Home prices edge upward?

From Business Week:

Although it’s too early to say the market has bottomed out, there are some indicators that prices may be stabilizing.

MAKING SENSE OF THE STORY FOR CONSUMERS

· The median price for existing, single-family homes rose 2.2 percent in March in California, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). March marked the first month since August 2007 that the state’s median sales price rose in month-to-month comparisons. According to the C.A.R. sales and price report, the median price of existing, single-family homes stood at $253,040 in March.

· Sales in California have soared in recent months, with existing, single-family home sales increasing 63.8 percent in March to a seasonally adjusted rate of 522,980 on an annualized basis.

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Bidding wars are emerging on foreclosures

From Wall Street Journal:

Real estate industry experts are reporting that favorable home prices in many parts of the country, including California, have ignited bidding wars as first-time buyers compete with investors for many of the same foreclosed properties.

MAKING SENSE OF THE STORY FOR CONSUMERS

· While the inventory of homes for sale still outpaces demand in many areas, inventory is shrinking and some middle class neighborhoods are running into shortages of moderately priced homes. C.A.R.’s Unsold Inventory Index (UII) stood at 5 months in March in California, compared with 12.2 months in March 2008.

· Although home prices in most areas of the country are still lower than a year ago, the Federal Housing Finance Agency (FHFA) reported last week that home prices nationwide rose a seasonally adjusted 0.7 percent in February from January, led by gains on the West Coast. While this is a positive sign for the market, it could mean that the window of opportunity for first-time home buyers is narrowing.

· Many economists and housing analysts predict that the most hard-hit areas of the country, such as Sacramento and San Diego, will be among the first to recover. According to an executive with Lyon Real Estate, if sales of foreclosed homes in Sacramento maintain its current pace, the supply will be exhausted in about one month. For non foreclosures, the executive at Lyon Real Estate speculates that the inventory will be exhausted in about eight months.

· It is important to note that many banks and sellers favor all-cash bids or offers from buyers who seem certain to qualify for financing. In some cases, sellers may choose the offer least likely to fall through rather than the highest bid.

· In some instances, buyers should make offers that are at or above the asking price of a home. If the home is extremely desirable or in a neighborhood that previously was out of many buyers’ price ranges, putting in an offer slightly higher than the asking price may help to seal the deal.

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Mortgage rates drop to record low

Rates on 30-year, fixed-rate mortgages averaged 4.85 percent for the week ending March 26, following an announcement by the Federal Reserve that it is launching a new effort to assist the U.S. housing market. The rate marked a record low in the history of the Freddie Mac survey. The previous low was 4.96 percent set during the week of Jan. 15.

Fast Facts for April 2009

Calif. median home price - February 09: $247,590(Source: C.A.R.)
Calif. highest median home price by C.A.R. region February 09: Santa Barbara So. Coast $715,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region February 09: High Desert $121,970(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 3/26/09 30-yr. fixed: 4.85% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.85% Fees/points: 0.6% (Source: Freddie Mac)