Archive for November, 2010

Shadow Inventories: Why the Housing Slump Lags

Tuesday, November 30th, 2010

The housing market may not correct itself until people rejoin it. But people might not rejoin the housing market until corrects itself. Got it?

That’s essentially one of the reasons why housing markets around the country have been so slow to recover. Many homeowners and banks have decided to simply wait the recession out and keep their inventories of unsold houses off the market until prices improve.

In other words, if a homeowner thinks the market will improve, say, next summer, and they can afford to wait another six months to sell, they’re likely to do just that.

So with millions of such homes just sort of waiting around for people to start buying, the housing slump just keeps dragging on and on. As soon as there are signs of recovery, thousands of withheld homes get put back on the market, pushing prices down again.

Furthermore, the slow foreclosure process—plus lagging unemployment that cripples home-buying and fuels fears of future foreclosures—would alone stunt the recovery, even without all the other factors.

These sorts of rational market irrationalities happen all the time during economic crises, when panic, uncertainty, and economic chaos keep markets from sorting themselves out more methodically.

But here’s some good news for Dallas-area homeowners. According to the Dallas Morning News:

The Dallas-Fort Worth area has one of the lowest “shadow” inventories of unsold homes among major U.S. cities, according to a new study. But the addition of these houses to the market still significantly adds to the supply.
Shadow inventory homes are properties that have been foreclosed on or are in the process of foreclosure but are not currently listed for sale. Housing analysts say this pending supply will keep prices depressed in many cities.
Nationwide, there were more than 2 million shadow inventory homes in August—an eight-month supply—according to researchers at CoreLogic Inc. In the Dallas area, the shadow inventory was 6.7 months, the California-based mortgage and finance analysts said in a report released Monday.

In other words, there will be fewer recovery “false starts” in a place like Dallas.

Until then, it’s still a prime buyer’s market for those who are in the position to do so. Contact one of our Dallas home loan experts if it’s time to buy.

Texas Lending — Three Reasons to Keep Your House on the Market Over the Holidays

Monday, November 15th, 2010

Christmas Home As we mentioned last week , many potential homeowners take a break from house hunting over the holiday season. This happens partly for holiday reasons—we all get busy with Christmas parties, pageants, and shopping. But it also happens for market-based reasons—primarily that many homeowners take a break from selling.

The usual rule goes like this: A house that’s been on the market for a long time might be assumed to have something wrong with it. So when no-one is buying anyway, it’s wise to do your house a favor and take it off the market to keep it fresh for when buying picks up.

But, in this economy, staying in the home-selling game through the holidays might just be a wise choice. Here are three reasons why:

Dress Your House in its Christmas Best

With trees bare, leaves brown and bagged, and flowers hibernating until spring, winter isn’t normally the time to show off your house at its verdant best. Drape those dormant trees in Christmas lights, however, and you’ll be appealing right to the heart of what many potential home buyers are looking for in a house.

Home buyers usually shop with specific visualizations in mind—birthday parties, family dinners, and holidays like Christmas. A home on the market during the holiday season—dressed up in its sparkly, cheery best—makes it easier for homeowners to do just that, and form that sort of bond with the house that leads to a sale.

Carolers Are Customers Too

Think about all the people that head out Christmas light cruising and caroling each year. You can turn this tradition to your advantage by having your house ready and waiting for when the revelry comes by. Even if most carolers and cruisers aren’t specifically looking for houses while out and about, your resplendent house might just stick in their mind for when the time is right for them to buy.

Throw the Rules Out the Window

This year, the usual rules just don’t apply. For the most part, homeowners everywhere are struggling to sell their perfectly sellable homes—the kind that would normally be snapped up quickly in a healthy economy. Most potential home buyers understand and expect this, and so the normal stigma attached to non-sellers isn’t really there. Avoid letting your home fall into disrepair and go the extra mile with holiday touches, and it will find a buyer when the market is ready—regardless of how long a for-sale sign has been in the front yard.

The market is slowly ripening in Dallas —have your home ready when opportunity knocks. Contact one of our Dallas home loan experts for more information.

Home for the Holidays? Three Reasons It Might be Time to House Hunt

Monday, November 8th, 2010

Big holiday party coming up? Need some extra space? Considering a new home, anyway? Despite what you might think, the holiday season is an underrated time to do a bit of house hunting. Here’s why:

Less Competition

Despite the massive inventory of unsold houses out there these days, you’re still likely to run into some competition with other potential homebuyers over the best ones for your price range. The holiday season can thin the crowds, as folks would rather focus on parties, presents, and portly men in red suits than the grind of making a life-changing decision. You’re more likely to end up with the home of your dreams.

Lower Prices

With more foreclosures coming and thousands of homes being held off the market by patient banks, few economists out there are predicting the sort of sharp upswing in home prices next spring that we really need. But, especially in a place like Dallas, the foundation for at least a modest recovery is still in place. Don’t be surprised if we start to see prices inch up a bit more during the spring.

As we’ve said often here at Texas Lending Today, prices and home interest rates are never going to be much lower than they are now. If you’re in the position to buy, strike while the iron is hot.

More Ready to Sell

Houses in which families are planning on hosting one last Christmas dinner or family holiday get together are more likely to be the types to get taken off the market for a few months, until the merriment ends and weather finally warms up again. So the types you’ll find if you head out house hunting over the holidays are more likely to be empty, foreclosed upon, and ready to sell right away. If you’re eager to get into a home before Christmas, you might appreciate the quicker turnaround.

Not everything is easier when that first winter chill arrives—people get busy, offices close, and lots of homes are, indeed, taken off the market. And since it usually takes from 30-60 days to close on a home, actually moving in before Christmas leaves little time for delays. Then again, with the kids out of school and family in town, you’d have that much extra help on moving day.

So if it’s time to buy, this time of year is a great time to start looking. Contact our Dallas housing market experts for more information.

 
 

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