Housing Market Rock Bottom?

There is talk and indicators that the housing market might be reaching the bottom. According to the latest data housing prices tumbled nearly 19 percent, but for the first time in 16 months the decline did not set a new record. It’s the first time since October 2007 that the S&P Case-Shiller 20-city home price index has not hit a record low.

Is the bottom getting close? It looks like some investors and those that were playing the fence seem to think so. It will take several more months before we truly know but signs are pointing to the housing economy stabilizing. The local market seems to be picking up. The phones are ringing, the sun is out and contracts are being locked up. Homes that have been up on the market for the past six months to a year are now starting to fly off the shelf. If you would have told me two years ago that you could buy a four bedroom two and half bath home with two-thousand plus square feet for $225k or less, in King County, I would’ve wet my pants with laughter?

It’s an investor and first-time Homebuyer’s field day. There are one and two bedroom Bank Owned REO Foreclosure condos available for under $100k, duplexes and four-plexes under $350k -yes in King County. If you do the math that means with the right amount down and the correct program from William Doom you’ll be paying less for mortgage than you would for rent or in the case of an investor positive cash flow out of your property – a win-win situation. What more could you ask for? If you’re in a position to get into the game or expand your portfolio DO NOT hesitate chances like this come once in a lifetime.

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The Market Is Heating Up, Be Prepared for Multiple Offers

The days of rock-bottom housing prices may be reaching an end.

According to the National Association of REALTORS, the number of Existing Home Sales fell by a modest 140,000 units last month. It’s the fifth straight month in which home sales straddled the 4.5 million mark.

The national housing inventory is down 900,000 from its July 2008 peak.

These are two encouraging signs.

Meanwhile, in a separate report, the Commerce Department said the supply of newly-built homes for sale is at a 7-year low. This, too, is a positive signal for housing.

Home values are based on supply and demand.  If the number of homes for sales falls while the number of buyers stays constant, home prices will rise.  This is because the same number of buyers are competing for fewer properties.  It’s basic economics and that may be what we’re seeing right now in the marketplace.

But the balance could shift further.  Remember: the March housing data doesn’t account for first-time home buyers that used the $8,000 First-Time Homebuyer Tax Credit.  Because the stimulus package didn’t pass until February, buyers on the program likely hadn’t closed on their respective homes before March data was released.

There’s a big piece of the demand side of the equation unaccounted for, in other words, and if you’re an active home buyer now, you’re probably hearing a lot about multiple-offer situations and seeing this action first-hand.

Data from the housing market hasn’t been outstanding, but it’s definitely not looking worse.  Sales levels, inventories and home prices appear to be leveling off nationally and the number of active seems to rising.

Overall, it points to higher home values ahead.

Request a FREE List of Seattle REO Bank Owned Foreclosures!

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Update On 2009 First-Time Homebuyers Taxcredit

Rer IRS Website:

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

http://ftp.irs.gov/newsroom/article/0,,id=204672,00.html

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Mortgage Rates April 17, 2009 – Mortgage Week In Review

Seattle Mortgage Rates increased April 17, for a second day as MBS posted another day of losses.  Week over week rates are posted a 10bp improvement.  Although there was 3bp improvement lenders sill took advantage of the decline in MBS and increased Mortgage Rates.  Feel Free to contact Your Mortgage Planner William Doom to discus Home Financing. april17mbs

Overall rates remain low for the time being, thanks to the FEDs Subsidy Suppression program.  The FED continued its weekly protocol purchase of Agency Mortgage-Backed Securities Purchase Program.

Gross purchases from April 9 through April 15: $30,400 million
Net purchases from April 9 through April 15: $21,750 million

With respect to housing data, news is rarely positive or negative on a universal level. There’s always two perspectives to consider, after all.

  1. The home buyer’s perspective
  2. The home seller’s perspective

Usually, when data is beneficial to one group, it’s less beneficial to the other.  This is true for rising home prices, average days on market and so forth.

Today, the group that gets the most benefit from data is the home seller group.

Published Thursday, a government report showed that Housing Starts fell 11 percent nationwide in March and also fell short of analyst expectations.  A “Housing Start” is a new housing unit on which construction has started.

The press is calling this a stumbling block for the economy, but that’s not exactly true.

Fewer Housing Starts last month means that fewer new homes will come on the market later this year.  This is not necessarily bad news.  Especially if you’re planning to sell your home in the latter half of the year.  With fewer homes for sale, the supply-and-demand curve should shift in favor of home sellers.  This helps stabilize home prices at a time when they might otherwise be prone to fall.

If it’s true that stable housing markets are key in an economic recovery, then fewer Housing Starts is actually a push in the right direction.

But there’s more to the story (as always).

As footnoted in the Commerce Department’s report, a statistical disclaimer states that the Housing Starts data’s Margin of Error was so high that the report’s conclusion is just a guess.  Technically, the entire report is invalid anyway

So, the government won’t issue its final March 2009 Housing Starts data for months, but if the initial figures stick, home sellers may be in position to command higher sale prices later this year to the detriment of home buyers.  It’s basic economics.

And from a home seller’s perspective, that news is good.

[where: 98109]

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