January 31, 2008
Welcome to the first edition of "Market Matters Advisory." Part of C.A.R.'s
recently launched Market Matters initiative, this weekly Advisory will
provide market response information to help you navigate today's real
estate climate.
The Advisory will keep you informed of the latest real estate market news in print, broadcast, or online; and provide a heads up on developing news stories and trends. It includes media coverage summaries, quick tips, factoids, and concise strategies on how to interpret the news, put it in perspective, and explain what's happening to your clients.
It also will help youmonitor and shape stories that impact the
REALTOR® image.
December sales and price report released
C.A.R. on Tuesday released its December 2007 sales and price report.
Home sales decreased 33.4 percent in December in California compared with
thesame period a year ago, while the median price of an existing home fell
16.5 percent.
While the market is not what it was a year ago, serious buyers have more
choices than ever and they are generally safe from the bidding wars of
previous years. Interestrates on long-term, fixed, and adjustable mortgages
are near their historic lows, and the economic stimulus package that passed
the U.S. House of Representatives earlier this week is now in the
Senate and may increase the conforming loan limit, giving buyers in
high-cost areas access to more affordable loans.
For tips on explaining to your clients what the December sales and price
report means, visit Talking Points (click here), or go to
http://marketmatters.car.org
and click on the Talking Points button on the navigation menu.
To read the full C.A.R. news release, click here.
You also might want to check out our Client Information
Sheets (click here) for handouts to share with
clients. Topics include "Why buy a home in today's market," "How to
purchase a home," "Price your home to sell," and more. The sheets are
available as a PDF so you can download and print them.
Fed cuts interest rates by half point
"It is clear that the Fed has moved into a crisis-fighting posture," said David Jones, chief economist at DMJ Advisors.
The Fed move was expected after the government reported the economy slowed to a paltry 0.6 percent growth rate in the last three months of 2007, adding to fears of a recession. A recession is usually defined as two consecutive quarters of declining gross domestic product, or GDP. The GDP is the total market value of goods and services produced in a country in a given period of time. The Fed's hope is that making credit cheaper will encourage additional borrowing, giving the economy a needed boost amid a global credit crisis that began in August.
To read the full story, click here.
Slump hasn't curbed 'House Lust'
In, "HouseLust: America's Obsession With Our Homes," (Currency, $24.95)
"Newsweek" reporter Daniel McGinn posits that despite the slump, Americans
are still obsessed with real estate. The suburban Boston resident, who
freely confesses his own struggles with house lust, explores seven facets
of the vice in his book. For research, he spent the night in a model home,
attended real estate investment seminars and, in one tedious weekend,
obtained his own real estate license.
This "USA Today" review of McGinn's new book offers some welcome news--even
in a housing downturn, consumers remain committed to achieving the American
dream. The book lays out what drives consumers to pine for ever bigger,
better homes. It also contains valuable information for converting a fence
sitter into a client.
To read the full story, click here.
Home buyer who believes she overpaid sues real estate agent
"I don't think it's a suit that has merit. I think the standard of proof is going to be that this agent willfully, deliberately with malicious intent withheld this information. This information that was allegedly withheld is public information. The bank wouldn't have given them the mortgage in the amount thatthey got if the appraisal didn't back the house." -MSNBC Legal Analyst Susan Filan.
Home buyer Marty Ummel has been making the national media rounds complaining about a buyer's agent based in Carlsbad who helped her find her San Diego home. If clients ask you about this case, remind them that although agents are there to counsel and advise, buyers ultimately must do their own due diligence. You also might point out that multiple factors influence the value of houses that may appear to be comparable but are in fact quite different: condition of the property, upgrades and improvements and the like. Each seller's case also is unique; some may be more motivated than others, which also impacts the sales price. All the more reason to make your case for using a REALTOR® who knows the market to guide buyers through the purchase process.
To view the full story, click here.
This case has generated a lot of buzz, including a column by Frank Cook,
publisher of "Real Estate Intelligence Report." He's not convinced
the case is a winner.
To read the column, click here.
In other news:
The presidential candidates and the housing
crisis
Case-Shiller home prices in U.S. fall for 11th
month
Homeownership in record
plunge
Fourth quarter saw biggest one-year drop since tracking began in
1965 as mortgage problems and rising foreclosures take their
toll.
FBI probes 14 companies in subprime
mess
New stimulus plan may spur
conflict
One man's foreclosure, another man's
steal
Wave of foreclosures in California takes auction home prices way down, to
the delight of buyers
Tips on upcoming news stories, especially those that warrant a closer
look.
Diane Espinoza of the "Sonoma Valley Sun" is launching a new column,
tentatively called "Comps," that will compare what the same amount of money
will purchase in different cities and neighborhoods in and around Marin
County.
For a link, click here.
Here's what to tell consumers.
· Interest rates continue to remain near their historic lows. The fixed-rate mortgage was 6.10 percent in December, below November's 6.21 percent, and slightly lower than 6.14 percent from December 2006.
· December's fixed-rate was at its lowest level in the past five months, having peaked in July 2007 at 6.7 percent.
· Month-to-month sales increased for the second month in a row, rising 4.7 percent in December compared with November.
· The time a home remained on the market prior to selling improved to 67.2 days in December compared to 72.1 days for the same period a year ago.
· In December, it would have taken 14.5 months to sell all the homes on the market at the current sales rate, an improvement compared with November, when it would have taken 15.4 months.
· Although seasonally adjusted sales fell 33.4 percent year to year in
December 2007 compared with 2006, they were above the 300,000-unit
level for the first time since August 2007.
Questions? Comments? Contact
MarketMatters@car.org .
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