Realtors see buyers returning to market
WASHINGTON, D.C. – May 20, 2009 – Historically high housing affordability and low mortgage interest rates, combined with buyer opportunities in the distressed sales market, have increased home sales in many areas of the country.
“There has never been a better time to buy,” said National Association of Realtors® (NAR) Chief Economist Lawrence Yun, who presented NAR’s economic outlook at the Realtors Midyear Legislative Meetings & Trade Expo. Yun noted a “perfect storm” of favorable conditions.
“Housing affordability is at an all-time high, mortgage rates are historically low, and interest rates are the lowest they’ve been since the days of Eisenhower,” said Yun.
While he doesn’t anticipate an immediate pickup in the coming months, Yun believes early summer will be a critical indicator of how homebuyers respond to the $8,000 tax credit. “The home buying process takes time,” said Yun. “This summer will gauge the success of the first-time home buyer tax credit.”
California has already shown signs of recovery, with home sales rising much faster than anticipated; some areas in the state are seeing a 70 to 80 percent increase in sales. Yun attributes the extraordinary surge to buyers who sat on the fence but are now taking advantage of the great opportunities out of fear that they’ll miss out on current deals.
According to Yun, many first-time buyers want deeply discounted and distressed home prices. Nationally, distressed sales have made up about half of all recent transactions. Fifteen to 20 percent have been short sales, and 30 to 35 percent have been foreclosures. Yun says that these statistics are unfortunate, but the situation, along with current home buying incentives, has created an impressive window of opportunity for potential home buyers.
“The stimulus and falling inventory levels will help stabilize prices,” said Yun. “My projection is home sales will be 10 to 20 percent higher the second half of this year (compared to) last year, and we will come out of this recession in 2010.”
© 2009 FLORIDA ASSOCIATION OF REALTORS®