Welcome to Connie Mahan Real Estate Group - your source for Sumter County real estate.
In addition to specializing in Sumter County, we also service Lake, Pasco, Hernando, Citrus, and Marion counties.
As a full service real estate brokerage firm we work side by side with sellers, buyers, investors, and builders in residential, commercial, vacant land, and property management.
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Keeping you updated on the market!
For the week of
May 21, 2012
MARKET RECAP
We're at a point in the housing recovery where few people doubt we are actually in the midst of a recovery. Since the beginning of the year, we've been reporting news and data that have generally trended more positively and more optimistically.
Home builders are trending as positively and as optimistically as anyone in the housing sector these days. The NAHB/Wells Fargo sentiment index surged in May to hit a new recovery high of 29. The improved outlook is driven by strengthening consumer sales and buyer traffic, which, in turn, has lead to more housing construction. Housing starts rebounded 2.6 percent in April to 717,000 annualized units, considerably higher than the analysts' consensus forecast for 690,000 units.
While starts are up, foreclosures are down. In fact, foreclosure filings have fallen to their lowest level since July 2007. The five-year low is a product of a death of foreclosure activity in once very active states: Year-over-year foreclosure filings dropped 67 percent in Nevada, 44 percent in Arizona, and 30 percent in California. So much for the surge in distressed properties that was anticipated to swamp the market once the robo-signing imbroglio was put to rest.
Pricing trends also point to a sustained long-term recovery. The national median list price for homes rose by 0.7 percent in April from March to its highest level in nearly a year.
That said, we're always quick to note that all housing markets are local. When we look at local markets we find that asking prices are up 25 percent in the formerly hard-hit market of Phoenix and 15 percent in the less-hard-hit market of Miami year-over-year.
Look for median asking prices to continue their push higher. Valuation firm Pro Teck reports housing inventory is running at a 6.3-months supply nationally, the lowest level in six years. Falling inventory coupled with rising demand points to one thing – a sustained upward trend in home prices.
The news gets even better when we factor in Fitch Ratings expectations for increased demand for private-label mortgage bond issuance; that is, mortgage bonds not issued by one of the government-sponsored entities (GSEs) – Freddie Mac, Fannie Mae, and Ginnie Mae. The once flourishing private-label market reached $6 trillion in trading activity in 2007. The market is far below that level today, but transactions so far this year have already eclipsed the total for 2011. Fitch sees volume expanding further over the ensuing months.
Mortgage lending might be the last hurdle to clear in the housing recovery. More security issuance in the private market means less reliance on the GSEs. That means a more vibrant, diversified lending environment and an environment more amenable to meeting more borrower’s needs.
Making Sense of Lending Rates
One question we field as often as any is “What determines lending rates?” The short answer is that many factors – seen and unseen – go into the lending rates borrowers are quoted.
That said, a few factors are more impacting than others. The Federal Reserve is an obvious factor. When the Fed purchases long-term Treasury securities and mortgage-backed securities, it creates demand. Increased Fed demand, in turn, means lenders can offer loans at lower rates than if there was no Fed demand. The Fed, in a sense, creates a market.
The level of risk acceptance or aversion among investors also influences lending rates. When investors are more risk averse, as they have been for the past month, they flock to haven securities – Treasury notes and bonds and other high-quality, low-yield debt. This “flight to safety” pushes mortgage lending rates lower because investors are more willing to lend at lower rates because of demand for higher-quality securities.
The dynamic interaction of supply and demand also works on lending rates. If demand for borrowable funds is brisk, lenders are in a position to quote rates or charge points higher than the national average. If the supply of loan able funds increases, as it's prone to do when investors are more risk accepting, lending rates will drop to entice people to borrow.
But perhaps the greatest influencing factor is anticipation – each individual's outlook on the market. If more individual lenders believe economic growth and inflation are in the future, rates will rise today in anticipation. The reverse will occur if more lenders see slower growth and lower inflation.
Anticipation also happens to be the most difficult (if not impossible) factor to quantify. What's more, anticipation can be very fickle and can change on a dime; thus making prognosticating very difficult.
If you have questions on the local market in your area or would like to discuss your next real estate step, don't hesitate to contact us.
We can schedule a "no strings attached" appointment to fully review your options in this market. We have an action plan for you!
My team and I are diligent in our efforts and prove it with our results!
Don't wait, call or email today.
We look forward to hearing from you.
Sincerely,
Connie Mahan
Broker/Owner
Connie Mahan Real Estate Group Inc.
352-457-7553 Direct
352-569-0233 Office
866-819-0089 Toll-free fax
Market Matters Update brought to you by:
The Josh Dougherty Team"
Josh Dougherty
Office: 407-872-3383 x241
Toll Free Fax: 1-877-220-6499
jdougherty@fbchomeloans.com
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