Thoughts on the Late Summer Real Estate Market

Summer is not officially over until Thursday, but the kids are back in school, there is a crispness in the air, and Rich Steve and I were all back in studio together after a summer filled with travel and health travails for us, so we thought it would be a good time to give an end of summer report. Inventory has been creeping up slowly, we started off the year with about 4900 single family homes on the market, about a 6 or 7 month supply- a fairly balanced market.   This has crept up to over 6,000 today. Many people decided to put their homes on the market too, hoping to grab the buyers before the tax credit expired, but they failed to properly price their homes, and they sit on the market.   Take the week of September 9^th,    there were 6181 single family homes for sale through Statewide MLS, with an average of 129 days on the market, that week the average DOM for the 121 single families that did sell  was 79 days.   Affordability is at historical highs now too, Lawrence Yung, NAR's chief economist, pointed out in his weekly podcast that to buy the median priced home at today's rates with a conventional FHA loan with at 97% LTV, the buyer would be looking at a monthly payment of about $1,150, that same home would have translated into a $1,650 mortgage payment 5 years ago.   That is a $500 savings every month for the life of the loan, yet outside of investors and cash buyers, there are few in the game. This Week's Real Estate Insight Sellers: Serious and savvy buyers are closely watching the market. They may have been sitting on the sidelines since the crisis started.  They know what is and is not a good deal and will not pay too much for a home in this market.   Price your home to sell or take it off the market   Buyers:   Jobs are slowly being created, and as we see those numbers rise, consumer confidence will rise too. Mortgage rates are priced relative to yields on U.S. government debt, when confidence rises, investors will pull the money out of treasuries and rates will rise.   Each rise in interest rates translates into that much less home you can afford. If you are confident in your source of income, don't wait too much longer to buy.