The National Association of Realtors® reported today nine consecutive months of gains for Pending Home Sales. This according to the association this is a first for the series of the index since its inception in 2001.
The Pending Home Sales Index, is a forward-looking indicator based on contracts signed in October, the index rose 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2. Basically it is a predictor of homes that will close in the next month or two.
Much of the credit for home sales goes to the tax credit. The Federal tax credit spurred sales in both September and October. Locally, Alameda saw its best two sales months of the year in those months and those 61 days accounted for 31 percent of the sales for the first 10 months period.
Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
If I can summarize what Yun said in the release is: Based on our population we are not buying enough homes, but the tax credit is getting people interested. We can see that happening in Alameda. The challenge is inventory. Until we get more homes on the market the Island will continue to bounce along with the market.
Showing posts with label Tax Credit. Show all posts
Showing posts with label Tax Credit. Show all posts
Tuesday, December 1, 2009
Thursday, November 19, 2009
Double Digit Growth in 2010???
So I was reading this morning that Fannie Mae is forecasting "predicting" an 11% growth in home sales for 2010.
If true . . . this is good news because this has been a deep and long recession and there has been a lot of negative news for at least two years. From what I see in the market make it hard to believe the Fannie Mae economists that are projecting sales of new and existing homes will jump 11 percent next year and that national home prices will stabilize, remaining essentially flat.
The second I can believe that prices will stabilize and will be flat for a year or more, but 11% growth with very little inventory is hard to understand. The inventory will have to come from banks releasing foreclosed holdings and stimulus buyers trying to step up. This is all reliant on financing becoming more accessible for higher priced homes.
Even more optimistic is the mortgage guarantor's monthly housing forecast with sales of existing homes growing by 10 percent, to 5.46 million and new-home sales are expected to rebound by 24 percent.
Our little Alameda market has seen very little movement over the past three months in inventory but sales have been brisk in the same period. November already has 18 sales and is on pace to exceed 2008's 32 sales.
Sales on the Island (January to October) are pacing slower this year compared to last. So to see a big change locally is difficult. The one unknown is the change in the tax credit that now runs until April 30 to be in contract.
The first-time homebuyer tax credit spurred national home sales in the third-quarter, but I am not sure that the boost in sales are sustainable without the government assistance. Job loss will continue to put pressure on home sales, fear of job loss will keep many out of the market. It is my belief that housing will rebound when jobs come back.
If true . . . this is good news because this has been a deep and long recession and there has been a lot of negative news for at least two years. From what I see in the market make it hard to believe the Fannie Mae economists that are projecting sales of new and existing homes will jump 11 percent next year and that national home prices will stabilize, remaining essentially flat.
The second I can believe that prices will stabilize and will be flat for a year or more, but 11% growth with very little inventory is hard to understand. The inventory will have to come from banks releasing foreclosed holdings and stimulus buyers trying to step up. This is all reliant on financing becoming more accessible for higher priced homes.
Even more optimistic is the mortgage guarantor's monthly housing forecast with sales of existing homes growing by 10 percent, to 5.46 million and new-home sales are expected to rebound by 24 percent.
Our little Alameda market has seen very little movement over the past three months in inventory but sales have been brisk in the same period. November already has 18 sales and is on pace to exceed 2008's 32 sales.
Sales on the Island (January to October) are pacing slower this year compared to last. So to see a big change locally is difficult. The one unknown is the change in the tax credit that now runs until April 30 to be in contract.
The first-time homebuyer tax credit spurred national home sales in the third-quarter, but I am not sure that the boost in sales are sustainable without the government assistance. Job loss will continue to put pressure on home sales, fear of job loss will keep many out of the market. It is my belief that housing will rebound when jobs come back.
Monday, November 9, 2009
More Homes and Buyers Qualify Under Tax Credit
I wanted to give a bit more information on the newly signed tax credit because it will have an impact on our local market since it now includes both first time buyers and move-up buyers. The biggest plus for the Alameda market is the legislation increases the income limit for buyers.
Under the prior credit it would have been very difficult for someone to purchase in Alameda give the income limit and the ability to qualify for a loan at the median price. Now that both first time and “move up” buyers, income limits have been increased to 125,000 dollars for single filers and 225,000 dollars for joint filers it is more reaslist for Alameda and Bay Area buyers.
The tax credit is only available on homes priced under 800,000 dollars but with the current Alameda inventory that includes that includes 82 of the current 119 properties for sale; 70 percent.
Similar to previous tax credits, first-time buyers are still eligible to receive up to 8,000 dollars, but this time “move-up” buyers are also eligible to receive up to 6,500 dollars, and income limits have been significantly raised across the board.Here are a few key points about this new tax credit:
To be eligible for the “move up” buyer tax credit, you must have been living in your principal residence for five consecutive years out of the last eight.
To take advantage of the tax credit you will need to make a qualified home purchase before April 30, 2010 and it has to close by June 30, 2010.
Given current interest rates, the tax credit and prices lower than we have seen in about eight years it may be time to start looking for a home in the non-traditional selling season.
ZipRealty put together an informationa video on the tax credit.
Inventory Data November 9, 2009
Under the prior credit it would have been very difficult for someone to purchase in Alameda give the income limit and the ability to qualify for a loan at the median price. Now that both first time and “move up” buyers, income limits have been increased to 125,000 dollars for single filers and 225,000 dollars for joint filers it is more reaslist for Alameda and Bay Area buyers.
The tax credit is only available on homes priced under 800,000 dollars but with the current Alameda inventory that includes that includes 82 of the current 119 properties for sale; 70 percent.
Similar to previous tax credits, first-time buyers are still eligible to receive up to 8,000 dollars, but this time “move-up” buyers are also eligible to receive up to 6,500 dollars, and income limits have been significantly raised across the board.Here are a few key points about this new tax credit:
To be eligible for the “move up” buyer tax credit, you must have been living in your principal residence for five consecutive years out of the last eight.
To take advantage of the tax credit you will need to make a qualified home purchase before April 30, 2010 and it has to close by June 30, 2010.
Given current interest rates, the tax credit and prices lower than we have seen in about eight years it may be time to start looking for a home in the non-traditional selling season.
ZipRealty put together an informationa video on the tax credit.
Inventory Data November 9, 2009
|
Friday, November 6, 2009
News Alert: Tax Credit for Homebuyers Signed
Normally I do not post RE news on Friday, but big news today. President Obama signed a homebuyer tax credit this morning. The just enacted tax credit that applies to more buyers than ever before, and you may be one of them.
Similar to previous tax credits, first-time buyers are still eligible to receive up to 8,000 dollars, but this time “move-up” buyers are also eligible to receive up to 6,500 dollars, and income limits have been significantly raised across the board.
Here are a few key points about this new tax credit:
- To be eligible for the “move up” buyer tax credit, you must have been living in your principal residence for five consecutive years out of the last eight.
- For both first time and “move up” buyers, income limits have been increased to 125,000 dollars for single filers and 225,000 dollars for joint filers.
- The tax credit is only available on homes priced under 800,000 dollars.
- To take advantage of the tax credit you will need to make a qualified home purchase before April 30, 2010.
Have a great Friday and even better weekend.
Subscribe to:
Posts (Atom)