Thursday, June 18, 2009

Ten Market "Up's and Down's" in the First Quarter 2009

1. The Return of the Multiple Offer: More and more agents are seeing multiple bids being made on homes that are priced well and in good condition. With all the foreclosures out there, buyers have to pick through homes in less than spotless condition, and when they find a quality listing, they're jumping on it.
2. Negative Equity Home Ownership: Homeowners in a negative equity situation are becoming more the rule than the exception. One fifth, or almost 22 % of home owners owe more than their home is worth.
3. Some Markets Show Increase: Although overall house prices have declined 14.2 percent from a year ago, there are a few markets that noticed an increase in house prices from January to March 2009.
These include:
Fayetteville, NC: +14.4%; Oklahoma City, OK: +5.1% Binghamton, NY: +2.5% Jacksonville, NC: +2.5% Cumberland, MD: +2.3% Austin, TX: +1.6% Gainsville, GA: +1.5% Toledo, OH: +1.5%
4. Top ten Markets that have decreased by over 20% include:
Redding, CA: -34.1% Vallejo, CA: -31.8% Riverside, CA: -31.1% Las Vegas, NV: -30.3% Modesto, CA: -30.4% Bakersfield, CA: -29.4% Phoenix, AZ: -24.4% Miami, FL: -23.7% Naples, FL: -23.9% Santa Barbara, CA: -22.9%
5. Senate Ok's Foreclosure Bill: The Senate approval of the foreclosure-prevention bill means tougher rules for lenders and extra provisions for owners of foreclosed properties. Now homeowners have a 90 day grace period before they have to move. Deposit insurance by the FDIC has been increased from $100,000 to $250,000. It also discourages some of the old lending practices. Now lenders must be prepared to take financial responsibility for mortgages advertised with "too good to be true" interest promotions.
6. $8,000 Home Buyer Tax Credit: This was introduced as an incentive for first-time home buyers taking the first step toward home ownership.
7. Home Builders Losses on the Mend: Major home builders who have noticed losses for the first quarter have decreased from one year ago. Pulte Homes reported a loss of $514 million in 2009, improved from $696.1 million at the same time in 2008. D.R. Horton Inc. report losses of $108.6 million, compared to $1.31 billion during the first quarter in 2008. Horton claims their new building strategy which includes building smaller, lower priced houses in an effort to compete with foreclosure sales is working.
8. Long Term Interest Rates Lower than Short Term: It's now cheaper to get a 30-year fixed rate mortgage (now averaging 4.80 percent), than a 15-year term at 4.48 percent or a 5 year at 4.8 percent. Historically, short term rates have always been the lowest.
9. Green Building Trends: Building environmentally friendly homes is more than a trend, it's becoming the norm. In fact, the green building industry is expected to grow 60 percent in 2009. Builders not familiar with this type of construction technology are going to be left behind.
10. No More McMansions: Homes are getting smaller as buyers opt for smaller, more economical and energy efficient designs. They are still getting the upscale upgrades the likes of granite counters and spa baths, but on a smaller scale.

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