Posted on Thursday, June 30, 2011
John Burns Real Estate Consulting (JBREC) released a housing report card Thursday that confirms most key market indicators trending southerly, signaling more distress may be in store.
“The existing home market continues to remain weak, with most indicators still grading at poor levels and almost all of the indicators we track falling further this month,” the report said.
The National Association of Realtors recorded a seasonally adjusted drop in annual resale activity to just over 5 million residences, with median resale prices down 5.4 percent in year-over-year statistics, up only according to month-to-month data.
The Standard & Poor/Case-Shiller U.S. Index collapsed in the first quarter of 2011 to a low “not seen since 2002,” the report said, adding that both its 10 and 20 market composite indices similarly bottomed out.
These numbers reflect a buyer’s market, with affordability never “better for entry-level buyers, and rarely worse for move-up and move-down buyers,” according to JBREC.
The firm held that markets, such as Las Vegas, continue to overcorrect in terms of home values. At the same time, mortgage rates have stagnated at historic lows.
The otherwise good news for affordability, however, failed to mix well with consumer confidence, which continues to yield mixed feelings about the housing market and homebuyer prospects.
Accordingly, JBREC says the Consumer Confidence and Consumer Comfort Indices saw decreases, inversely correlating to an uptick in the aptly-named Misery Index (unemployment + inflation), which increased to 12.16 percent – a number that the report ranked “significantly higher” than its historical average of 9.46 percent over the last 60-plus years.
Still, JBREC reported slight rises in overall economic growth, with the employment market seeing improvements for nine consecutive months, although May’s payroll expansion of 54,000 was the weakest gain since September 2010.
With unemployment lengths averaging out at 39.7 weeks, achieving a record high, inflation rose steadily and layoffs continued unabated, delivering mixed results.
JBREC is a company responsible for producing independent housing research, advice, and consulting services.
By: Ryan Schuette DS NEWS