Today, we have a special treat. Ann Douglas of DoorFly.com is our guest blogger explaining why most would prefer to own. Enjoy! – The KCM Crew

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth… (We) are now experiencing 100,000 property views per minute.”The latest Credit Suisse Monthly Survey of Real Estate Agents reports:
Our Monthly Survey of Real Estate Agents pointed to another month of improved traffic – the third straight month, and the highest level for our traffic index since April 2010, the last month of the homebuyer tax credit. The improved economy and stronger consumer confidence has translated into an increase in homebuyer traffic.
Pending home sales improved further in December, marking the fifth gain in the past six months.
“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”The National Association of Realtors just reported that the number of house sales increased 12.9% over last month.
“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.
“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”
“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.
“Contrary to popular belief, the American Dream of homeownership has not turned into an American nightmare. In fact, we’re seeing a national resurgence of buyer and seller activity on Trulia.com,” said Pete Flint, CEO of Trulia.
“During the housing bubble, the American Dream of homeownership was beyond reach for many young adults. Stuck with student loans and entry-level jobs, many had resigned themselves to being lifelong renters. But the tide is changing – Millennials are now today’s most serious homebuyers,” says Tara-Nicholle Nelson, Consumer Educator for Trulia.
The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.
“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?
The U.S. Federal Reserve, which has administered life support to the economy over the last two years, says it’s seeing some promising signs of life.This is most easily seen in the increase in the Dow which has shown a 20.9% in increase in the last twelve months.
In its “Beige Book,” containing reports from the twelve Federal Reserve Districts, the central bank finds “moderate expansion” of economic activity at the end of the year.
It said conditions were improving in the Boston, New York, Philadelphia, and Richmond Districts. Activity increased modestly to moderately in the Cleveland, Atlanta, Chicago, St. Louis, Kansas City, and Dallas Districts.
The economy of the Minneapolis District “continued its moderate recovery,” while that of the San Francisco District “firmed further”.
“I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”
(Our) Home Data Index shows that U.S. home prices stopped declining in early January and have posted their first uptick since mid-August 2010.It seems prices have stabilized and, in some markets, are perhaps even showing appreciation. However, before we get too excited let’s take a look at the reason this is taking place. According to Clear Capital:
“This recent national change in price direction is encouraging for the overall housing sector,” said Dr. Alex Villacorta, senior statistician at Clear Capital.
“This uptick is the first non-incentivized change in prices we’ve seen since the downturn began, and could provide great opportunity for buyers, sellers and investors alike. Although many markets still remain under significant downward pressure in light of increased distressed sale activities, it is clear that the severity of the downturns observed in October and November have subsided.”
…it is still too early to determine whether this current uptick in home prices is a temporary reprieve or the start of a sustained recovery…Why? The number of distressed properties coming to market slowed dramatically in the last quarter of 2010.
…every spike in REO saturation (REO saturation calculates the percentage of real estate owned properties sold as compared to all properties sold in the last rolling quarter) has corresponded with a decline in home prices, and vice versa. The most recent rolling quarter for REO saturation has slowed considerably after gaining 3.2 percent during Q3 2010, with national REO rates only climbing 1.4 percent. A decrease in REO saturation indicates that an increasing proportion of fair market transactions are occurring, and as the level of distressed transactions decrease, prices tend to increase since the overall market value for an area is less affected by distressed comparable sales. If this observed negative correlation persists, a leveling off of the national REO saturation rate could indicate that home prices are poised for further gains well ahead of the seasonal spring lift.As we explained months ago, there is a window of opportunity to sell before a large number of discounted properties go up for sale. This opportunity will last for the next 60-90 days. By then, banks will have fixed many of their paperwork challenges and again start releasing distressed properties to the market.