8/26/2008 : Real Estate Outlook: Prices Stabilizing

Real Estate Outlook: Prices Stabilizing

by Kenneth R. Harney

The economy continues to send mixed messages -- some encouraging for real estate, some not -- but this week the positive are edging out the negatives.

Take housing prices for example. The research company with the largest database of ongoing real estate transactions - First American CoreLogic, which tracks property values in thousands of Zip codes and neighborhoods - reports that nominal price drops have "stabilized" in 883 core-based statistical areas, showing no declines in the past two months.

Why's that important? Because flattening out is what we need before we can see a cyclical turnaround -- in other words, where even in the hardest hit local markets in California, Florida, Arizona and Nevada, prices have hit bottom.

The National Association of Realtors sees similar bottoming out -- even the first signs of turnaround -- in a number of key markets in the U.S. In its latest quarterly report, home sales were up year-to-year in 26 percent of all states and 35 percent of metropolitan statistical areas.

Biggest price jumps were in Yakima, Washington, where the median was up 8.9 percent, Binghampton, New York, up 8.7 percent, and Amarillo, Texas, up by 7.2 percent.

On the other hand, the Realtors also reported the national median sales price was down by 7.6 percent from the second quarter of 2007, and now stands at $206,500.

In other key economic developments: New housing starts fell by three percent last month - which is only logical given builders' still bulging unsold inventories.

And mortgage rates took a dip this week to an average 6.47 percent for 30 year fixed. Fifteen year rates slipped below 6 percent to 5.99 percent. New loan applications for FHA mortgages to purchase homes rose slightly, according to the Mortgage Bankers Association of America -- even while applications for conventional home purchase mortgages from Fannie Mae and Freddie Mac dropped for the week.

Published: August 26, 2008 According to the Realty Times