Second Quarter 2011 Shows That Real Estate Industry Remains In Flux
One step forward, two steps back. Or vice versa.
When it comes to the housing market these days, it depends on who you talk to and where you live. But one of the perplexing issues remains that people aren't buying houses, and one of the key reasons is falling prices.
Although lower prices encourage bargain hunters to look for deals, they can also scare off homebuyers. And, between the two, anxiety appears to be winning.
This spring, home prices in major cities were back to the same levels reported in the summer of 2003. Although prices in several locations are beginning to rise again, even with the increases, housing remains the weakest part of the U.S. economy. Prices aren't likely to fully recover until the glut of foreclosures for sale is reduced, companies start hiring in greater numbers, banks ease lending rules and more people get comfortable again with buying a house.
"Prices are going down, and they have to go down," said Barry Newman, a HouseHunt agent working for @properties in Deerfield, Ill. "I don't think we've hit the bottom, and I think there are a lot of people holding back because of all the foreclosures on the market."
According to other agents polled by HouseHunt.com across the United States, the second quarter of 2011 was mostly the same as the first quarter, with numbers steady but down from more prosperous times.
"It's slower this year than last year for me, and if I'm judging from the previous few quarters, people are still looking and still buying, but, overall, they're a lot more particular," said Joyce Pettit of Keller Williams Realty in Boiling Springs, S.C. "I'm hoping that prices have pretty much stabilized here. I don't think they can fall a whole lot more."
Across the country, 64 percent of respondents to the House Hunt poll said prices were down, compared to 56 percent in the first quarter. Also, 19 percent said appreciation was up 0-5 percent, compared to 21 percent in the first quarter; 7 percent say prices were up 5-10 percent, compared to 9 percent previously; and 5 percent say prices were up 5 percent, compared to 6 percent in the first quarter.
One of the country's hot spots appears to be suburban Denver, where HouseHunt agent Kristen Malcolm of Coldwell Banker in Cherry Hills Village says prices are up at least 20 percent for her agency.
"Houses are moving, inventory has dropped because so many houses have gone under contract and sold, and in Cherry Hills there have been quite a few instances where people have gotten full asking price and multiple offers," Malcolm said. "There's so much demand; so much is going under contract and selling. There are lots of buyers."
But sellers continue to outnumber buyers overall, according to the survey, with 52 percent of respondents saying there are more of the former in their community. Thirty-five percent say there are more buyers where they work, and 13 percent say the ratio is about even.
Regarding inventory, 82 percent of respondents say there's a good supply in their region, down slightly from 87 percent in the first quarter. And when it comes to asking price, 55 percent say they're getting at least 95 percent of their target price, while 45 percent say they're getting lower than what they're seeking.
Inventory and prices took a double hit in Minot, N.D., during the second quarter, where a tough economy was exacerbated by the flooding of areas along the Souris River.
"We lost more than 4,000 homes because of flooding," said Clyde Thomas, an agent with Coldwell Banker. "It's not a good situation right now, and there's a real fight when it comes to homes coming up on the market."
Thomas estimates that there are currently six times as many real estate agents compared to prospective homebuyers in his small community because of the flooding.
"There are far more sellers than buyers," he said. "It's been pretty hard."
Overall, the national median existing-home price for all housing types was $166,500 in May, which was almost 5 percent below the comparable price in May 2010, according to the National Association of Realtors. And the average interest rate for a 30-year fixed-rate mortgage was 4.5 percent, slightly above the four-decade low of 4.17 percent reached in November.
What's more, the number of existing homes available for sale remains high with 3.72 million on the market in May. A large inventory of homes tends to suppress prices.
"I don't yet see the light at the end of the tunnel," said Mike Bearden, president and CEO of HouseHunt Inc. "Prices are still declining in most areas despite incredibly low prices and interest rates. Many sales these days are all cash investor sales. Banks must start lending money to more prospective home purchasers for housing prices to stabilize and begin to increase. The banks are waiting for a better economy and stronger employment, but those cannot be achieved without housing participating in the recovery. We will see how the rest of 2011 plays out; then we may have a clearer picture as to when housing will recover."
Here are a few additional notable results from the second quarter 2011 survey conducted by HouseHunt.com.
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Donna Varnum
Cary, NC REALTOR
RE/MAX Integrity
(919) 810-8510
---
Visit my Cary NC Home Hunter Website
Cary, NC Real Estate, Condos, Homes for Sale
Apex, NC Real Estate, Condos, Homes for Sale
Holly Springs, NC Real Estate, Condos, Homes for Sale
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One step forward, two steps back. Or vice versa.
When it comes to the housing market these days, it depends on who you talk to and where you live. But one of the perplexing issues remains that people aren't buying houses, and one of the key reasons is falling prices.
Although lower prices encourage bargain hunters to look for deals, they can also scare off homebuyers. And, between the two, anxiety appears to be winning.
This spring, home prices in major cities were back to the same levels reported in the summer of 2003. Although prices in several locations are beginning to rise again, even with the increases, housing remains the weakest part of the U.S. economy. Prices aren't likely to fully recover until the glut of foreclosures for sale is reduced, companies start hiring in greater numbers, banks ease lending rules and more people get comfortable again with buying a house.
"Prices are going down, and they have to go down," said Barry Newman, a HouseHunt agent working for @properties in Deerfield, Ill. "I don't think we've hit the bottom, and I think there are a lot of people holding back because of all the foreclosures on the market."
According to other agents polled by HouseHunt.com across the United States, the second quarter of 2011 was mostly the same as the first quarter, with numbers steady but down from more prosperous times.
"It's slower this year than last year for me, and if I'm judging from the previous few quarters, people are still looking and still buying, but, overall, they're a lot more particular," said Joyce Pettit of Keller Williams Realty in Boiling Springs, S.C. "I'm hoping that prices have pretty much stabilized here. I don't think they can fall a whole lot more."
Across the country, 64 percent of respondents to the House Hunt poll said prices were down, compared to 56 percent in the first quarter. Also, 19 percent said appreciation was up 0-5 percent, compared to 21 percent in the first quarter; 7 percent say prices were up 5-10 percent, compared to 9 percent previously; and 5 percent say prices were up 5 percent, compared to 6 percent in the first quarter.
One of the country's hot spots appears to be suburban Denver, where HouseHunt agent Kristen Malcolm of Coldwell Banker in Cherry Hills Village says prices are up at least 20 percent for her agency.
"Houses are moving, inventory has dropped because so many houses have gone under contract and sold, and in Cherry Hills there have been quite a few instances where people have gotten full asking price and multiple offers," Malcolm said. "There's so much demand; so much is going under contract and selling. There are lots of buyers."
But sellers continue to outnumber buyers overall, according to the survey, with 52 percent of respondents saying there are more of the former in their community. Thirty-five percent say there are more buyers where they work, and 13 percent say the ratio is about even.
Regarding inventory, 82 percent of respondents say there's a good supply in their region, down slightly from 87 percent in the first quarter. And when it comes to asking price, 55 percent say they're getting at least 95 percent of their target price, while 45 percent say they're getting lower than what they're seeking.
Inventory and prices took a double hit in Minot, N.D., during the second quarter, where a tough economy was exacerbated by the flooding of areas along the Souris River.
"We lost more than 4,000 homes because of flooding," said Clyde Thomas, an agent with Coldwell Banker. "It's not a good situation right now, and there's a real fight when it comes to homes coming up on the market."
Thomas estimates that there are currently six times as many real estate agents compared to prospective homebuyers in his small community because of the flooding.
"There are far more sellers than buyers," he said. "It's been pretty hard."
Overall, the national median existing-home price for all housing types was $166,500 in May, which was almost 5 percent below the comparable price in May 2010, according to the National Association of Realtors. And the average interest rate for a 30-year fixed-rate mortgage was 4.5 percent, slightly above the four-decade low of 4.17 percent reached in November.
What's more, the number of existing homes available for sale remains high with 3.72 million on the market in May. A large inventory of homes tends to suppress prices.
"I don't yet see the light at the end of the tunnel," said Mike Bearden, president and CEO of HouseHunt Inc. "Prices are still declining in most areas despite incredibly low prices and interest rates. Many sales these days are all cash investor sales. Banks must start lending money to more prospective home purchasers for housing prices to stabilize and begin to increase. The banks are waiting for a better economy and stronger employment, but those cannot be achieved without housing participating in the recovery. We will see how the rest of 2011 plays out; then we may have a clearer picture as to when housing will recover."
Here are a few additional notable results from the second quarter 2011 survey conducted by HouseHunt.com.
- Eighty-four percent reported that the average time a house spent on the market was in excess of 60 days, with some saying it was close to four months.
- Sixty-six percent said customers were either repeat buyers or investors, up from 58 percent in the previous quarter.
- Sixty-five percent said they were getting multiple offers on their listings.
---
Donna Varnum
Cary, NC REALTOR
RE/MAX Integrity
(919) 810-8510
---
Visit my Cary NC Home Hunter Website
Cary, NC Real Estate, Condos, Homes for Sale
Apex, NC Real Estate, Condos, Homes for Sale
Holly Springs, NC Real Estate, Condos, Homes for Sale
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