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Health & Fitness

Buy? Sell? Some REALLY Good News About the Realty Market

Real Estate Market Gains? Sellers are Selling. Buyers are Buying. Short Sales and Foreclosures are down. Most think that the real estate market has turned around. Or has it?

 

Real estate is finally looking waaaay better for home buyers and sellers.

Of course for Realtors® like me, such news today made me so happy that I followed up my rare high calorie meal at KFC with a rare big hot fudge sundae at Baskin-Robbins.

Find out what's happening in San Clementewith free, real-time updates from Patch.

Well, look, we Realtors haven’t had much good news in a long time. Naturally, we celebrate all good news, but this is VERY special news worthy of a diet-buster lunch like I had.

The bearers of this good news were my old friends, the father and daughter home loan team of Bob and Katie Howe of Irvine. They sent me the yummy-good data on the housing market improvement and so, extending my joy, I thought I’d blog this most salient info on to you. So here goes…

Find out what's happening in San Clementewith free, real-time updates from Patch.

If you look at the less-demanding standards of the past few years, the latest housing figures actually DO look pretty good.

On September 25, the Standard & Poor’s Case-Shiller Home Price Index showed a 1.2% price gain in July compared to a year earlier. And better yet, prices have risen for three consecutive months.

The National Association of Realtors (NAR) reported on September 26 that sales of existing homes had risen by a whopping 9.3% in August, compared to a year earlier, and that the median price of existing homes sold was up 9.5% over the past year. (Note---NAR and Case-Shiller use different methodologies.)

For the 12 months ended in July, sales of newly constructed homes were up about 25%, a most welcome increase, since new construction means new jobs, even though the total was still only about half of the 700,000 units considered healthy.

Experts are especially impressed that prices of the least-expensive third of homes lead the gains, going up a full 1% between June and July.

Those lower-end homes had received the worst drubbing in the recent housing market collapse. Is this the start of the long-awaited and elusive housing recovery -- one that would bring a stronger economy overall? Or is the market just taunting us as it bumps along the bottom?

"It's for real. This is absolutely for real," says Susan Wachter, professor of real estate at Wharton. The market, she says, is poised to enter a "virtuous cycle" where positive trends will spur more positive trends. "This market recovery will continue," she says, predicting that rising prices will prod potential buyers to buy before prices go up more. That demand will nudge prices up, drawing in even more buyers.

"I have been optimistic about this market for six months or a year," she adds. Several factors have combined to strengthen the market, Wachter says. Extraordinarily low rates have allowed millions of homeowners to reduce their monthly payments by refinancing.

Moreover, Wachter notes, unemployment, while still high at 7.8%, is not rising, and fewer workers feel the threat of layoffs. The stock market has been very strong, making those with investments feel wealthier.

Worries about a shadow supply are easing. "People are less likely to walk away when they see prices rising," she says.

In the San Clemente/San Juan Capistrano/Dana Point area, I’ve noticed a sea-change in highly motivated home sellers’ willingness to sell when the comps finally showed their home worth a certain pre-determined figure that they’d been waiting for.

And most buyers have finally realized that with fewer and fewer foreclosures and short sales on the market they’d better buy now or face higher prices every month that they wait.

It’s nice to see my clients happy about buying or selling again, and it makes me so happy that tomorrow, maybe I will get my husband to accompany me to the Cold Stone Creamery for a shake. Questions about real estate? Click on my picture or link listed here in Patch.

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