While Homes Sales Were Up Month to Month - Higher Inventory and Higher Rates Don't Bode Well for Pricing. And High-end Taking a Bath

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Real Estate Agent with Buyer Broker Chicagoland - CHICAGO IL AND SUBURBS

Sales of previously occupied homes rose modestly from March to April - as buyers took advantage of prices that were 15.4 percent below year-ago levels.   Comment -- (I know our business has been up - as we are serving many first time homebuyers in the 200-300k range....)

Home sales rose 2.9 percent to an annual rate of 4.68 million last month, from a downwardly revised pace of 4.55 million in March.

The results slightly beat economists' forecasts.

The median sales price plunged to $170,200, down from $201,300 in the same month last year. That was the second-largest price drop on record after January, when prices fell 17.5 percent.

Comment -- Interestingly - that was in the face of rates getting down to 4.75%.  They have trended up during the past week to about the 5% range - and may move higher - suggesting that there may be more pricing pressure to come..

The number of unsold homes on the market at the end of April rose almost 9 percent from a month earlier to nearly 4 million. That's a 10-month supply at the current sales pace.

Comment - That also means future pricing pressure.

"We still need a continuing and consistent rise in home sales to get the inventory down," said Lawrence Yun, NAR's chief economist. Only then, will prices stabilize and eventually recover.

Another big problem, Yun noted, is the lack of activity at the higher-end of the housing market, among properties priced at $750,000 or higher.

Interest rates are much higher for loans above $730,000 that cannot be purchased by Fannie Mae or Freddie Mac. And that's sapping demand for expensive properties.

"It's just stalled. completely stalled," Yun said.

The Realtors group is pushing for the Federal Reserve to start buying up those loans, even if they are not backed by Fannie and Freddie.

It also wants the higher loan limits to apply to the whole country, not just expensive areas like California and New York.

Comment - something needs to be done about the high end being stalled....Not sure what - but those homeowners are taking a bath - with many just walking away from the property...

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If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on your side – looking out for your best interests.

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Rainmaker
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Rick Hauser
Buyer Broker Chicagoland - CHICAGO IL AND SUBURBS - Hawthorn Woods, IL
ABR, CNC, CNE, GRI, SFR, Exclusive Buyer Agent-Cov

Mortgage bonds totally broke down today.  Down last Thur & Friday - & yesterday & today - today - tanking.... 30 yr fixed has moved from 4.75% to 5% - & tomorrow or later this week - may be 5.5%

May 27, 2009 02:55 PM #1
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Rick Hauser

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