RISMEDIA, Jan. 22, 2008-Encouraging signs that a meaningful recovery in the overall U.S. housing market could begin later this year are found in HouseHunt’s fourth quarter, 2007, “Current Market Reports” survey of member-agents and in year-end statistical data compiled by the National Association of Realtors (NAR).
Just consider: Monthly inventory totals of unsold homes are down slightly for the first time in more than a year; buyer-seller ratios are stabilizing; an increasing number of member-agents reported that their sellers received 95% of more of their asking prices; monthly home sales are up slightly; and nearly two-thirds of U.S. metro areas reported median home price increases in the third quarter.
Conversely, HouseHunt’s latest random survey also found that average home price appreciation has decreased and that the average amount of time required to sell a home has increased to more than 90 days in many areas. Daily doses of negative news in the media continues, and unresolved mortgage liquidity problems are also keeping many potential buyers on the sidelines.
Many real estate observers agree that the key to once again achieving a more balanced market between buyers and sellers is a rebound in consumer confidence, which fell 20 points in recent months.
“What’s badly needed now is a more positive attitude among both Realtors and their customers at the local level because that’s where the recovery will begin in earnest,” said Michael Bearden, president and CEO of HouseHunt, Inc., a consumer-oriented Internet firm that provides free information and services to homeowners, home buyers and home sellers in 47 states through nearly 2,000 member-agents and its primary Web site, Househunt.com.
“Our surveys and NAR data suggest that many potential buyers are waiting on the sidelines to see if they can gauge the bottom of the market,” Bearden continued. “No one wants to buy on the way down. However, consumers who take a long view of real estate home values should recognize that the selection is great right now, and if they can find a home they would really like to live in, price appreciation will occur over time. No market bottom is required unless you are an investor looking for a quick resale.”
Lawrence Yun, NAR chief economist, expects existing home sales to hold fairly steady, then rise later in the year and continue to improve later this year. “On one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said last week in a news release. “On the other, consumers continue to wait for additional signs of market stabilization. As a result, the exact timing and strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
Yun noted earlier: “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines along with a modest reduction in the number of homes on the market. Our inventory is still high and further in prices may be required in some areas to induce buyers back into the market.”
Preliminary NAR figures for November show that there is a 10.3 month national supply of unsold existing homes across America. This is down from a 10.7 month supply in October and from 10.4% in September. Last spring the national housing market was nearly balanced with a 6.6 month supply of unsold homes.
Here’s a sample of HouseHunt member-agent quarterly survey reports:
Tim Rogers of Keller Williams Advantage Realty in State College, PA, exclusive HouseHunt member-agent for State College, said that first-time buyer activity in the $125,000 to $175,000 price window continues to be strong. He reports more buyers than sellers with a limited supply of unsold homes. Average time on the market is 90-120 days.
John Toay of Prudential Burroughs & Chapin Realty in Myrtle Beach, SC, exclusive HouseHunt member-agent for Murrells Inlet, SC, reported average time on the market of 60-90 days and prices down 10-15% from a year ago. Most activity is from repeat buyers from out-of-state looking to retire there. Average home price is $225,000.
Mike Sherrill of Better Properties Real Estate in Lakewood, WA, exclusive HouseHunt member-agent for Tacoma, reported that a surplus of unsold new homes has driven down prices. Average existing home price is $250,000. Greatest activity is from first-time buyers, he said. Most sellers are getting 95% or more of their asking prices.
Susan Borrelli of Weichert Realtors in Burke, VA, exclusive HouseHunt member-agent for Quantico, VA, said buyers currently enjoy an advantage: “There has not been a better time to purchase a home in this decade. Foreclosures in Prince William County are up substantially, there is an ample inventory to choose from, prices are down, interest rates are low, offers are negotiable, the economy is good and we are adding 50,000 new jobs a year.” Average home price is $300,000.
Stephanie Holloway Kirk of F.C. Tucker Company in Indianapolis, IN, exclusive HouseHunt member-agent in Washington Township, reported an affordable market poised to enjoy appreciation gains in the near future. First-time buyers are very active, she said, and many sellers said they are getting multiple offers. Average home price is $250,000. Average time on the market is 60-90 days.
Fourth quarter, 2007, national HouseHunt survey showed:
Average Buyer-Seller Ratio – Fifty-nine percent of member-agents in the U.S. reported more sellers than buyers; 27% said more buyers, and 14% said it was about even.
Regional exceptions were reported in Florida (71% more sellers), Chicago Metro (71% more sellers) and the Midwest (70% more sellers). A year ago the national ratios were: 52% more sellers, 28% more buyers and 20% said it was about even.
Average Time on the Market- Sixty-one percent of member-agents said it now takes an average of 90 days or more to sell a home in the U.S. Another 30% said it takes at least 60 days. Regional exceptions are: Florida (95% said 90 days or more); Chicago Metro (90% said 90 days or more); the South (84% said more than 90 days); and the Midwest (76% said more than 90 days), A year ago, 84% of member-agents in the U.S. said it was taking more than 60 days, on average, from listing to sale.
Average Sales vs. Asking Price – Member-agents reported that 54% of sellers are getting 95% or more of their asking prices, on average, across the country. Regional exceptions include: Florida (only 19% getting 95% or more); Texas and the Midwest, where 70% are getting 95% or more, on average. A year ago, 65% of member-agents in the U.S. reported their customers getting 95% or more.
Average Annual Price Appreciation – Thirty-four percent of member-agents reported positive price appreciation, on average, in the U.S. in the past 12 months. Fifteen percent reported no change and 51% reported negative appreciation. This compared with 53% positive appreciation and 47% negative appreciation a year ago. Biggest negative appreciation reported in any region in the fourth quarter of this year was Florida (85%), Chicago Metro (71%) and California (70%).
Multiple Offers – Member-agents reported that only 23% of their clients are receiving multiple offers from buyers. Regional exceptions include Chicago Metro (9%), Florida (10%) and California 17%). A year ago the U.S. average was 24%.
Buyer Activity – Repeat and move-up buyers represent 61% of sales activity in the U.S. Regional exceptions include Texas (87%), the Midwest (32%) and the West (75%), the Northeast (47%) and Chicago Metro (28%).
Unsold Inventory – Sixty-three percent of member-agents reported that inventories of unsold homes in the U.S. are up over a year ago. Regionally, California (76%) was the highest and Texas (41%) was the lowest.