Bob Brackney on Topeka's Real Estate & Financing Markets

Hello again to everyone,

I would like to apologize for the delay in this posting; the last few weeks have been busy!

It has been busy; in fact the # of sales in the month of June is up nearly 15% over May and the average price is up 13.6%. Lots of homes are starting to move as the “depletion of inventory” numbers would suggest ( just north of 4 months)  It is still true that if the home is priced correctly and is presented well; it sells.

Here is part of an article from REALTOR magazine (reprinted with permission):

Sales Activity Picks Up

Although conditions remain mixed around the country, unpublished snapshot data shows a number of areas are experiencing much higher sales activity than May 2007, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.

“Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing,” Yun says (Yun is National Association of REALTORs chief economist). “It’d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”

Single-family home sales rose 1.6 percent to a seasonally adjusted annual rate of 4.41 million in May from 4.34 million in April, but are 14.5 percent below the 5.16 million-unit pace in May 2007. The median existing single-family home price was $206,700 in May, which is 6.8 percent below a year ago.

Here's how existing-home sales fared across the country:

• Midwest: rose 5.5 percent in May to a pace of 1.16 million but are 16.5 percent lower than a year ago. Median price: $165,300, which is 0.7 percent below May 2007.

• Northeast: rose 4.6 percent to an annual rate of 910,000 in May, but are 15.0 percent below May 2007. Median price: $278,000, down 2.4 percent from a year ago.

• West: increased 2 percent to an annual pace of 1.02 million in May, but are 12.8 percent below a year ago. Median price: $286,600, which is 16 percent lower than May 2007.

• South: slipped 0.5 percent to an annual rate of 1.91 million in May, and are 17 percent below May 2007. Median price: $175,000, down 4.3 percent from May 2007.

Keep in mind the stats from the above article in REALTOR magazine are mostly from April and May information.

With that said here are your End of June stats for Residential homes in Shawnee Co. for the month of June:

Please post your questions or comments.

Thanks for viewing!

Bob Brackney, RECS, e-Pro

Owning Broker

Mortgage Broker

Pending home sales increased just over 6.3% according to the figures release for April ’08 for the Pending Homes Sales Index, a forward-looking indicator based on contracts signed in April. The index is at it’s highest since October ’07 but is still 13% below its level a year ago. Lawrence Yun, NAR Chief Economist (who I quote frequently) released other market predictions this week:

• Affordability getting better. NAR’s housing affordability index has been trending up this year and is projected to rise 15 percentage points to 128.0 for all of 2008. “It appears that more buyers are realizing they can take advantage of a favorable combination of mortgage interest rates, home prices and family income,” says NAR President Richard F. Gaylord. “Overall affordability conditions are the best we’ve seen since the middle of the housing boom in 2004, but with far more choices and much less pressure than buyers experienced four years ago to make an investment in their future. Recent declines in mortgage rates on conforming jumbo loans and a return to sound but not overly stringent underwriting standards will permit more people to qualify for a loan.”

• Mortgage rates to go up. “Although mortgage interest rates will remain historically favorable, they will start to steadily inch up,” Yun said. The 30-year fixed-rate mortgage should rise gradually to 6.3 percent by the end of this year, and then hold at that level for most of 2009.

• Demand for homes only rising. Yun said the underlying fundamentals point to a pent-up demand. “Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,” he said. “The housing market has been underperforming by historical standards, partly because buyers were hampered by mortgage availability issues, but that’s improved and an upturn is more likely. On the other hand, it’s unclear what role consumer confidence will play in the coming months.”

• EHS to see healthy gains in ’09. Existing-home sales should increase from an annual pace of 5.05 million in the second quarter to 5.83 million in the fourth quarter. For all of this year, existing-home sales are expected to total 5.40 million, and then rise 6.3 percent to 5.74 million in 2009. “Sales gains will be greatest in areas that underwent sharp price declines,” Yun said.

• Prices to stabilize in second half of this year. After unprecedented home price declines in the first half of the year, many markets can anticipate stabilizing price trends in the second half. The aggregate median existing-home price is likely to decline 8.4 percent in the first half of this year, and then begin to stabilize in the second half before rising 4.4 percent next year to $213,900. “Policymakers need to be attentive to the fact that many homeowners have seen a reduction in housing equity, or are in an ‘underwater’ situation. More needs to be done on the policy front to alleviate hardships and bring fence-sitters back into the marketplace,” Yun says.

• New-home sales slow to recover. New-home sales will probably fall 31.7 percent to 529,000 in 2008 before rising 12.5 percent to 595,000 next year. Housing starts, including multifamily units, are projected to drop 27.2 percent to 987,000 this year, and then slip 0.6 percent to 980,000 in 2009. “Rising construction costs will provide less room for price cuts on new homes,” Yun said. The median new-home price is forecast to decline 3.1 percent to $239,500 in 2008, and then rise 5.4 percent next year to $252,400.

• A better economic picture. Yun sees an improving economy. Growth in the U.S. gross domestic product (GDP) should be 1.7 percent in 2008 and 2.0 percent next year. The unemployment rate is estimated to average 5.3 percent this year and 5.6 percent in 2009.

• Inflation growing. Inflation, as measured by the Consumer Price Index, is expected to be 3.6 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income should grow 1.4 percent in 2008 and 2.5 percent next year.

Existing-home sales for May will be released June 26; the next forecast and Pending Home Sales Index will be released July 8.

Bob Brackney, RECS, e-Pro

Owning Broker

Mortgage Broker

portions of this post are reprinted with permission from REATOR® magazine.

Hello again to everyone,

As we thought the end of month stats are much improved over the mid month. The Average SOLD price recovered almost enough to go to the green. The newly included stat of inventory depletion is in the red because the # of "new to the market" out paced the "SOLDs".

One other interesting stat: According to Showing Solutions, Inc., a showing coordination service provider used by a majority of Topeka’s real estate brokerages, the number of showings in June is up 8% over May and up 14% over April.

End of May Stats:

Please post your questions or comments.

Thanks for viewing!

Bob Brackney, RECS, e-Pro

Owning Broker

Mortgage Broker