June 2011–Real Estate Market Update

 

June 2011 Market Update The U.S. housing market continues its gradual and uneven progress, despite the expiration of the home buyer tax credit. The remarkable rebound in housing activities from the initial drop following the end of the home buyer tax credit this past July adds to the belief that the risk of a double-dip downturn in housing may be disappearing. As the housing market continues to work through the excess supply overhang, a result from the glut of foreclosed properties which is keeping home prices below their long-term trend growth, economists anticipate mortgage rates at or above 6% by the end of 2012 and expect buying activity to continue its upward momentum. Supporting this view is the rising concern about inflationary pressures sparked by political unrest in the Middle East. While surging gas and food prices could prove transitory and pose no major threats, these price increases may weigh down consumer spending, which accounts for two thirds of the economy. While, the Federal Reserve is committed to making necessary policy changes to address such risks. Meanwhile, core price gains, excluding food and fuel, were modest in April, offering some relief to consumers. As the economy improves, stimulus efforts by the government and the Fed is expected to gradually wind down, which typically spurs rising interest rates to keep inflation in check. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers are encouraged by increased market stability.   Home Sales in millions   The number of homes home sales in April were down 12.9% compared to the same time last year when the impact of the tax credit was at its peak. Sales were relatively stable compared to the previous month: less than a 1% decline. NAR Chief Economist Lawrence Yun states that “given great affordability conditions and job creation, home sales should be stronger” and cites unnecessarily tight credit for limiting sales. Gradual but uneven improvement is expected to continue. In fact, home sales have increased six of the past nine months.     Home Price in thousands Home prices rebounded 2.4% in April with median home prices rising to $163,700. This is 5% below the year-ago level and continues to keep the median price close to 2002 levels. Three out of eight homes sold during April, or 37% of sales, were distressed properties, which typically sell at a 10%–20% discount. This is down 3% from March. Investors represented 20% of sales, and all-cash buyers were 31% of sales in April, down from a record high of 35% in March. Prices and mortgage rates remain favorable for buyers for the spring selling season.   Inventory- Month's Supply in months   The supply of homes measured in months on the market, if sales continue at their current pace, inched up during April compared to March. Inventory levels remained 26% below the peak of 12.5 months in July and only 11% above April of 2010 when the tax credit was in full swing. Source: National Association of Realtors Interest Rates Rates have reached a new record low after steadily declining throughout May, primarily due to uncertainty in the global and domestic economies. Rates are still expected to follow an upward trend as the year progresses. As overall economic activity gets back on track, rates will likely rise to keep inflation in check. This window of opportunity for buyers to lock in these historically low interest rates may not remain open much longer.   This Month's Video	Contact Us, your local real estate expert, for information about what's going on in our area.
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Smitha and Rahul Ramchandani are a licensed real estate Broker-Salesperson/Sales Representative Team with Keller Williams in New Jersey. They are Buyer Specialists and a Home Marketing Experts. You can reach Smitha and Rahul and their team online at: http://www.Morris-Homes.com.
Their team specialize in North Central New Jersey including towns such as Boonton, Chatham, Chester, Convent Station, Denville, East Hanover, Florham Park, Hanover, Harding Twp., Mendham, Montville, Morristown, Morris Plains, Morris Twp., Mountain Lakes,
Parsippany, Randolph, Rockaway, Whippany