The news about the economy
and housing is confusing but remains positive.
The Pending Home Sales Index declined 2.6 percent in August over
July. The data, compiled by The National
Association of REALTORS, reflects properties under contract but not
closed.
The housing market is “The
lone bright spot in the economy.” That is according to The September UCLA
Anderson Forecast, a new economic report just released. Low interest rates,
slightly increased sales prices and reports of a steady economy are helping.
The Federal Housing Finance
Agency reports that US home prices have increased 3.7 percent from a year
ago. S&P/Case-Shiller released a
report also showing home prices on the rise for the fourth consecutive month.
They are at their highest levels in nearly two years. They report home prices in their 20 major
city index are up 1.2 percent compared to a year earlier. According to the Zillow Home Value Index home
values have declined 0.1 percent in August from July but up 1.7 percent from
August 2011.
According to Fiserv, an
analytics firm, home prices still have a long way to go before returning to the
peaks experienced during the housing boom.
In a recent report, they explained that from 2007 to 2012, home prices
nationwide fell by a third on average. Home
prices are rising now and many economists predict continuance. However, Fiserv’s
projecting we may not return to peak levels until 2023, if then.
For the Lake Gaston real
estate market; in September 2012 we closed 17 waterfront homes, 12 off-shore
homes, 3 waterfront lots and 1 off-shore lot for a total value of $8,274,750
compared to 18 total properties in September of last year for a total value of
$3,660,004. Our overall sales (lots and homes) total 226
units and $58,569,715 for the first nine months of 2012 compared to 173 units
and $53,065,871 in the first nine months of 2011 or an increase of 10.4% in
sales dollars and a 30.6% increase in units.
To put these numbers in perspective, the first nine months of 2008 we
experienced closed sales of $74,067,882 and in 2007 the same period yielded
$103,061,740 in sales. We currently have
19 waterfront homes under contract, waiting to close, along with 9 off-shore
homes and 7 waterfront lots. All of these sales numbers are from our Multiple
Listing Service and do not reflect private sales which will have minimum
impact.
Moving Forward
After the Presidential Election,
the cloud of confusion over the housing market should drop. Some surveys say as
many as twenty-five percent of Americans are holding off on major buys until
they know who will hold the President-elect position.
As employment strengthens so
should the housing market. A huge part
of our recovery relies on folks getting mortgage approval. With the new
Dodd-Frank Wall Street Reform Act banks and financial institutions are, to some
degree, paralyzed. Regulators are
forcing banks to increase capital requirements and urging them to reduce
risks. For banks to sell their loans in
the secondary market, the loans must meet the new requirements. Banks who lend without meeting the new
requirements risk having to buy back their loans from Fannie or Freddie. One banker stated “We don’t process a loan
for credit anymore: we process the loan for Dodd-Frank compliance.”
There is no doubt the
mortgage industry needed different regulation. One could say our industry received a
cleansing, by reducing (or eliminating) the abusive lenders in the subprime
market. The housing collapse has definitely
created awareness. We are seeing better
quality lenders, REALTORS, appraisers and people that are more conscientious.
Barney Watson with RE/MAX On The Lake and can be reached
at 252-532-3274 or www.barneywatson.com
