Havasu Home Talk

My friend Katie Murphy at Hi-Tech Mortgage here in Lake Havasu City emailed this to me this week.  It’s an excerpt from the 10/23/09 Existing Home Sales report by Steven A. Wood, Chief Economist for Insight Economics:

Existing Home Sales ROSE by 9.4% in September to 5.57 million, compared with market expectations for a smaller increase to 5.35 million. - This increase has lifted sales to their highest level since July 2007. - Over the past year, existing home sales have increased by 9.2%. However, this is 23.2% below their September 2005 record high. - About 45% of sales were estimated to be to first-time home buyers, spurred by low prices and the home buying tax credit from the government. - About one-third of sales were estimated to be distressed.

The Inventory of Homes Available for Sale FELL by 7.5% to 3,630k. With this decline, the inventory of homes available for sale is now 15.0% below its year ago level. This reduced the months supply to 7.8, its lowest level in since March 2007. This is supply is significantly lower for relatively low priced homes and substantially higher for relatively high priced homes. However, there appears to be a large “shadow” inventory of homes available for sale, both from homeowners who have kept their homes off the market because of low prices and from financial institutions temporarily holding foreclosed homes off the market.

Home Prices continued to decline compared to their year ago levels. Over the past year, average prices have fallen by 6.5% while median prices have tumbled by 8.5%. Year-on-year prices have declined in 37 of the last 38 months and are still falling moderately, partly reflecting a shift in the composition of sales to lower priced homes and partly reflecting the much lower prices associated with distressed sales.

Bottom Line: Existing home sales peaked during the summer of 2005 and fell steadily through November 2008. - Since then, there has been a moderate recovery in sales. - However, a significant number of the sales are of distressed properties, which is depressing home prices. - The inventory of homes available for sale has fallen substantially over the past year and is now only modestly above “normal” levels. - Anecdotal evidence suggests a substantial ‘shadow’ inventory that would come onto the market if sales (and especially prices) were to pick up. - Home prices have been falling on a year-on-year basis for 3 years but there is some evidence that the pace of decline is beginning to slow.

Don’t forget that there’s a time change happening this weekend everywhere…Well, almost everywhere except for here.  Arizona is one of only a couple states who do not participate in Daylight Savings Time – our clocks always stay the same!

So, remember that all your friends in different states are about to “Fall Back” an hour – and they’re going to be on different times come Sunday morning.

Daylight savings time ends at 2:00 am on November 1, 2009 and the clocks in our neighboring states will be set back 1 hour.

Interesting article emailed to me from the National Association of Realtors this week:

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to latest survey. The Pending Home Sales Index rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5. Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month.”

We’re experiencing similar things in Lake Havasu City.  We’ve had continued increased sales activity, and short sales are definitely taking some time to close.  If you are interested in taking advantage of the First Time HomeBuyer Tax Credit you should be making an offer right now!  It needs to close by the end of November to qualify.