More Sales, Less Inventory : Home Prices Headed Higher?
The housing market continues to signal that a broad rebound is underway.
In October, despite sparse home inventory, the number of properties sold increased 1.4% nationwide.
According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, October Existing Home Sales gained 70,000 units as compared to September, registering 4.97 million existing homes sold overall.
An “existing home” is a home that has been previously occupied and, as compared to prior months, the stock of homes for sale is depleted.
Just 3.3 million homes were listed for sale last month. This represents a 2 percent drop from September and marks the sparsest home resale inventory of 2011.
The current home supply would last 8.0 months at today’s sales pace — the fastest rate since January 2010.
The real estate trade group’s report contained other noteworthy statistics, too :
- 34 percent of all sales were made to first-time buyers
- 29 percent of all sales were made with cash
- 28 percent of all sales were for foreclosed homes, or short sales
It also said that one-third of transactions “failed” as a result of homes not appraising for the purchase price; failure to achieve a mortgage approval; and, insurmountable home inspection issues.
This 33% failure rate is huge as compared to September 2011 (18%) and October 2010 (8%). It underscores the importance of getting pre-qualified to purchase, and of selecting a home “in good condition”.
For today’s home buyer, October’s Existing Home Sales may be a “buy signal”. Supplies are falling and sales are increasing. Elementary economics says home prices should begin rising, if they haven’t already.
Remember : The data we’re seeing is already 30 days old. Today’s market may be markedly improved already.
The good news is that mortgage rates remain low. Freddie Mac reports that the average 30-year fixed rate mortgage rate is 4.000% with 0.7 discount points, making homes as affordable as they’ve been in history.
With rising home values, you may end up paying more to purchase your new home, but at least you’ll pay less to finance it.
How much are properties listing and selling for in your neighborhood? Get the latest data with weekly updates – free, fast & easy:
….or, call us now
Norma Wall, Broker, 214-212-6770
or Marian Porter, Broker Associate, 214-577-7766
Contract Changes – Tail Wags Dog!
Prisoner in your own property
By Norma Wall, Broker
I work with buyers. I work with sellers. I play fair. I expect others to play fair.
Sometime the rules of engagement swing a bit too far in favor of one party, and that causes what I refer to as “tail wags dog” syndrome.
One example of this, in my opinion, is a proposed change to the Texas Real Estate Contracts, that throws the seller under the bus, or in jail in his own property, and it goes as follows:
Utilities
Under the current sales contract forms, the seller agrees to turn utilities on for inspections. Under the proposed changes, the seller agrees to have the utilities on during the entire time the property is under contract.
The following is a copy of an email I sent to general.counsel@trec.texas.gov regarding proposed change:
I am strongly opposed to this change.
Many sellers have moved to other states. Many properties are vacant, distressed, short sales or foreclosures.
Keeping utilities on during the entire contract period is not a good practice from a property preservation or economic standpoint. This requirement would place an unnecessary hardship on the seller.
It is important to shut off utilities after inspections to protect the property. The most common problem is undetected water leaks that can flood the entire property from something as simple as a commode seal, or a visitor who leaves a commode running. Hot water heaters are another common problem. Vandals recently stole pipe from outside water faucets on one of my foreclosures and the water ran in the back alley for several days before it was detected.
P.S. – We’re in STAGE 3 DROUGHT – how much water do you think is lost simply because of vacant properties?
Many banks have specific requirements that their foreclosed properties be WINTERIZED from the moment of possession, year round. They must be dewinterized for the inspection and winterized again immediately after the inspections, year round. There is no option or negotiation.
Listing agents on foreclosures normally pay the utilities and file for reimbursement from the banks; many banks will only pay if invoices are submitted within 21 days of closing – the city water departments take twice that long to bill. The listing agent is stuck paying utility bills and not getting reimbursed.
From an economic standpoint (regardless of showing instructions or real estate guidelines) the selling agent and/or his buyer will enter the property and leave lights on, AC or heat blasting, running the utility bills. Banks have limits on how much they will pay, and careless actions like this run the expenses far above the amount allowed by the seller – in which case the listing agent is held responsible for the overage.
I’ve personally had to change the keybox combo to keep them out of the property without making an appointment. One agent in particular kept giving his client the combo so many times that I had to change the keybox 4 times before we closed!
Please consider these issues before making a final decision.
Yours truly,
Norma J. Wall
Broker 0425586 | North Point Realty | 214-212-6770
