Expect a Summer Rise in Home Sales
A flat pattern in home sales activity should continue for the next couple of months before improving over the summer, according to the latest forecast by the National Association Of Realtors®.
Lawrence Yun, NAR chief economist, said in a May 7 realtor.com report that the extent of an expected recovery hinges on better access to affordable loans. "Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," he says. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."
Fed Acts Again
The Federal Reserve once again cut the federal funds rate, lowering it on April 30 by a quarter of a percentage point to 2 percent. Neil Irwin of the Washington Post said, "That is likely to eventually lead to lower borrowing costs for someone taking out an adjustable-rate mortgage . . . ."
Christian Menegatti, an analyst at RGE Monitor, expressed the views of many in the financial community that this reduction will be the last. "[The Federal Reserve is] saying, 'Look, we've had monetary policy on steroids for the last few months, but that is changing now.'"
Have We Hit Bottom?
Yes, According to Cyril Moulle-Berteaux, in his May 6 guest editorial entitled "The Housing Crisis Is Over" in the Wall Street Journal.
Mr. Moulle-Bertaux, supports his positive view from his opening comments:
"The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now."
In addition to crediting the lower interest rates on mortgages, he cites the return of housing affordability: "Homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in."
New Hope for Upside Down Homeowners
Fannie Mae plans to introduce a refinancing program for homeowners owing more than their home is worth. The Wall Street Journal reports that, "Fannie's refinance plan would result in new loans of equivalent size, leaving the borrower underwater but giving him or her a lower monthly payment or at least a fixed rate." The new program will be limited to people who have kept up on their payments so far and whose loans are owned or guaranteed by the company. The report notes, "Rather than reducing the principal due on the loan and taking an immediate loss, Fannie is betting that these people will be able to keep up on their new loans and prices will recover."
April 2008 Housing Data
Northern Virginia: April 2008
The Northern Virginia Association of REALTORS® reports on April 2008 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton.
A total of 1,455 homes sold in April 2008, about 11 percent less than April 2007 home sales of 1,631, but up from March home sales of 1,250. At the end of April, there were 2,157 sales contracts pending in Northern Virginia.
Active listings increased by about 17 percent from last year, with 10,699 active listings in April, compared with 9,165 homes available in April 2007. Homes continue to take longer to sell in 2008, with the average home in April staying on the market for 100 days, compared with 82 days on the market (DOM) in April 2007. However, DOM has decreased since January of this year when homes took an average of 123 days to sell.
The average sales price in April 2008 fell by 8.59 percent from last year, to $484,432, compared with last April's average of $529,943.
The median price of a home sold in Northern Virginia in April was $413,500, which is a decline of 12.02 percent compared with April 2007's median price of $470,000.
Greater Northern Virginia: April 2008
Sales activity in Greater Northern Virginia (NVAR jurisdictions plus Prince William, Loudoun and the Greater Piedmont counties) for April 2008 shows an increase from 2007.
The number of Greater Northern Virginia region homes sold in April was 2,746, a 1.29 percent increase from April 2007's total of 2,711 sales.
The average sales price of $407,519 in April 2008 was about 18 percent below the April 2007 average sales price of $496,644.
Across Greater Northern Virginia, 23,471 listings are active, which is about 13 percent greater than this time last year, when 20,746 homes were available. The average DOM for a home sold in April 2008 was 112 compared with last year's 98 DOM, an increase of about 15 percent, but down from March 2008's 121 DOM.
Information deemed reliable, but not guaranteed.