Northeast home sales are poised for a big spring bounce
In the latest sign of a bottoming real estate market, the National Association of Realtors said June 2 that its seasonally-adjusted index of sales contracts signed jumped for the third straight month, surging 6.7% in April compared to March and 3.2% compared to April 2008. It was the biggest monthly gain since October 2001 and the first year-over-year gain since August.
Pending home sales are considered a leading indicator because sales are typically finalized a month or two after contracts are signed.
Interestingly, the Northeast appears to be heading for a big bounce in home sales. The Pending Home Sales Index in the Northeast (made up of New England, New York, New Jersey and Pennsylvania) rose 32.6% from March and 0.8% from April 2008. Of course, not all of those contracts will lead to sales because mortgages can fall through and some contracts are contingent on a buyer selling a home elsewhere.
The Realtor group doesn’t breakdown the statewide pending home data but spokesman Walter Moloney told me that Maine, Rhode Island, and parts of New Jersey are beginning to “recover.”
It seems that the federal government’s $8,000 tax incentive for first-time buyers is working.
Vincent Valvo, group publisher The Warren Group, which puts out housing reports on New England, said first-time buyers are likely using the federal credit to buy foreclosed homes and other deeply-discounted properties.
But the activity does not yet constitute “such a wave that it will overcome all the housing problems we’ve had,” he said. “But it is better than it was.”
The state associations usually don’t track pending sales. But the Massachusetts Association of Realtors has just started collecting that data, though it doesn’t adjust for seasonal variations. For what it’s worth, single-family pending sales in Massachusetts increased 18.4% in April compared March but declined 8.5% compared to a year earlier.
Tuesday, June 2, 2009
Pending Home Sales Rise for 3rd Straight Month
By Phil Mintz
Contracts signed show a big jump, especially in the Northeast, another indicator the market may be bottoming.
Low interest rates and an $8,000 tax credit for first-time home buyers helped push pending home sales up for the third month in a row, another indication that the decline in the real estate market may be stabilizing, the National Association of Realtors reported on June 2.
The group's Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7%, to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008, when it was 87.5, the group said. Economists surveyed by Thomson Reuters (TRI) had expected the index would edge up to 85 from a reading of 84.6 in March. It was the biggest monthly jump since October 2001.
Pending home sales activity was greatest in the Northeast, where the index increased 32.6%, to 78.9, in April, 0.8% above a year ago. The only region that showed a decrease was the South, where the index declined 0.2%, to 93.0, 3.5% higher than a year ago. In the Midwest the index rose 9.8%, to 90.4, and is 11.1% above April 2008. In the West the index rose 1.8%, to 94.8, but is 2.9% below a year ago.
Very Favorable Conditions
Lawrence Yun, the group's chief economist, said buyers are responding to very favorable market conditions, and while the total number of existing-home sales is expected to improve, there will be sharp local variations. "The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline," Yun said in a news release.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing-home sales.
Paul Dales, U.S. economist for Capital Economics in Toronto, said in a report that if the April increase in pending home sales is reflected fully in existing-home sales numbers, it would bring them to an annual rate of 5.1 million, a level last seen before the collapse of Lehman Brothers in September.
"The pending home sales index has now improved for three months in a row, adding to the evidence that housing activity is finding a floor," Dales wrote. Nevertheless, even if existing-home sales were to rise to 5.1 million, they would still be 30% below their peak. Accordingly, even if activity is finding a floor, it is at staggeringly low levels."
The Associated Press contributed to this report.
Mintz is news editor for BusinessWeek.com in New York.
Contracts signed show a big jump, especially in the Northeast, another indicator the market may be bottoming.
Low interest rates and an $8,000 tax credit for first-time home buyers helped push pending home sales up for the third month in a row, another indication that the decline in the real estate market may be stabilizing, the National Association of Realtors reported on June 2.
The group's Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7%, to 90.3 from a reading of 84.6 in March, and is 3.2% above April 2008, when it was 87.5, the group said. Economists surveyed by Thomson Reuters (TRI) had expected the index would edge up to 85 from a reading of 84.6 in March. It was the biggest monthly jump since October 2001.
Pending home sales activity was greatest in the Northeast, where the index increased 32.6%, to 78.9, in April, 0.8% above a year ago. The only region that showed a decrease was the South, where the index declined 0.2%, to 93.0, 3.5% higher than a year ago. In the Midwest the index rose 9.8%, to 90.4, and is 11.1% above April 2008. In the West the index rose 1.8%, to 94.8, but is 2.9% below a year ago.
Very Favorable Conditions
Lawrence Yun, the group's chief economist, said buyers are responding to very favorable market conditions, and while the total number of existing-home sales is expected to improve, there will be sharp local variations. "The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline," Yun said in a news release.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing-home sales.
Paul Dales, U.S. economist for Capital Economics in Toronto, said in a report that if the April increase in pending home sales is reflected fully in existing-home sales numbers, it would bring them to an annual rate of 5.1 million, a level last seen before the collapse of Lehman Brothers in September.
"The pending home sales index has now improved for three months in a row, adding to the evidence that housing activity is finding a floor," Dales wrote. Nevertheless, even if existing-home sales were to rise to 5.1 million, they would still be 30% below their peak. Accordingly, even if activity is finding a floor, it is at staggeringly low levels."
The Associated Press contributed to this report.
Mintz is news editor for BusinessWeek.com in New York.
Monday, April 27, 2009
A New Look (For Our Website)
We have continued to make improvements to our website, which we would invite you to take a look at if you haven’t recently…www.WaterfrontPropertiesOfMaine.com.
A major change is that we have added some outstanding photos of the state of
Other recent improvements include “Interactive Maps” for each category of waterfront property, which lets you locate each listing on a map of Maine – and each listing now has a “Body of Water” button, which, when clicked, will give you extensive information on the lake, river or coastal area where the property is located.
Stay tuned for future improvements…
Monday, April 6, 2009
"Now" is the Time to Buy...
There is an old saying in real estate circles: “NOW is always the best time to buy”. Why? Because it is always a good time to buy a good piece of real estate, at a good price -- if it meets your needs.
Historically, real estate in the United States has always increased in value over the long run – and it is the best wealth building tool available to individuals -- plus for the majority of Americans, it ends up being the largest slice of their net worth and financial estate.
Today, given the current market conditions, many professionals think this is the best buying opportunity in decades:
1) Selection: There is an unusually large inventory of properties to choose from.
2) Prices: There has been an average decline in prices of 20-30% since the peak of the market 2 years ago.
3) Interest Rates. With decent credit, 30 year fixed mortgages at 5% (and perhaps going down to the 4% range) are historic lows, making lower priced housing even more affordable.
4) Timing: Because of real estate’s cyclical nature, sooner or later the inventory will decline (it is already starting to be absorbed by bargain hunters), prices will level off, interest rates will start to rise, sellers will become less flexible…and the bottom will be behind us. We think buyers will have this unique opportunity through the first half of 2009 before the market begins to change -- as it always does.
________________________________________________________________________
Historically, real estate in the United States has always increased in value over the long run – and it is the best wealth building tool available to individuals -- plus for the majority of Americans, it ends up being the largest slice of their net worth and financial estate.
Today, given the current market conditions, many professionals think this is the best buying opportunity in decades:
1) Selection: There is an unusually large inventory of properties to choose from.
2) Prices: There has been an average decline in prices of 20-30% since the peak of the market 2 years ago.
3) Interest Rates. With decent credit, 30 year fixed mortgages at 5% (and perhaps going down to the 4% range) are historic lows, making lower priced housing even more affordable.
4) Timing: Because of real estate’s cyclical nature, sooner or later the inventory will decline (it is already starting to be absorbed by bargain hunters), prices will level off, interest rates will start to rise, sellers will become less flexible…and the bottom will be behind us. We think buyers will have this unique opportunity through the first half of 2009 before the market begins to change -- as it always does.
________________________________________________________________________
Sunday, March 22, 2009
Our Stimuls Program: Save Hundreds, Maybe Thousands.
Housing has always led the way out of economic downturns. To play our part in re-invigorating the real estate market, Waterfront Properties of Maine will contribute 20% of their commission to our Buyer’s closing costs on any sale completed before July 1, 2009. Depending on the size of the sale, this could amount to several hundred – to possibly several thousand dollars in savings…
Tuesday, March 3, 2009
Obama's Stimulus Program: Free Money, Other Perks
With the signing of the American Recovery and Reinvestment Act of 2009, the federal government has made some bold and unprecedented moves to stimulate the housing market.
America’s home buyers and homeowners will soon have:
1) Lower interest rates for home mortgages, probably in the 4% range.
2) A greater ability to get financing through FHA, Fannie Mae and Feddie Mac in high cost areas.
3) Foreclosure mitigation and short sale standards.
4) A true tax credit incentive to buy a home NOW. If you are a first time home buyer or have not owned a home in the last 3 years, and you purchase a home this year of 2009, have an adjusted gross income of less than $75,000 ($150,000 on a joint return), then it is likely that you will qualify for $8000.00 tax incentive which is almost FREE money that you won’t have to repay, unless you resell your home in the next 3 years.
For more details, you can go to either http://www.federalhousingtaxcredit.com/2009/faq.php or to http://mainerealtors.com/First-TimeHomebuyerTaxCreditFAQ.pdf.
America’s home buyers and homeowners will soon have:
1) Lower interest rates for home mortgages, probably in the 4% range.
2) A greater ability to get financing through FHA, Fannie Mae and Feddie Mac in high cost areas.
3) Foreclosure mitigation and short sale standards.
4) A true tax credit incentive to buy a home NOW. If you are a first time home buyer or have not owned a home in the last 3 years, and you purchase a home this year of 2009, have an adjusted gross income of less than $75,000 ($150,000 on a joint return), then it is likely that you will qualify for $8000.00 tax incentive which is almost FREE money that you won’t have to repay, unless you resell your home in the next 3 years.
For more details, you can go to either http://www.federalhousingtaxcredit.com/2009/faq.php or to http://mainerealtors.com/First-TimeHomebuyerTaxCreditFAQ.pdf.
Tuesday, February 3, 2009
Fall In Home Prices Boost Sales
Fast-dropping interest rates and the most affordable homes in more than three decades helped prop up the staggering residential real estate market in December, according to a report released Tuesday.
The pending home sales index increased 6.3 percent to 87.7 in December, the first gain since August, according to the National Association of Realtors. The December figure is also 2.1 percent higher than the same month in 2007.
The closely watched index is a forward-looking indicator based on contracts signed in December -- or basically the number of home sales in process. The West region had a mixed report with the index declining 3.7 percent to 97.5, but was 17.5 percent better than December 2007.
“The monthly gain in pending home sales spurred by buyers responding to lower home prices and mortgage interest rates more than offset an index decline in the previous month,” NAR chief economist Lawrence Yun said in a news release. “The biggest gains were in areas with the biggest improvements in affordability.”
The NAR’s Housing Affordability Index increased 10.9 percent to 158.8, the highest since the index started in 1970.
“Significant uncertainty still clouds the housing market despite improved affordability conditions,” Yun said. “For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified buyers.”
February 3, 2009
San Francisco Business Times
The pending home sales index increased 6.3 percent to 87.7 in December, the first gain since August, according to the National Association of Realtors. The December figure is also 2.1 percent higher than the same month in 2007.
The closely watched index is a forward-looking indicator based on contracts signed in December -- or basically the number of home sales in process. The West region had a mixed report with the index declining 3.7 percent to 97.5, but was 17.5 percent better than December 2007.
“The monthly gain in pending home sales spurred by buyers responding to lower home prices and mortgage interest rates more than offset an index decline in the previous month,” NAR chief economist Lawrence Yun said in a news release. “The biggest gains were in areas with the biggest improvements in affordability.”
The NAR’s Housing Affordability Index increased 10.9 percent to 158.8, the highest since the index started in 1970.
“Significant uncertainty still clouds the housing market despite improved affordability conditions,” Yun said. “For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified buyers.”
February 3, 2009
San Francisco Business Times
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