Last Saturday afternoon, I was left with the challenge of entertaining a 3 year old while the temperature outside was a frosty 8 degrees. We thought about sledding, but it was just too cold, we thought about heading off to the library, but that was just too low action. We needed to burn some energy. Off we went to what I think is one of not only Skokie's best kid attractions, but one of the best on the whole North Shore, the Skokie exploratorium. If you want to experience a great afternoon with your toddler's and pre-schoolers, check out this link. http://gocitykids.parentsconnect.com/browse/attraction.jsp?id=133861&area=196 .
As a realtor who has sold over a hundred homes in the area in the past 2 decades, this is one of the many advantages life in Skokie offers that I encourage potential area home buyers and new residents to check out. To check out our Skokie area listings, enjoy the home search feature on our website, the opportunities to buy will put a smile on your face!
Saturday, January 26, 2008
Monday, January 14, 2008
Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.
The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.
Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.
There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.
“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.
NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.
The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.
After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.
WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.
The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.
Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.
There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.
“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.
NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.
The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.
After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.
Saturday, January 5, 2008
Happier New Year? In all likelihood 2008 will be
Happier New Year? In all likelihood 2008 will be
Kenneth R. Harney, Washington Post Writers Group
December 30, 2007
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WASHINGTON - Queen Elizabeth II once famously referred to her "annus horribilis," a year in which almost everything went wrong, from family scandals to a fire that destroyed parts of Windsor Castle.The American housing market experienced its own annus horribilis in 2007, a year when all the sins and excesses of the prior six were visited upon nearly everyone in the system:*Homeowners lost $160 billion in net equity in their homes from the first quarter of 2007 through the third, according to the latest "flow of funds" data from the Federal Reserve. Homeowners' equity stakes, their property value less their mortgage balances, dropped to 50.4 percent, from 56.1 percent as recently as 2002.
Both numbers could be worse in the Fed's fourth-quarter survey.*Foreclosures on single-family homes hit 1.69 percent in the third quarter, the worst in decades, and 5.6 percent of all home mortgages in the country were delinquent by 30 days or more.One out of five subprime adjustable-rate loans nationwide was delinquent by the end of the third quarter, and the proportion was higher in a handful of states: 26.2 percent in Michigan and nearly 23 percent in Massachusetts.*Home sales tanked in almost every local market that had seen hyperinflation in prices in the boom years of 2001 to 2005. Local declines in excess of 50 percent year-to-year are not unusual in parts of California, Florida, Nevada and Arizona.In many of the same markets the sales booms had been propelled by speculative investors looking for quick payoffs. Now one-quarter of new foreclosures in California, Arizona and Nevada involve flippers sending back the keys.* The national inventory of unsold houses jumped to 10.8 months, a level that even the most optimistic economists concede is a drag on the overall market.*Job losses in housing and mortgage-related industries have been staggering, into the hundreds of thousands by some estimates, and extend to the highest executive ranks of Wall Street's and banking's most prominent firms. When you lose billions on dumb bets on subprime mortgage securities, you can also lose your head.Everybody knows these tales of woe -- and more. It's been a lousy year. Could 2008 be better?I think the odds are reasonable that it will. Here's why: Through the grimmest headlines of 2007, a number of positive underlying economic forces kept real estate from being a true bust. If those forces continue, they should help cut the time needed for the correction cycle to bottom out and the inevitable recovery to begin.Take mortgage rates. Had the cost of money been significantly higher in 2006 and 2007, delinquencies and foreclosures stemming from the toxic mixes of subprime loans would have been much worse.But the 30-year fixed rates that hovered in the low 6 percent range for much of the year -- even in the high 5s for a couple of weeks -- allowed many borrowers to refinance into alternatives such as FHA or conventional Fannie Mae/Freddie Mac loans. The recently announced national loan modification and rate-freeze should keep at least some struggling subprime borrowers out of foreclosure.Steady, moderate national growth of jobs, economic expansion and low inflation also helped the housing market in 2007 and could continue to do so. By the way, despite all the scary statistics, sales of existing and new homes in 2007 totaled an estimated 6.5 million, which would make it the fifth-largest sales year in American real estate history.Another fact that often got lost in the bad news in 2007 and offers reason for hope: Vast swaths of the country never experienced the excesses of the boom years and have not endured the pains of the crunch in the most volatile markets.The latest federal quarterly home-price data from the Office of Housing Enterprise Oversight found that while significant declines have occurred in dozens of speculative markets, prices were flat or up in 204 of the 287 metro areas surveyed.At some point in every correction cycle, even in the most depressed markets, consumer psychology begins to change. People who need or want houses look around, see lower prices, affordable financing and say: Hey, this is a smart time to buy. The cycle has done its work.It won't be everywhere, but that psychology should begin taking hold in a growing number of markets in 2008.
Kenneth R. Harney, Washington Post Writers Group
December 30, 2007
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WASHINGTON - Queen Elizabeth II once famously referred to her "annus horribilis," a year in which almost everything went wrong, from family scandals to a fire that destroyed parts of Windsor Castle.The American housing market experienced its own annus horribilis in 2007, a year when all the sins and excesses of the prior six were visited upon nearly everyone in the system:*Homeowners lost $160 billion in net equity in their homes from the first quarter of 2007 through the third, according to the latest "flow of funds" data from the Federal Reserve. Homeowners' equity stakes, their property value less their mortgage balances, dropped to 50.4 percent, from 56.1 percent as recently as 2002.
Both numbers could be worse in the Fed's fourth-quarter survey.*Foreclosures on single-family homes hit 1.69 percent in the third quarter, the worst in decades, and 5.6 percent of all home mortgages in the country were delinquent by 30 days or more.One out of five subprime adjustable-rate loans nationwide was delinquent by the end of the third quarter, and the proportion was higher in a handful of states: 26.2 percent in Michigan and nearly 23 percent in Massachusetts.*Home sales tanked in almost every local market that had seen hyperinflation in prices in the boom years of 2001 to 2005. Local declines in excess of 50 percent year-to-year are not unusual in parts of California, Florida, Nevada and Arizona.In many of the same markets the sales booms had been propelled by speculative investors looking for quick payoffs. Now one-quarter of new foreclosures in California, Arizona and Nevada involve flippers sending back the keys.* The national inventory of unsold houses jumped to 10.8 months, a level that even the most optimistic economists concede is a drag on the overall market.*Job losses in housing and mortgage-related industries have been staggering, into the hundreds of thousands by some estimates, and extend to the highest executive ranks of Wall Street's and banking's most prominent firms. When you lose billions on dumb bets on subprime mortgage securities, you can also lose your head.Everybody knows these tales of woe -- and more. It's been a lousy year. Could 2008 be better?I think the odds are reasonable that it will. Here's why: Through the grimmest headlines of 2007, a number of positive underlying economic forces kept real estate from being a true bust. If those forces continue, they should help cut the time needed for the correction cycle to bottom out and the inevitable recovery to begin.Take mortgage rates. Had the cost of money been significantly higher in 2006 and 2007, delinquencies and foreclosures stemming from the toxic mixes of subprime loans would have been much worse.But the 30-year fixed rates that hovered in the low 6 percent range for much of the year -- even in the high 5s for a couple of weeks -- allowed many borrowers to refinance into alternatives such as FHA or conventional Fannie Mae/Freddie Mac loans. The recently announced national loan modification and rate-freeze should keep at least some struggling subprime borrowers out of foreclosure.Steady, moderate national growth of jobs, economic expansion and low inflation also helped the housing market in 2007 and could continue to do so. By the way, despite all the scary statistics, sales of existing and new homes in 2007 totaled an estimated 6.5 million, which would make it the fifth-largest sales year in American real estate history.Another fact that often got lost in the bad news in 2007 and offers reason for hope: Vast swaths of the country never experienced the excesses of the boom years and have not endured the pains of the crunch in the most volatile markets.The latest federal quarterly home-price data from the Office of Housing Enterprise Oversight found that while significant declines have occurred in dozens of speculative markets, prices were flat or up in 204 of the 287 metro areas surveyed.At some point in every correction cycle, even in the most depressed markets, consumer psychology begins to change. People who need or want houses look around, see lower prices, affordable financing and say: Hey, this is a smart time to buy. The cycle has done its work.It won't be everywhere, but that psychology should begin taking hold in a growing number of markets in 2008.
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