NAR Reports Housing Surge, Slowdown likely

Posted on February 14, 2010 by Ginger Wilcox

The National Association of Realtors ® released it’s 4th quarter existing home sales report last Friday. The report had good news for most metropolitan areas.  According to the report, sales increased from the third quarter in 48 states and the District of Columbia; 32 states saw double-digit gains. Year-over-year sales were higher in 49 states and D.C.; all but three states had double-digit annual increases.  NAR’s Chief Economist attributed the gains to the first time home buyer tax credit and low interest rates.  RealtyTrac also released it’s foreclosure report last week with positive news.  U.S. Foreclosures were down 10% in January.

While the reports were rosy, there is an expectation that a slowdown of activity may occur later this year when the homebuyer tax credit ends (in April) and with interest rates expected to rise.  Foreclosures are also expected to swing up according to RealtyTrac.   “January foreclosure numbers are exhibiting a pattern very similar to a  year ago: a double-digit percentage jump in December foreclosure activity  followed by a 10 percent drop in January,” said James J. Saccacio, chief  executive officer of RealtyTrac  “If  history repeats itself we will see a surge in the numbers over the next few  months as lenders foreclose on delinquent loans where neither the existing loan  modification programs or the new short sale and deed-in-lieu of foreclosure  alternatives works.”

So what does this news mean for Marin homebuyers and sellers?  Sellers who want to sell this year should consider putting their home on the market as soon as possible to take advantage of the tax credit (where available) and low interest rates.  For home buyers, your action plan depends on what you are looking for.   While we expect a substantial increase in the number of homes available later in the spring and early summer, a higher interest rate may counteract any savings if we see minor price drops.  Email us or give us a call if you would like us to let you know if you should jump now or hold off on making a move until later in the year.