Report: Stage is set for recovery
Job losses, falling prices stunting demand
By Inman News, Monday, June 22, 2009.
Conditions that could support a housing recovery are taking shape now, but job losses, falling home prices and tight lending standards mean demand for housing remains "remarkably low," according to a new Harvard University report out today.
Home-price declines and low interest rates have restored housing affordability in many markets, and a dramatic reduction in home construction should eventually improve the balance between housing supply and demand, the 2009 State of the Nation's Housing Report from the Joint Center for Housing Studies of Harvard University concludes.
Sales of distressed properties, temporary first-time buyer tax credits, and low interest rates have helped stabilize sales. But as homes continue to enter the foreclosure process in record numbers, the number of vacant housing units for rent, sale or being held off the market is at record highs, putting pressure on prices.
"We do see some signs of stabilization, more in home sales and less so in prices," said Nicolas Retsinas, director of the Joint Center. "The macro forces pushing back against recovery include job losses and foreclosures, which are adding to inventory and motivating sellers to keep lowering their prices."
The report estimates 5.7 million jobs were lost between December 2007 and April 2009, and another 11 million Americans were working part time involuntarily or had stopped looking for work altogether. Gains in homeownership rates made during the boom have been erased, falling from 69 percent in 2004 to 67.8 percent last year, a level last seen in 2001.
Although housing is becoming more affordable now, the report also noted that the number of households paying more than half their incomes for housing jumped from 13.8 million in 2001 to 17.9 million in 2007.
How prospective buyers respond when home prices stop falling and the economy improves will determine whether and when the homeownership rate turns up again, the report said. In the near term, demographic forces favor the rental over the for-sale market. ...CONTINUED
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Submitted by Kevin Schmidtchen on June 22, 2009 - 4:30am.
Here in Santa Barbara CA, we are seeing a good deal of the market stabilizing. The last 2.5 months have seen closed and pending sales back to normal levels. Big thing is that most pending sales are also closing on their property.
I have also noticed that buyers here in Santa Barbara are not afraid to write offers and once in escrow, the biggest hold up is the loan.
Overall the real estate market here in Santa Barbara seems to have reached price benchmarks. Time will tell.
Kevin Schmidtchen
blog: www.SantaBarbaraRealEstateVoice.com
Submitted by Robert A. Hulme on June 22, 2009 - 4:47am.
The Housing Market is stabilizing here in Utah as well. First-Time Home Buyer incentives have played a major role in our return.
www.UtahCountyHomes.ws
www.UtahCountyRealEstate.us
Submitted by Judy Orr on June 22, 2009 - 6:42am.
Sometimes I feel the Midwest is always a step behind the east and west coasts. I still do not see recovery in the southwest suburbs of Chicago. Most of our sales are distressed properties and only the most motivated sellers can and will compete.
This makes for very few move-up buyers to continue the selling cycle and they expect the same huge discount they had to give their buyers. To me, continually falling prices and contracts mainly on distressed properties does not equal recovery.
Judy Orr
Classic Realty Group
Oak Lawn Homes For Sale
Submitted by Jon Astaris on June 22, 2009 - 10:14am.
The report says "Conditions that COULD support a recovery are taking shape" but that there are many elements in place that are likely to derail it - not, as the title of the article trumpets, that the "stage is set" for recovery which implies that recovery is now a certainty. The Inman crew spinning for the Propaganda Ministry. Who knew.
Submitted by Paul Francis, CRS on June 22, 2009 - 12:32pm.
Since prices have returned back to earth in Las Vegas, the only thing holding us back are the lenders.
More specifically... lenders handling short sales in an efficient way to keep the homes from going to foreclosure in the first place.
Inventory for QUALITY REO homes has dwindled dramatically and the only thing holding people back from snapping up short sales is the time involved.
We see a definite base on average prices in the areas we cover and the free fall in home values has stopped for the time being. Market values have been consistent for the past several months which certainly suggests stabilization.
Paul Francis, CRS
Prudential Americana Group
www.LasVegasRealEstateHome.com
702.592.3058
Submitted by Danny C. Flucke Jr. on June 22, 2009 - 1:50pm.
I usually do not like the "doom-and-gloom" crowd - But I have to respectfully disagree with this article.
Having been through three of these cycles - The only tangible indication of a bottom - Is when a home buyer with an 800 credit score and 6mo worth of income reserves after their 25% down payment - Can close escrow with a stated-income loan product.
THAT is when the markets (real estate and credit) have stabilized long enough for the downside risks to be minimal.
Even though all indications point to further declines - I have bought 3 properties over the last six months - Knowing it may be a 10 year hold to see a profit.
It would be great to know how many "positive spin" article writers - Are out there right now - In escrow - Buying properties.
Writing the market is "turning around" is one thing - Putting your money in that same market is quite another.....
Danny C. Flucke Jr.
Senior Partner
Nationwide Mortgage Experts, LLC
Direct: (714)624-9479
DCFJ@NationwideMortgageExperts.com
www.NaMoEx.com
Submitted by Bob Wilson on June 22, 2009 - 2:48pm.
Bob Wilson
What happened? NAR went from having their own shills on payroll to paying Inman?
http://www.google.com/hostednews/ap/article/ALeqM5jmT59dgLTTziX4p9X9MRBR...
San Diego Homes.com
Home Sales San Diego.com
Submitted by Bob Wilson on June 22, 2009 - 4:21pm.
From Bloomberg today:
“The worries are still out there,” said John Wilson, who helps oversee $120 billion as chief market technician at Morgan Keegan & Co. in Memphis, Tennessee. “Nobody is ready to get the trumpets out and herald the end of the recession.”
Bob Wilson
Home Sales San Diego.com