U.S. existing home sales rose 2.9 percent in April

WASHINGTON (Reuters) – Sales of existing homes in the United States rose 2.9 percent in April, according to an industry survey on Wednesday that supported views the three-year housing recession was near a bottom.

The National Association of Realtors said sales climbed to an annual rate of 4.68 million from a 4.55 million pace in March. That was slightly higher than market expectations for a 4.66 million-unit pace.

"Most of the sales are taking place in lower price ranges and activity is beginning to pick-up in the mid-price ranges, but high-end home sales remain sluggish," NAR chief economist Lawrence Yun told reporters.

During the month, single-family home sales rose 2.5 percent to an annual rate of 4.18 million, while condos jumped 6.4 percent to a 500,000 annual pace. Home sales were up in three of the four regions.

U.S. financial markets showed little reaction to the data.

"This report seems to offer another piece of evidence that home sales are stabilizing," said Zach Pandl an economist at Nomura Global Economics in New York.

Housing, which is at the heart of the 17-month old recession, is showing signs of stabilizing. Analysts reckon home sales and groundbreaking for the construction of new homes will probably reach bottom by mid-year.

Plunging home values and rising unemployment are forcing consumers to drastically cut back on spending, a factor seen holding back the economy from a quick recovery once the recession ends.
In April, the inventory of existing homes for sale rose 8.8 percent to 3.97 million. The median national home price fell 15.4 percent to $170,200, compared to the same period a year-ago. That was the second biggest percentage decline on record.

A separate report from the Federal Housing Finance Agency showed prices for U.S. single-family homes fell 7.3 percent over the 12 months ended in March. On Tuesday, the Standard & Poor's/Case-Shiller survey showed prices off 18.7 percent in March compared to the same period last year.

Distressed properties accounted for 45 percent of all sales in April and NAR's Yun said these were distorting the median home price.

"Because foreclosed properties will likely be released into the market over the rest of the year, it is critical that distressed homes be quickly cleared from the market," said Yun.

He also urged the Federal Reserve to help restore liquidity in the jumbo mortgage market to boost sluggish high-end home sales.

A separate report from the Mortgage Bankers Association showed applications for home loans fell to their lowest level since early March as the highest lending rates in more than two months sapped demand for refinancing last week.

CNBC host Jim Cramer on investing in real estate

In the May 25th issue of TIME Magazine, CNBC's Mad Money host Jim Cramer was asked the following:

"Is it safe to start reinvesting a small portion back in stocks again, or are we better off investing in real estate?"

Mr. Cramer replied: "I think real estate is a once-in-a-lifetime opportunity, because there are no competitive buyers. Mortgage rates are the lowest in my life. Affordability is the best in my life. Clearly, real estate is much better than stocks right now."

Mr. Cramer echoes what numerous economists and financial advisors have been saying. When would NOW be a good time to make your once-in-a-lifetime investment? Call me and lets get started!

Snohomish County Statistics - April, 2009

Current Residential & Condo listings - 5,592 (down 21.86% from last year)
New listings taken this month - 1,579
Pending sales this month - 1,111 (up 23.17% from last year)
Percent of listings that sold this month - 19.87%
Median closed sales price - Apr. ‘08, $330,000
Median closed sales price - Apr. ‘09, $290,000
Rate of appreciation = -12.12%

~ Courtesy of NWMLS

King County Statistics - April, 2009

Current Residential & Condo listings - 13,164 (down 14.29% from last year)
New listings taken this month - 4,123
Pending sales this month - 2,646 (up 9.38% from last year)
Percent of listings that sold this month - 20.10%
Median closed sales price - Apr. ‘08, $410,000
Median closed sales price - Apr. ‘09, $350,000
Rate of appreciation = -14.63%

~ Courtesy of NWMLS

Eastside Statistics - April, 2009

Current Residential & Condo listings - 5,007 (down 6.88% from last year)
New listings taken this month - 1,385
Pending sales this month - 777 (up 5.86% from last year)
Percent of listings that sold this month - 15.52%
Median closed sales price - Apr. ‘08, $510,817
Median closed sales price - Apr. ‘09, $429,950
Rate of appreciation = -15.83%

~ Courtesy of NWMLS

Pending sales in Western Washington rise with improved affordability, buyer incentives

Northwest Multiple Listing Service (NWMLS) members reported pending sales for April surged 11.4 percent compared to twelve months ago – and rose 21.3 percent from March.

Brokers reported 6,918 pending sales during April across the 19 counties that make up the Northwest MLS market area. That's up from the year-ago total of 6,208, and the March figure of 5,701 pending sales (offers made and accepted, but not yet closed).

For the four-county Puget Sound area (King, Kitsap, Pierce and Snohomish), brokers notched 5,372 pending sales, the highest total since August 2007 and a jump of 26 percent from March.
Inventory is shrinking and prices are showing some signs of stabilizing, according to data in the latest report from NWMLS. The median price for last month's closed sales of single family homes and condominiums area-wide was $270,000. That matched the figure for March, but still lagged prices of a year ago (down 12.9 percent).

Inventory is down 18.3 percent from year-ago levels, with Clark, Kitsap and Pierce reporting the largest drops. Members added 10,824 new listings of single family homes and condos to inventory last month, down almost 20.5 percent from the year-ago total of 13,607 new listings.

Lower prices, record low mortgage interest rates, improving consumer confidence, the $8,000 first-time buyer tax credit and other incentives for buyers are credited with spurring activity. Industry officials, noting activity is quite strong in the lower, more affordable price ranges, hesitate to declare a housing recovery is under way:

Dropping inventories and rising affordability are positive signs, according to Frank Nothaft, Freddie Mac's chief economist. "The housing market may be edging toward a bottom," he stated.
"April was a good market for new pending sales; we seem to be moving to a more balanced market," said NWMLS director Meribeth Hutchings, broker/owner of Windermere Real Estate/Lake Stevens, Inc.

"We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around," said Lawrence Yun, chief economist for the National Association of Realtors® (NAR).

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, described the market as "bifurcated."

"Sales are up and prices have stabilized in the more affordable market," he explained, while noting the mid- to upper-end markets are experiencing entirely different conditions.

NWMLS director Kathy Estey agreed. "We had our best month since September," she commented, but said sales of homes priced at $1 million or more are still slow compared to the pace of a few years ago. Estey, the managing broker at John L. Scott's downtown Bellevue office, said sales of high-end homes lag in part due to limited availability of mortgages for homes priced above conforming loan limits. (The median asking price for homes currently offered for sale in West Bellevue, a market served by Estey's office, is more than $1.5 million.)

Another MLS director reported a "terrific increase" in first-time buyer activity in Seattle's close-in neighborhoods, calling it the best it's been in almost two years.

"We just had five offers on a Ravenna house priced around $400,000 and it sold for considerably more than the list price," said Mike Skahen, the broker at Lake & Company. He also said another one of his agents represented a client whose offer beat out 10 competitors. "I hope we're seeing the start of the spring selling season," something he said was lacking last year for the first time since starting his real estate career 33 years ago.

In King County, pending sales of single family homes (excluding condos) rose more than 25 percent from March. Of six "sub-areas" the MLS tracks within the county, North King County (encompassing Shoreline, Lake Forest Park and Kenmore) and the Eastside areas had the strongest month-to-month gains. Compared to March, pending sales of single family homes for April shot up nearly 52 percent in the North King County map areas, and rose more than 35 percent on the Eastside.

Prices for sales of single family homes and condos that closed last month in King County continued to lag year-ago totals (down 15.3 percent), but edged up from March (up 4.5 percent). For single family homes (excluding condos), the median selling price for April's sales was $350,000, up 4.4 percent from March.

Condominium sales area-wide were down about 7.5 percent from a year ago, but up significantly (40.8 percent) from the previous month. In King County, which accounts for about six of every 10 condo sales, pending sales were down 8.1 percent from a year ago, but jumped nearly 42 percent from March.

Tacoma broker Dick Beeson of Windermere/Commencement Associates also reports the market there is warming up, evidenced in part by increased traffic at open houses and phone calls. Many first-time buyers are still unaware of the $8,000 tax credit, according to Beeson, who says it is stimulating marginal interest. "It is almost a serendipity to first-time buyers when they discover they qualify."

"Most everyone recognizes that real estate in our region is 'on sale,' and that's certainly validated in the latest report," stated Ron Sparks, managing vice president at Coldwell Banker Bain. Buyer demand has increased to 2006 levels in some notable area neighborhoods, according to an analysis by Sparks, who tempered his optimism by saying, "For the scale between buyers and sellers to balance, it's important that buyer demand begin to increase so prices can stabilize. The MLS report and comments from agents in the field tell us we're seeing some progress in that direction."

Sparks also said in his experience, "highly advantageous buyer markets are pretty rare," so when they appear, he's inclined to advise people confident in their financial position to take advantage of it. He extends such advice to his own children, he admitted, noting one of them just closed escrow and another just made her first offer.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. "This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment," he said in commenting on a new report from NAR that showed a nationwide rise in pending sales for March.

~ Courtesy of NWMLS

Low Rates Won’t Last Forever!

Mortgage rates are currently at historically low levels. We are now enjoying the lowest mortgage rates since they began recording them in the early 1970’s.

Experts are starting to warn that these rates won’t be around forever…if you want to make sure to take advantage of these low rates, now is the time to act!

This week at the Fed Meeting, they discussed the current economic situation and concluded that inflation remains tame, the slowing of the economy seems to be lessening, and the bright spot was consumer spending increased a bit as did consumer sentiment. This may indicate that consumers are starting to feel better about the economy, which may signal the start of a turning point in our economy. When we start seeing economic recovery, interest rates will start to increase.

Another factor that has been keeping interest rates low is the Fed purchasing of mortgage-backed securities, which they began in January. The Fed has now purchased $400 billion in
mortgage-backed securities to date. This has been an action directed at keeping mortgage rates low to help stimulate housing and refinance transactions. However, when the Fed backs out of purchasing mortgage-backed securities the result will likely be higher interest rates.

As Wayne Gretzky once said, “You will always miss 100% of the shots you don’t take.” Today is a great time to secure a historically low interest rate!

~ Courtesy of Wendy Charles, LoanCentral LLC, 425.468.9321, WendyC@LoanCentral.com

Legislature approves program to help first-time homebuyers

Washington REALTORS sent out a press release about a program approved by the state Legislature that would create a loan for first-time homebuyers, so they could get the $8,000 tax credit — available for first-time homebuyers — sooner.

The program approved by the Legislature would allow homebuyers to borrow that $8,000 from a state-sponsored program so they could put the money toward a down payment or closing costs.

From the press release: “The program authorizes the state treasurer to deposit $25 million in a financial institution, which would then open a line of credit for the Washington State Housing Finance Commission (HFC). The HFC would use that credit line to pay for down payment loans to first-time buyers. Buyers repay the advance loan after filing for and receiving the tax credit.”

This is great news and should definitely help the market build and keep momentum going forward.

~ Courtesy of The Capitol Record