News From the real estate writers
Sunday, April 15, 2012 – By DEREK KRAVITZ and ALEX VEIGA, AP Real Estate Writers
“Five years after the U.S. housing bust sent sales and prices plunging, the spring home-buying season is pointing to a long-awaited recovery. Reduced prices, record-low mortgage rates, higher rents and an improving job market appear to be emboldening many would-be buyers. Open houses are drawing crowds.
And many people seem to have concluded that prices won’t drop much further. In some areas, prices have begun to tick up. Interviews with more than two dozen potential buyers, sellers, brokers, Realtors and economists suggest that confidence is up and that sales will move slowly but steadily higher”
Santa Fe shows signs of prices on the rise! - Aldea Lofts
“The biggest challenge that we’ve had over the past four years is fear — fear that the economy is collapsing, that property values are collapsing, that the world is coming to an end,” says Mark Prather, a broker at ERA Buy America Real Estate in La Palma, Calif. “The fear factor is all but gone.” Prather says the number of prospective buyers who contacted his company last month was about 35 percent more than a year ago.
The spring buying season got an early lift-off from an uncommonly warm January and February — a winter that was the best for sales of previously occupied homes in five years. Permits to build houses and apartments rose in February to their highest level since 2008.
“People feel much more confident,” said Steve Brown, co-owner of real estate company Irongate Inc. of Dayton, Ohio, who says sales jumped more than 16 percent for the first two months of 2012 over the same period last year. “There’s no question there’s a good feeling in the marketplace.”
In Miami, the average sales price has surged 14 percent in the past year, according to Trulia, a real estate data firm. In Phoenix, the average is up 13 percent, in Pittsburgh 9 percent.
Earnings reports Friday from two big banks suggested that more people are taking out mortgages. JPMorgan Chase issued 6 percent more mortgages from January through March than it did a year ago and got 33 percent more applications. Wells Fargo issued 54 percent more mortgages and received 84 percent more applications.
Still, few think the housing industry is nearing a return to full health. For that to happen, a robust job market would be needed. More hiring would give more people the money and job security to buy. That would help boost sales and prices.
Such areas as Atlanta, suburban Las Vegas and central California show few signs of recovery. And in some others — from Seattle to Cleveland — home prices have continued to slip. The average has dropped 9 percent in Seattle over the past 12 months and 7 percent in Cleveland.
But in many parts of the country, including thriving areas of Boston, Dallas and Seattle, confidence is rising along with prices. Among the reasons:
- Hiring has strengthened. Each month from January through March generated a solid average of 212,000 jobs. Unemployment has sunk from 9.1 percent in August to 8.2 percent. More job security tends to embolden more people to invest in a home. In Dayton, for example, the University of Dayton is hiring for a new engineering research center, General Electric is hiring hundreds of contractors and the nearby Wright-Patterson Air Force Base are expanding.
- Loans remain cheap. The average rate on a 30-year fixed-rate mortgage is 3.88 percent. That’s just above the 3.87 percent reached in February — the lowest since long-term mortgages were first offered in the 1950s.
- Homes are more affordable. Nationwide, home prices are down 34 percent since 2006.
- Americans are more confident. The Thomson Reuters/University of Michigan’s survey of consumer confidence rose in March for a seventh straight month to its highest level in 13 months.
Also fueling interest are signs that home values are finally stabilizing. One factor that had slowed purchases after the housing boom ended in late 2006 was fear that a home would lose value soon after its purchase.
But the price declines slowed toward the end of 2011, according to the Wells Fargo/Case-Shiller home price index. And CoreLogic says the average price nationally rose slightly in January and February.
“Unless prices went down, I don’t think we would have ever been able to afford a home,” said John Henschel, 37, an information technology consultant who will move with his family into a five-bedroom house in Wheaton, Ill., in May. “But we feel like prices aren’t going to go back down. We’re confident. So why not?”
On a rainy Saturday this month in long-struggling Riverside, Calif., 12 families visited a three-bedroom house priced at $199,999. Ten others stopped by in the first hour of the next day’s open house. By the end of the weekend, two buyers had made offers.
“We’re seeing more buyer activity this spring than we’ve seen in probably four years,” said Liane Thomas, the broker who was showing the house.
Prices in the area could rise in coming months because the supply of homes for sale in Riverside is down — from nearly 19,000 last year to 13,000 in February.
The average time a home sits on the market in Phoenix has dropped from 114 days last year to 90 days, according to the Cromford Report, a data research group.
In suburban Washington, D.C., Rory Obletz and his wife have been saving to buy after renting for six years. Obletz, 27, failed in two previous bids for single-family homes. He’s hoping a third bid — about $10,000 above the asking price of $399,000 for a home in Silver Spring, Md. — will succeed this month.
“One home we went to, it was under contract by the time we walked out of the house,” Obletz said. “If you really want to get something, you don’t have a lot of time to think about it.”
It isn’t just bargain-hunting families seeking homes. Investors are increasingly buying single-family houses, fixing them up and re-selling them or converting them into rentals.
Investors are out-bidding many first-time buyers on cheaper homes in particular. Sales of homes between $100,000 and $250,000 have jumped nearly 19 percent over the past year. For homes between $250,000 and $500,000, sales are up 13 percent.
So with these changes, now is a good time to invest in the Aldea Community of Santa Fe. Live Work Lofts are a great value with tremendous opportunity for increase in value as the commercial area around the Plaza develops.
Call for a tour: 505.603.9300
For more information, visit Aldea Lofts, www.AldeaLofts.com