Everything Real Estate Related and More!: Positive Signs in the Houseing Market

05/12/2014 at 11:10 am • Posted in Dream Blue, Listing Marketing, Luxury Homes, Real Estate Advice, Real Estate Agent, Real Estate News, Real Estate Trends, Uncategorized by Dick Greenwood • 0 Comments

Positive-Signs-in-the-Housing-Market186331067

A headline saying “Housing Down for the Last 3 Months” conveys a negative thought and does not convey a true picture of the housing market. If the paper printed all the facts, the public would have a totally different perspective on the market. Here are a few facts that should be presented.
First, prices are still increasing, not at the same rate as 2013, but at a rate that almost all economists say is a healthier 4.3%. Volume may be down, but values are up.
Secondly, according to Realtor.com, the number of homes for sale and the amount of time they have typically been on the market have both increased. These are “welcome signs” for the spring buyers. The larger amount of inventory and slower selling times could make homes more affordable in some markets and reduce the frequency of bidding wars.
Third, the spring buying season in the Midwest and Northeast has been pushed back by the weather. Chicago for example had the third snowiest winter in history with many storms coming on the weekends. I know what you are thinking; weather would not deter a home buyer. I can positively say that it does. After 30 years in the new home market where we tracked daily traffic coming into the models, along with the weather, we know that even a little rain keeps people away.
Fourth, we now have job growth and household formations, both of which were on the back burner during the recession. Whenever we have job growth, population growth and growing household formations we have housing demand. Currently, the strongest housing markets are the same ones that have job growth. Chicagoland created 55,000 jobs last year—housing will follow this year.
Fifth, Doug Duncan, SVP and Chief Economist at Fannie Mae reported “compared to last year, consumers are less pessimistic about their personal finances, and more optimistic about the current selling environment and their ability to get a mortgage.” This positive consumer mindset will continue to drive the market.
Sixth, over the last six years, a common thought was that homeownership had lost some of its allure as a financial investment. The Federal Reserve did a study to see if this is true. Here is what they found. A homeowner’s net worth is over thirty times greater than that of a renter. The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100.

share...