Is the market slowing?

I don't think I agree with everyone who has said that the market is slowing. It's the holidays and everyone is focused on that for now. Those folks who really want to buy are out there looking. In fact today I had clients out looking. I have another client who just settled on her new place yesterday so people are out there buying homes. Dec. and Jan. are slow times anyway. The debate continues. Here's something from REALTOR Magazine that I thought was interesting.

From the National Assoc. of Realtors:
Existing-Home Sales Ease as Mortgage Rates Rise(December 29, 2005) -- Existing-home sales declined in November while home prices sustained double-digit annual gains, the NATIONAL ASSOCIATION OF REALTORS® reports. Total existing-home sales—including single-family, townhomes, condominiums and co-ops— eased 1.7 percent to a seasonally adjusted annual rate of 6.97 million units in November from a pace of 7.09 million in October. Sales were 0.1 percent below the 6.98 million-unit level in November 2004.David Lereah, NAR’s chief economist, says higher mortgage interest rates were responsible for moderating sales, but notes that it’s important to keep an eye on the actual level of home sales given the market surge this year. “The current pace of home sales activity remains historically strong—only eight months have had a higher sales pace,” he says. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”The national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.33 percent in November, up from 6.07 percent in October, according to Freddie Mac. The rate was 5.73 percent in November 2004. Last week, Freddie Mac reported the 30-year fixed rate eased back to 6.26 percent.The national median existing-home price for all housing types was $215,000 in November, up 13.2 percent from November 2004 when the median was $190,000. The median is a typical market price where half of the homes sold for more and half sold for less.NAR President Thomas M. Stevens from Vienna, Va., says housing inventory levels are improving. “As more listings of homes come on the market during this period of modestly declining sales, more home buyers will find themselves in a better position to negotiate,” says Stevens, senior vice president of NRT Inc. “Most home sellers will see excellent returns on their investment, but should understand that double-digit annual increases will become less common in the coming year.”Total housing inventory levels rose 1.2 percent at the end of November to 2.90 million existing homes available for sale, which represents a 5-month supply at the current sales pace.Single-family home sales were down 1.9 percent to a seasonally adjusted annual rate of 6.11 million in November from 6.23 million in October, and were 0.5 percent below a 6.14 million-unit pace in November 2004. The median single-family home price was $213,500 in November, 13.5 percent higher than a year ago.Existing condominium and cooperative housing sales slipped 0.8 percent to a seasonally adjusted annual rate of 857,000 units in November from a level of 864,000 in October. Last month’s sales activity was 2.0 percent higher than the 840,000-unit pace in November 2004. The median condo price was $225,300, up 10.7 percent from a year ago.Regionally, total existing-home sales in the South eased by 0.7 percent in November to a level of 2.74 million, but were 3.8 percent higher than November 2004. The median price in the South was $184,000, up 8.2 percent from November 2004.Existing-home sales in the Midwest slipped 1.3 percent to annual pace of 1.56 million in November, and were 0.6 percent below a year ago. The median price in the Midwest was $170,000, which was 10.4 percent higher than November 2004.Total existing-home sales in the Northeast declined 2.7 percent to an annual sales rate of 1.09 million units in November, and were 4.4 percent lower than November 2004. The median price in the Northeast was $250,000, up 9.2 percent from a year ago.Existing-home sales in the West fell 3.7 percent to a pace of 1.58 million in November, and were 3.7 percent below a year ago. The median existing-home price in the West was $328,000, up 19.3 percent from November 2004.—NAREditor's Note: For more housing market statistics and research reports,visit NAR's Research Department at REALTOR.org.

Talk in the News

Here's an article that I thought was interesting. There's so much real estate news out there so whenever I run across something I find interesting, I'll share.

How to Bargain for a HouseAs the Real-Estate Market Cools
By Ruth Simon From The Wall Street Journal Online
Home buyers are finally starting to catch a break.
After years of soaring real-estate prices -- not to mention periodic bidding wars for third-rate properties -- inventories of homes for sale are rising in many parts of the country. As a result, some buyers are regaining long-lost bargaining power.
That gives buyers in many markets more room than they have had in years to push sellers to sweeten the pot. Buyers are asking for, and often getting, concessions ranging from help in paying their closing costs to money for repairs or redecorating.
This Rhode Island home got new landscaping before being shown.

And sellers in many markets -- including once-hot areas like Phoenix, San Diego and Boston -- are finding that they can no longer just slap a price on their home and expect it to move quickly. Increasingly, they are being advised to set more realistic pricing expectations and to spruce up their property with fresh paint or some new plantings out front to stand out from the crowd.
In Rhode Island, where active listings are up 43% from a year earlier, some agents are going even further. Broker Ron Phipps recently offered the buyer of a 2,200-square-foot waterfront condo priced at $550,000 a two-year lease on an Audi TT sports car. The buyer applied the $18,000 value of the lease to the purchase price instead -- then bargained with the seller to kick in an additional $7,000 for closing costs and a new air-conditioning system.
The re-emergence of tactics like these is notable because it could signal the end of a prolonged seller's market in some parts of the country.
Some sellers are even cutting list prices outright. In Phoenix, where the number of homes on the market has climbed to 17,000 from 5,400 three months ago, "we're now constantly getting emails that prices have been reduced," says Charles McLean, broker-owner of Century 21 Metro Alliance. His advice to sellers: go "all-out" with marketing tactics like open houses. As recently as this summer, that wasn't only unnecessary, it was often impossible -- properties sometimes were selling in as little as 24 hours.
In Northern Virginia, Elaine Raabe, the buyer for three stores run by the local Realtors association, says she's having trouble keeping signs that say "price reduced" in stock. For the previous two years, she says, "you couldn't keep an 'under contract' sign in the building."
In San Diego, Steve Krescanko of Century 21 Award is advising clients to offer the buyer's broker a 3% commission instead of 2.5%. On a two-bedroom, two-bathroom home in Escondido, Calif., that recently sold for $420,000, the seller combined a 3% payout to the broker with $6,500 toward the buyer's closing costs.
Buyers can get help with closing costs near San Diego.

Of course, home sales traditionally slow in the fall. And if mortgage rates remain low, sales could bounce back in the spring. New-home construction surged in September, according to the Commerce Department. Sales of existing homes held steady at their second-highest level on record in September, according to the National Association of Realtors, or NAR. (That's partly because of a boost from Katrina refugees buying homes.)
And many "price cuts" right now are actually deceptive: Sellers who overpriced their properties are being forced to roll back expectations -- but they're still getting more than they probably would have for the same property a year ago.

Home

I'm sitting in a hotel room this morning trying to decide what I'd like to do today. I should try to do some work but the truth is, I'm home visiting family for the holiday and I really shouldn't do any work at all. Went to my sister's house yesterday and saw the new grandbabies. They are so cute! Of course I would say that right? No, really they are. Miles Houston and Justus Horatio are sweet little boys who will grow up to be fine young men. They'll probably be best friends and tell each other secrets and have a great time giving their mothers fits. Horatio was premature so he's a bit on the small size for his age and isn't doing some the things that most seven month olds would be doing but for the most part, he's ok. He has to wear a head helmet though because one side of his head is a little soft and pushed it which makes look even more adorable. I'm taking lots of pictures with them too. My parents would be so proud.

I'm going to my hometown today. Mom and dad are buried there and I may go visit their gravies but probalby not. Every time I go to Vicksburg I think I should go visit their graves but I never do. Probably because it will just make me very sad. I'll play it by ear. One of my favorite things to do when I go to Vicksburg is visit Sholly's Hot tamales. They have the best tamales on the planet! No one comes close. Donna's had me on a diet lately and Sholly's doesn't fit but I may have to veer from the diet slightly for Sholly's. It's an old Vicksburg tradition and has been in business since the early 1900s. I'll play that by ear too.

Anyway, I'm home.

Going home

It's been a busy past few days and not much has been going on in the real estate world. All the news pundits say the bubble has popped but of course you know that's not true. Not much has been going on lately because everyone is consumed with the holidays. I'm just finishing my holiday cards now and I'm headed to Miss. for the next couple of days. Dec. is a slow time in real estate. I do have a client who's closing on a new house next week though so I've been a little busy. I also have a new listing. It's at 3468 24th St. SE. It's a great 3 bedroom, 2 bath house that's been recently renovated and it has parking! Check it out on longandfoster.com. I don't have my website up and running yet so I'm directing you to L & F's site instead. While I'm in Miss. I plan to do some work on the site and get it up and running so I'm looking forward to your feedback. My Dec. has been busy. I also passed the exam for my VA license so soon I'll be able to sell there too.

A trip home is always a mixed bag for me. Since my parents are both deceased most of the joy of going down there is gone. My brother and sister are still there as well as several nieces, nephews and grandnieces and nephews but it's not the same. When my mom was alive she would always cook a favorite meal and attentively listen to whatever I had to say for myself. My dad was very quiet but he and I would get into wonderful discussions about politics and football. No matter what, I could always count on them to be impressed by anything I talked about. My mother would let me know she was impressed by saying "gone girl." I loved hearing her say that. I miss talking to them both.

While I'm in Miss. I may check out real estate. In my hometown of Vicksburg the houses are real cheap. The house I grew up in wouldn't sell for more than $65,000 if we put it on the market today. It's amazing how different home values are from place to place. The house I live in now is worth more than my sister's and brother's houses combined.

I'm taking my computer with me so I'll be able to stay in touch. I'll keep you posted. In the meantime, I wish every one of you a happy and safe holiday.

Is it spring yet?

I guess it's officially winter. It's so cold out there and no one wants to be out, especially me. In my business, however, being out is how I make my living. Selling real estate requires going out into the elements every day, looking at houses, taking clients out to look at houses, checking on properties that you have as listings, etc. It's hard work but this is also one of the busiest times of the year for me.
Stop believing what you read in the Washington Post or hear on the radio. The housing market is not cooling off as all the media pundits want people to think. It's Dec., things natually slow down over the next couple of months. Many people are too busy shopping for Christmas to think about shopping for a home, even if they need one. Lots of people have houses to sell and there are a lot of buyers out there. Usually in Dec. though, the people out looking are investors looking for bargains. Unfortunately for them and others out there looking, sellers still think the market is the same as it was six months ago. It's not. The market is balancing out and sellers are not getting those outrageous prices they got six months ago but they think they still can. If you're planning on putting your house on the market in the next couple of months and you really need to sell it, be realistic about the price. What you get for your house is what someone will pay for your house, as I've said often here. It's play money anyway. What I mean by that is if you took out a mortgage of $250,000 for your house and you paid $20,000 actual out of pocket for down payment and closing costs, if you sell it for whatever you sell it for, you'll reap more than what you put in so it's a profit. The mistake I think sellers make is that they forget about the costs associated with keeping a property operating while they "wait for my price." While you wait for your price, you continue to pay the mortgage every month, the utilities, the taxes, maintenance, etc. I did an open house Sunday for someone in my office and the seller is determined to "get her price." She won't budge on the price but she also won't spend any money to make the place show better. It's been on the market more than 30 days. It will sell eventually but in the meantime, she's had to pay two mortgages, upkeep on two places and all she needs to do is invest $20,000, fix it up, reduce the price another $20,000 and call it a day. I think people loose sight of their goal to sell the home.
Anyway, busy week for me this week. I've been working none stop for about a month now trying to achieve my goals by the end of the year. It's not impossible, I'm actually very close to it now but I have to keep working until the end of the year to insure that I reach it. I do plan to stop on Dec. 30 regardless and not do anything real estate related until Jan. 3.
Got to run and get ready for the day. Enjoy yours.

News you can use

Two items in USA Today today that I need to point out about the housing market:

1. Home prices up 12%, U.S. says
WASHINGTON (AP) — Average U.S. home prices jumped 12% from the third quarter of 2004 to the same period this year, a slowing from the record pace of the previous quarter but a strong increase, federal regulators reported Thursday.
The figures released by the Office of Federal Housing Enterprise Oversight, the agency that oversees the big mortgage finance companies Fannie Mae and Freddie Mac, were the latest sign of a gradual cooling of the red-hot housing market. The Commerce Department reported Tuesday that sales of new homes jumped to an all-time high in October, in what could be a final spurt from a housing market that is expected to slow after five record-breaking years.

2. Rates on 30-year mortgages dip for second week
WASHINGTON (AP) — Rates on 30-year mortgages fell for a second consecutive week, but analysts believe the future direction will be up as the Federal Reserve keeps tightening credit to keep inflation under control.
Mortgage giant Freddie Mac reported in its weekly survey Thursday that rates on 30-year, fixed-rate mortgages averaged 6.26% this week, down from 6.28% last week.
Rates for 30-year mortgages hit 6.37% three weeks ago, the highest level in more than two years. Analysts attributed the two weeks of declines to market uncertainty over the economy.
"Mortgage rates are in a holding pattern at the moment as financial markets try to discern where inflation and growth in the economy are headed," said Frank Nothaft, Freddie Mac's chief economist.
"Until the market decides these issues, mortgage rates should stay within a relatively narrow band," he said.

Lots of media stories will give the impression that the sky is falling and the housing market is tanking. It's not. It's Dec. so the market is doing what it always does this time of the year. If you're not in the market for a house are you going to be out in the cold going to open houses? Probably not. If you are in the market for a home, don't pay attention to the media. Trust me, reporters enjoy making something seem more important than it is, they look for bad news at every turn. I used to be a reporter so I know how they think. Anyway, this is still a great time to buy and it's a great time to sell. If you want to do either, give me a call.

Who flipped the switch?

Winter is creeping in, it's getting colder and I can't stand it! I grew up in Miss. and before I moved here I had seen snow twice in my life. I moved here when I was 28 years old and it snowed the day the moving van arrived with my furniture. That was a nice welcome to your new place. Anyway, every year I say I'm going to be ready for the winter cold and every year I'm not. This year is no exception! It's cold this morning and all I want to do is stay in bed under the warm covers. But of course I can't do that.
Today I'll be attending an all day real estate seminar sponsored by the RE association I belong to, GCAAR. I'm truly looking forward to it because there have been three similar events this year, two in the area and one in San Francisco and I couldn't go to because I had transactions in play and I needed to be here. What they do at these events is talk about the market and what's going on. Realtors from all over the area come and share their experiences, thoughts, concerns, ideas and it's an excellent way for someone like me who's new to the business, to learn a lot. I've told you my thoughts about what the market is doing. In my next post I'll share what other RE agents think the market is doing and what you should do if you're planning to buy or sell a home in the near future.
I'm working on a new website. When it's up and running I'll give you the address so you can check it out. If there's anything that you'd like to see on my site let me know.
Also, check out my new listing at www.homesdatabase.com/ajrealestate. It's a great house in Brookland located at 812 Buchanan St. NE. The list price is $425,000. If you're interested in seeing it or you know someone who's in the market, please contact me.
Must go start my day. Enjoy the rest of your day and remember, you can rest when you die.