The battered housing market has some spring it its step, at least according to the National Association of Realtors. The trade group says sales of existing home sales rose 2.9% in April, from March, to an annual rate of 4.68 million.
There are some notes of caution here before we declare the housing slump over. Sales were still down 3.5% year-over-year. Most of the activity remains in the low price points. The percentage of first-time home buyers fell to 40% of all transactions, down from 53% in March. A lot of the activity is investors snapping up multiple foreclosed homes. Distressed properties represent 45% of the sales total.
Anecdotally I’m beginning to see and hear of more higher-end homes selling in my neighorhood in Los Angeles. The magic number seems to be under $1 million. Once an asking price gets lowered below that and the home sells. The Realtors Association economist Lawrence Yun says the larger, jumbo loans needed to buy higher-end homes still aren’t available. “The Federal Reserve needs to help restore liquidity for the jumbo mortgage market by buying these loans under the TALF program,” he says
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.