Market Report March 2008

Looking at March 2008 compared with March 2007, the number of new listings decreased 9.5%. Additionally the number of closed sales declined 29.1% and the pending sales decreased 28.7%. At the month's rate of sales the 2,074 active listings would last 8.4 months.

This is a Decrease in Inventory from the beginning of the year when it was at 10.2 compared to 2006 when themarket was still hot with an inventory of 3.8.

Existing Home Sales to Stabilize Before Upturn in Second Half of 2008

The following article is gleaned from "Existing-Home Sales to Stabilize Before Upturn in Second Half of 2008" by Walt Molony from Realtor.org

WASHINGTON, April 08, 2008 -
Little change is expected in existing-home sales over the next few months, before improving notably during the second half of the year, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said the market will come into clearer focus this summer. “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he said. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in February, slipped 1.9 percent to 84.6 from an upwardly revised reading of 86.2 in January, and was 21.4 percent lower than the February 2007 index of 107.6. “The slip in pending home sales implies we’re not out of the woods yet, though an era of successive deep sales declines appears to be over,” Yun said.
Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6 percent to 5.74 million in 2009.
“Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun said. The aggregate existing-home price will probably ease by 1.4 percent to a median of $215,800 for all of 2008 before rising 3.7 percent to $223,800 next year.
“The economy will not grow in first half of the year,” Yun said. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.” Growth in the U.S. gross domestic product (GDP) is expected to be 1.4 percent in 2008 and 2.4 percent next year. The unemployment rate is forecast to average 5.4 percent this year and 5.6 percent in 2009.

Bush: More Help on Way for Home Owners

The Bush administration released over the weekend a sweeping proposal to revise regulation of financial markets.The proposal, which will be outlined in detail April 1, will merge or eliminate some long-standing institutions like the Securities and Exchange Commission, and streamline others. The Federal Reserve would get a new role as the super cop in charge of financial-system stability. Some proposals are expected to directly address the current mortgage-risk problems. Treasury Secretary Henry Paulson, who authored the plan, says it wouldn't necessarily prevent future financial crises."I don't think any regulatory system is going to change that," Paulson says. "I think we rely very, very heavily on market discipline. Having said that, I still think we need a system that is more efficient and gives us a better chance, gives us more tools to try to solve problems."Rep. Barney Frank of Massachusetts, the Democrat who chairs the House Financial Services committee, says he found the plan encouraging. But he says that for the rest of this year, lawmakers need to devote all their energy to stabilizing the mortgage-market turmoil rather than determining broader fixes. "It's too close to an election and it's a very major thing," he says.

Source: The Wall Street Journal, Damian Paletta, Greg Ip and Michael M. Phillips (03/31/08)

They Buy to Own- No Matter what the Media Says

One of every 16 Americans is buying a home this year...

A desire to own a home of their own and to establish a household is the most often sited reason for purchasing a home, according to preliminary results from NAR’s Profile of Home Buyers and Sellers. Thirty-three percent of all buyers, and a whopping 70 percent of first-time buyers, express this as their prime motivator in the 2007 report, scheduled for release in November. A job-related move, desire for a larger home, a change in family situation, desire for a home in a better area and a desire to be closer to family and friends are also high on the list of reasons for purchasing a home. Interestingly enough, taking advantage of perfect market conditions was not mentioned -- not this year, last year or...well... ever!