Sagging Homebuilder Confidence Opens The Door For Good Deals

Builder confidence in the housing market slipped this month, according to the National Association of Homebuilders' monthly Housing Market Index.
The Housing Market Index is actually a weighted composite of 3 separate surveys. One measures current single-family sales; one measures projected single-family sales; and one measures traffic of prospective buyers.
All three surveys were down in July:

• Single-Family Sales : From 17 (June) to 15 (July)
• Single-Family Project : From 22 (June) to 21 (July)
• Buyer Foot Traffic : From 13 (June) to 10 (July)

The HMI's July reading of 14 puts confidence at its lowest point since April 2009.
For home buyers in Henderson, Colorado , a drop in builder confidence could create an opportunity for negotiation.
Remember, it wasn't too long ago that most builders were flush with home inventory, unable to find willing buyers. To help move product at that time, builders dropped prices and offered incentives including free upgrades. If confidence continues to sag going forward, home purchase deals of that nature may return -- especially as the foreclosure market gets larger.
See, in the past, builders' main competition for buyers were the existing home sellers.  Today, builders compete with the existing home sellers and the banks with REO.
It's a terrific time to be a home buyer, in other words -- sellers are fighting for you. It's no wonder sellers have little leverage anymore. Couple that with all-time low mortgage rates and affordability for homes is at an all-time high.
If you're planning to buy a home later this year, you may want to consider moving up your time frame. The market looks ripe for good deals this summer.

Foreclosure Activity Slows Again In June 2010

313,841 foreclosure filings were made in June, according to foreclosure-tracking firm RealtyTrac. The figure represents a 3 percent drop from May and 7 percent drop from June of last year. However, foreclosure filings remain relatively high nationwide.
June marks the 16th straight month the filings topped 300,000. 1 in every 411 U.S. homes received some form of notice last month with foreclosure density varying wildly from state-to-state.
Like everything else in real estate, it seems, foreclosures are a local phenomenon.
The states with the highest foreclosures per capita were:

• Nevada : 1 foreclosure filing per 88 homes
• Florida : 1 foreclosure filing per 171 homes
• Arizona : 1 foreclosure filing per 189 homes

The states with the lowest foreclosures per capita were:

• Vermont : 1 foreclosure filing per 26,051 homes
• West Virgina : 1 foreclosure filing per 8,058 homes
• South Dakota : 1 foreclosure filing per 6,528 homes

Overall, 40 states beat the national Foreclosure Per Capita average and 10 states fell below. The sheer volume of REO, though, is creating interesting buying opportunities for first-timer buyers, move-up buyers, and real estate investors in Denver.
Homes bought from banks are usually less expensive than non-foreclosure homes. This is one of the major reasons why distressed sales account for roughly 30 percent of all home resales. Less expensive, though, doesn't always mean "cheaper". Foreclosed homes are often sold as-is and may be defective or otherwise uninhabitable.
Making repairs to get these homes into "living condition" can be costly.
Therefore, if you're buying a foreclosed home, make sure you know what you're buying before you make your bid. Have a certified professional inspect the home to check for damage, and consider enlisting the help of a real estate agent to assist with negotiations and management of the contract.
The process of buying a foreclosed home is different from buying a typical resale. Make sure you do your homework.

25 Cities In Which To Get A Bang For Your Homebuying Buck

Home affordability is at an all-time high. Home values are still in recovery while mortgage rates continue to make new lows. But where are homes the most affordable?
CNNMoney.com recently ran a piece titled "Where Homes Are Affordable", listing 25 communities around the U.S. in which median incomes are relatively high and median homes are relatively low.  It's a housing market "bank for your buck" list.
The top 10 cities as listed by the editors:

1. Deerfield Beach, FL
2. Lafayette, IN
3. San Antonio, TX
4. Deltona, FL
5. Spring, TX
6. Glendale, AZ
7. Avondale, AZ
8. Bolingbrook, IL
9. Fishers, IN
10. Des Moines, IA

Of the top 10, 2 picks are from the Southeast; 4 are from the Midwest; and 4 are from the Southwest.  2 are "major" cities and the rest are suburbs of bigger cities.  Lafayette stands lone as a college town.
The rest of CNNMoney.com's 25 cities follow a similar pattern -- larger suburbs geographically concentrated in the Midwest and Southwest. Surprisingly, though, New Jersey and Virginia do find themselves represented.  Even the expensive Eastern Seaboard has its good buys.

Was The Pending Home Sales Report Really That Bad? It Depends Who You Ask -- Buyer Or Seller.

The Pending Home Sales Index plunged in May 2010, just one month after the expiration of the federal home buyer tax credit program.
The Pending Home Sales Index is now at a record-low level.
A "pending home sale" is an existing home under contract to sell, but not yet closed. According to the National Association of Realtors®, 80 percent of homes under contract close within 60 days.
Because of this timeline, we can expect the summer's Existing Home Sales to be weak, too. With fewer homes going under contract, fewer homes can close.
On the surface, May's Pending Home Sales Index looks like terrible news for housing. And, if you're a seller, it just might be. But, if you're a buyer, the story reads differently.  Just consider the market conditions.
A broad look at the housing market shows:

1. Home supplies are rising in most markets
2. Home sales are falling in most markets
3. Mortgage rates are at all-time lows

In other words, in most markets, more sellers are competing for fewer buyers, and the "winning" buyers are financing their homes at the lowest rates in history.
It's an excellent time to be a home buyer in Denver.

May 2010 Existing Home Sales Is Better Than The Headline Data Suggests

Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.
An "existing home" is a home that cannot be considered new construction; a resale of an existing home.  Existing Home Sales fell 2.2 percent in May.
The press is calling the drop in sales "unexpected" and disappointing, but a deeper look at the data shows the news isn't as bad as it first appears.
First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.

• Northeast : -18.3 percent
• Midwest : 0.0 percent
• South : +0.5 percent
• West : +4.9 percent

Second, the supply of homes for sale dropped to 8.3 in May and, because home prices are based on supply and demand, this is a positive for pricing.
By comparison, in 2008, the average existing home inventory was 10.4 months.
And, lastly, in May, first-time home buyers represented 46 percent of all buyers. The number was likely buoyed by the tax credit program but that doesn't damper the fact that first-time buyers provide a support floor for the housing market.  Keep in mind that, in a 'normal' market, first time homebuyers make up about 1/3 of homebuyers.
First-time buyers in Denver enable "existing owners" to move-up to bigger homes, which, in turn, trickles up to the mid-size and jumbo markets.
Analysts expected more from May's numbers and that may explain why the reaction to the data is generally negative.  However, in many cities, home resales did just fine.