The North Fulton Blog

It's been a while since I posted anything to my blog but I did want to post before year's end.  Some of what I'm posting is from the December issue of Real Estate Trends.  I thought this was a good summary of recent 2009 activity and an outlook for 2010:

The year draws to a close with the strongest month of sales increases seen since the 2003-2005 period. In fact the increase from November 2008 to November 2009 (42.9 percent in units closed) may be the largest month over month increase in history. While the average sales price nationally was still down nearly 5 percent, it is also one of the best reports seen in the last four years of sinking unit sales and declining prices.

And, yes much of it was due to the stimulus provided by the lower-than-normal interest rates (courtesy of Uncle Sam buying up a trillion dollars of mortgage backed securities) and the first-time homebuyer tax credit that originally was to have expired November 30. At this point leading brokerage firms will take the largess and count themselves fortunate that this kind of one time supply-side stimulus was available.

Foreclosures will be with us for a while. Estimates of the inventory of foreclosures range as high as 2 million currently; the same sources indicate we may see as many as 2.4 million additional foreclosures in 2010. Foreclosures in the higher priced brackets are just starting to become a factor and should prices drop further we will see more damage of this kind.

As time passes, all manner of changes continue to take place.  We're now told by the head of the FED that the recession is over.  But the unemployment rate continues to remain outrageously high.  And it doesn't show any signs of improving anytime soon.

All indices and survey and reports continue to show improvement in the real estate market.  In July, the new home sales rate increased by 9.6%.  Home prices are starting to move upward once again, mind you at miniscule rates, but improving nonetheless.  More people are out buying homes now than previously this year.  And that's great news for both the economy and for real estate agents!

It seems as we approach the deadline for the $8000 tax credit, everyone is jumping on the bandwagon to increase and extend this measure.  It's about the only program of all the stimulus packages that has worked (along with Cash for Clunkers).  Most comments I've heard are urging a higher amount ($12000 to 15000) and an opening of the tax credit to all buyers.  If that were to occur, I believe we would see a huge improvement to our economy. 

A few side notes:

A little known FHA loan program finances the purchase and renovation of an existing home.  The plan, known as the 203(k) loan lets qualifying candidates borrow a single loan with 3.5% down payment to cover both the selling price and the cost of licensed contract work to improve the property.  Check it out or call me and I'll help you.

Many potential buyers are dismissing the new home market for a variety of reasons.  But why is this market so important?  Each new home built represents about 3 new jobs, and adds about $90,000 to local, state and federal coffers in the form of taxes, permits and fees.  This could be a great benefit to our economy.

Foreclosures are with us for a while longer.  Don't be misled by the good real estate news!  We have several more years of foreclosures with us that will continue to effect the market.  Sadly, many people will lose their homes.  Conversely, my buyers will benefit from the "deals" they'll get on foreclosure properties.  It's my guess, that the real estate market and the economy won't fully recover until we've peaked on the foreclosure market.  That may take some time.

It's been a while since I last posted info here.  I have 7 new listings, one of which is under contract now and 1 that will come on the market shortly.  Some of these are foreclosure sales, but 3 of them are not.  That tells me that homeowners are beginning to feel like the market is turning around.  That's been my feeling, too.  Even though we'll continue to see foreclosures for the new year or two, I don't think we're going to see the continual downward spiral on home values.  As a matter of fact, we've even seen some appreciation in home values.  As we enter the fall, I'm optimistic about the future of the real estate market.  Provided we don't enter a period of high inflation and continued recession, I think 2010 will be a nice year for real estate.  I'm going to share with you several tidbits of info I've come across that I thought were worthy of mention:

• Mortgage rates fell to their lowest level in three months.  The 30 year fixed rate mortgage averaged 5.12% with an average 0.7 point for the week ending Aug 20.
• Nationwide housing affordability during the second quarter of 2009 continued to hover near its highest level in 18 years. 
• National housing prices fell 7.8% in June 2009 compared to June 2008. That's the smallest year-over-year decline in 2009.  The seasonal improvement in home prices is a positive sign, but it's important to note that a decline in distressed sales was responsible for the lower decline value.  If the decline in distressed sales is sustainable and not simply a result of recent foreclosure moratoriums, this could be a first step towards recovery, which will then be followed by outright price increases that will result in continued upward price trends.
• Despite all of the bad news in the media about homeownership and mortgages, most Americans (92%) still believe buying a home is a great investment.
• American homeowners are much more realistic about their own home's values than they were a year ago, but are more optimistic about the future than at any other time in the past year.  More than 60% believe that their own home lost value in the past 12 months.  But homeowners are much more optimistic about the future values of their homes with 81% believing their homes' values will not decline in the next six months.  This survey also indicated that many homeowners could be waiting on the sidelines to sell.  (If this is truly the case, the future could be a lot better than we think)

It appears to me that we're seeing the first signs of an improving real estate market.  All of these signs, from different sectors and surveys, are saying the same thing:  it seems like the market is improving!  I believe there is ample reason for "cautious optimism".  Gosh, I sure hope so!