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Existing home sales and prices dip this year – good news or bad?

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Existing home sales

Each month, the National Association of Realtors (NAR) measures existing home sales which indicate transactions that closed on resale homes. With the home buyer tax credit incentive expired on April 30th, the real estate sector is looking closely at economic indicators and keeping tabs on the pulse of the aftermath of doing without the tax credit.

According to NAR, “existing-home sales remained at elevated levels in May on buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates,” having declined nationally by 2.2% between April and May. After experiencing a 7.6% rise in April compared to March, May’s numbers are not alarming despite a small dip, especially given that existing home sales are up nearly 20% over May of 2009.

Some had forecasted a major drop in activity in May after the April 30 tax credit expiration, but closings will still be impacted through the summer, so the breath holding isn’t quite over.

Home prices

According to the FHFA, home prices rose a marginal 0.8% from March to April after a 0.1% increase in March. Although it is a regularly referenced index, the FHFA home price index is not a complete picture however, as it is calculated based on purchase prices of homes backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.

Although existing home sales are doing relatively well, looking to home price indices as an economic indicator won’t prove to excite or motivate the industry, given that home prices have fallen 1.5% nationally in the last 12 months (ending in April) but more importantly have fallen 12.8% from the real estate sector’s peak in April 2007.

Some note that home prices dipping a bit is good news as it is motivating to buyers, while others note that this is part of the overall cycle and that prices were over inflated to begin with. Given that home sales are still strong, do you think a dip in home prices is good news or bad news?

CC Licensed image courtesy of heather_joy via Flickr.com.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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13 Comments

13 Comments

  1. Joe

    June 22, 2010 at 5:00 pm

    “Existing home sales and prices dip this year – good news or bad?”

    Wellll, depends on whether you are a buyer or a seller, eh! 🙂

  2. Dunes

    June 22, 2010 at 9:03 pm

    If you add this to the Pot..

    Traffic to real estate sites down 24%… inman.com/news/2010/06/22/social-networking-sites-gobble-more-traffic

    Maybe it depends on if you are an Agent, eh!

  3. King Of Homes

    June 22, 2010 at 9:38 pm

    EVERYTHING NOW DAYS IS TIED TO AFFORDABILITY.

    When the banks decides enough is enough they will start raising interest rates. If the government does not have their act together BEFORE the rate adjustment then our industry and the country along with it will be in ruins.

    FHA needs to do a 40 and 50 year loan option NOW so payments will be more affordable and obtainable in the future when the banks DO make thier move. (REMEMBER the banks will not raise interest rates until the FED does and the Federal Government has a great influence on when this will happen.)

    Only when we are able to have the interest rates back to more reasonable place and stability in home prices will we truly be on the road to recovery. EVERYTHING NOW DAYS IS TIED TO AFFORDABILITY.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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