Copy for Real Estate Guide Column for 8-14-09

REAL ESTATE PATTERNS
By Ken DuVall

ASK AND YE SHALL RECEIVE!

Pending U.S. home sales rose in June for the 5th straight month, another encouraging sign of life in our embattled housing market. For June, the pending home sales index rose 3.6%. The last time there were 5 consecutive monthly gains was back in July 2003. The results were far “better than analysts expected”, which seems to be the new mass media mantra! Nevertheless, amen.

The jump in pending home sales coincides with other positive trends in the residential market. That market is healing and the patient is getting healthier at an accelerating pace according to most industry analysts.

For the first time in 5 years, home resales have risen for 3 months in a row, increasing almost 4% in June. Low prices, attractive mortgage rates, and the first-time homebuyers’ $8,000 tax credit (which is now expected to be extended) have kick-started sales.

Essentially, housing’s is so affordable now, coupled with the tax credit, have become bigger factors in influencing sales. Experts expect existing home sales to gradually rise over the balance of the year, with conditions varying around the country. But I anticipate an unpaved road along the way.

Losses shrank from the year-ago period, as builders across the country took smaller charges against the falling values of its land and unsold homes. More encouraging news: new-home orders picked up during the first half of the year. It appears home sales are on a sounder footing and inventory is gradually being absorbed.

The REALTORS Confidence Index measures the strength of the current housing market and future expectations. Using data from the survey of a panel of REALTORS, we respond to questions regarding current and expected demand, price of homes, and other economic conditions. Our answers are then used to create the index. The current month’s report uses responses of 2993 REALTORS from all over America. For the most part, we feel the indicators are encouraging.

It has been the worst housing recession anyone but us really old folks can remember. From the frenzied boom peak in 2005 to 2006 to the trough earlier this year, home resales fell 38% and new home sales tumbled 76% as construction skidded 79%. And for the first time in 40 years, home prices posted consecutive annual declines. A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath. The worst- barring some extreme global event- for the moment is apparently over. By every measure, except for ongoing foreclosures and job losses, the housing market appears to have stabilized and in many areas is on the comeback trail. Nationwide, home resales in June are up 9% from January, and new home sales have climbed 17% in the same period. Construction has risen nearly 20% since the first of the year.

What more could we ask for at this point in time, without seeming like the “Fisherman’s Wife”?

Ken owns Ken DuVall & Associates, REALTORS at 3rd Ave. & Mangrove in Chico. Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year. See Chico MLS listings and all my columns at www.KenDuVall.com. Call Ken at 345-3700 for all your real estate needs. Free consulting.