dcsimg

Some U.S. housing markets starting to show signs of life

Earlier this summer, a couple in the Chicago area told their Realtor they wanted to offer $450,000 for a lakefront condo they had seen. When they opened the Chicago Tribune and saw a headline that national housing prices could still head lower, they called their agent immediately and said he should reduce their offer by $50,000.

The agent told the couple he certainly would do what they wanted, but if he did, they weren't likely to get the home. Another buyer was ready to offer $525,000.

Jim Gillespie, CEO of Coldwell Banker Real Estate, Parsippany, N.J., which has offices across the country, tells the story to illustrate his thoughts on the housing market in mid-2011.

"What we're seeing nationally is there is no national story," he says. "It's all local and it's all individual wants and desires. In speaking to our brokers around the country, they're saying prices and time-on-the-market are really street-by-street."

In some areas they're up, and in others they're stable, Gillespie says.

Housing prices on the upswing

The news article noted by the Chicago couple was based on the Standard & Poor's/Case-Shiller market analysis for May, which found that home prices had risen slightly (1 percent) in 16 of the 20 large U.S. cities that it tracks. May was the second consecutive month that prices had risen, according to the closely watched index.

U.S. Commerce Department data for June also showed an increase in home prices. In a separate report, it said median sales price for new homes increased 5.8 percent in June to $235,200.

Analysts attributed the slight increases the Case-Shiller index saw to it being spring - the busiest season for home buying and selling. They also said that they weren't convinced the market had reached bottom and that prices could still fall.

Home prices still were down 4.5 percent from the previous May and were comparable to prices in 2003, according to the report.

Others, including home builders and mortgage lenders, are slightly more optimistic about the U.S. housing industry - now three years from when it crashed. They believe that it's starting to come back and that renters are growing more confident and will soon begin competing for properties, pushing up prices in some areas.

Builder: Some areas showing "more promise"

Jacque Petroulakis, spokeswoman for the Pulte Group of Bloomfield Hills, Mich., which builds homes in 28 states, says market conditions are still challenging. However, she says, many areas of the country are starting to show more promise as the economic recovery begins to gain traction.

One of the most important factors is job creation, she says, and at the end of July, the U.S. government reported good news on that front: Applications for unemployment fell to their lowest level in four months.

Petroulakis agrees with Gillespie that home buyer demands are market-specific and that some areas are beginning to move faster than others.

Demand for new homes remains strongest in greater Washington, D.C. and northern Virginia, she says. Demand also seems to be improving from the Mid-Atlantic to New England.

Most of the Midwest markets continue to have challenges, although some states including Michigan are showing "more and more promise," she says.

The West remains the most challenging because of its high number of foreclosures and distressed homes, Petroulakis says.

"Overall," Petroulakis says, "we are pleased with the increased buyer traffic we're seeing at some of our sales offices and the feedback we are hearing from home buyers."

Lender: Mortgages are available to strong applicants

Joe Rogers, executive vice president at Wells Fargo Home Mortgage, Charlotte, N.C., says that lending has eased some as banks are taking an individual approach to home mortgage applications.

Mortgage money is available to those with jobs and a good credit history, he says. "Lenders are looking at each case on its own merits," he says. "That doesn't mean we can accommodate every situation but we are delving into each borrower a little more deeply to understand their ability to repay.

"Our goal," he adds, "is to make as many sound loans as we can to customers who can be successful."

Consensus: "Good time to buy"

All three agree that this is an ideal time to buy for those who have some money and the desire to own a home.

Even if the market hasn't reached bottom, Gillespie says, you shouldn't wait if you want a home. "Prices are very affordable in many markets. Inventory is up so you have lots to choose from. And mortgage interest rates are at historic lows."

Petroulakis agrees: "It's a tremendous time to buy a new home with interest rates still near all-time lows and new home prices at great values."

Many builders, like Pulte, she says, still are offering buyers special incentives so they could save thousands of dollars on upgrades or on financing the purchase of their dream home.

Rogers says it looks to him like the market is treading water. That means that people who want to own homes and plan to stay in them for more than a few years would do well to buy, he says.

However, these experts say, while mortgage interest rates are at historic lows, homeowners may find it challenging to do a home refinance unless they have equity as their home value is likely to be lower than when they took out the original mortgage.

Share: