April 2009 Housing Stats

April 2009 Regional Home Sales Northern Virginia: April 2009 The Northern Virginia Association of Realtors® reports on April 2009 home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton. A total of 1,544 homes sold in April 2009, a 6.12 percent increase above April 2008 home sales of 1,455. Active listings decreased by 23.04 percent from last year, with 8,234 active listings in April, compared with 10,699 homes available in April 2008. The average days on market (DOM) for homes in April 2009 decreased by 15 percent to 85 days, compared with 100 days in April 2008. Sales prices continue to remain lower than those realized last year. The average sales price in April fell by 16.29 percent from April 2008, to $405,514, compared with last April's average of $484,432. The median price of homes sold in Northern Virginia in April was $356,750, which is a decline of 13.72 percent compared with April 2008's median price of $413,500. Greater Northern Virginia: April 2009 Sales activity in Greater Northern Virginia (NVAR jurisdictions plus Prince William, Loudoun and the Greater Piedmont counties) for April 2009 continues to show an increase from 2008. The number of Greater Northern Virginia region homes sold in April was 2,904, a 5.75 percent increase from April 2008's total of 2,746 sales. This marks the thirteenth consecutive month of increased year-over-year sales totals for Greater Northern Virginia. The average sales price of $331,600 in April 2009 continues to lag behind the 2008 average by 18.63 percent. The April 2008 average sales price was $407,519. Across Greater Northern Virginia, the number of listings showed a decrease from 2008 numbers, with 15,683 listings active, which is 33.18 percent less than this time last year, when 23,471 homes were available. The average DOM for a home sold in April 2009 was 89 compared with last year's 112 DOM, a decrease of 20.52 percent. Price Stabilization Is First Step to Recovery: Tax Credit Bridge Loans on the Way Although there are encouraging signs in the housing market - including a pick-up of home sales in previously hard-hit markets, record affordability, and continuing low interest rates - prices have not yet hit bottom, according to a panel of housing and economic experts who spoke at a real estate summit hosted by the National Association Of Realtors® as part of its Midyear Legislative Meetings in Washington, D.C., the week of May 11, 2009. To put a floor under the market, the federal government must continue to intervene, panelists said, and expanding the first-time home buyer tax credit is a good place to start. The credit should be expanded to all households, they said, including those with higher incomes, and increased significantly in value, perhaps to $15,000 to $16,000 instead of the current $8,000. "Then it would start to move real estate," said Robert Sibcy, president of Sibcy Cline, REALTORS®, based in Ohio. In a positive move, the U.S. Department of Housing and Urban Development is set to roll out guidelines permitting HUD-approved lenders, public housing finance agencies, and some nonprofit organizations to make bridge loans to home buyers. The loans would be collateralized by the $8,000 tax credit, giving buyers the upfront funds for a down payment. The inability to use the credit for the down payment has been a major stumbling block for the tax credit. NAR has been calling for HUD to use its authority to allow the bridge loans. During the summit, HUD Secretary Shaun Donovan announced that HUD has decided to allow bridge loans, sparking a loud cheer of appreciation from more than 1,000 Realtors® attending the session. "We want FHA consumers to access the credit to use as a down payment," Donovan said. "I want to thank NAR for its partnership with FHA." More details on the guidelines will be released in a few days, he said. Donovan said the credit is expected to stimulate 100,000 first-time home buyer purchases and 60,000 move-up purchases this year before it expires December 1. Affordability At All-Time High Historically low interest rates and low prices combine to put housing affordability at an all-time high, according to NAR Chief Economist Lawrence Yun. Speaking at NAR's Midyear Legislative Meetings in Washington, D.C., Yun offered his analysis of the current national and regional housing picture, as well as his predictions for the future of the industry. "We're overshooting downward, which sets the stage for a big upswing," Yun stated. "Any further decline is over-correction at this point," he added. Early summer will be a critical time to see how buyers are responding to the federal stimulus package, Yun said. He cautioned Realtors® to encourage buyers to stay within their budgets and called for sound underwriting standards. "We want sustainable homeownership," he said. Yun noted that the credit crunch appears to be easing somewhat. He predicts some economic recovery in 2010, with national unemployment edging higher - to 10.5 percent - before stabilizing. People buying today could see slight increases in value by next year, Yun concluded. "Today's homebuyers are perfectly positioned to hedge inflation," he said. Northern Virginia's Market Hits Bottom, Expert States at NAR Summit at Mid-Year Elizabeth Razzi, of The Washington Post, covered the panel of speakers at the Summit at the NAR Midyear Event. She wrote the following item on her May 13 blog, citing Tom Lawler, founder of Lawler Economic & Consulting in Vienna: Beware Dated Housing Stats "Anyone here from Northern Virginia?" asked Lawler. He was one of the panelists in that marathon economic summit meeting that the NAR held at the Marriott Wardman Park [on May 12]. "Northern Virginia is actually starting to bottom," he said. He warned participants that all the home-price indexes reported in the news rely on dated information. "Case-Shiller not only has a lot of foreclosures, but the last index was based on January-February closings and those contracts were made a month or two earlier," he said, referring to the closely followed index of home prices. 'Economists In The Latest Wall Street Journal Survey See An End To The Recession By Autumn,' The Wall Street Journal Reports According to the WSJ survey results: Half the respondents said that fiscal and monetary stimulus has provided the basis for a sustainable recovery. Twenty-seven percent said it has boosted the economy, but they had doubts about sustainability. According to the article: "The Fed has the big guns and has effectively averted a depression or a much more severe recession," said Diane Swonk of Mesirow Financial. The role of the Fed in stabilizing the market has boosted the outlook for Chairman Ben Bernanke. On average, the economists say there is a 72 percent chance that Mr. Obama will reappoint the Fed chairman in 2010. "If there's a hero to this piece, it's Ben Bernanke," said Paul Kasriel of The Northern Trust Corp. Although there will be slight improvements in the economy, the unemployment rate will increase before it declines, the economists agreed. Forty-six percent of the surveyed experts noted that the recession could last three to four years, with 27 percent believing that it could end in five to six years. All economists noted that recession corrections take years.