Thursday, January 6, 2011

National Housing Stats

Traffic Up, But Buyers Show Tremendous
Price Sensitivity

Some buyers hunt for bargains, most remain fearful of lower prices:
Our Monthly Survey of Real Estate Agents indicated a modest uptick in
traffic in December, bringing traffic back to weak, but more palatable levels
in many areas. Many agents noted that buyers were brought into the market
by the perception of good deals, or the fear that mortgage rates would
continue to increase. Traffic also remains spotty within markets, with
increases one month followed by decreases the following and vice versa.

Mortgage rates introduced a sense of urgency, bargain hunters looked
around: The fear of rising mortgage rates was a clear catalyst for buyer
urgency across markets, although some agents mentioned that the higher
rates are already starting to reduce the pool of potential buyers. In nearly
every market (especially those with significant foreclosure listings), buyers
remained focused on finding distress listings. Buyers remain fearful of further
price declines; so the need a clear bargain to have sufficient confidence. Our
traffic index increased to 29.1 in December, up from 22.1 in November.

Continued pressure on home prices, but somewhat less seller
willingness to cut before the Spring. Our price index inched up to 23.0 in
December, from 21.6 in November, indicating continuing pressure, as any
reading below 50 indicates sequentially lower home prices. However, agents
noted that the lower prices had brought out some additional buyers and that
sellers were reluctant to cut prices further given their hope for significantly
higher buyer traffic in the Spring. We do worry about renewed pressure on
prices in the Spring if demand is not sufficient and also because of the
added competition as foreclosures return to the market (after banks
postponed sales due to documentation issues). Our home listings (inventory)
index improved to 51.2 in December from 41.3 in November, indicating flat
inventory and generally consistent with the trend of lower inventory in
John Holbrook - Realtor Amelia Island, Fernandina Beach & Yulee, FloridaCell: 904-415-0171 Email: Web:

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