The Makings of a Buyer’s Market

Buyers are pulling back. Home prices have been rising too much relative to income for many would-be buyers to keep pace. Since 2011, the U.S. median home price has risen 55 percent while wages are up only 18 percent. Now, the Federal Reserve has become more aggressive against inflation; with several short-term interest rate increases over the past year. A monthly mortgage payment on a typical home today is $1,136, up from $639 in 2011.

And confidence is down. Only 38 percent of consumers today strongly believe it’s a good time to buy, down from 43 percent last year, and the numbers are lower for renters who don’t have equity to tap for a down payment.

With buyers stepping back a bit, inventory is no longer falling. New-home construction is increasing and more homeowners are considering listing. A recent survey NAR conducted shows 50 percent of consumers strongly indicate it is a good time to sell, compared to only 28 percent just two years ago. Most home sellers will also be buyers. With inventory expected to grow, prices will stop rising so fast. That’s a healthy adjustment. Buyers can soon resume their search for the American dream.


Has Housing Reached a ‘Recovery Path’?

Sales of existing homes rose slightly in March, marking the sixth consecutive monthly rise for existing home sales in the last eight months, the National Association of REALTORS reported Wednesday.

“We’re clearly on a recovery path,” says Lawrence Yun, NAR chief economist.

Existing home sales rose 3.7 percent in March from February, as distressed sales, such as those in foreclosure, continued to make up a big bulk of home sales (40 percent of all purchases).

“At this point, we’re likely to see a steady improvement in sales,” says economist Joel Naroff of Naroff Economic Advisors. 

View what economists have to say about who’s buying and currently driving the market at:

Based on these sources: “Rising home sales point to a recovery; Prices expected to keep falling 5% to 7% this year,” USA Today (April 21, 2011), “U.S. Home Sales Top Forecasts in March,” The New York Times (April 21, 2011), and “Rich People Buying Homes Again–Should You?” AOL Real Estate News (April 20, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:

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Local and National, “Good News”

The overall number of El Dorado County area home sales continues to increase. The 198 April sales were the most in a single month since June of 2006. Home sales were 13 percent above March and 50 percent better than a year earlier.

Some housing economists believe the worst is over and positive forecast are coming from a variety of sources. The “National Association of Realtors” also reflects encouragement. Please view and share their new economic forecast VIDEO: