Being a Realtor can be a pretty hard job, there are long hours and disappointments, punctuated by the occasional sale—which these days is a “drop everything emergency” and “get the deal to close moment”. But the business has its quiet times too. And so it happened that I was fishing in Lemon Bay this week with a couple of potential clients, and they asked about the “market”. I was happy to share the news, the housing market’s long, cold winter may finally be in a springtime thaw.
New data show that the price declines we've all seen are easing in big cities, and sales of new homes improving. Many economists see the easing of foreclosures as key, since the glut of these properties being sold at a discount has been a significant drag on both existing and new home prices.
The Sarasota local daily paper had a front-page story on how the “pending” sales were way up. Let me say that I personally have had two homes under agreement (pending) for nearly 6 months. The offers came in the “owners” agreed to the price, but the banks (who need to approve the deals) have been sitting on their hands for weeks and weeks. So “pending” is not the leading indicator it once was in better times, back then a pending deal took about 1 month between the accepted offer and the close of escrow and occupancy of the home. This is like saying the number of "engagements" is way up, so the weddings will follow--but maybe not...
“The foreclosure market is drying up. Banks may be shy to load the market with their inventory, or they are waiting for the Administration to require them to allow the former owners to rent the houses back. In any case, if it continues, it will likely mean that we’ve either seen a bottom—or have passed a bottom—in prices because of limited supply and still strong demand.”
The US economy overall has been improving, with unemployment, retail sales, corporate profits and other measures showing steady if unspectacular gains. Housing has been one of the last holdouts, but analysts note that prices have stabilized and sales volume has been gaining.
Notices of default, which are the first step in the foreclosure process, fell in the first three months of the year, a 17.6 percent drop from the same period last year. Banks still retain many foreclosed properties on their books, and some analysts have predicted that housing prices could weaken again if lenders dump these properties into the recovering market. But any long-feared “second wave” seems to be increasingly unlikely.
Low interest rates and the availability of bargain-priced properties are drawing more buyers into the market. Although don’t think that the low price mortgages are all that easy to get. You still have to pretty much prove to the lender that you don’t need the money, in order to get them to consider you as a borrower.
Several factors continue to hold back a major turnaround in housing, including a weak job market, tight mortgage lending standards and the huge number of homeowners who can't sell the home they no longer want to live in--these are the folks who would like to retire to Florida or elsewhere but they owe more on their mortgages than their homes are worth, leaving them essentially stuck in their properties. And until we get a major housing recovery, the broader economy, and the Florida market, will suffer.
New-home sales nationally fell 7.1 percent in March from the previous month, the Commerce Department said Tuesday, but don't worry about that too much, it was partly because Commerce revised February sales figures up significantly. Even though the figure for March was the lowest since November, overall sales of new homes are up about 16 percent for the first three months of the year compared with 2011, the department said. The report helped boost the Dow Jones industrial average 74.39 points to 13,001.56. That improvement means that new-home sales in April and May will probably be stronger than last year, which were the worst on record.
But just as the Robins portend the coming of Spring, and the Crocus tells a gardener that it’s time to get the seeds in the ground, moving vans tell more about the health of a real estate market than any of the “cooked books” the industry tries to sell you. And there are moving vans on the highways now. My opinion: it looks like this Nuclear Winter is about over.
Dane Hahn is a real estate professional in Englewood and the SW coast of Florida. You can reach him at dane.hahn@gmail.com or by phone at 941-681-0312. On the web see him at http://www.danesellsflorida.com/