That’s right… GOOD NEWS… We’re seeing it everywhere by all the “Market Experts.”
Some of the headlines:
“Americans Expect 1.4% Increase in Home Prices: Fannie Mae,” HousingWire (June 6, 2012)… More Americans are optimistic that home prices will inch up over the next year, with expectations that prices will rise at least 1.4 percent in that timeframe. That marks the highest amount ever recorded in Fannie Mae’s monthly National Housing Survey. Thirty-four percent — also the highest ever recorded — of the 1,000 respondents in the May housing survey say they expect to see a boost in home prices in the next year.
“Inventory of For-Sale Homes Falls 20% From Year Ago,” Daily Real Estate News, (June 13, 2012)… The number of homes on the market continues to become a shrinking pool. Inventory of for-sale single-family homes, condos, townhomes, and co-ops dropped 20 percent in May compared to year-ago levels, according to data from REALTOR.com of 146 markets.
“The shadow inventory fell nearly 15% annually and is now similar to October 2008 levels.” CoreLogic (June 14, 2012)… The number of properties pending foreclosure or REO, but not yet on the market to sell, is down year-over-year in April. The shadow inventory supply now stands at 1.5 million units, representing a four-month supply, down from a 6 month supply in January.
“The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said Mark Fleming, chief economist for CoreLogic. “This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”
Do National Real Estate Headlines Actually Influence Local Markets? This is a question we are frequently asked. Local real estate professionals know the best information for either buyers or sellers is local market data. However, we must realize that what happens in the national real estate market dramatically impacts regional and local markets. For example:
Are 30 year mortgage interest rates in North Dakota under 4% because of what happened in the their market over the last few years? Of course not. They benefit from lower rates because of what happened in the national economy (if not the world economy).
Buyers all over the country are concerned about the reports of distressed properties about to come to market and what impact they will have on house values. The truth is only a handful of states will be adversely affected.
However, if overall consumer confidence is shaken, every market is impacted. This is why it is important that you work with a real estate professional that understands three things:
1. What the national headlines are saying and why they are saying it
2. What impact the issue may or MAY NOT have on your local market
3. How to simply and effectively explain both of the above to you
Agents who just ignore national headlines are hiding their heads in the sand. Agents who use the headlines as scare tactics to unfairly influence the actions of their customers are engaging in unethical behavior. Agents who take the time to keep abreast of the national real estate issues and are patient in explaining how these issues will impact you in the local market are true professionals.
The first two types of agents could cost you dearly. The last group will maximize the outcome of your real estate transaction – both personally and financially.
So back to the headlines… What is the Real Story?
Celebrate the return of even a smidgen of optimism … not by the professionals but by the public. This is the energy that will begin to drive a recovery. That’s not to say that we will not hear bad news in the future… We will bump along this rocky valley for some time…. But rays of sunshine are starting to burst through the clouds!
In the interim, or for that matter from this point forward, get the facts… not every deal is a good deal… consult a professional who understands your market.
May the market be with you.
