San Francisco Home Sales at 3yr High

Condo and home sales are up in the Bay Area by 20% versus last year and at a 3 year high, according to Bloomberg.com.  The average price dropped by 27% during the same period.  The drop in available jumbo loans (for purchasing expensive homes) and increase in foreclosure sales likely drove prices down.  I say in any market where the inventory is shrinking, growth is soon to be found!

Home Sales Up in Lubbock, TX

Inventories are down and home sales are up in Lubbock, TX.  Year to date prices have gone up by 11% versus 2008, and monthly June sales have increased by 2% with prices up 5% versus 2008.  Local officials are optimistic that such numbers will soon spawn a revitalization of the construction sector.  With inventory declining and prices rising, it should only be a matter of time.  Via LubbockOnline.com

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.

Utah Housing Nearing the Bottom

Utah has been one of the harder hit states by the housing collapse falling 61 perfect since 2005. However, the new federal incentive programs for home buyers seem to be slowing down the negative slide from the past 4 years. It is too early to tell if the rebound will be sharp or slow and steady but the main bottleneck seems to remain bank financing for new projects. It all comes down to the money, people.

I just have one question, are people from Utah really Utahns?

From the Salt Lake Tribune

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

New Homes and Prices Up in California Communities

A small nugget of positive news comes from California, in which several metropolitan areas are seeing year over year growth. Of course this is California and who doesn’t want to live there, right? Nevertheless, Vallejo – Fairfield had average home prices increase by 17% which is pretty darn good considering the rest of the economy. Heck it even beats any investment plan that I know of. Read more at Timesheraldonline.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.

Texas Home Sales Down in 2nd Qtr

Dallasnews.com reports that the Dallas - Fort Worth region is experiencing the lowest quarterly sales data since 1991. The sunny part is that while the sales have been poor, new home starts are even further down which helps lower overall inventory. Not the best news, but the report seems optimistic that the overall market is at least stabilizing. And we have to stabilize before we can start building again!

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.