Home sales rise to highest level in 2.5 years
Only a 7-month supply of homes on market; bidding wars are erupting
The Associated Press
updated 2:26 p.m. MT, Mon., Nov . 23, 2009
WASHINGTON – Home sales surged for the second month in a row in October, climbing to the highest level in 2 1/2 years as first-time buyers rushed to take advantage of an expiring tax credit.

Home sales nationwide are now up nearly 36 percent from their bottom in January, data Monday showed, though they are still 16 percent below the peak in autumn 2005. At the current sales pace, there is only a 7-month supply of homes on the market and in some areas there are bidding wars.

Joey Wilson, 53, and her husband made unsuccessful offers on 20 Las Vegas homes since midsummer before closing on a four-bedroom, $136,000 home this month.

“It’s insane,” said Wilson, who relocated from Kentucky. “I’ve never seen a market like this before.”

The National Association of Realtors said home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. It was the biggest monthly increase in a decade, and far above the 5.65 million pace expected by economists, according to Thomson Reuters.

Without adjusting for seasonal factors, sales were up 21 percent from a year earlier and were up in all four regions of the country. The gains were led a 26 percent increase in the Midwest. Sales were up 25 percent in the Northeast, 23 percent in the South and 10 percent in the West.

The housing recovery is being driven by lower prices combined with federal programs to lower mortgage rates and bring more buyers into the market. The median sales price was $173,100, down 7 percent from a year earlier and off roughly 2 percent from September.

Many experts predict prices will hit a new low next spring, perhaps falling another 5 to 10 percent, as more foreclosures get pushed onto the market.

The government has tried to counter that trend by offering a tax incentive for first-time buyers and by keeping mortgage rates around 5 percent since the spring.

The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30.

The Realtors’ report on October home sales reflects offers made before buyers knew the tax credit would be extended.

“The incentives really did get people to go out and buy,” said Wells Fargo economist Adam York. “The question is: What does the trend look like when the credit is over with?”

Home sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.

The new deadline means “we’re going to see some good activity coming out of the spring,” said Pat Lashinsky, chief executive of online real estate brokerage ZipRealty Inc.

But the government support can’t last forever. For example, the Federal Reserve is likely to curtail its effort to push down mortgage rates next year. If rates then rise too high, it would make home purchases less affordable and dampen housing demand.

“When we do kick those crutches out from under the housing market, will it be able to stand on its own?” said Mark Fleming, chief economist with real estate information company First American CoreLogic. “It’s really hard to tell.”

Another concern is that job losses are pushing once creditworthy homeowners into default. Borrowers with prime, fixed-rate loans accounted for one in three new foreclosures in the second quarter, the Mortgage Bankers Association said last week. Nationwide, a record 14 percent of homeowners with a mortgage were either behind on their payments or in foreclosure.

And in areas where foreclosures have hit hard, housing remains depressed, despite low prices and mortgage rates and the tax credit.

Cleveland real estate agent Colleen Rock notes that the city’s economy is still struggling with job losses. Another round of foreclosures could depress prices again.

“Just because we’re stabilizing, I can’t comfortably tell you we’re back to a normal market,” said Rock, an agent with Re/Max Crossroads. “It might be another year.”

The Associated Press and Reuters contributed to this report.

By Paul Wiseman, USA TODAY
Foreclosures fell for the third-consecutive month in October, another sign the worst of the housing crisis may be past.
RealtyTrac, an Irvine, Calif., real estate firm, reports Thursday that foreclosure filings totaled 332,292 last month, down 3% from September but up 19% from a year earlier. The figure means that one of every 385 homes received a foreclosure notice in October.
“It looks like it’s leveling out,” says Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, N.J. “We’re not seeing further deterioration in the housing market.”
RealtyTrac CEO James Saccacio said that the third-straight monthly drop was unprecedented and perhaps a sign “that the foreclosure tide may be turning” but warned that “the fundamental forces driving foreclosure activity in this housing downturn – high-risk mortgages, negative equity and unemployment – continue to loom over any nascent recovery.”
Four states – California, Florida, Illinois and Michigan – accounted for 52% of last month’s foreclosures.
Seven of the 10 U.S. metropolitan areas with the worst foreclosure rates were in California: Vallejo-Fairfield; Modesto; San Bernardino ; Bakersfield ; Merced; Stockton; and Sacramento.
Nevada continued to have the nation’s worst foreclosure rate: One in 80 Nevada homes got foreclosure notices in October. In Las Vegas, the figure was even worse: one in 68.
But foreclosures were down 4% in Nevada from a year earlier – the first year-over-year drop in the state since RealtyTrac started monitoring the figure in January 2006. RealtyTrac said a state foreclosure mediation program “may be slowing the inflow of distressed properties into the foreclosure pipeline.”
Foreclosures shot up 56% in Illinois last month from September.
“Despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states,” Saccacio said.
Baumohl says vulnerable homeowners with adjustable-rate mortgages are benefiting from low interest rates that keep a lid on monthly payments. But he’s worried that rates will rise – and hurt homeowners struggling to make their payments – as the economy improves and businesses start competing for credit with a deficit-ridden federal government.
See state-by-state chart below.

FORECLOSURES ACROSS THE USA
Rate rank State Filings 1 for every X housing units (rate) Change from Sept ’09 Change from Oct ’08

31 Alabama 2,447 873 1% 193%

33 Alaska 304 928 35% 18%

4 Arizona 13,345 200 -11% -24%

24 Arkansas 1,892 680 12% 0%

2 California 85,420 156 -1% 50%

11 Colorado 5,047 421 -19% -6%

20 Connecticut 2,306 624 8% -26%

32 Delaware 439 885 106% 112%

District of Columbia 258 1,102 -39% 14%

3 Florida 51,911 168 -6% -4%

8 Georgia 12,468 318 -17% 26%

17 Hawaii 925 548 -5% 134%

5 Idaho 2,471 255 -2% 111%

6 Illinois 19,946 263 56% 57%

21 Indiana 4,386 633 -2% -19%

43 Iowa 423 3,143 -45% -15%

37 Kansas 929 1,313 -27% 42%

39 Kentucky 1,164 1,638 -10% 120%

38 Louisiana 1,274 1,459 -23% 98%

41 Maine 363 1,919 -11% 4%

9 Maryland 6,661 348 -1% 124%

15 Massachusetts 5,411 503 17% 49%

7 Michigan 16,468 275 -2% 45%

27 Minnesota 2,983 773 -15% 12%

42 Mississippi 539 2,328 -62% 174%

30 Missouri 3,218 823 2% -12%

46 Montana 106 4,109 -3% 165%

48 Nebraska 123 6,348 -65% 146%

1 Nevada 13,842 80 -26% -4%

22 New Hampshire 897 662 15% 30%

13 New Jersey 7,435 471 39% -12%

25 New Mexico 1,244 693 56% 371%

40 New York 4,797 1,655 -16% 28%

36 North Carolina 3,447 1,197 -8% 7%

47 North Dakota 59 5,264 74% 40%

12 Ohio 11,646 435 7% -4%

35 Oklahoma 1,552 1,046 -48% 90%

16 Oregon 3,160 509 -9% 11%

34 Pennsylvania 5,545 988 1% 38%

14 Rhode Island 903 499 -8% 55%

26 South Carolina 2,889 700 -11% 42%

44 South Dakota 105 3,402 -17% 209%

23 Tennessee 4,030 676 14% 0%

28 Texas 11,798 800 -11% 19%

10 Utah 2,403 385 -35% 33%

50 Vermont 15 20,762 -53% 15%

19 Virginia 5,484 597 -5% -16%

29 Washington 3,337 822 9% -22%

49 West Virginia 100 8,827 -69% 12%

18 Wisconsin 4,311 594 4% 128%

45 Wyoming 66 3,672 -33% -35%

– U.S. 332,292 385 -3% 19%
Source: RealtyTrac

I hear this all the time from clients after I’ve staged their condo/house for sale.  Most recently at a $6.2 million listing in Breckenridge, but also at a $100,000 condo in Boulder. 

Unfortunately, many homeowners employ the following strategy:  We’ll list the home vacant or tired-looking, then we’ll wait and see if it sells before we decide to stage it. 

All realtors can tell you that the traffic of potential buyers is greatest when a home is newly listed.  That’s when your home should look its’ best to appeal to the greatest number of buyers.  Imagine the perfect person viewing your home, but not seeing the potential of the home because it’s vacant, only partially furnished, or because it just looks lived in. 

The cost of staging is much less than the extra mortgage payments while your house is on the market longer.  We do not charge to preview your home and give you our list of recommendations for staging (general, not specific) and estimates on the cost of staging. 

This is the strategy all homeowners should employ:  Stage your house at the time you list it for sale, to highlight the positive features of the home, eliminate distractions and help buyers visualize themselves and their furnishings in your home.  Your house will sell quicker!

Click here for DIY Tips on Home Staging or feel free to contact Nancy Ewing at Creative Angle REdesign and Staging at 970.333.4349 or CreativeAngle.net

Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.

In the Summit County area, more than 100 homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.

“This CDPE designation will be invaluable as I work with sellers and lenders on complicated short sales,” said Smits. “It is so rewarding to be able to help sellers save their homes from foreclosure.”

Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as Amy Smits with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys their credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.

The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.

“Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.