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May 2011 Market Update
Gradual and uneven progress in the housing market continues without
government support. The market has shown remarkable improvement from the
initial drop after the expiration of the home buyer tax credit this past
July. Although higher-than-normal distressed and all-cash sales continue
to skew the overall picture of home prices downward, inventory remains
at pretax credit expiration levels. As economists anticipate rates at or
above 6% by the end of 2012, buying activity is expected to continue its
upward momentum.
Increasing signs of inflation have been a recent item of concern.
Driven by unrest in the Middle East, the retail price of gas has risen
by 25% since the year began and 89% from this time two years ago. In his
first ever press conference, Federal Reserve Chairman Ben Bernanke noted
the Fed believes these price increases are transitory and will not have
a major impact on the U.S. economy. However, according to NAR’s chief
economist, for each $10 per barrel rise in oil prices, $80 billion is
removed from the economy.
Bernanke stated that the Fed will keep a close eye on the impact of
oil prices on the economy as it considers policy changes. Although
inflation is up for the first quarter, price gains excluding food and
fuel slowed in March, helping consumers to feel less constricted.
As the economy improves, stimulus efforts by the government and the
Federal Reserve Board will gradually wind down, which typically spurs
rising interest rates to keep inflation in check. Meanwhile, buyers
continue to benefit from historically favorable buying conditions and
sellers are encouraged by increased market stability.
Home
Sales
in
millions
Home sales were up 3.7% in March compared to
the previous month but were down 6.3% compared to the same time last
year when the impact of the tax credit was nearing its peak. Gradual but
uneven improvement is expected to continue. In fact, home sales have
increased six of the past eight months. The general trend of improvement
remains a positive signal, as home sales remain up 32% since the low in
July and are down only 12% since the peak last April, which was induced
by the tax credit deadline of a signed contract by the end of that
month.
Home
Price
in thousands
Home prices rebounded 2.2% in March with median home prices rising to
$159,600. This is 5.9% below the year-ago level and keeps the median
price close to 2002 levels. Continuing February's trend, two out of
every five homes sold during March, or 40% of sales, were distressed
properties, which typically sell at a 10%-20% discount. The decline in
home prices is less indicative of individual home values and more
reflective of a large number of less expensive homes selling and
bargains that are getting snapped up. Investors represented 22% of
sales, and all-cash buyers were at a record high of 35% of sales in
March. Prices and mortgage rates remain favorable for buyers for the
spring selling season.
Inventory- Month's Supply
in months
The supply of homes measured in months on
the market, if sales continue at their current pace, remained stable
compared to the previous month. This is the third-lowest level since
June. Inventory levels remain 33% below its peak of 12.5 months in July
and only slightly above where it was last year when the tax credit was
in full-swing.
Source: National Association of Realtors
Interest Rates
After rising above 5% for the first time in ten months in early
February, rates have remained stable in the 4.8% range. They are still
expected to follow an upward trend throughout the year. As overall
economic recovery remains on track, rates will likely rise to keep
inflation in check. Buyers wanting to capture the savings in monthly
payments that a historically low interest rate affords are expected to
move quickly to take advantage of excellent buying conditions.
This Month's Video
Topics For Home Owners, Buyers & Sellers
Staging is an increasingly important component, not only in selling a
home but also in attracting would-be buyers. Even with all of the
commonly accepted advantages of staging, only about 1 in 3 sellers stage
their home.
- The average increase in list-to-sell in stages homes: 1.07%
- The average cost of staging: $250
- Potential benefit based on a $200,000 home: $3150
The Internet is one of the main sources
of information buyers use during the home search process, and staging is
key to showing the home at its best online.
Rooms that sellers stage
most often:
- Living Room: 73%
- Kitchen: 64%
- Master Bedroom: 58%
- Dining Room: 49%
- Master Bath: 45%
- All Rooms: 37%
- Office: 16%
The cost of staging is minimal compared to the benefits: more
showings and ultimately a higher percentage of asking price.
Kauai Real Estate Update
A summary of Kauai real estate sales is shown in the charts below. The
relatively low number of sales each month can cause the median sales
price to fluctuate significantly. It is recommended that median sales
price be viewed as what is selling and not an absolute measure of value
of properties.
Additional Kauai sales information is
available upon request.
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Contact Richard Dolbeare for information about the Kauai real estate
market. Kauai market updates and local events are periodically posted
at his
Kauai Real Estate blog.
Jump to Kauai summary
About Richard Dolbeare
Richard Dolbeare is a full-time Hawaii Realtor® living and working on
the island of Kauai since 2004. He is an agent with Keller Williams
Realty with important referral benefits from his affiliation with the
2nd largest real estate franchise in the nation. Referrals from Keller
Williams agents across the nation are a key source of leads for both
buyers and sellers of Kauai real estate.
Richard is the author of Kauai's #1 blog hosted by the ActiveRain real
estate network and is the Localism Community Leader for Kauai's Poipu
area. His
Kauai Real Estate blog provides up-to-date information on the Kauai
real estate market and local news.
For Sellers, Richard uses the proven triad selling solution emphasizing
Pricing, Exposure, and Follow-thru. The 2nd element, Exposure, is
provided via internet marketing, direct mail, and open houses.
For Buyers, Richard offers his extensive knowledge of the Kauai real estate market
and market trends. His Community Landing Pages feature videos,
descriptions, and sales data especially popular with buyers beginning
their search on the internet. His extensive collection of Kauai
communities is available at .his
Kauai Communities website.
Richard is eager to meet new clients and you are welcome to contact him
by phone, text, email, or personal appointment.
Contact Information
Richard T. Dolbeare (RA)
Keller Williams Realty
(808) 651-4550
Aloha@RichardDolbeare.com
www.KauaiRocks.com
Brokerage Legal Info
Keller Williams Realty, 1819 S. Kihei Rd., Ste. D-110, Kihei, HI 96753,
(808) 270-2900
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