Chicago Market Up in 2nd Qtr

The Illinois Association of Realtors announced Tuesday that home sales were up 67% in the 2nd quarter versus the 1st quarter of 2009.  The year over year numbers are still down versus 2008 however.  Also a good sign is the fact that home prices actually increased 7% as well.  When higher sales are driven by weakness in pricing you can argue that there is still uncertainty in the market, but if pricing and numbers are going up, that signifies true demand.  Source: Chicago Tribune

MO Housing Sales Steadying

Thankfully we are starting to see some reports of housing turning around lately.  This one comes from Cape Girardeau County, Missouri where only 3 less homes closed last month than the same period in 2008.  Especially noteworthy is the fact that the average home price was UP.  The average year to date numbers are still down versus last year, but only by a small amount.  Read more at the SE Missourian.

Home Sales Steady in Des Moines

A little positive news this morning from the Des Moines Register, where home sales appear to be evening out.  Year over year figures are basically steady while prices have dropped slightly.  The good news is that realtors are starting to report that more buyers are coming forward, a good sign indeed.

Stimulus Plan Slow, Easy to Criticize

There are a lot of critics to the stimulus package of late, including these articles from the New York Times and San Francisco Chronicle. Of course only a small part of the stimulus package has been spent. By the end of the year, only 25% of the $787 billion will be paid out. So it is a little early to criticize. Not only that but the economy is a BIG ship and it takes time to get it pointed right again. Keep in mind that this isn’t about dumping a couple of bucks and having people spread it around. The plan is about long term sustainability, building infrastructure and technology that will create jobs years from now.

AIA Report Forecasts Falling Commercial

According to a new report from the American Institute of Architects, the commercial contruction market is expected to fall by as much as 20-30% this year and 13-17% next year . Chief Guessmaker Kermit Baker says that for new offices and retail space you must first have jobs and consumer spending. You can read more of the gloomy story at Bloomberg.com.

New Appraisal Rules Mean Lower Sales

Beginning May 1st a new regulation was enacted to try to put a buffer on often inflated appraisal reports. You may know that the appraisal is what the banks use to value a home prior to committing to a loan for the property. Most appraisals are honest fair valuations based on similar homes in the area. But appraisers have some leeway in the numbers and unscrupulous ones may even give the bank and realtor whatever they need to get the deal done.

Now the bank and realtor have to deal with a 3rd party who orders the appraisals in order to keep such favors in check. The problem is that now the appraisals take weeks instead of days, requiring longer mortgage rate locks and extensions which are more expensive. Also if the home’s value was questionable the friendly local appraiser could give a quick ‘yes/no’ response to the bank and the deal could be halted without any wasted time or expense. Now an appraisal must actually be ordered (for $300-400) to determine this go/no-go. Then if the deal gets cancelled the customer is out the appraisal fee.

Read more at stltoday.com

Did We Miss the Opportunity to Fix Housing?

Well, only if you consider a complete and instantaneous reverse in the market trends. According to a report from the New York Times, we missed the chance to fix the housing market by 3 years. The downtrend started very sharply in 2006 but a fix wasn't in place until early 2009. Hats off to all the policymakers and economists out there! It also explains that the stimulus money may not go as far toward fixing residential construction as you might hope. Since much of the money is going to public programs (roads, bridges, etc) a lot of residential labor and equipment is still idle because it cannot be used in public projects. If you want to beat yourself over the head some more, read about it at New York Times.

Existing Home Inventory Hurting New Home Sales

While new home sales continue to be be a thorn in the economy’s side it is the ‘buy used’ mentality that seems to be hurting most. It certainly seems obvious that buyers would shop new homes against what they could potentially buy on the existing market. But if you combine that fact with the slide in home values (also related to the supply side of the equation) and new homes have trouble competing. Read more at CNNMoney.