Everything I've been reading in the past two weeks are showing very positive signs that the economy is finally moving in a decent direction. We have a long way to go, but the signposts are up ahead. There are five clear signals that say 'BUY' right now. You need to study your local market carefully because the national market is just a combination of all local markets. Many local areas are seeing stable or rising prices, inventory reductions, unemployment rate decreases and personal income increases. We are not out of the woods yet, but things are definitely looking up.
According to the Bureau of Economic Analysis at Bea.gov personal income increased $133.2 billion, or 1.0 percent, and disposable personal income increased $78.3 billion, or 0.7 percent, in January, according to the BEA. Personal consumption expenditures (PCE) increased $23.7 billion, or 0.2 percent. In December, personal income increased $56.6 billion, or 0.4 percent, DPI increased $48.5 billion, or 0.4 percent, and PCE increased $56.5 billion, or 0.5 percent, based on revised estimates. A trend of increasing income bodes well for housing as more people have more money, they are willing to take on more risk.
Regional and state unemployment rates were generally unchanged in January. 24 states recorded unemployment rate decreases, 10 states registered rate increases, and 16 states and the District of Columbia had no change, the U.S. Bureau of Labor Statistics reported today. Thirty-nine states and the District of Columbia posted unemployment rate decreases from a year earlier, 9 states reported increases, and two states had no change. The national jobless rate fell by 0.4 percentage point between December 2010 and January 2011 to 9.0 percent, 0.7 point lower than in January 2010. In January nonfarm payroll employment increased in 35 states and the District of Columbia, and decreased in 15 states. Visit the link below for information on your specific area.
http://bls.gov/news.release/laus.nr0.htm for summaries for your specific area
3. Recent Sales Activity.
Many areas have an increasing number of sales, and a decreasing inventory of houses for sale. There are three factors that you must take together, housing inventory, sales volume, and prices. If your area has a large inventory of homes with few actual transactions, this is a negative situation. Its like having a lot of apples but only a few people wanting the apples. Of course the opposite is true. If the local inventory is dropping and sales are picking up, this is good news for your area. Visit your local boards of realtors’ websites where you can find the monthly stats for your area.
http://www.nahb.org/fileUpload_details.aspx?contentID=55104
5. Mortgage Availability.
As a Realtor, I know that a house needs to sell twice. The first time it sells is when the buyer and the seller agree on a price. The second time, and arguably the most important time, is the mortgage bank's underwriter agreeing to the value from his/her analysis of the appraisal, local market figures, and estimates of value from various computer generated valuation models. The mortgage market has been somewhat tight for the past two years as lenders exited the business, credit tightened, and values and incomes dropped like stones. That said, there are signs that mortgages, especially jumbo mortgages, are being approved in increasing numbers as credit is eased a bit. With fixed interest rates at historically low levels locking in a cheap mortgage on houses that are 30-40% less than two years ago is a great way to benefit from the housing downturn we've all experienced.
Give your local Realtor a call and find out how the market is in your area. Use an expert so you can avoid the pitfalls of going it alone. If you are on Long Island, or NYC, give me a call at 917-331-9686 as I'm a licensed sales person, and member of LIBOR and NYBOR. You can visit me at http://activerain.com/afontana or http://tonyfontana.com/specials for a great deal on real estate commission rebates we are offering.
Good luck!
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