Bright Outlook For Housing Market Activity Revealed - Unsold Homes Declining

May 3, 2007

Overall housing market indicators improved substantially in many areas of the country during the first quarter of 2007.  This, despite the concern over sub-prime mortgage lending problems and a rise in foreclosure procedures.  (according to the results from the latest HouseHunt “Current Market Conditions” nation survey of member agents.  Inventories of unsold homes are trending downward; annual positive price appreciation is up; buyer-seller ratios are more balances; average time on the market from listing to sale is improving; and more home sellers say they are getting 95-100% of their asking price.

• Inventory of unsold homes – After steady buildup.  59% of member agents reported that the number of unsold existing homes in their exclusive territories was either down or about the same as a year ago.  Latest estimate from the Nation Association of Realtors ® (NAR) is a 6.7 month supply which is down from October’s 7.4 month supply.
• Price Appreciation – Sixty-one percent of member agents report positive annual price appreciation compared to only 53% in the fourth quarter of 2006.  Hardest hit region of the country is the Northeast which reported only 21% positive price appreciation.  The Chicago Metro area reported 88% positive price appreciation.
• Buyer-Seller Ratio – Home sellers still outnumber buyers but the ratio is slowly moving toward a more balanced market, which many observers feel was achieved nationally a year ago before moving to a buyer’s market.
• Time On The Market – A vast majority of member agents reported that it is still taking more than 60 days, on average, from listing to contract.  Currently, 78% of the respondents report 60 days or more compared to 84% in the fourth quarter of 2006.
• Asking Price to Sale Price – No change nationally over two quarters.  It’s still 65%.  In the South Region, only 52% report that their sellers are getting 95-100% of their asking price.  In the Chicago Metro area, only 58% of member agents report their clients are getting 95-100%.  “Although not statistically pure, we’ve found over the past four years that our quarterly random survey of top real estate agents in the field is both accurate and timely,” said the president and CEO of HouseHunt.  “Their survey responses tell us what’s going on today in rural and metropolitan markets across the country, not last month or six months ago.  This is vital information for homeowners, home buyers and home sellers actively involved in local markets.”  He sees a tightening of underwriting standards as a long range positive for both consumers and the industry.  “Exotic, no money down and interest-only mortgages are extremely risky at best.  Unexpected reductions in incomes and or property values spell disaster for everyone involved.”  NAR economist David Lereah observed:  “Today’s sub-prime problems are occurring against a backdrop of cyclically low mortgage rates and a growing, healthy economy.  Jobs and liquidity are plentiful in the marketplace, suggesting that the sub-prime problems may be a manageable problem within our $10 trillion-plus economy.

source: RISMEDIA

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