Green Shoots for Spring? March Real Estate Market Stats

by Alex Stenback on April 10, 2009

march-hosuing-stats-09.png

MAAR has just released the numbers, and point to some ‘green shoots’ in their press release:

Three key barometers of market recovery showed signs of hope in March:
1. The March Average Days on Market Until Sale is 9.0 percent lower than a year ago.
2. The March Percent of Original List Price Received at Sale is 0.6 percent higher than a year ago.
3. The April Supply-Demand Ratio, which measures the number of houses for sale per buyer, is 23.5 percent lower than a year ago.

Definitely encouraging news – low rates, low prices, and plenty of incentives are doing their job to soak up inventory.

The market remains bottom-heavy, with foreclosures and short sales accounting for 53.5% of the pending sales and posting a median price of $122,000.00.  Accordingly, median and average sales prices continued to slide (down 22.9% and 22.4% respectively) but it must be noted that those figures are so heavily influenced by the number of sales in the lower price bands that they are not a very useful baromoter.

Despite the good news, headwinds persist.  Chief among them, as you can see in the graphic above, we still have a supply “overhang” that needs to work itself out.   But also:

Sellers may still face challenges, but lower rates, higher affordability, and lower prices may make 2009 a sweet spot for aspiring homeowners.

{ 1 comment… read it below or add one }

Chuck April 19, 2009 at 5:44 am

It continues to amaze me the lack of understanding of what Alt-A and Option-ARM loans did to the housing market during 2003-2007. The “resets” discussed in the media imply that these are “Traditional ARM” resets, e.g., simply a rate adjustment. If fact, nearly all of the Alt-A / Option-ARM loans have a reset from paying interest-only to interest-plus-principal, and for most people who used these loans, it means immediate foreclosure. It’s a small fraction of borrowers who can budget a doubling or tripling of monthly mortgage payment.

Another way to think of it is that Alt-A and Option-ARM loans allowed a borrower to “temporarily” live in a house that cost 2X or 3X what they could afford/pay off.

Now that these loans are gone, the market will fall back to pricing with traditional loan underwriting, which is 1998-2001.

Leave a Comment

 

Previous post:

Next post: