The current buzz among the real estate industry, as well as the mortgage industry, is the question, or may I say the concern, of the condition of the real estate market after April 30. April 30 marks the expiration of the home-buyers tax credits and March 31 marks the end of Fed's mortgage-buying program. Both of these changes are expected to make a definite impact on the mortgage industry. The Augusta Chronicle recently published an article quoting the Associated Press:
"Concerns remain that home sales will weaken after March 31, when the Federal
Reserve is set to end its program to buy mortgage securities to keep home loan rates
low. Once that program ends, mortgage rates could rise. Adding to the worries, a
newly extended homebuyer tax credit is set to run out at the end of April. Once the
Fed's mortgage-buying program ends, analysts say rates could rise as high as 6
percent for 30-year loans."
How much of an impact these changes will make is unknown. The first quarter of 2010 has not been as strong a market as we normally experience, yet we are still hopeful.
As we look at our local real estate market at the close of 2009, our December, figures compared with November, for resales, show us an average list price down 9.25%, at $119.092; average days on the market up 6%, 144 days; and closings, down 6%, at 221. Our new construction market, since spring of 2009, has been experiencing an increase in sales: December shows average list price relatively unchanged, $196,422, days on the market up 2.5%, 160 days, and closings down 3%. The cost per square foot on new construction has dropped significantly since March, 2009, resulting in resale homes competing with new houses. Why this drop? MLS stats show us new construction inventory peaked in June, 2008 at 4172 active MLS listings. Material prices have dropped, so in an effort to sell off the high inventory of product, builders became willingly and able to work for lower rates.
Focusing on our current market, typically spring ushers in not only warmer weather, but a warming up of the real estate market. Listings are normally up and buyers slowly begin swarming the market. Though it is still a little early yet, so far this spring has been quite different. The Multiple Listing stats are showing:
MARKET COMPARISON REPORT OF 01-1-09 to 3-12-09 & 01-01-10 to 3-12-10
Residential Properties New & Resale Property:
2009 2010 Difference Percentage
Units Dollars Units Dollars Units Dollars Units Dollars
689 101.152,006 658 98.206,195 -31 -2,945,511 -4.50 -2.91
Note: the average sales price on these properties is $149,250 for the period in 2010, with that same time in 2009, the average being $146,810. These figures tell us that prices are down, which are a result of high inventory and most likely foreclosures in the market bringing down values. The first-time homebuyers tax credit helped to push up sales last fall, 2009, in the lower price points, but the new move-up buyer tax credit fell short of accomplishing which it was designed to do and that is increase sales in the higher price range, therefore, depleting the high inventory of homes on the market.
Remember, our local; real estate market is still quite steady compared to the rest of the nation. We remain hopeful. Though we have experienced drops, they are not really significant ones. There are some great real estate deals to be had. Stay informed. Knowledge is power. I will keep you updated.