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Economy

Inventory news, good and bad

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.

"Unsustainable" price rises won’t be sustained

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 call out CoreLogic tale as all wet (that is, not wet at all)

Realtors reading about a CoreLogic story were quick to call shenanigans, making for an amusing read.

See, HousingWire reported about a CoreLogic roundtable on mortgage fraud. It wrote:

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 drop slightly

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.

Consumer confidence rising

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

Greater Augusta Association featured at economic development event

From left: Delene Adams, Minnie Stevenson, Fred Morgan, and VAR Interim CEO Rick Lugg

From left: Delene Adams, Minnie Stevenson, Greater Augusta Association President Fred Morgan, and VAR Interim CEO Rick Lugg

Home builders positive about market for the first time in seven years

For the first time since 2006, a survey of the nation’s homebuilders found them with a positive outlook about the market. It’s not scientific, but it’s still nice to see.

Economist: No housing bubble

The Economist took a look at Standard & Poor’s housing data and concluded that there probably isn’t a housing bubble at the moment. And when you see the charts you can see why.

For example, if you start at the end of 1987 (giving it a value of "100"), here is what real house prices look like.

image

Is there a new housing bubble forming?

Once upon a time there were two shamans in a tribe. They both tried to predict how bad the upcoming winter would be. One threw rabbit bones and predicted a harsh winter. The other threw squirrel bones and predicted a mild winter.

The winter was mild, thus proving that throwing squirrel bones was a more accurate way of predicting the weather.

In an unrelated note, there is some speculation that we might be starting to inflate a new housing bubble, as prices are rising more quickly than is typical.

So, are we? Is there a bubble growing?

There are people who insist either yes or no, and have the bones data to prove it. I’m not going down that road. But it’s worth considering the

Buy a greener home, qualify for a better mortgage?

There are a handful of tax breaks for homeowners who improve the energy efficiency of their homes — essentially, the government reduces your taxes if you make your house greener.

Now a bill introduced in the Senate by senators Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) would give a different kind of incentive — it would require lenders to take into account the energy-efficient features of a home when calculating a borrower’s income/expense ratio.

Essentially, it would allow buyers to qualify for a larger loan or a better rate if a home is energy efficient.