NAR Home Sale Projections - Glass Half Empty or Half Full for Florida ?

NAR today reported that the tightening credit market for home mortgages will dampen home sales for the short term.

This is their (9^th) report this year.

Lawrence Yun, NAR senior economist, said unusual disruptions in the mortgage market are dampening the outlook for home sales, notably for August and September. “There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines.

Existing-home sales are expected to drop 8.6 percent this year compared to 2006, with new single-family home sales and housing starts falling 23.8 percent, the association announced today.

It’s interesting to note, that just last month NAR had predicted a 6.8 percent drop in the existing-home sales market and an 18.9 percent drop in new single-family home sales this year compared to last year.

Yun said that the jumbo loan market is “beginning to settle,” though, and “FHA-insured loans are helping to fill the subprime vacuum.”

Other NAR Projections:

• The 30-year fixed-rate mortgage is projected to average 6.4 percent for the balance of the year and then hover in the 6.5 percent range in 2008, the association reported.

“We expect the Fed to cut rates two times before the end of the year, which will lower interest rates for prime borrowers and FHA-insured loans,” Yun stated. “FHA modernization could buffer the fallout of subprime loans, which would raise our sales forecast in the future.”

The new numbers compared to 2006:

Projected Existing Home Sales: Projected New Home Sales:

A Couple of Key points take from this:

• Jumbo loan market is now beginning to settle
• FHA-insured loans are helping to fill the subprime vacuum.
• The volume of existing-home sales this year will be better than 2002, which was the second year of the housing boom.

So as a Florida Realtor and prospective home buyer or seller you have to ask yourself now:

Is the Glass Half Full or Half Empty ? It really depends a lot on maintaining a realistic view on the market conditions here in Florida.

Here’s a few TIPS to help Sellers & Buyers in the current Market:

As a Seller: you need to ask your self these questions or rather your Agent should be asking you these as a qualifier to determine if they want to list your home.

1. How quickly do you want to sell your home ? Yea it’s kind of a loaded question, you see everyone wants to retain full value, but the reality is: if you want to sell it now…I mean really sell it, you have to make sure you are priced lower than the guy around the block selling his or her home.
2. Are you attached to your home ? The key here is you should now Dis-associate yourself with the word home, it’s now a house and you need to make sure you under stand the distinction.
3. Have you made the required changes to de-clutter, clear-out and paint or clean up the home to make it attractive to a buyer ? You may love the wallpaper pattern in your bathroom or the painted mural on the dining room wall, but if a potential buyer does not have the same taste….you just lost an opportunity to connect and sell your home. See # 2 Above. If in doubt ask your Agent, if they are not honest with you, fire them and get another.

As the market continues to correct itself prices will change down and buyers will want deals. They have waited this long. Give them a deal if you really want to sell or take it off the market !

As a Buyer: you need to ask your self these questions or rather your Agent should be asking you these as a qualifier to determine if they want to work as your Buyers Agent.

1. Are you Pre–Qualified or Pre-Approved, do you know the difference ? Pre-Qualified generally means that either you or someone else has taken a general look at your income & expenses and plugged them into a debt-to-income ratio formula. It does not mean anyone has checked out your credit scores or analyzed your credit report. Pre-Approval is when you are pre-approved for a mortgage, it means a lender has looked closely at both your credit report and your income and determined that you qualify for a loan.
2. Have you determined Your Buying Objectives and Needs ? Why do you want to buy a home? Need more room? Down sizing? You really need to have a clear objective before you even call a Realtor or start looking.Do you have the courage to make an offer if you see something you like ? In this market you hold a lot of power but don’t be ridiculous and offer half of the asking price. Make a fair offer and don’t be afraid to negotiate.

Given the current market conditions it is better to be informed before hand, so you can make the deal as soon as soon as practical and and your Realtor don’t waste each others time.

Tags: Mortgage, sub-prime, FHA, Florida+Home+Seller, Florida+Home+Buyer, Jumbo+Loan, NAR, Home+Sales, Interest+Rate, FHA-insured+loans