Homebuyers pumped up the volume in the third quarter of 2011 but only a few areas of the country made any noise when it came to an increase in selling price.
With mortgage rates at record lows and a drastic reduction in home prices the past few years, many potential buyers on the fence appear to be reconciled to the current conditions and are making a move on houses in some locations.
“I think the economy has been down long enough that people know where it is, and if they have the money to do something, they realize that the pricing’s not bad and that now is the time they should act,” said Lou Ulery, a real estate agent who works the West Palm Beach and Delray Beach areas of Florida. “The pricing hasn’t gone up much but there are more sales.”
Ulery, one of several HouseHunt agents surveyed about third-quarter conditions, said that his area of Florida attracts investors and people looking for second homes. He added that the average time a house remains listed on the market is between four and five months.
“The ones that are priced well go a little quicker,” he said. “It’s going to take a while for things to really turn around, but the higher-priced homes seem to have hit the bottom about a year ago. A lot of the more expensive homes are definitely on the way back up.”
Overall, 22 percent of HouseHunt agents said prices were up 0 to 5 percent, an increase of 3 percent from the previous quarter, while 58 percent reported a negative appreciation, down from 64 percent in the second quarter. States with the highest appreciation included West Virginia, Wyoming, North Dakota, New York and Kansas; among states with the greatest depreciation were Nevada, Arizona, Illinois, Minnesota and Georgia.
Regarding inventory, 68 percent reported a good supply, a decrease of 14 percent from the second quarter. The large jump likely signals an increase in activity and the probability that banks aren’t releasing a backlog of foreclosed houses onto the market.
“There is a strong demand for properties that can actually be bought,” said Mike Hoke, a real estate agent with an office in Riverside, CA. “We’re getting close to 100 percent of the asking price, and in some cases a bit more. Prices are down 5 percent on average from a year ago, but the activity level of good, well-priced homes in good condition that you can actually buy is probably up.”
Hoke said that some REOs or equity sales are on the market less than 30 days but that most short sales “take forever.” He said one recent buyer had to go through four lenders before a sale could get done, leading him to surmise that an uptick in the overall mood of the country and less-stringent barriers to loans is needed to get the housing market rising on a steady path.
“Buyers are increasingly nervous and lenders are increasingly a major problem when it comes to getting deals done,” Hoke said. “Many buyers are sitting on the sidelines to see if prices will go down even further, and some are there because of the lending process. Something needs to break loose.”
Activity in the Phoenix metropolitan area appears to be doing that despite Arizona’s poor showing in almost all national housing statistics.
“Low interest rates and people sensing that we’re near the bottom of the crisis” has resulted in the “biggest sales surge since 2005,” said Kevin Houston, a real estate agent in Phoenix whose office concentrates on eastern cities of the region such as Tempe and Chandler. “Since March, sales are up quite a bit on properly priced properties, and we’re usually getting multiple offers on them.”
Houston described his mood as “cautiously optimistic,” but any hint of good news is tempered by banks continuing to hold back a lot of properties. He said a recent report revealed that Maricopa County had 276,000 vacant homes, most of them likely stalled in the foreclosure process.
“It looks like we have a shadow inventory that’s pretty large,” Houston said. “I think banks and lenders are stringing them in because they don’t want to flood the market.”
In northern Virginia, agent Leslie Woods-Hulse reported that volume dollar sales were up 23 percent in September from the month before and 7.6 percent from a year ago, with the total number of closed properties also up 23 percent from August and 13 percent from a year ago. The average sold price of a home and the closing price versus the asking price are virtually unchanged, however. The similar numbers are likely a combination of a stalled economy and the fact that a lot of sellers aren’t overpricing their homes anymore.
“The sellers are becoming more aware of what to list their particular homes for, so the list price to sale price is much better than it used to be,” Woods-Hulse said. “Also, the appraisers, who have gone through some pretty stiff scrutinizing to do their jobs, are appraising the properties at for what they’re really worth in today’s market.”
Hulse-Woods, who doesn’t see the housing market leveling off until at least 2013, sees glimmers of hope moving ahead.
“There are investors coming out of the woodwork to buy properties, which should help absorb properties back into the market,” she said. “Hopefully that will get real buyers back into the market as opposed to all of the flippers we saw a few years ago. That in itself is doing a tremendous amount for the industry and getting us into more of a level playing ground. But it has been a trip.”
Here are a few additional results from the third quarter survey conducted by HouseHunt.com:
• Seventy-four percent reported that the average time a house spent on the market was in excess of 60 days, a decrease of 10 percent from the second quarter.
• Twenty-seven percent said customers were first-time buyers, down from 34 percent in the previous quarter.
• Sixty-five percent said they were getting multiple offers on their listings, the same figure that was reported in the second quarter.
HouseHunt’s Quarterly Comparison Chart For the U.S. | 3rd Qtr 2011 Results in Red
| 2009 | 2010 | 2011 | ||||||||
| Quarter | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd |
| Buyer-Seller Ratio | ||||||||||
| More Buyers | 32% | 32% | 33% | 38% | 34% | 44% | 32% | 34% | 35% | 39% |
| More Sellers | 57% | 58% | 58% | 42% | 53% | 43% | 61% | 49% | 52% | 38% |
| About Even | 11% | 10% | 9% | 20% | 13% | 13% | 7% | 17% | 13% | 23% |
| Avg. Time On Market | ||||||||||
| 0-60 Days | 21% | 22% | 35% | 21% | 23% | 16% | 11% | 10% | 16% | 26% |
| Sold in 60 Days Plus | 79% | 78% | 65% | 79% | 77% | 84% | 89% | 90% | 84% | 74% |
| Unsold Inventory | ||||||||||
| Good Supply | 91% | 85% | 83% | 76% | 82% | 84% | 87% | 87% | 82% | 68% |
| Tight Supply | 9% | 15% | 15% | 24% | 18% | 16% | 13% | 13% | 18% | 32% |
| Annual Price Appreciation | ||||||||||
| Up 0-5% | 16% | 14% | 26% | 21% | 32% | 20% | 19% | 21% | 19% | 22% |
| Up 5-10% | 3% | 3% | 6% | 9% | 7% | 9% | 11% | 9% | 7% | 4% |
| Up 10% Plus | 4% | 3% | 3% | 7% | 4% | 6% | 5% | 6% | 5% | 8% |
| Unchanged | 7% | 3% | 3% | 6% | 9% | 10% | 10% | 8% | 5% | 8% |
| Negative Appreciation | 70% | 77% | 62% | 57% | 48% | 55% | 57% | 56% | 64% | 58% |
| Buyer Activity | ||||||||||
| Repeat/Move-up * | 48% | 48% | 34% | 50% | 58% | 58% | 63% | 58% | 66% | 73% |
| First-time Buyers | 52% | 52% | 66% | 50% | 42% | 42% | 37% | 42% | 34% | 27% |
| Ask vs. Sale Price | ||||||||||
| Less Than 95% | 56% | 57% | 55% | 48% | 47% | 57% | 59% | 54% | 45% | 49% |
| More Than 95% | 44% | 43% | 45% | 52% | 53% | 43% | 41% | 46% | 55% | 51% |
| Multiple Offers | ||||||||||
| Yes | 60% | 60% | 65% | 60% | 60% | 59% | 54% | 62% | 65% | 65% |
| No | 40% | 40% | 35% | 40% | 40% | 41% | 46% | 38% | 35% | 35% |
| * Total includes 3rd Quarter Investors | ||||||||||
About HouseHunt, Inc.
HouseHunt, Inc. is a consumer-oriented Internet firm that provides free information and services to homeowners, home buyers and home sellers across the United States through its member-agents and through its primary web site, HouseHunt.com.
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