Posted on Tuesday, April 6, 2010
Maybe you’re wondering if other people’s misfortune is an opportunity for you to get ahead?
Together American homeowners have lost over $13 trillion dollars in personal wealth. More than 11.3 million, or 24% of all residential properties with mortgages were underwater (meaning the owners of those homes owed the bank more than their home was worth) at the end of 2009. That number is expected to swell to as high as 28 million but will recover for many in 2015, taking until 2020 or longer in some of the country’s harder hit regions. But where there is adversity there is opportunity.
Meaning, if you live in Washington D.C., for example, it may take until 2015 for your home value to recover, but if it’s investment opportunities you’re looking for, you’ll probably want to get started this year. In Atlanta, Georgia; Dallas, Texas; and Riverside-San Bernardino, California, plan on around 2016. If Boston, Massachusetts is your home town, experts say 2017 will be your year. And if you chose Cape Coral-Fort Myers, Florida; Pittsburgh, Pennsylvania; Las Vegas; or Lancaster, Pennsylvania 2020 will be a happier time. For those of you in Detroit, I am sorry to say it may take even longer for your home value to recover due to the other things that have “gone wrong” in your region.
Because there are about 4 million births, 2 million deaths, 2 million weddings, 1 million divorces, 1 million immigrants arriving on U.S. shores each year, and existing homeowners relocating on average every 7 to 10 years, there is typically a constant stream of about a million households forming and homes in demand each year. Except that’s not what has happened since the real estate bubble burst. Instead, bad press, high un and under employment and fluctuating access to new mortgage loans, mean buyers have been hesitant or simply unable to buy homes. As a result, the supply of homes has swelled, and the prices or value of homes has dropped. The addition of even more foreclosed homes to this supply has caused home prices and your own home’s value to drop even more. The most recent Existing Home Sales statistics released by the National Association of Realtors just this past month unfortunately reflect another 6% decrease in homes sales, or a total 23% decrease since November.
One indicator to be watching is the NAR Existing Home Sales;
What is the National Association or Realtors?
The National Association of Realtors (NAR) is exactly what it sounds like, a national association of real estate sales agents and brokers. NAR began collecting date on the number of homes sold way back in 1968 so by now they’ve become pretty good at. NAR releases its Existing Home Sales indicator, which reports information from the prior month, around the 25th of each month.
Where does the information the Existing Home Sales indicator is calculated based on come from?
And homes sold in ways other than through Realtors, for example, homes sold For Sale By Owner, are not included. Existing homes account for 90% of all home sales. How does NAR report the Existing Home Sales information?
NAR reports home sales for the entire country, as well as for the 4 individual regions in our nation – Northeast, South, West, and Midwest - separately so that you can see how your region in particular is doing. NAR compares the number of homes sold during the current month with the number of homes sold during the immediately prior month as well as with the number of homes sold during the same month of last year. Only existing home sales, not the sale of new construction homes, are included. The numbers are based on a sampling from 20 cities including single family homes, townhomes, condominiums and co-operatives.