Home sales hit new low
July 25th, 2007, 10:51 am · 1 Comment · posted by mistywilliams
Sales of existing homes across the country hit a nearly five-year low last month, falling 3.8 percent from May to a seasonally adjusted annual rate of 5.75 million units. That’s also down 11.4 percent from June 2006, according to the National Association of Realtors.The group’s senior economist, Lawrence Yun, said a mix of hesitant buyers, rising interest rates and tightening lending standards are hampering sales.Still, the number of existing homes for sale dropped by 4.2 percent in June. And the median price hit $230,100, up 0.3 percent from the same month last year. That’s the first time in 11 months the median was higher than the year-ago price.
August 3rd, 2007 at 7:37 am
“One of the problems is the number of homes on the market,” says Hanif Burt of House Buyers Investment Group LLC TheAzHouseBuyers.com). In November, there were more than 20,000 homes for sale in Maricopa County. That’s 3 times more than just a few months ago, so people have more choices than before. They can take more time making their decisions… and they have more power to negotiate. “Another issue, the price of homes jumped up extremely fast… but the jobbing market pretty much stayed the same,” says Burt. Some homes have increased over $100,000 in price. How many people have received a $100,000 raise in a year? So people just can’t afford these high prices. In short, even though the market won’t drop off, our prices will become flat, and analysts don’t see the market getting any better. Also, lenders have now tightened their guidelines for 100% financing, moving to 95%. They are now requiring down payments. This effectively takes buyers out of the market because it’s tougher for buyers to come up with 5% on a 200K house. This leaves more supply over demand… making it more difficult for houses to be sold. Come September, lenders will now require those refinancing or buying to qualify at the higher interest rate for any arm type of loan. In short, many will not be able to refinance from their already high payment into a better one. Also, many will simple not qualify with this new guideline in place. In short, this both puts even more inventory on the market at a time when real estate becomes traditionally slow for the holiday mounths
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What does all of this mean for you? Well in short, selling your house now may be difficult. Selling down the road may be even more difficult because of the limited buyers in the market and home affordability. “We will have a summer frenzie that will help”, says Hanif Burt of House Buyers Investment Group LLC TheAzHouseBuyers.com), but it will be at least another year or two until prices start to climb. For more information visit http://www.TheAzHouseBuyers.com.