Are we at the bottom?

Research Firm Says Housing Currently Undervalued by 14% to 17%
December 13th, 2010

Today’s post contains a link to another article, which was first sent to me and other real estate professionals in Real Trend’s periodic email update on the industry. The article itself is from a web site called DS News.com, which bills itself as a site “delivering stories…impacting the mortgage default servicing industry.”

The article itself, as you’ll see, cites research by a group called “Capital Economics,” and it cites a number of other sources in arriving at the conclusion that overall, housing prices are now 14% to 17% undervalued “relative to disposable income per capita.” Low interest rates also play into the affordability mix. The point, as we’ve been saying for months, is that today’s buying opportunity is compelling. The article also muses over possible reasons why this record level of affordability hasn’t done more to spur sales. They finger the usual suspects: high unemployment, tight credit, and negative equity for many current homeowners.

We certainly agree that these are all factors at the margin, and will remain so for some time. We continue to believe, however, that plain old-fashioned fear is a bigger driver than any of the others. We continue to hear from buyers who are afraid to commit because they hear, or fear, that prices may fall further, and they don’t want to get in too early. While this widespread attitude may create a self-fulfilling prophecy in the short run, the fact remains that over the longer run, markets will always fight to return to balance, and a fundamentally undervalued market won’t stay that way for long.

We understand that, human nature being what it is, many people will wait until they see convincing evidence that we’ve reached the bottom before they take the plunge. In other words, they’ll wait until the bottom has passed, and then they’ll jump into a rising market. They may not gain anything by waiting, and may well lose a little, but they’ll feel better about it. We’re already seeing this phenomenon with relation to interest rates. 30 year rates have risen from 4.25% to 4.75% in the last few weeks, as we said they would. We’re starting to see buyer move to get in before they go higher. This may be the impetus to get prices themselves moving up soon, as inventories start to decline. In other words, the evidence is starting to mount that the “bottom” may have already passed.

Nick Woodard
www.nickwoodard.com
Hodges and Fooshee Realty
615.566.9839

New Goals!

Man is it HOT out there!!! And not just the weather.. the real estate market is heating up too. I have seen more and more buyers hitting the market as rates continue stay at record lows. Last week I had a client lock in at 4.5% intrest rate! That is a historic best for any client I have ever worked with. What an amazing opportunity.

Recently, I have started creeping up on a personal goal of mine. I have set a goal to sell 100 homes before I turn 31 years old. Last week I sold my 71st home to a wonderful couple and number 72 will be closing on Friday of this week. That gives me a year and a half to sell 28 more homes! I can't thank you all enough for your continued support of me and my career. Your business and referrals are such blessings to me and my family. I truly can't thank you enough. I pride myself in working harder than anyone else, educating my clients more than anyone else, and truly caring more than anyone else. I have surrounded myself with an amazing supporting staff that works just as hard as I do for my clients. God has truly blessed me with an amazing career and amazing people to work for. If I can ever serve you or anyone that you know, please give me a call. Thank you all again for stopping by. God Bless.

Nick Woodard
www.nickwoodard.com
615.566.9839

Will the tax credit be extended???

http://blog.hsh.com/index.php/2010/02/will-the-homebuyer-tax-credit-be-extended-again/

Will the tax credit be extended???

http://blog.hsh.com/index.php/2010/02/will-the-homebuyer-tax-credit-be-extended-again/

Rates drop below 5%

Rates on 30-year fixed mortgages fell slightly this week, dipping below 5 percent, the mortgage financier Freddie Mac said Thursday.

The average rate on a 30-year fixed mortgage was 4.97 percent this week, down from an average of 5.01 percent last week. Last year at this time, the rate for a 30-year fixed mortgage averaged 5.16 percent, Freddie Mac said.

Rates fell to a record low of 4.71 percent in early December. They have held around 5 percent thanks to a Federal Reserve program to pump $1.25 trillion into mortgage-backed securities to try to keep rates low and make home buying more affordable. That program is set to end March 31.