NeWS to KnOW

We have some positive real estate news from the month of January.  Home sales in January 2012 were up 16% compared to last year.  There were 594 sales in the Birmingham market.  The inventory of homes in January was at the lowest level we have seen in the past seven years. 

Wondering about foreclosure numbers?  Foreclosure sales in January 2012 represented 38% of all sales with an average sales price of $82,323.  The average sales price for non-foreclosure homes in January was $160,354.

The market seems to be moving in the right direction - let's hope it continues this direction.

Based on current real estate market conditions, it is estimated that one in five home loans will likely default.  These defaults will come from a wide range of mortgage situations. When you dig deeper into who these homeowners are, you find that they are not just the ones that are currently non-performing or 60 days past due.

The foreclosures will come from homeowners that have been behind in the past but are current now.  These homeowners have a high probability of eventually losing their homes.  Other sources of foreclosures are currently performing loans that are at various stages of negative equity.  It is estimated that nearly half of all mortgages that have loan-to-value ratios above 120% will default.

It will be interesting to watch how these looming foreclosures will affect the real estate market in 2012.

The Federal Reserve Board seems to have confidence in the US economy continuing to improve.  Because of this, they voted to leave the Fed Funds Rate unchanged for the 16th time in a row.

In their press release, the Fed said that since it's meeting in November 2011, the U.S economy has been "expanding moderately" despite all the European issues of the past few weeks. So, for the time being, interest rates continue to hang around all time lows. It is still a great time to buy or refinance your house to capture these low rates!

The National Association of Realtors released data yesterday showing that existing home sales nationally were down 3% for the month of September.  Even though sales were down, the numbers were still above the levels from September 2010.  In the South, home sales for September were actually 10% above the levels from one year ago.

It is important to recognize the overall picture when looking at these numbers.  While things could be better, they could also be much worse. It appears we are doing better than last year.  Let's hope for a strong finish in the next few months as 2011 draws to a close.

According to the Alabama Center for Real Estate (ACRE), June residential home sales in Alabama experienced an 11.9% increase from the prior month.  This is a move in the right direction for the local housing industry.  The sales transactions were supported by displaced homeowners finding a place to live after the devastating storms that hit our state in April.

The big picture is that the Alabama market out gained the national numbers, where the overall US market showed a decline of 0.8% for June.  We will see what happened in July in a few weeks and determine if this growth will continue.