Home Sale Thud to 5-Year Low Point

NAR Report of Existing Home Sales No Surprise to Anyone

Mortgage Rates Up For Third Straight Week

High Appraisals Signal Change

Home Sales in 'Free Fall'

Oh boy, I wish I had better news. The Fed and the media are having a field day with the housing market. Yesterday I heard a report on the radio that the Fannie-Mae chief had announced that house prices would drop about 4% this year, even more next year, and the drop would continue for years to come. If only the reporter would add, "Remember, these are national figures and may not be accurate in your market". My fear (and it's echoed by many other people in the industry) is that the news becomes a self-fulfilling prophecy. The more the media announces home-sales and home prices dropping, the more buyers sit on the sidelines and wait for the prices to drop.

We had a slight surge in sales in August, but since the Labor Day weekend and back-to-school, the market has been deathly still. Showings have dropped significantly. I'm still getting phone calls from the marketing I do, but it's mostly lenders, calling to offer their services in case I talk to a real live buyer.

I've talked to buyers who were hot to buy a couple of months ago, who now say they think they should wait for prices to come down some. I explain, in vain it seems, that prices are not in free-fall in our area. Foreclosures are not taking over our market (Prince George's County seems to be weathering that storm very well, thankyou.) However, interest rates are going up and waiting may place buyers in a position where they can't take advantage of price reductions.

The problem is that it is likely that prices will continue to drop. Partly because we're entering that time of year, and partly because of the media. The following statistics tell the story:

In 2006, the months of June, July and August looked like this in Prince George's County:

June - 2,056 new listings; 1,219 contracts written, total dollar volume sold $427,262,179
July - 1,969 new listings; 1,184 contracts written, total dollar volume sold $363,640,435
Aug - 2,054 new listings; 1,171 contracts written, total dollar volume sold $424,592,204

In 2007, those same three months looked like this:
June - 2,014 new listings, 724 contracts written, total dollar volume sold $232,168,671
July - 1,963 new listings, 729 contracts written, total dollar volume sold $205,298,215
Aug - 1,926 new listings, 570 contracts written, total dollar volume sold $198,091,212

That's a 53.35% drop in dollar volume sold over the same month last year! It's even a pretty big drop from just last month. As you can see, around the same number of homes are coming on the market each month as last year, but the number of homes that are actually selling has dropped by a huge amount. This is because the buyers are staying away in droves.

And when I hear the news each day -- much as I don't like it -- it's hard to blame them.

The following are articles that I think are relevant in today's market. They say what I would say if I could say it this well!

From 9/21/07, Realty Times: An article by Blanche Evans on what to tell buyers who are sitting on the fence, waiting for prices to drop. Those who have spoken to me about the current market have heard these same words -- we can't see into the future. Prices may drop, but interest rates may go up, keeping that dream house out of reach. The mortgage news is all doom-and-gloom and it's having a greater effect on the market than the actual events that are unfolding. The recent rate cuts by the Fed don't have much to do with mortgage interest rates. They're two different animals. Anyway, as usual, she has said it way better and in more depth than I've said it. So read on...

An article by Blanche Evans (Editor of Realty Times, a well-respected newsletter for consumers and the industry alike), who speculates that our current mortgage and housing problems can be traced back to the Tax Relief Act of 1997, which changed the way homeowners deal with capital gains upon the sale of their homes.

A Washington Post article by Kenneth R. Harney, detailing how the mortgage credit crunch is affecting all of us, not just those who have credit problems. Today your credit score might be good enough to qualify for the best interest rates and terms. The criteria for those interest rates is changing daily, lender by lender. And your credit may be affected by where you live, as well. Read on...

(c) Susan Pruden.

These "over-50" eyes don't multitask as well as they used to. I don't seem to be able to juggle map book, MLS property printout, and driving as well as I used to. Well, I used to call it multitasking. Nowadays it's called "distracted driving".

 

Anyway, I broke down and got a GPS system. She talks to me, tells me what turns to take and how far I have to drive before I get to that turn. Very helpful, even if occasionally I confuse her by taking detours that aren't in her plan. Like to the grocery store. She politely tells me that she is "re-calculating route", then tells me to make a "legal u-turn" as soon as is possible.

 

But the funniest part is her pronunciation of certain words. "Maryland" seems to flummox her a bit, but it is recognizable as "Maryland". But my absolute favorite is her pronunciation of "Belleview Avenue" in Cheverly.

 

As I enter Cheverly, she crisply says "Turn right at Believe You Avenue"! So for all my friends who have an address on Belleview Avenue, just be warned, there is a new way to say it, so say it proudly!  "I live on Believe You Avenue in Cheverly!"

 

Thanks goodness for things to be amused by.

 

(C) Susan Pruden.