Housing Market Turning the Corner?

There is a strong indication that the housing market may be turning the corner and buyers are getting off the fence. The National Assn of Realtors reported that pending home sales rose in June for the fifth straight month. Most of this has been fueled by the continuing low interest rates, high housing inventories, tax benefits, seller incentives and the bargain prices on many homes. We have certainly witnessed much more buyer activity and deals coming together in just the last 30 days.

Despite what we have been through in this turbulent economy, a recent survey indicates that Americans still believe in the dream of home ownership. According to the June PULSE Top 25 Metropolitan Statistical Areas Survey, 83 percent of consumers believe buying a home is a good financial decision. Those surveyed, which are in their prime home purchasing years (ages 25 to 44), had not been adversely affected by the market in the past several years. About 75% of the survey respondents said that now is a good time to purchase a home because of home price declines.

Consider the following:

1. Today’s headlines indicate that the “Affordability Index” today is the same as 6 years ago (2003) signaling an excellent opportunity for buyers.

2. Case Shiller U.S. housing index shows increased home values for the 1st time in 3 years signaling the probable beginning of the housing recovery.

3. Interest rates today are outstanding – who knows what they will be like next year or the year after. They are at historical lows this year – that we know for sure.

4. Higher inventory levels today are excellent for buyers for 2 reasons:

a. Most Sellers are highly motivated right now (once they see things turn, they will become less motivated – they are tired of the buyer’s market they have been experiencing for 3 long years).

b. Our problem in the past has been not enough inventory to show prospective buyers. Today, a buyer can get much closer to their ideal home (or lot) due to the increased inventory levels and they can get it at a more competitive price.

All in all, it has been challenging and will no doubt continue but we remain focused on the road ahead not the bumps below.

Make it a great weekend. Life is a Gift...Live It!

Gray Nathan
Amanda Mavis
Woodland Dev. & Realty
15563 Railroad St.
Hayward, WI 54843
715-699-4040
nathan@garynathan.com
www.garynathan.com