Simi Valley & Thousand Oaks Real Estate

Published: Tuesday, 3 Nov 2009 | 2:52 PM ET
Published: Monday, 2 Nov 2009 | 11:50 AM ET By: CNBC.com

Pending home sales rose for the eighth straight month in September as new home buyers rushed to take advantage of the $8,000 tax credit before it expires at the end of the month, according to an industry group.

The National Association of Realtors said Monday that pending home sales rose 6.1 percent to 110.1 from 103.8 in August. It was the largest annual increase on record and marked the longest streak of gains since the measurement began in 2001. It was also the highest level in nearly three years.

Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, to be flat.

"What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," said NAR Chief Economist Lawrence Yun. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery."

The group estimates about 3 million renters are now financially well-qualified to buy a median-priced home, and Yun said if buyers stay within their budget, there will be a sizable pent-up demand.

In the Northeast, the index slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago.

In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

Congress is moving to extend the credit to buyers who sign sales agreements by April 30. Lawmakers also want to add a $6,500 credit for buyers moving into other homes as long as they have been living in their current residence at least five years.

"We're clearly not out of the woods because an excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory."

The index surged a record 21.2 percent in September from the same period a year-ago.

© 2009 CNBC.com

Posted by janiswk1 at 2:52 PM | Permalink | Comments (0) | TrackBacks (0)

Buying a home in today’s market may be challenging, particularly for those with credit problems or little saved to put toward a down payment. But there are many factors impacting the current housing market that make buying a home today a viable option.

Here are five reasons for buying a home today:

1 Interest rates on long-term, fixed, and adjustable mortgages are at historically low

levels. The rate on a 30-year, fixed mortgage is hovering just below 6 percent, while,

by comparison, interest rates were hitting 8 percent and higher during the last market

downturn in the late 1990s, and were between 10 and 12 percent at the height of the last

housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and your

monthly payments are more affordable.

 

2 No one can put a price on the intrinsic value of homeownership. Home prices also

reflect financial worth and, the good news is, across California the median sales price

for a single-family home has been consistently rising for several decades. In short,

housing remains a solid, long-term financial investment. While the pace of home appreciation

has slowed over the last year, historical data suggest home prices will continue to appreciate over

time. The projected median home price for a single-family home in California in 2008, for example,

is $553,000. By comparison, the median price in 2000 was $241,350; $193,770 in 1990,

and $99,550 in 1980. (source: C.A.R.)

3 The length of time a home remains on the market before it is sold has increased from

roughly two weeks in 2004 to between eight and nine weeks in 2007. According to the

unsold inventory index provided by the CALIFORNIA ASSOCIATION OF REALTORS®, it would

take 16.3 months to sell all the homes on the market at the current sales pace, compared with 6.4

months in 2006. With more homes on the market for longer periods of time, you have more choices

when it comes to selecting a home today.

4 The multiple-offer frenzy that dominated the latest housing boom has subsided, and there isless pressure on today’s home buyers to outbid one another. REALTORS® in California reported

that in 2007 only 28 percent of homes sold had multiple offers, compared with 57 percent

in 2004. (source: C.A.R.)

5 The credit industry crisis that has made securing a home loan difficult for many has led to

heightened scrutiny of mortgage lenders. As a result, state and federal agencies have created

protections for home buyers that were not in place a year ago. The U.S. Federal Reserve, for example,

has proposed a plan to require lenders to confirm a borrower’s ability to afford a mortgage before

making a loan and establishing guidelines for explaining subprime loan terms in order to better educate

buyers. Many new public education and awareness campaigns, such as Freddie Mac’s “Don’t Borrow

Trouble®” campaign, have been developed to help you achieve the dream of homeownership without the

financial risks that led so many borrowers into trouble in recent years.

Posted by janiswk1 at 11:16 AM | Permalink | Comments (0) | TrackBacks (0)