Some intersting notes

Americans changed residences less often last year than at any time since the Census Bureau began keeping track in 1948, the latest sign of how the recession and falling house prices are keeping more people in place.

“We are normally thought of as a country on the move, but now all levels of migration have almost come to standstill,” said William Frey, a demographer at the Brookings Institution, a Washington think tank. “People are just staying put.”

Census press release—the national mover rate was 11.9% last year, meaning 11.9% of the people lived in a different dwelling than they did the year before. That was down from 13.2% in 2007. In total, about 35 million people moved last year, down from about 39 million in 2007.

The breadth of the recession has exacerbated the slowdown. Unemployment has risen in every state, and fewer jobs in almost every community mean fewer people are moving for work. Job losses have continued through this year, and many economists expect that the national unemployment rate, currently at 8.5%, to hit double digits by the end of the recession.

The American Moving and Storage Association said the number of people changing residences had been dropping for four years and fell 17.7 percent from 2007 to 2008. The first quarter of 2009 is likely to be even worse, the trade group said.

Jed Smith, a research director for the National Association of Realtors, said that on average it took a homeowner 10.5 months to sell a house in 2008 compared with 8.9 months in 2007.

Existing-home sales — including single-family, townhomes, condominiums and co-ops — declined 3.0 percent to a seasonally adjusted annual rate(1) of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.

Although prices rose from February to March, the national median existing-home price (2) for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.

Moving rates decline as people grow older: between March 1997 and March 1998, only 4 percent of those 65 and over moved while one-third of people ages 20 to 29 years old moved the highest rate of all age groups.

Of the 43 million movers, 27.1 million moved within the same county, 7.9 million moved to another county in the same state and 6.4 million took up residence in a different state. Additionally, during that one-year period about 1.2 million people moved to the United States from abroad.

Non-Hispanic Whites had lower overall rates of moving (14.5 percent) than African Americans or Asians and Pacific Islanders (about 19 percent for each group). People of Hispanic origin, who may be of any race, had the highest rate of moving (21.2 percent).

One-third of America’s renters moved between March 1997 and March 1998. In contrast, only 8.2 percent of homeowners moved during that time.

The Northeast had the lowest overall moving rate (11.5 percent) well below the national rate of 16.0 percent followed by the Midwest (14.7 percent), the South (17.2 percent), and the West (19.4 percent)

Other highlights from the report, available on the Internet at
http://www.census.gov/population/www/socdemo/migrate.html, include:
http://online.wsj.com/article/SB124042434548044425.html
http://www.marketwire.com/press-release/National-Association-Of-Realtors-978880.html
http://www.nytimes.com/2009/04/23/us/23census.html?_r=1&hp

Now is a great time to buy Annapolis Area Real Estate

Largest Inventory in a generation
Just taking a look at the local inventory numbers shows that there are four times as many homes available now as there were 4 years ago. That means instead of having to take whatever is available and racing other buyers to get it, you get to find the house that closest fits your dream for your next home.
Best affordability in a generation
Everyone knows that unemployment is quite high. However, even taking that into account the level of income in comparison to the housing prices is very favorable. More favorable than most people can remember in the adult lives, unless they happen to have bought a home in the early 60, and even then comparing today to back then would be tough. And that doesn’t include.
Historically low mortgage rates
I’ve heard about people claiming they couldn’t find a mortgage. My impression is that they were expecting to find a mortgage like you could four years ago. Hello? Four years ago, eight years ago for that matter, was an historical aberration that we all are paying for today with the financial crisis. Lenders have returned to the historically wise patterns of requiring more down payment. So if you’ve got the money, you can still get a loan for more.
Federal tax credit if you haven’t owned a home within three years.
The federal government is very concerned about the financial crisis and in an attempt to help alleviate it at the individual buyer level, there is a tax credit of 7500 available that will not be needed to be paid back if you actually live in the home and do not sell it for at least three years. You don’t want to sell it for at least three years anyway so you can collect the equity returns without having to pay capital gains tax anyway.

So all in all,
Wish I had more money to poor into real estate investments right now, I expect that those who do will be making a nice profit in three to five years.

Why he bought yesterday

I talked this week to a 22 year old. He just bought his first house.
Why did he buy now? Because he has been working for about a year and saved every penny to qualify. Why did he save every penny? Because he was not sure how long, the low prices would last.

And he got a great situation. He got into a starter home, of course, that is where he is starting, but a starter home is better then rent.
And he gets an immediate $7,500 tax credit. Nobody is going to complain about $7,500 in the pocket book. He has already spent it in his mind however. He has plans to make improvements. And he made those plans with a real estate agent so he knows that when he goes to sell the house in 5-7 years, the money he put in should pay him back.
He got a great mortgage rate, with the sellers help. These days sellers are frequently willing to help, he got the interest rate down to below 5%. His parents have not seen a mortgage rate that low in their life. That means he will put thousands of dollars in his own pocket instead of in the banks pockets in the next few years.
He got a great house for a great deal. How did he do it? He very carefully watched the neighborhood he knew he wanted, and as soon as one of the larger homes became available, he offered a price just below what the smaller homes have been selling for. The sellers jumped at his offer. He saved money. They saved time. Great for both sides.

What more could anyone want?
The answer for many people is to sell their home first…

Glittery Generalities

Yesterday the President gave some remarks about his solution to the foreclosure crisis. The crisis that many say is the root of the current economic downturn. I am not so sure it is the root, but it is at least one of the most dramatic and painful symptoms. Be that as it may, today the pundits got their say.

What are they saying? Some good, some bad. Some say it will be a good step; others a good step but; yet others think it is not enough; others think the market will recover faster without it.

I wonder what the specifics are. The president, great salesman that he is, spoke yesterday about all the benefits of his plan, but barely touched on the details, which will allow anyone else to judge for themselves the quality or lack thereof of his plan.

Of course, it is possible that in the short term anyway the details do not matter. After all, in the long term we are all dead, as my economics professors used to love to quote. Realistically, if the program is sufficient and the sales pitch is sufficient to convince the American public that the worst is over, that they can look ahead with optimism instead of foreboding, then in fact the worst will truly be behind us and Americans can get ahead with their economic lives.

Personally, I await the actions of the big banks, Bank of America, Citi, and JP Morgan Chase. If the plan actually affects their policies positively then the rest of the finance industry is likely to come along and the light at the end of the tunnel will actually start to get brighter.

Scant good news from the US capital

The Commerce Department reported this morning the slowest pace of construction of new homes nationwide dating back nearly 50 years. So if you like to buy newly built homes, now is the best time in most people’s lifetimes.
Looking ahead, applications for building permits, a good yardstick to measure future new construction, dropped to a record low. The new homebuilders are hunkering down for a longer down cycle than they had earlier anticipated.
The scant good news came from the National Association of Home Builders, yesterday their market index rose. It had been at an all time low so an upward tick while not significant is good news of a kind. The current level though continues to reflect a negative sentiment about the Real Estate Market.
What does this mean for Annapolis?
Rising numbers of foreclosures and fear about the housing markets future continue to feed apprehension about a down market. This means that buyers continue to have incredibly good choices available to them: better choices at better interest rates than have been seen in a generation.