expected for the region when compared with the nation.
The key point here is that the market is starting to stabilize and shifting to a balanced/seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.2%. A recent report indicates that economists are projecting rates to rise to 5-5.5% by year-end.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Tuesday, April 29, 2014
Rising Mortgage Rates Expected - Consumer Impact
It is going to happen...interest rates will rise as the economy and real
estate markets improve. Based on what the Federal Reserve tells us,
that scenario may be set in motion soon.
The Fed isn't expected to raise base interest rates when they meet this week, but it's expected that they will send signals of what is to come. They said that they would consider raising rates when unemployment goes below 6.5% and inflation is hovering around 2.0%, but the Fed will look at many more issues before deciding to raise rates.
Interest rates have been staying around 4.3%-4.5% for 30 year home purchase financing over the past several months, which is about 1% higher than a year ago. Rates are expected to climb to between 5 and 5.5% by the end of 2014.
Of course, rising interest rates will have an effect on purchasing power. A home buyer will be able to finance a higher sales price now versus what they can qualify for as rates increase. At 4.5% for 30 years, the principle and interest payment is $1,013.37 on a $200,000 mortgage loan.
See below for principle and interest calculations at rising interest rates:
$200,000 at 4.50% = $1,013.37
$200,000 at 4.75% = $1,043.29
$200,000 at 5.00% = $1,073.64
$200,000 at 5.25% = $1,104.41
$200,000 at 5.50% = $1,135.48
CLICK HERE to perform mortgage calculations for your price range
As you can see, going from 4.5% to 5.5% causes an 11% increase in monthly payment. Assuming a $200,000 mortgage is a buyer's maximum approval at 4.5%, a 5.5% interest rate will reduce a buyer's spending power to $178,475. Couple that with rising home prices (6.1% increase overall last year) in many locations, one can see the significance. This will affect home buyers, as well as home sellers.
Rate increases are expected to be gradual throughout the year, but they are expected to rise. Rates are still at or near historical lows we had not experienced priot to the past several years. Before that, 6-7% rates were considered great. The point here is to provide some persective on how rates will affect home purchases in the future.
The Fed isn't expected to raise base interest rates when they meet this week, but it's expected that they will send signals of what is to come. They said that they would consider raising rates when unemployment goes below 6.5% and inflation is hovering around 2.0%, but the Fed will look at many more issues before deciding to raise rates.
Interest rates have been staying around 4.3%-4.5% for 30 year home purchase financing over the past several months, which is about 1% higher than a year ago. Rates are expected to climb to between 5 and 5.5% by the end of 2014.
Of course, rising interest rates will have an effect on purchasing power. A home buyer will be able to finance a higher sales price now versus what they can qualify for as rates increase. At 4.5% for 30 years, the principle and interest payment is $1,013.37 on a $200,000 mortgage loan.
See below for principle and interest calculations at rising interest rates:
$200,000 at 4.50% = $1,013.37
$200,000 at 4.75% = $1,043.29
$200,000 at 5.00% = $1,073.64
$200,000 at 5.25% = $1,104.41
$200,000 at 5.50% = $1,135.48
CLICK HERE to perform mortgage calculations for your price range
As you can see, going from 4.5% to 5.5% causes an 11% increase in monthly payment. Assuming a $200,000 mortgage is a buyer's maximum approval at 4.5%, a 5.5% interest rate will reduce a buyer's spending power to $178,475. Couple that with rising home prices (6.1% increase overall last year) in many locations, one can see the significance. This will affect home buyers, as well as home sellers.
Rate increases are expected to be gradual throughout the year, but they are expected to rise. Rates are still at or near historical lows we had not experienced priot to the past several years. Before that, 6-7% rates were considered great. The point here is to provide some persective on how rates will affect home purchases in the future.
Wednesday, January 29, 2014
Cleveland, Northeast OH Area Real Estate Market December 2013
According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer
newspaper,
annual homes sales in the region increased overall in 2013 from 2012 by
11.8%. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, have been driving this increase in
activity and increase in
sales prices over the past year or so.
Sales comparing December 2012 to December 2013 slid slightly. Among the 15 counties in Northeast Ohio, single family home sales were down a percentage points.
By comparison, Northeast Ohio is showing a 6.1% price increase from last year (3.1% for condos), with the state of Ohio's at 5.2%. Ohio's sales volume increase was also up by over 14.7% compared to 2012. The US market saw a 11.5% increase in sales price from 2012 to 2013, and is showing a sales volume increase of 9.1%. Ohio and Northeast Ohio's price increases have stabilized/slow down recently, while the US sales prices continue to rise at a higher rate, which has been historically the case in our area compared with the nation. There is still a concern that home prices are rising faster than income growth.
Nationally, "Existing-home sales have risen nearly 20 percent since 2011, with job growth, record-low mortgage interest rates and large pent-up demand driving the market," said Lawrence Yun, chief economist for the national Realtors. "We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population."
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.5%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Sales comparing December 2012 to December 2013 slid slightly. Among the 15 counties in Northeast Ohio, single family home sales were down a percentage points.
By comparison, Northeast Ohio is showing a 6.1% price increase from last year (3.1% for condos), with the state of Ohio's at 5.2%. Ohio's sales volume increase was also up by over 14.7% compared to 2012. The US market saw a 11.5% increase in sales price from 2012 to 2013, and is showing a sales volume increase of 9.1%. Ohio and Northeast Ohio's price increases have stabilized/slow down recently, while the US sales prices continue to rise at a higher rate, which has been historically the case in our area compared with the nation. There is still a concern that home prices are rising faster than income growth.
Nationally, "Existing-home sales have risen nearly 20 percent since 2011, with job growth, record-low mortgage interest rates and large pent-up demand driving the market," said Lawrence Yun, chief economist for the national Realtors. "We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population."
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.5%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Thursday, November 14, 2013
11 Reasons To List Your Home During The Holidays
You’ve heard it from real estate agents before. “The Winter season is slow.” Or, “No one is really buying or selling.” And even, “I’ll get started in the New Year, it’s a new start right?” Wrong. The truth is, it’s better to be ahead than behind.
Here are 11 reasons to have your home listed during the holidays:
11. By selling now, you may have an opportunity to be a non-contingent buyer during the Spring, when many more houses are on the market for less money! This will allow you to sell high and buy low.
10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year.
9. Even though your house will be on the market, you still have the option to restrict showings during the six or seven days around the Holidays.
8. January is traditionally the month for employees to begin new jobs. Since transfers cannot wait until Spring to buy, you need to be on the market during the Holidays to capture the market.
7. Some people must buy before the end of the year for tax reasons.
6. Buyers have more time to look for a home during the Holidays than they do during a work week.
5. Buyers are more emotional during the Holidays, so they are more likely to pay your price.
4. Houses may show better when decorated for the Holidays.
3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home. Less supply and more demand means more money for you.
2. Serious buyers have fewer houses to choose from during the Holidays and less competition means more money for you.
And the number one reason why your seller should list during the Holidays…
1. People who look for homes during the Holidays are more serious buyers!
*Information courtesy of the Keller Williams Greater Cleveland SW blog
Wednesday, October 23, 2013
Cleveland, Northeast OH Area Real Estate Market September 2013
According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper,
homes sales in the region dropped from August to September, but continue to surpass last year's sales
figures. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, has driving this increase in activity and increase in
sales prices over the past year. Economist say that the recent government shutdown and consumer uncertainty attributed to the reduced sales volume in September.
Sales comparing September 2012 to September 2013 still show increasing sales figures. Among the 15 counties in Northeast Ohio, single family home sales are up 15.2% and 3.1% for condominium sales.
By comparison, Northeast Ohio is showing a 3% price increase from last year, with the state of Ohio's at 2%. Ohio's sales volume increase was also up by over 18.9% from September 2012. The US market saw a 11.7% increase in sales price from the year before, and is showing a sales volume increase of 10.7%. Ohio and Northeast Ohio's price increases have stabilized recently, while the US sales prices continue to rise at a higher rate, which has been historically the case in the area compared with the nation. There is concern that home prices are rising faster than income growth.
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.3%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Sales comparing September 2012 to September 2013 still show increasing sales figures. Among the 15 counties in Northeast Ohio, single family home sales are up 15.2% and 3.1% for condominium sales.
By comparison, Northeast Ohio is showing a 3% price increase from last year, with the state of Ohio's at 2%. Ohio's sales volume increase was also up by over 18.9% from September 2012. The US market saw a 11.7% increase in sales price from the year before, and is showing a sales volume increase of 10.7%. Ohio and Northeast Ohio's price increases have stabilized recently, while the US sales prices continue to rise at a higher rate, which has been historically the case in the area compared with the nation. There is concern that home prices are rising faster than income growth.
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have decreased slightly, hovering around 4.3%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Tuesday, September 24, 2013
Cleveland, Northeast OH Area Real Estate Market August 2013
According to the Northeast Ohio Regional Multiple Listing Service (NORMLS) and an article from the Cleveland Plain Dealer newspaper,
homes sales in the region continue to surpass last year's sales
figures. Lower home inventory, higher rental prices and higher buyer
demand due to low
(but climbing) interest rates, is driving this increase in activity and increase in
sales prices. The low inventory continues to increase new construction demand, as well.
Sales comparing August 2012 to August 2013 show increasing sales figures by double digits, like they did in the past 3 months. Among the 15 counties in Northeast Ohio, single family home sales are up 11.3% and 19.8% for condominium sales. From July to August 2013, sales rose by 1.2%.
By comparison, Northeast Ohio is showing a 8% price increase from last year, with the state of Ohio's at 3.4%. Ohio's sales volume increase was also up by over 16.9% from August 2012. The US market saw a 14.7% increase in sales price from the year before, and is showing a sales volume increase of only 13.2%. Northeast Ohio's price increases have stabilized recently, while Ohio and the US have dipped a bit.
Ohio just marked 26 straight months of annual sales gains, and nationwide sales of existing homes hit their highest level in 6.5 years. Lawrence Yun, the chief economist for the National Association of Realtors, described the August jump as a "temporary peak," driven by higher interest rates on home loans. He said he expects sales to be uneven over the coming months and that rising sales prices and restrictive lending may hold back sales growth.
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have begun to increase over the past several months, hovering around 4.5%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Sales comparing August 2012 to August 2013 show increasing sales figures by double digits, like they did in the past 3 months. Among the 15 counties in Northeast Ohio, single family home sales are up 11.3% and 19.8% for condominium sales. From July to August 2013, sales rose by 1.2%.
By comparison, Northeast Ohio is showing a 8% price increase from last year, with the state of Ohio's at 3.4%. Ohio's sales volume increase was also up by over 16.9% from August 2012. The US market saw a 14.7% increase in sales price from the year before, and is showing a sales volume increase of only 13.2%. Northeast Ohio's price increases have stabilized recently, while Ohio and the US have dipped a bit.
Ohio just marked 26 straight months of annual sales gains, and nationwide sales of existing homes hit their highest level in 6.5 years. Lawrence Yun, the chief economist for the National Association of Realtors, described the August jump as a "temporary peak," driven by higher interest rates on home loans. He said he expects sales to be uneven over the coming months and that rising sales prices and restrictive lending may hold back sales growth.
The key point here is that the market is starting to stabilize and shifting to a seller's market. Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates. Buyers should note that interest rates have begun to increase over the past several months, hovering around 4.5%.
This is a great time for buyers who also have a home to sell, because rates are still relatively low on the buying side, but home values have risen in many areas to improve the financial return on the selling side. If the economy continues to improve, buyers in the current market will be able to realize value gains for the homes they purchase as well.
Friday, March 15, 2013
Mortgage Interest Rates Are On The Rise
Interest rates have reached a 6 month high for 30 year loans, with an
average rate of 3.63%, up from last week's average of 3.52%. For
comparison, in November-December 2012 the rates were at a 3.35% national
average. The average 15 year rate also saw a small increase from 2.76%
to 2.79%.
The main contributors to the increase are the improved economy and the drop in unemployment rates. In fact, unemployment rates dropped below expectations to 7.7%. The short version of why these indicators affect interest rates, is due to consumer confidence and the obvious fact that if more people are working, there will be more people with the ability to make a home purchase.
So, what this means for a home buyer is that interest rates are on the rise. They fluctuate daily and we will see peaks and valleys, but the rates will be trending upward as the economy improves. That is why this year would be a great time to consider making a home purchase. Economists are projecting that rates will reach 4% by year's end. It's still a fantastic rate, but as the rates increase, it will affect a buyer's purchasing limit.
For sellers, we are seeing in most communities, that there is high buyer demand due to the rising rates and not enough homes for sale yet to meet the demand. When there is high demand and lower supply, that indicates a trend leaning toward a seller's market. That is why we are also seeing a slight increase in home sales prices, shorter days on the market and multiple offer situations on homes.
This is a very exciting point-in-time where a homeowner can experience a better seller's market, and still take advantage of the low interest rates and great sales prices, before we see further increases in those rates and prices. I would enjoy speaking to anyone considering a move, to discuss the local market and how it affects your specific situation and needs.
The main contributors to the increase are the improved economy and the drop in unemployment rates. In fact, unemployment rates dropped below expectations to 7.7%. The short version of why these indicators affect interest rates, is due to consumer confidence and the obvious fact that if more people are working, there will be more people with the ability to make a home purchase.
So, what this means for a home buyer is that interest rates are on the rise. They fluctuate daily and we will see peaks and valleys, but the rates will be trending upward as the economy improves. That is why this year would be a great time to consider making a home purchase. Economists are projecting that rates will reach 4% by year's end. It's still a fantastic rate, but as the rates increase, it will affect a buyer's purchasing limit.
For sellers, we are seeing in most communities, that there is high buyer demand due to the rising rates and not enough homes for sale yet to meet the demand. When there is high demand and lower supply, that indicates a trend leaning toward a seller's market. That is why we are also seeing a slight increase in home sales prices, shorter days on the market and multiple offer situations on homes.
This is a very exciting point-in-time where a homeowner can experience a better seller's market, and still take advantage of the low interest rates and great sales prices, before we see further increases in those rates and prices. I would enjoy speaking to anyone considering a move, to discuss the local market and how it affects your specific situation and needs.
Saturday, August 4, 2012
U.S. Real Estate Market Improved For Buyers And Sellers
According to an article in the Wall Street Journal, S&P's David Blitzer indicated that nearly seven years after the housing bubble burst, most indexes of house
prices are bending up. "We finally saw some rising home prices." Nationally, the number of existing homes for sale has
fallen close to the normal level of six months' worth despite all the
foreclosed homes.
This national trend is something I'm seeing locally in many of the Northeast Ohio suburbs, where as the inner-ring suburbs and Cleveland areas are still seeing a considerable supply of homes versus buyer demand. When we see lower supply and higher demand for homes (due to historically low interest rates), we will begin to see an increase in sales prices.
We're also seeing improvements in new home construction on a national and local level, but it still has a long way to go from what construction was like in 2002, which we may never see again.
As the economy and employment rate improves, so will the real estate market. As a Seller, the great news is that there are less Homes For Sale compared to last year, and there is higher buyer demand. Again, in that scenario, that means sales prices will remain where they are or show modest increases. As a Buyer, the great news is that interest rates are at or near record lows and the lenders have relaxed their approval criteria a bit over the past year or so.
I don't know what the future will hold in regards to the economy, real estate market or interests rates. What I do know, is that this local market in Northeast Ohio has shown significant improvement, and it's a great time to consider making a move.
This national trend is something I'm seeing locally in many of the Northeast Ohio suburbs, where as the inner-ring suburbs and Cleveland areas are still seeing a considerable supply of homes versus buyer demand. When we see lower supply and higher demand for homes (due to historically low interest rates), we will begin to see an increase in sales prices.
We're also seeing improvements in new home construction on a national and local level, but it still has a long way to go from what construction was like in 2002, which we may never see again.
As the economy and employment rate improves, so will the real estate market. As a Seller, the great news is that there are less Homes For Sale compared to last year, and there is higher buyer demand. Again, in that scenario, that means sales prices will remain where they are or show modest increases. As a Buyer, the great news is that interest rates are at or near record lows and the lenders have relaxed their approval criteria a bit over the past year or so.
I don't know what the future will hold in regards to the economy, real estate market or interests rates. What I do know, is that this local market in Northeast Ohio has shown significant improvement, and it's a great time to consider making a move.
Thursday, August 11, 2011
Impact of US Debt Downgrade on the Real Estate Market
Chief Economist for the National Association of Realtors, Lawrence Yun, discusses the impact of the US debt downgrade on the national real estate market.
See Video Here
See Video Here
Friday, March 25, 2011
"Shadow Inventory" Definition and Impact
A lot has been discussed about shadow inventory in real estate over the past several months. I want to give a clearer picture of what shadow inventory is and how it affects the real estate market's recovery.
Shadow inventory is defined differently, depending on who you ask. Some consider it to be just foreclosed homes that are not yet on the market. Others also consider homes that have 1st mortgage delinquencies greater than 90 days. Further, the definition can go on to include homes that are to be short sales that are not yet on the market and any homes that have had modified loans (as most of these loans still default after the modification).
Because of the varying degree of what constitutes shadow inventory, the perceived effect of this inventory varies as well. Without going too in depth with how this is calculated by the National Association of Realtors, essentially they use data from Mortgage Bankers Association and Lender Processing Services to account for the number of households that are to be included in this definition. For more about how this is calculated and determined, CLICK HERE and go to page 8 of the publication.
The effects of foreclosure and shadow inventory situation, just like anything else in real estate, vary by location. Arizona, California, Florida and Nevada are projected to be the worst hit by foreclosures. The good news is that overall delinquencies in all but 4 states (Washington, New Jersey, New York and Vermont) declined. The national average for serious delinquencies of 90+ days declined 38%. For detailed breakdown by state, this is a very informative ARTICLE and a good read.
While the number of delinquencies are declining, the amount of shadow inventory as well as distressed properties currently on the market will effect the pace of recovery in the real estate market. These homes are or will be competing directly with homes that are not in a distressed situation, causing these homes to remain on the market for a longer period of time and keep the market value for real estate depressed or stagnant.
Once these distressed properties are cleared out to more "acceptable" levels, then we can expect to see a more thriving real estate market. How long this will take is still anyone's guess, but we are probably looking at a 2-4 year window nationally, depending on the location. The key is to have an economy that continues to improve, resulting in fewer delinquencies, allowing the real estate market to catch up. Fewer foreclosures, of course, would reduce the amount of homes on the market, create a larger demand for non-distressed homes, resulting in quicker sales at a relatively higher sales price.
Shadow inventory is defined differently, depending on who you ask. Some consider it to be just foreclosed homes that are not yet on the market. Others also consider homes that have 1st mortgage delinquencies greater than 90 days. Further, the definition can go on to include homes that are to be short sales that are not yet on the market and any homes that have had modified loans (as most of these loans still default after the modification).
Because of the varying degree of what constitutes shadow inventory, the perceived effect of this inventory varies as well. Without going too in depth with how this is calculated by the National Association of Realtors, essentially they use data from Mortgage Bankers Association and Lender Processing Services to account for the number of households that are to be included in this definition. For more about how this is calculated and determined, CLICK HERE and go to page 8 of the publication.
The effects of foreclosure and shadow inventory situation, just like anything else in real estate, vary by location. Arizona, California, Florida and Nevada are projected to be the worst hit by foreclosures. The good news is that overall delinquencies in all but 4 states (Washington, New Jersey, New York and Vermont) declined. The national average for serious delinquencies of 90+ days declined 38%. For detailed breakdown by state, this is a very informative ARTICLE and a good read.
While the number of delinquencies are declining, the amount of shadow inventory as well as distressed properties currently on the market will effect the pace of recovery in the real estate market. These homes are or will be competing directly with homes that are not in a distressed situation, causing these homes to remain on the market for a longer period of time and keep the market value for real estate depressed or stagnant.
Once these distressed properties are cleared out to more "acceptable" levels, then we can expect to see a more thriving real estate market. How long this will take is still anyone's guess, but we are probably looking at a 2-4 year window nationally, depending on the location. The key is to have an economy that continues to improve, resulting in fewer delinquencies, allowing the real estate market to catch up. Fewer foreclosures, of course, would reduce the amount of homes on the market, create a larger demand for non-distressed homes, resulting in quicker sales at a relatively higher sales price.
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