Low inventory has been a problem lately, and not just in Virginia. But the latest figures from Realtor.com show that, while inventory is still low, signs are showing that it may be bottoming.
According to the report, June inventory was 7.3 percent below what it was a year ago. But here’s the good news: We had been looking at much bigger declines. For example, February’s numbers were down 18.6 percent year to year.
So the inventory drop may be slowing. In fact, reports the Wall Street Journal,
There’s a big deal going on in the Senate regarding tax reform.
The Senate Finance Committee has decided that the easiest way to change the tax code is to start with a blank slate — that is, start with no deductions at all, then add in the ones that are most important.
Unfortunately, in the post-Citizens United era, "most important" could easily become "what most big businesses want," rather than "what’s best for the country." Which is why NAR wants to be sure that tax incentives for homeowners — notably the mortgage interest deduction, property tax deduction, and capital gains exclusions — are at the top of the list.
About a month ago a survey was sent out to Virginia Realtors giving them the opportunity to share what they are experiencing first hand, in the field regarding the housing market.
The survey, conducted in partnership with The Federal Reserve Bank of Richmond, focused on the state of the residential housing market in Virginia and how those conditions changed during the first quarter of 2013.
About 70 percent of Virginia Realtors say that housing market conditions were slightly or significantly better the in the first quarter of this year, and a similar share of respondents indicated that the inventory of housing was very low.
CNBC’s annual list of "America’s Top States for Business" is out, and Virginia has slipped further — now we’re down to number five (tied with Utah). After finishing first for three years (2007, 2009, and 2011), we dropped to third place last year, and dropped further in 2013.
- South Dakota
- North Dakota
- Utah, Virginia
Why? CNBC ranked the states by a number of criteria, essentially boiling down to "where is it cheapest and easiest to have a business." So "cost of doing business" — taxes, utilities, wages, and real estate — is high on the list, and that was our first big stumbling block.
Good news: May inventory is up 16.9 percent for the year, which is a good, solid number. (See the explanation below.)
Bad news: Inventory is still 14.3 percent lower than last May nationwide.
Inventory typically follows a cycle, increasing through the first half of the year and decreasing through the second half. So by July it might be 15 percent above what it began the year with. By December it might be right back where it started.
In 2011 and 2012, inventory didn’t increase much through June, and then it decreased significantly through the end of those years — by December 2012, for example, inventory was more than 20 percent below what it started the year with.
Home prices can’t keep rising this quickly forever. That’s what Realtor magazine is reporting that CNBC is reporting that NAR has said. (I know, right?)
Here’s the deal: In May, NAR reported that home prices were up 15.4 percent from the year before. And that marked six months of those kind of double-digit price jumps. Said NAR’s chief economist Lawrence Yun, "[I]t cannot continue."
Which, of course, makes perfect sense, and (hopefully) no one is expecting it to continue. Prices are shooting up for several reasons, none of which will apply forever.
Realtors reading about a CoreLogic story were quick to call shenanigans, making for an amusing read.
In a round table discussion on mortgage fraud, Matthias Blume, senior director of analytics for CoreLogic, discussed a circumstance where a distressed homeowner poured cat urine on the rug so potential buyers are less inclined to make an offer.
Desperate times call for desperate measures. The home was being short-sold and the homeowners were not happy.
Mortgage rates plummeted last week… er, sorry. I mean "mortgage rates dropped slightly last week." Either way, average mortgage rates in the country were down a bit — the first drop in six weeks.
30-year fixed went from 3.98 percent to 3.93 percent (with 0.8 point; I’m still trying to find out how typical 0.8 point is.)
15-year fixed went from 3.10 percent to 3.04 percent (with an average 0.7 point).
Why bother sharing this? We haven’t talked about mortgage rates in a while, is all. They’re still amazingly low, but have been inching up.
FannieMae reported that “American’s confidence in their ability to buy and sell their home climbed sharply in May, “according to their Monthly National Housing Survey. The large boost in pace of residential sales from April to May, according to the Virginia Home Sales Report, suggests that Virginians are equally confident. The latest Virginia unemployment rate is 5.2%, much lower than the US rate which was at 7.6% last month. In fact, the Virginia rate is among the 10 lowest in the nation and the lowest in the Mid-Atlantic and Southeastern regions. Low unemployment isn’t the only reason to be confident. The median sales p