Three out of four Inman News readers participating in an online survey say housing markets in their area are improving or stabilizing — and most said they’ve noticed the change only in the last two months.
“Buyers are seeing inventory move, and that gets them moving. Interesting how that happens,” said a Summit, N.J.-based respondent who sees improvement in a market where many homes are located near commuter train lines to midtown Manhattan. “Yes, there are actually bidding wars again on well-priced, staged homes in great locations.”
Among 225 readers responding to the survey from March 23 to April 1, 48.9 percent said housing markets in their area were improving, 27.1 percent said they were stabilizing, and 12.9 percent characterized them as worsening.
Among those who are seeing improvement, 39.6 percent said the market changed “this month,” and another 23.4 percent said the change had occurred within the last month.
The most often-cited reasons for improved market conditions were low interest rates (70.6 percent), more affordable prices (67.8 percent) and good deals (57.1 percent).
Rates on conforming, conventional loans are at lows not seen in half a century, but so far many of those moving to take advantage of those rates have been homeowners seeking to refinance existing mortgages (see story).
The latest S&P Case-Shiller Home Price Indices show the 20-city composite down a record 19 percent from a year ago in January, and off 29.1 percent from peak, as average home prices returned to levels last seen in late 2003 (see story).
The National Association of Realtors is forecasting sales of previously owned homes to rise 1 percent this year, with the median resale price declining by 5.1 percent, to $188,500. The Mortgage Bankers Association, however, sees sales of previously owned homes falling 2.5 percent from 2008 levels, to 4.79 million.
Among the 13 percent who said market conditions are worsening, 52.3 percent said the economy was a factor, and an equal number blamed “uncertainty.” Less blame was placed on financing (28.4 percent), media coverage (28.4 percent), and declining home prices (27.3 percent).
“We still have not hit bottom,” said one reader, reporting on conditions in the north metro Atlanta market. “Foreclosures are the predominate transaction that sells. Short sales come in at a close second, and then we have a lot of corporate housing in inventory. It is very difficult for the ‘normal’ resale seller to compete against these listings.”
Buyers are “aggressive and wanting the best deal. It is much like … shark-infested water,” this respondent said. Sellers are “still hung up” on what “the home down the street sold for.”
In the San Francisco Bay Area, sales under $500,000 “are hot,” said another respondent, with only an average sales rate in the $500,000 to $1 million range, and “slow and grinding above that.”
The survey showed the mood of buyers and sellers is still far from carefree.
While 20.3 percent said homebuyers are “engaged” and 22.6 percent described their mood as “ready to buy,” 74.7 percent said buyers are “cautious.”
While 54.2 percent said sellers are “realistic,” 40.4 percent said sellers remain “stubborn,” and 27.6 percent called them “desperate.”
In the Summit, N.J. area, buyers are cautious, and sellers are “desperate if they have lost their job, stubborn if they can’t get a reality check on pricing, and realistic if they listen to me.”
Asked about the mood of sellers, a respondent from Las Vegas responded, “Real people or banks? Humans are either desperate or stubborn — who knows what asset managers really think?”
Although Las Vegas is coping with some of the highest foreclosure rates in the nation, the respondent said conditions began improving six months ago, with good deals available, inventory shrinking, and “engaged” homebuyers.
Many respondents complained that sellers are still not willing to get realistic about pricing.
“Sellers never, and I mean never, seem to understand that the market does include their home also,” said one respondent, who said conditions in Newark, Del., are worsening because of uncertainty and the economy.
“Sellers know that they are not going to get what they want, but some are still struggling to get their prices in line with the market,” said another report from Basking Ridge, N.J. “So they are continuing to lose equity when their houses take a long time to sell while they ‘chase the market’ with their price reductions.”
Buyers remain cautious as all areas of the Basking Ridge market are declining, but some sectors are harder-hit than others, the respondent said.
While 45.4 percent said inventories are stabilizing and 22.6 percent are seeing them shrink, about one in three respondents said inventory continues to grow.
Reporting from Lancaster, Calif., one respondent complained that there were “A LOT of vacant homes in ‘pre-foreclosure’ in our area.” While inventory is down by half from a year ago, a “false bottom” has been hit, with a “flood of foreclosures expected in our area” when a moratorium is lifted.