According to Crain's: Aug. 10, 2009

For the second straight quarter, sales of new homes climbed higher on a seasonally adjusted, annualized basis, as activity was buoyed by major price cuts and the $8,000 tax credit for first-time home buyers that expires Dec. 1.

The annualized sales rate had fallen 14 straight quarters since peaking at 35,163 in the second quarter of 2005. The rate now stands at just 4,164, up 13% from the first quarter but down 47% from a year ago, according to a report by Tracy Cross & Associates Inc.

“This is significant because it really signifies that the bottom, in our opinion, has been reached,” says Erik Doersching, an executive vice-president and managing partner with Tracy Cross, a Schaumburg-based real estate consulting firm.

In terms of actual sales, which Tracy Cross records when a buyer signs a contract for a new home, there were 1,112 in the region during the quarter. The highest number of sales during the quarter occurred in developments targeting first-time buyers and those in so-called “in-fill,” or established, areas, along with some of the projects that target people 55 and older.

“The tax credit has been huge,” says Jeffrey Benach, co-principal with Chicago-based Lexington Homes LLC, who says the firm’s two suburban projects, in Des Plaines and Wheeling, both had solid quarters. “We’ve gone a few months without gloom and doom in the news. For so long, people were afraid to buy because they thought things would turn into crapola the next day.” 

Mr. Benach says he thinks prices hit bottom in February and March. He says Lexington dropped prices about 20% from when the two developments were launched a couple years ago and that in the second quarter the company instituted small, several-thousand-dollar price increases as sales firmed.

Tracy Cross’ Mr. Doersching forecasts that sales will continue to gradually rise as the recession abates and wary consumers grow more confident.

Home Affordability Hits 18-Year High
Housing affordability is reaching record levels with nearly 73 percent of all homes sold in the first three months of 2009 considered affordable.

That’s the highest percentage ever reported by the 18-year-old, quarterly Housing Opportunity Index, compiled by the National Association of Home Builders and Wells Fargo Bank.

To be considered affordable, a family making the national median household income of $64,000 must be able to devote no more than 28 percent of their income toward housing costs.

The most affordable major metropolitan areas and their median home prices are:
 

1. Indianapolis: $98,000
2. Youngstown, Ohio: $67,000
3. Akron, Ohio: $78,000
4. Grand Rapids, Mich.: $97,000
5. Syracuse, N.Y.: $85,000
6. Warren, Mich.: $119,000
7. Cleveland: $86,000
8. Buffalo, N.Y.: $90,000
9. Toledo, Ohio: $78,000
10. Dayton, Ohio: $85,000

The 10 least affordable metropolitan areas are:
 

1. New York City: $418,000
2. San Francisco: $525,000
3. Los Angeles: $288,000
4. Nassau-Suffolk, N.Y.: $375,000
5. Honolulu: $360,000
6. Santa Ana: Calif., $360,000
7. Newark, N.J.: $315,000
8. Miami: $185,000
9. McAllen, Tex.: $106,000
10. El Paso, Tex.: $127,000

Source: CNNMoney, Les Christie (05/19/2009)
 

Daily Real Estate News  |  May 12, 2009  |  

Tax Credit Can Be Used for Down Payment
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Other Solutions for Today's Market

During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.

“Right now the Federal Reserve is the market,” said panelist Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.

“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” said NAR President Charles McMillan. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”

The real estate summit is part of the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.

 

DECEMEBER 2008 REPORT

Through the end of November, more than 73,000 properties worth
more than $22 billion were sold throughout the region in 2008.
The average sale price of $300,673 was down just about 5%
compared to the same time period last year, indicating
stability in pricing. For the fourth consecutive month, the housing
inventory in the Chicago metropolitan area has decreased 5.1% 
in November from one month earlier.

Koenig & Strey
Our brokerage continues to outperform the market in both dollar
and unit production. More than 200 experienced agents have
joined our brokerage this year, and we have maintained our 
#1 market share in key areas including the Gold Coast,
Glen Ellyn, Lake Forest, and Libertyville. Our Naperville office has
not only gained market share but has achieved a 13%
increase in volume YTD, compared to 2007.

Mortgage Update – 5.53% rates lowest in 2008
Lower interest rates are contributing favorably to the increasing
affordability of housing. Mortgage rates reached 5.53 %
in the week ending 12/6/08, for 30 year fixed-rate loans.
Down from 6.2% at beginning of November, rates steadily
decreased throughout the month arriving at the lowest
weekly average this year.

Market Watch	Year: 2007	Year: 2008
Sales	99,578	73,332
Sales Dollars	$31.5 Billion	$22 Billion
Average Price	$316,747	$300,673
Days on Market	80	95