The Real Estate Market is Back! in March. At Ruhl&Ruhl, our new sales pending in March were only down 0.8% from March of 2008. And the first two weeks of April have been up 43% over the same weeks in 2008. In fact, nationally March results also showed for the first time that housing sales started to gain traction in all regions of the country. Positive Factors Causing Better Real Estate Sales Many factors are contributing to the improving real estate market: 1.Mortgage Interest Rates at Record Low - interest rates are at their lowest level since 1947. In the 1980’s we said “if interest rates would just get below 12%, we can sell homes again...” Now interest rates are below 5%. 2.Housing Affordability is at an All Time High - housing affordability is at its highest level since the government started measuring it in the 1970’s. 3.First Time Buyer Tax Credit Programs - of 2008 and 2009, offering up to $7,500 and $8,000 incentives to first time buyers, identified as persons who have not owned a principle residence in the three years prior to purchase. 4.Positive News in the Media - this has been as much a “fear session” as a recession, with negative press coverage eroding buyer confidence. Many economic conditions were worse in the 1980’s, but we only had the news on TV at 7:00 a.m. and 5:30 p.m. Now the public is bombarded with bad news 24/7 on TV and the internet. Thankfully some in the media are beginning to localize their news and even running some positive stories. 5.FHA Loans Easier and Affordable - the Facts & Trends Ruhl&Ruhl REALTORS • Spring 2009 Real Estate In this issue: page 3 Spring Has Sprung in New Construction page 4 Quad Cities - Second Most Affordable in Country page 4 Ruhl&Ruhl 100th Largest Broker in Country page 4 See Ruhl&Ruhl’s New Blog page 6 Our Region’s Home Prices Stable After six months of wondering if we would ever sell another house, the real estate market is back! Hallelujah! The regional real estate market slowed dramatically during the fourth quarter of 2008 and the first quarter of 2009. Real estate pending sales were down as much as 50% compared to the prior year during some months. Prospective buyers were paralyzed with fear due to the troubled economy, and concerns about whether or not they would have a job. This downturn is reflected in the 2009 Regional Real Estate Trends chart on page 2. As shown, first quarter sales volume was up 32% in Dubuque, but down in all of our other markets, with the drop from first quarter 2008 as follows: Cedar Rapids . . . . . . . . . . . . . . 17% Clinton . . . . . . . . . . . . . . . . . . . 53% DeWitt . . . . . . . . . . . . . . . . . . . 69% Dubuque . . . . . . . . . . . . . . . . . . 32% Illinois Quad Cities . . . . . . . . . . 19% Iowa Quad Cities . . . . . . . . . . . 28% Iowa City . . . . . . . . . . . . . . . . . 20% Maquoketa/Preston/Bellevue . . 43% Muscatine . . . . . . . . . . . . . . . . . 19% In most markets the percent drop in number of properties sold is less than the percent drop in sales volume because sales in upper price ranges have been more negatively impacted by market conditions than sales in lower price ranges. First time buyers, motivated by historically low interest rates and the First Time Buyer Tax Credit, are able to buy without waiting for their current homes to sell, which is part of the hold up for move up buyers. Housing Turnaround Began in March Our regional market began to improve RuhlHomes.com – Continued on page 2 RuhlHomes.com ~ 1 The Huggins Team Gina and Darrin 563.288.2968 [email protected]
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Transcript
The Real Estate Market is Back!in March. At Ruhl&Ruhl, our new sales
pending in March were only down 0.8%
from March of 2008. And the first two
weeks of April have been up 43% over
the same weeks in 2008. In fact, nationally
March results also showed for the first time
that housing sales started to gain traction in
all regions of the country.
Positive Factors Causing BetterReal Estate Sales
Many factors are contributing to the
improving real estate market:
1.Mortgage Interest Rates at Record
Low - interest rates are at their lowest
level since 1947. In the 1980’s we said “if
interest rates would just get below 12%,
we can sell homes again...” Now interest
rates are below 5%.
2.Housing Affordability is at an All Time
High - housing affordability is at its
highest level since the government started
measuring it in the 1970’s.
3.First Time Buyer Tax Credit Programs
- of 2008 and 2009, offering up to $7,500
and $8,000 incentives to first time buyers,
identified as persons who have not owned
a principle residence in the three years
prior to purchase.
4.Positive News in the Media - this has
been as much a “fear session” as a
recession, with negative press coverage
eroding buyer confidence. Many
economic conditions were worse in the
1980’s, but we only had the news on TV
at 7:00 a.m. and 5:30 p.m. Now the public
is bombarded with bad news 24/7 on TV
and the internet. Thankfully some in the
media are beginning to localize their news
and even running some positive stories.
5.FHA Loans Easier and Affordable - the
Facts & TrendsR u h l & R u h l R E A L T O R S • S p r i n g 2 0 0 9
upplied by the REALTOR Associations or their Multiple List ing Services. Neither the Boards nor their MLS guarantee or is in any way responsible for its accuracy.reflect all real estate activity in the market.)
Current % of Active 2009 Avg. 2009 Sales 2009 % o Unit Sale/ 2008 2008 Avg. 2008 Sales
MLS Listings Listings Sales Price Volume # Sold Sales List # Sold Sales Price Volume
RuhlHomes.com ~ 5
However, at the end of the first quarter,
only 34% of new homes in inventory
were two story homes. This is true in the
best selling price range of $225-
$300,000 and is consistent in the other
price ranges as well. However, by
contrast, in the Illinois Quad Cities only
10% of sales and 10% of current
inventory are two story homes. In the
same QCA market, attached homes /
townhomes / villas accounted for 33% of
the market sales in 2008, but represent
46% of the standing inventory at the end
of the first quarter in 2009.
These are just two examples of the
imbalance in inventories experienced in
a number of our regional markets, but
they can have a serious impact on how
buyers, builders, lenders and even agents
can view a market if they do not look
closely enough. Buyers see generalized
numbers and may incorrectly think that
an overstuffed market is ripe for bargain
hunting. Builders need to look for the
correct niche to take advantage of an
under-built price point or style, and
lenders need to be ready to look beyond
what has not sold well to support
builders who are lining up with the
expressed needs of the marketplace,
wherever or whatever that might be.
Location, style, price and the appropriate
quality of construction for each are still
the key factors in determining success in
new construction sales.
Spring is here! Let’s take advantage of
the change in season and the change in
attitudes to BUILD toward a Great 2009!
Our Region’s Home Prices Stable ~We Are “An Isolated Pocket of Strength”
The headlines of the Federal Housing
Finance Agency’s news release read:
Record Home Price Declines in Fourth
Quarter; Isolated Pockets of Strength.
We are happy to report that our
region is one of the “isolated pockets
of strength.” Nationally, prices fell 8.2%
from the fourth quarter of 2007 to the
fourth quarter of 2008.
In our markets, as shown to the right,
prices either increased during the same
timeframe: 0.85% in the Quad Cities;
0.57% in Dubuque; 0.69% in Cedar
Rapids; or they decreased only slightly -
1.63% in Iowa City and 1.48% in
DesMoines.
Furthermore, of the 294 MSA’s
(Metropolitan Statistical Areas) ranked
by appreciation, our markets all ranked
highly - the Quad Cities at 61st, Cedar
Rapids 70th, Dubuque 76th, and Iowa
City 143rd.
If you compare our appreciation in
home prices over one year to the 40%
drop in stock values, real estate continues
to be a great investment in our region.
Cedar Rapids, IA 70 +0.69% +12.56%
Davenport - Moline - Rock Island, IA - IL 61 +0.85% +17.57%
DesMoines - West DesMoines, IA 138 -1.48% +14.10%
Dubuque, IA 76 +0.57% +17.86%
Iowa City, IA 143 -1.63% +15.37%
USA -8.24 +12.99
Percent Changein House PricesMetropolitan
Statistical Areas
National Rankingby Appreciationof 294 MSA’s* 1 Year 5 Years
Information courtesy of Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO stats alwaysrun one quarter behind. Their full report is accessible at www.ofheo.gov.*Rankings based on annual percentage change in house prices.
(NOTE: This representation is based in part on data supplied by the REALTOR Associations or their Multiple List ing Services. Neither the Boards nor their MLS guarantee or is in any way responsible for its accuracy.Data maintained by the Boards or their MLS may not reflect all real estate activity in the market.)
Iowa Quad Cities (Quad City Area Realtor Assoc.) 991 $147,400 $48,649,600 330 96% 412 $164,300 $67,695,100