The Real Estate Bloggers

Posted: 15 Aug 2011 07:01 AM PDT

Constrution-worker The home remodeling industry has been improving with it’s 20th straight month of year over year gains. This is a very positive sign that people are investing in their homes.

The question I have is this: “Are people remodeling their homes because they are planning on staying or are they getting the homes ready to sell in a tough market?”

If families are improving their homes because they are not planning on moving up to a better home, this may not be the greatest thing for the industry. However, if they are improving their homes to improve the possibility for a sale then the real estate industry should be getting excited. The pressure for movement when the economy improves should be fantastic.

The June 2011 index rose 23 percent year-over-year—and for the 20th straight month—in June to 129.5, the highest number ever in the index to date.

“The first half of 2011 brought pain to many sectors of the economy including home sales and jobs, however Americans continue to invest in remodeling, sending the BuildFax Remodeling Index to a new all-time high,” said Joe Emison, Vice President of Research and Development at BuildFax. “With so many Americans unable to sell their current home, it is apparent that they are planning on staying in their current residences and are making renovations and upgrades.”

In June, the West (7.3 points; 6%), the Midwest (11.2 points; 13%), and the South (< .1 points; < 1%) all had month-over-month gains, while the Northeast saw a decline (3.7 points; 4%). On the bright side, the Northeast was up 1.6 points (2%) from June of 2010, as was the West (24.4 points; 24%) and the South (7.6 points; 8%). The Midwest was down slightly year-over-year (1 point; 1%), but much less so than last month (10.6 points; 11%). via Buildfax.com

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Economic Turmoil Not Helping Real Estate Sales

Posted: 15 Aug 2011 06:17 AM PDT

Couple Sometimes you can’t catch a break when selling real estate.

The marketplace was settling down, sales were showing some positive movement, and interest rates are at record lows. Yet, and there always seems to be a yet, the market can not gain any traction.

This time it is the recognition that the government has taken on a crushing level of debt and is unable to find the answer that will reassure the markets that all is going to be okay. Standard and Poor downgrading the debt and the stock markets nerves about the debt ceiling deal have made those looking to make a real estate purchase very nervous.

And if you think about it, it makes sense. The family that is looking to upgrade their home is not going to pull the trigger if their investments lose 20 percent. Or the family that is thinking about moving for a new job may hold off because they are not confident the company will not have layoffs soon. They are better off staying where they are at and riding out the storm.

So now it is the agents and the brokers that have to ride out another storm. These agent have to be losing their minds. Low home prices and low mortgage rates have made housing the deal of the century, yet no one is buying. Washington, the newspapers, and even the National Association of Realtors can tell us everything is okay and it is a great time to buy and it very well maybe.

But until the American family can feel secure in their finances and their future it is not a great time to buy.

That is the lesson of the past few years.

But then, within the last two weeks, whatever hope industry leaders had for the market’s stabilization came crashing down.
Between the stock market’s constant up-and-down, Standard & Poor’s downgrading of mortgage finance giants Fannie Mae and Freddie Mac and the Federal Reserve announcing it would not change interest rates until at least 2013, those involved in real estate are nervous once again about the future of the industry. If homebuyers know mortgage interest rates won’t go up significantly in the future, they could lose a sense of urgency to secure a low rate now. A bleak outlook on job creation and job security doesn’t help, either.
“There’s been a lot of fear and uncertainty involving the health of the economy and the wild ride on Wall Street,” said Greg McBride, a senior financial analyst with Bankrate.com, the personal finance website. “It doesn’t engender the type of confidence that is needed for people to go out and make big-ticket purchases, like buying homes.” via NJ.com

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Economic Turmoil Not Helping Real Estate Sales