Good Housing News Predicted

All the leading indicators say housing is definitely on the mend, economists reported in advance of the official release of several pieces of good news expected this week.

Bloomberg News surveyed 53 economists and asked them where they expected the numbers to fall. Here are their predictions:

• Construction starts in September are expected to hit a 610,000 annual rate, the most since last November.
• Sales of existing homes likely rose to a two-year high.
• Because of fear of a relapse, the Federal Reserve is predicted to leave interest rates low for a few more months.
• Building permits, a sign of future growth, probably rose to a 590,000 annual pace, also the highest level since November, the Commerce Department is likely to announce.
• The National Association of Home Builders/Wells Fargo index is expected to rise to 20 from 19, the economists say.

Google Inc. plans to resume hiring and acquisitions after its third-quarter sales beat analysts’ estimates. CFO Patrick Pichette says: “We weathered what is an incredible recession. If you have all this behind you, the only outcome you should have as management is: ‘OK, let’s build now.’”

Source: Bloomberg, Courtney Schlisserman (10/18/2009)

Big Rebound in Existing-Home Sales

According to the National Association of REALTORS®, there has been a big rebound in existing-home sales in September with first-time buyers driving much of the activity, marking five gains in the past six months.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Home Sales Breakdown

The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Here’s the region-by-region picture:

Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.

Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.

South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.

West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

Source: NAR

Where Does Washington State Rank in Foreclosures?

Based on second quarter 2009 reports provided by Mortgage Bankers Association, Washington state has a foreclosure rate of 4.72%.  Compared to 15.62% in Nevada and 17.12% in Florida, this is positive information.

Kennewick Expected to Gain 3.4% Appreciation by June 2010

According to a new forecast of real estate prices, CNNMoney.com has indicated that home values will drop in 342 out of 381 markets during the next year.  Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

However, a handful of metro areas will buck the trend, according to Fiserv. Six markets will remain flat, and 33 will actually post gains. The biggest winner will be the Kennewick, Wash., metro area, where home prices have ramped up 8.9% over the past three years and are expected to increase another 3.4% by June 2010.

CNNMoney.com

Windermere/Tri-Cities to Sponsor More Toyota Center Shows

Tri-Citians have long asked for a performing arts theater, and Windermere/Tri-Cities is helping out!   The Toyota Center is working on improvements to the facility that doubles as a venue for hockey games and stage shows.  Windermere is helping financially to create more of a theater setting and provide a more intimate show experience.   The stage for the shows will be named Windermere Theater in the Toyota Center and will accommodate about 2,100 viewers for a show.   Besides the Broadway Series, the center plans to bring more productions and shows every year as well as other marquee entertainers.   Kenny G is scheduled on November 18.

Higher Mortgage Rates Expected

Higher mortgage rates are expected as The Federal Reserve has indicated they will “ration out” the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead a longer “weaning” off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.

It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher . . . most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise. This means that waiting to purchase or refinance will very likely result in a higher rate, which will reduce the amount of loan qualification (and purchase price), SO DON'T WAIT!

A Historic Time to Buy

This is a historic time to buy.  Young people just starting to invest and buying their first homes are potentially the winners in this recession.  First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®.

A study by investment company T. Rowe Price points out that investing when prices are low can result in amazing gains. For instance, between 1970 and 1990, the annualized rate of return for the S&P 500 was 11.5 percent.
Source: The Associated Press

Long-Term Mortgages Near Record Low

Long-term mortgages are near record low!   According to Freddie Mac, 30-year fixed-rate mortgages moved closer to the all-time low of 4.82 percent reached in May, falling to 4.87 percent this week from 4.94 percent a week ago.  Are you considering purchasing?  Don't wait!