National Real Estate Market Shows Home Prices Dropping and New Home Sales Improving
By Admin
According to Housing Wire, release of November data from the Case-Shiller Home Price Index shows that prices continue to drop in most areas, and that Seattle prices are at a record low. While prices are falling, the rate of drop is far less than is was in the initial fall from the peak. Housing Wire forecasts a drop of 5% in prices by the end of 2011.
Concurrently, new construction sales are improving. Another Housing Wire report showed that December new home sales rose 17.5% from November. Improvements in new construction sales, which have been near all time lows, will eventually mean that hiring in the construction industry will improve.
New sales of single-family homes rose 17.5% in December from a month earlier to the highest level since April when the homebuyer tax credit propped up the market.
The Commerce Department said the seasonally adjusted rate of 329,000 units last month was up from a downwardly revised 280,000 for November, yet still 7.6% below 356,000 a year earlier.
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By hdnelson
Each month we try to compare some reports about the national real estate market to what we see in our local markets. While nationally the blog Calculated Risk reported that short sales increased significantly in the 4th quarter, we only saw 27% (a very modest rise if any) of last year’s short sales close in Q4. There was also a report from Marc Hanson that the percentage of REO (bank owned) sales In December fell in California as an overall percentage of sales in that market. In our market the number of closed sales that were bank owned rose from 38 in November to 43 in December (up 12%). Our market agrees with the article that $200-300k is the new normal for homebuilders. The article shows that the percentage of sales in the west under $300k was 42% in 2007, but is now 65%. In Kitsap County, the percentage of sales under $300k was 54% (1945 of 3615 total sales) in 2007 and in 2011 was 72% (1829 of 2538 total sales). More at http://tinyurl.com/7pljyjx
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By hdnelson
The number of closed sales in Kitsap County in January fell about 37% from December and was about 6% lower than a year ago. Pending sales rose about 42% compared to last month and were about 16% higher than a year ago. In December, there were 195 closed sales and 191 pending sales. In January there were 123 closed sales and 275 pending sales. 48% of the closed sales were distressed properties (compared to 32% last month). 46% of the pending sales were distressed properties (compared with 38% last month). Among closed distressed sales, bank owned sales were more than 3 times the number of short sales closed. This month we will report that the median price dropped sharply. This reflects the higher percentage of sales that were distress properties. More at http://www.prowserealestate.com/Blog/Kitsap-Real-Estate-Market-Report-February-2012
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By hdnelson
The influential real estate and economics blog Calculated Risk has posted that “The Housing Bottom is Here”. He differentiates between new home sales increasing - this is happening already - and housing prices reaching a bottom, which he thinks nationally will occur in March 2012.
There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices (especially if prices fall another 4% to 5% NSA between the November Case-Shiller report and the March report). Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales.
See http://www.calculatedriskblog.com/2012/02/housing-bottom-is-here.html
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