Real Estate News: November home sales increase 19 percent over 2010
Rockford Area Realtors sold 281 homes in November, 19 percent more than 236 properties sold in November 2010, moving from 232 homes sold in 2010 to 281 homes in November 2011. This is the sixth straight month of significant year-over-year increases.
The three-month rolling average price fell slightly from last month, down 1.7 percent from $103,281 in October to $101,553 in November. Prices are still behind 2010 levels; the November 2010 average price was $116,767.
Steve Bois, CEO of Rockford Area Realtors, said: “Foreclosure and short sale inventories are working through the market, with buyers in the market favoring lower-priced homes. The continued gain in housing sales with six months of increases shows that buyers are seeing real value in the market.”
Through the first 11 months of the year, a total of 2,958 properties have been sold, compared to 3,112 sold from January to November 2011, a difference of 154 properties, or just 5 percent off last year’s total. If that pace holds, it will be the lowest annual drop in sales since the housing downturn began in 2007.
From 2009 to 2010, sales dropped 8.3 percent from 3,642 sold in 2009 to 3,341 sold last year. From 2008 to 2009, sales dropped 8.4 percent from 3,978 in 2008 to 3,642 in 2009. From 2007 to 2008, sales dropped 31.9 percent from 5,844 sold in 2007 to 3,978 sold in 2008. From 2006 to 2007, sales dropped 18.7 percent from 7,192 sold in 2006 to 5,844 sold in 2007.
Have sales bottomed out in fourth quarter 2011, or can they still go down?
“I’d say it’s too close to call this one,” Bois said. “Based on these trends, it doesn’t appear that we will have major price swings in either direction in the near future. We need to continue to move the inventory of distressed properties, which will help stabilize prices.”
Another positive statistic is that the monthly housing inventory hit a four-and-a-half-year low. In November, 2,800 properties were for sale, the lowest monthly inventory since February 2007, when 2,771 properties were available. Bois said the drop in inventory levels historically shows a positive upcoming trend on seller prices.
Economists from the National Association of Realtors say gradual improvement in the economy is expected next year. Bois said: “Tighter mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently. However, we know there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon (kids leaving home and coming back), that can’t continue indefinitely.”
Meanwhile, The Wall Street Journal reported in October that economic indicators of house buying are turning in buyers’ favor. First, the nation’s ratio of house prices to yearly rents is nearly restored to its pre-bubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.
Friday, Dec. 2, U.S. rates for 30-year mortgages increased from 3.98 to 4 percent, based on an optimism that Europe’s debt crisis will be contained, pushing up yields for the treasuries that guide home loans. The 30-year rate has been at or below 4 percent for five straight weeks, extremely low rates by historic standards, the lowest in Freddie Mac records dating to 1971.
From the Dec. 7-13, 2011, issue