Market Update 4-25

April 25, 2007 by gp.

While some bright signs are beginning to peak through the market malaise, overall the market continues to be sluggish. Some buyers are coming back to the table, and more sellers are bringing their homes to market as the spring selling/buying season gets underway. Properties continue to stay on the market longer and there are more price reductions making their way into the market as well. This area stayed healthy for much longer than most other parts of the country but the last several months have seen the market quiet down considerably, and this will for the most part remain the norm for the next several months as prices moderate from their torrid pace of the last several years.

This from the Wall Street Journal, 4-24:

Home Sales, Confidence Sink
Sales of existing homes plunged 8.4% during March, the National Association of Realtors said, as bad weather kept prospective home buyers huddled in front of the hearth they already have instead of hunting for a new one. The fall was the sharpest plunge in 18 years. Economists figured that after some unnaturally balmy temperatures led to stronger-than-forecast homes sales during January and February, sales in March were ripe for a snap-back with the onset of colder weather. Indeed, demand froze up even though the average rate on a 30-year fixed mortgage slipped to 6.16% from 6.29% in February, according to Freddie Mac. David Lereah, the Realtors’ chief economist, also noted that the “negative impact of subprime is considerable” and said that demand should suffer through spring as a result. Mr. Lereah can generally be relied upon to find the rainbow in any gloomy housing report, but he said that he doesn’t expect a full housing recovery until 2008. He thinks median prices will slide 1% to 3% this year.

Though consumers’ moods don’t tend to swing too wildly from month to month on the back of housing-market conditions — gyrations in gasoline prices tend to have a more acute influence — the housing slump is clearly having an impact on attitudes. The Conference Board reported that consumer confidence fell in April, as assessments of current economic conditions and the outlook for six months down the road were both weaker. Further, Ian Shepherdson of High Frequency Economics pointed out that only 2.7% of consumers surveyed in the report are planning to buy a home in the next six months, a 10-year low. That could mean home sales will continue to wither, come rain or come shine. “The housing correction is not complete,” wrote Steven Wood of Insight Economics.

While this is a macro, national trending, on a micro level we are seeing similar attitudes in our area. GP

Posted in Uncategorized | Comments Off