Giving thanks for affordability
Thanksgiving Day is tomorrow and giving thanks for good health, family and friends is traditional when we celebrate this day. But there is also something more you should be thankful for this year – an affordable real estate market.
The National Association of Realtors’ conference was held last week in San Diego, and one of the hot topics presented at the conference was the Homeownership Survey conducted by Move.com. Move.com is a real estate Web site providing information on properties for sale, financing, remodeling and general real estate services.
Its survey indicated that affordability and foreclosures are the top reasons why buyers are making home purchases. One out of eight (12.1 percent) of the homebuyers today are planning to purchase a home as an investment property. This is an increase of 5.6 percent from seven months ago.
Also reported is the fact that first time home buyers make up almost half of today’s home purchases. Almost 10 percent of consumers say they plan to buy a home in the next two years, while 5.4 percent plan to purchase in the next 12 months. 48.3 percent of these buyers are first time buyers who are getting the benefit of an additional extension of the $8,000 first time buyer tax credit through the middle of next year.
This new affordability has resulted in home prices rising nationally for the second consecutive quarter. Although prices are still down from last year, a National Association of Realtors' survey reveals that most states have continued to see a surge in existing home sales for the second straight quarter. During the third quarter, the national median home price was $177,900, an increase of $7,000 from the previous quarter.
Locally, Manatee County sales of single-family homes and condos are rising, according to the Manatee Association of Realtors. It has reported a 34.9 percent sales increase from October 2008 to October 2009. Pending sales are also higher than last year, with the median sales price of all existing homes sold during the month of October reported at $185,625, higher than the national average.
Another fact making the national real estate market looking better is something reported by the Wall Street Journal. It indicates that only 21 percent of all single family homeowners were underwater on their mortgages (owing more than the market value of the property) in the third quarter of the year, down from 23 percent at the end of the second quarter. This could result in reducing the rate of foreclosures and keeping the market moving forward.
My personal feeling for being bullish on the real estate market is always the 75 million baby boomers in this country and 6 million just across the border in Canada. When you consider 29 percent of the population is between 45 and 63 years of age, it’s a pretty good bet that this group will be starting to look for retirement homes, especially now when pricing is so attractive.
So this Thanksgiving when you’re giving thanks to whoever or whatever in your life you believe in, don’t forget to thank the god of real estate for our new found affordability. With a little luck, next year you’ll be thanking the god of real estate appreciation.
