Positive Angles

Here’s the latest news article from Positive Angles. There is plenty of good news in the market if you’re willing to look for it. This service has assembled housing reports from around the country. Since a great deal of our business comes from the Northern markets, it’s good to see that some of these “feeder” areas are on the rebound.

Click here for the full story:  http://invision.sotheby.mindmatrix.net/LiveContent/Emails/37984/PositiveAngles_Issue3-6_FINAL_(2).pdf

The forcast calls for PAIN

We continue to get mixed messages from the various news organizations about home prices which I think  just frightens most buyers. We have had one negative and two positive articles in our local paper in just the past three days! The positive articles generally talk about the increased volume (more homes and condos are selling than last year at this time), and the negative articles report that, for the most part, prices are down…way down from the peak in 2006.

This “saw-toothed bottom” will be the norm for three or more years  in my opinion. No disasterous decline, no apprecable increase. Just as some inventory gets snapped up, other homes will hit the market to replace them. And this won’t just come from banks and short sales. A recent national survey included in Zillow’s Q1 Real Estate Market Reports reported that 7% of homeowners were ” very likely” to put their home on the market. That represents 5,320,000 homes in the United States and is more than all the homes that were sold in 2009! 8% of those suveyed said they were “likely” to put thier home on the market and another 14% said they were “somewhat likely” to list their homes.

I think the latter two groups will list their homes if they perceive any sign that the economy is improving. Therefor this pent-up supply or “shadow inventory” will continue to keep prices at these levels ( a little up…a little down) for the forseeable future.

Here is an article from the Washington Post that sums up the latest Case-Shiller report:

WASHINGTON – May 26, 2010 – Home prices remained weak through the early months of this year, according to a closely watched housing index released Tuesday, an indication that the housing market continues to struggle despite recent improvements.

The Standard & Poor’s/Case-Shiller home price index showed that prices of single-family homes were down 0.5 percent between February and March, the sixth consecutive month-over-month decline. On a seasonally adjusted basis, prices were flat, according to the index.

Prices in 13 of the 20 cities tracked by the index fell in March, including the Washington region, where prices were down 0.7 percent. Detroit and Minneapolis saw the largest price declines, 4.1 percent and 2.7 percent, respectively.

The housing market is in a tentative recovery. Sales of previously owned homes jumped nearly 8 percent in April compared with the previous month, for example. And there was some positive news in the Case-Shiller data: Prices were up about 2.3 percent compared with the same period last year.

“The housing market may be in better shape than this time last year; but when you look at recent trends, there are signs of some renewed weakening in home prices,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in statement.

The recent weakness in prices is disappointing given record-low mortgage rates and a homebuyer tax credit that helped boost sales through the first few months of this year, analysts said. The tax credit expired last month, and home sales are expected to decline in its absence.

“We haven’t turned the corner on home prices,” said Steven Ricchiuto, chief economist for Mizuho Securities in New York.

The Case-Shiller index measures repeat sales of homes and reflects a rolling three-month average, so the March data also captured transactions that closed in February and January.

There is still an oversupply of homes on the market, particularly foreclosures, said Patrick Newport, U.S. economist for IHS Global Insight. Foreclosed properties typically sell at a discount, bringing down neighboring home values.

The “housing glut and foreclosures” will drive the Case-Shiller index down another 6 to 8 percent before reaching bottom in 2011, Newport said. “Prices appeared to stabilize late last year, and they are now starting to edge down again,” he said. “With the tax credit gone, sales are going to drop, and we’re going to see that trend continue.”

Another index tracking price changes in homes with loans backed by Fannie Mae or Freddie Mac provided a mixed picture. Prices of homes sold in March were up slightly, 0.3 percent, compared with February, according to data released by the Federal Housing Finance Agency, which regulates the mortgage-finance companies. But that increase was offset by a 1.9 percent decline in prices during the first quarter compared with the previous quarter and a 3 percent decline compared with the first quarter of 2009.

While prices fell in most cities tracked by the FHFA index, the Washington region saw a significant improvement. Of the 25 largest metro areas, home prices increased the most, nearly 12 percent, in the Washington region in the first quarter compared with the first quarter of 2009.

Overall, home prices are likely to gradually fall an additional 5 percent through the end of 2011, said Paul Dales, an economist at Capital Economics. “I don’t think we’re going to get anything like the crash [in prices] we had before,” he said. “It won’t be a disaster, but it will undermine the wider economic recovery.”

Copyright © washingtonpost.com

1625 Seminole Dr – Sold

Pricing and the Foreclosures to come

Here’s an interesting blog article I found regarding the coming foreclosures that some think will keep downward pressure on prices for some time.  http://www.google.com/reader/view/#stream/user%2F00893875234044064666%2Fstate%2Fcom.google%2Fbroadcast

Latest Positive Angles article

Tired of all the doom and gloom? Put a little “positive angle” on things with their latest issue here: Positive Angles