July 18, 2024

The National Association of Realtors (NAR) reported that the median price for a single-family home in Q1 was 13.8% lower than in Q1 a year ago. But first-time buyers represented half of all purchases and many went for foreclosures and short sales. These “typically are selling for 20% less than traditional homes,” according to the NAR, and this skews median prices downward. On a hopeful note, 18 of the 152 metro areas in the survey reported PRICE INCREASES.

Equally hopeful was the fact that in many areas, the number of homes for sale continued to drop in April. Some analysts see this as a sign the housing market is nearing a bottom, especially since inventories have historically increased in April.

Finally, at last week’s NAR conference, the CEO of the International Council of Shopping Centers pointed out that demographics are in our favor. The high school graduating class in 2010 will be the biggest in our country’s history. As that huge cohort moves forward, it will generate lots of economic prosperity, beginning in the near future.

>> Review of Last Week

LET’S TAKE OUR GAINS… Well, we had a nice two-month rally in which the Dow headed north eight out of nine weeks, so it wasn’t surprising that a slew of investors finally sold off their holdings and took their gains. This of course drove prices down, so last week the stock market indexes went lower across the board.

It wasn’t just profit taking that sent stocks down. Wednesday, April Retail Sales came in at –0.4%, which investors didn’t much like. But if they had looked more closely, they would have seen the decline was mostly in two categories – gas stations and grocery stores, where experts don’t expect weakness to persist. Take out these sectors and retail was down just 0.1%.

For the rest of the week, the Consumer Price Index (CPI) came in flat, which shows inflation is in check, but the Core CPI number was up a little more than expected. Industrial Production was down for April, though better than expected. The NY Empire State Index, a good measure of manufacturing, shot up for the second month in a row, hitting its highest level since last August. University of Michigan Consumer Sentiment came in higher than anticipated. Finally, the President of the Dallas Federal Reserve averred that “the U.S. economy has pulled back from the edge of the abyss.”

Nonetheless, the Dow slipped 3.6% for the week, to 8268.64; the S&P 500 dropped 5.0%, to 882.88; and the NASDAQ slid 3.4%, to 1680.14.

Even though stocks were falling, things weren’t all that terrific in the bond market, though prices held on well enough. The FNMA 30-Year 4.0% bond, a mortgage backed security closely tied to mortgage rates, closed Friday at $100.12, down only 12bp. Mortgage interest rates were largely unchanged for the week, remaining at historically low levels.

>> This Week’s Forecast

HOUSING PLUS A FEW OTHER ITEMS They’ll be taking the temperature of our favorite industry once again with April Housing Starts and Building Permits on Tuesday morning. Wednesday we’ll have the minutes from the Fed’s April 29 meeting. Thursday the Philadelphia Fed Index gives a pretty good read on manufacturing.

Corporate earnings reports for Q1 have slowed to a crawl, but Hewlett-Packard, Target, Deere and Home Depot will be interesting to watch.

This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego real estate

2 thoughts on “Median Price for a Single-Family Home in Q1 was 13.8% Lower

  1. Given the ratio to income to sales price in California the foreclosure crisis will be a California problem for many years. Until the recent bubble lending 3 times income was a good yardstick but now it ranges from 6 to 10 times income and this has become the norm. A good example would be the city of Santa Rosa BMR problem that has a cap of 50K income for houses costing 304K using the FHA 3% down program. Low income cannot afford a 300K home; only in California is this type of thinking keep alive by local and state government. In fact the State yesterday wants to give low income families 100% financing for foreclosure homes in the most impacted parts of the state. These homes require extensive rehab which low income citizens do not have and will again provide a new wave of foreclosures in the coming years.

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