Markets Stabilize

Bloomberg reports today: "Home Prices Rise in Half of U.S. Cities as Markets Stabilize". For several years now I have been watching the indicators change over from Buyers Market to Sellers Market. Slowly the signs are stacking up and 8 months ago I heard a national speaker at the annual conference for the Maryland Association of REALTORS(R) (MAR) tell agents that sometime this year we would see rising prices again, albeit a slow 1% per year rise. The economic guru Mr. Anirban Basu who has done presentations for many groups in our area with charts showing small wave like improvement over the next few years, barring unforseen events. Steve Harney also predicted last Fall that prices would fall another 6% nationally before that happened. He spoke again 2 months later at the national conference for the Council of Residential Specialists(CRS)in November and said much the same thing. I am seeing houses in our area selling in less than 6 months which is the standard measure of "normal" and if priced and staged right, entertaining multiple offers. Below is an excerpt from an email I received today from Michael Fagan, PHH Home Loans: "The National Association of Realtors (NAR) said that of the 146 Metro cities surveyed, home prices rose in 74 of them in Q1 2012. This is up from 29 cities that saw an increase in home prices in Q4 2011. In addition, the NAR also said that inventories for existing homes fell 22% since this time last year and are down 41% since the peak in mid-2007. While the housing market has a long way to go, this report was a nice step in the right direction. There was also news from the National Federation of Independent Business, which said that its small business optimism index gained 2% in April as the survey revealed that companies have increased plans for hiring and investing in the future. While companies added new employees at a slower pace in April than in March, the index rose to 94.5 — the highest level since February of 2011. Overall, though, the report showed that our economy is improving but is still fragile. The state of our economy is part of the reason for the improvement in Bonds (and home loan rates, which are tied to Mortgage Bonds) of late. Another big reason that Bonds and home loan rates have been improving is the fresh round of uncertainty out of Europe. France elected a new president, and this change of the guard represents the ninth EuroZone leader swap since the financial crisis began. Greece is also back in the news and their citizens are not taking to the austerity measures either. The New Democracy government, a pro-bailout party, is having trouble gathering the support to rule the government. This has sparked some safe haven trading into our Bonds, as investors see our Bonds as a safe place for their money. The bottom line is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows."