RISMEDIA, April 6, 2007-Overall housing market indicators improved substantially in many areas of the country during the first quarter of 2007 despite the concern over subprime mortgage lending problems and a rise in foreclosures, according to results from the latest HouseHunt "Current Market Conditions" national survey of member agents.
Inventories of unsold homes are trending downward; annual positive price appreciation is up; buyer-seller ratios are more balanced; average time on the market from listing to sale is improving; and more home sellers say they are getting 95-100% of asking prices.
- Inventory of unsold homes – After a steady buildup, 59% of member agents reported that the number of unsold existing homes in their exclusive territories was either down or about the same as a year ago. Latest estimate from the National Association of Realtors (NAR) is a 6.7 month supply, down from October's 7.4 month supply.
- Price Appreciation – Sixty-one percent of member agents report positive annual price appreciation compared to only 53% in the fourth quarter of 2006. Hardest hit region of the country is the Northeast, which reported only 21% positive price appreciation. The Chicago Metro area reported 88% positive price appreciation.
- Buyer-Seller Ratio – Home sellers still outnumber buyers but the ratio is slowly moving toward a more balanced market, which many observers feel was achieved nationally a year ago before moving to a buyer's market.
- Time On the Market – A vast majority of member agents reported that it is still taking more than 60 days, on average, from listing to contract. Currently, 78% of respondents report 60 days or more compared to 84% in the fourth quarter of 2006.
- Ask/Sale Price Ratio – No change nationally over two quarters. It's still 65%. In the South Region, only 52% report that their sellers are getting 95-100% of asking prices. In the Chicago Metro area, only 58% of member agents report their clients are getting 95-100%.
"Although not statistically pure, we've found over the past four years that our quarterly random survey of top real estate agents in the field is both accurate and timely," said Michael Bearden, president and CEO of HouseHunt, Inc. "Their survey responses tell us what's going on today in rural and metropolitan markets across the country, not last month or six months ago. This is vital information for homeowners, home buyers and home sellers actively involved in local markets."
Bearden sees a tightening of underwriting standards as a long range positive for both consumers and the industry: "Exotic, no money down and interest-only mortgages are extremely risky at best. Unexpected reductions in incomes and/or property values spell disaster for everyone involved."
NAR economist David Lereah observed: "Today's subprime problems are occurring against a backdrop of cyclically low mortgage rates and a growing, healthy economy. Jobs and liquidity are plentiful in the marketplace, suggesting that the subprime problems may be a manageable problem within our $10 trillion-plus economy."
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